4 Factors that Affect the Cost of Setting Up A Dry Cleaning Business
Opening a dry cleaning business isn’t the most glamorous of endeavors, but it can be a very profitable one. Despite the fact that the industry has declined slightly over the last decade largely due to the popularity of low-maintenance clothing, dry cleaning businesses still bring in $9 billion in annual revenue in the United States alone—making it an attractive option for aspiring business owners. However, starting up a business, no matter what kind, isn’t free. You’ll have to be willing to invest some money into your business before it can thrive. But what exactly affects the cost of setting up a dry cleaning business?
Franchise vs. Independent
Deciding whether your business will be an independent business or a franchise will play a part in the cost of setting up a dry cleaning business. While many dry cleaners are independent mom-and-pop shops, there are plenty of franchises to choose from if you don’t want to start from square one.
Some benefits of starting a franchise include instant name recognition, credibility, and assistance in the startup process. Franchise businesses typically have lower total investment costs, especially upfront, but will need to meet financial requirements set by franchisors. This usually consists of an upfront franchise fee as well as ongoing fees such as monthly royalties and advertising.
On the other hand, independent business owners can expect higher initial investment costs, but they will retain more control over investment decisions. For example, independent business owners can choose when to remodel or expand their business, without external pressure from a franchise.
New vs. Used Equipment
As expected, obtaining dry cleaning equipment may be one of the most expensive parts of the process; however, there are ways to save. While brand new equipment may sound like a good idea to offset aging equipment repairs, it’s an unnecessary expense. Capital cost for new equipment is steep, and unless you pay cash upfront for both the equipment and installation, you may not see a profit for 3-5 years.
Instead, consider searching for used equipment from reputable equipment manufacturers and dealers, or even on reselling sites like eBay. You can also keep an eye out for dry cleaners that are going out of business; you could potentially take their equipment off their hands for a fair price.
It’s important to note, of course: don’t purchase equipment that is too used. Buying run-down equipment could end up increasing your overall costs to pay for repair or replacements in the future. Try to strike a happy medium in order to control the cost of setting up a dry cleaning business.
“As-a-Service” Models
As with your dry cleaning equipment, your business’s point of sale system is another considerable expense to keep in mind. While you can purchase a POS outright, many business owners opt to preserve their capital by purchasing, leasing, or renting a POS system through an “as-a-service” model.
Similar to leasing, as-a-service models allow you to procure all-new hardware with minimal risk and investment. Further, you’ll be given a low, manageable monthly payment that will ensure controlling your expenses is a breeze. In addition to low upfront costs, you’re not responsible for maintenance. If a product needs fixing or replacing, your provider will send someone to service it, free of charge. This keeps you from having to shell out money for repairs and replacements.
While low upfront costs and free maintenance are considerable benefits, the overarching advantage of as-a-service models is staying up-to-date on the latest technology. As-a-service helps business owners avoid technological obsolescence by providing you with the latest technology and updating you whenever new technology arrives. This way, you never have to worry about slow, outdated equipment.
Pick Up and Delivery Services
When assessing the cost of setting up a dry cleaning business, another thing you’ll have to consider is whether or not you’ll be offering pickup and delivery services. If so, you’ll need to invest in reliable transportation and dependable drivers. This also requires you to decide the number of staff members you want to bring on—if you want a staff at all.
For your pickup and delivery service to be successful and organized, you’ll need to hire staff to manage pick up orders in-store as well as staff to manage and deliver delivery orders. There’s no right or wrong way to go about it; without pickup or delivery services, you don’t have to pay much, if any, in labor costs. Though you will obviously have to pay staff in order to offer pickup and delivery services, they do boost your overall revenue in the long-term.
A lot of factors can shape the upfront cost of setting up a dry cleaning business. Choosing to be independent or a franchise, buying equipment, as-a-service options, right down to the services you offer all play a role in your business’s financial beginnings. While some choices can save you tons of upfront costs, not every scenario has a clear choice; you’ll have to be willing to crunch the numbers yourself to see what is best for you and your unique business needs.
Contact the team of experts at Fabricare with to learn more about the best ways to maximize your revenue.
