How to Start a Dry Cleaning Business: 10 Essential Steps for Success
In a world where everyone is always in a hurry, convenience reigns supreme. Just look at the popularity of fast food places, online ordering, delivery services, and the like. In this day and age, people barely have time to cook for themselves, let alone do their own laundry. Opening a dry cleaning business is a great idea in a society where everyone is on the move; however, aspiring dry cleaners may become overwhelmed with starting their own business. Rest assured, we’ve created the ultimate guide on how to start a dry cleaning business. By following these 10 steps, you can ensure that your business will be profitable for years to come.
Step 1: Develop a business plan
Above all else, begin with a business plan. This will serve as a formal declaration of your professional goals and your plan to achieve them. No detail is too insignificant; think through the layout of your desired managerial structure, describe your service, establish pricing, determine what kind of cash flow you anticipate, and more. This will allow you to have an organized approach and will also be necessary information to convince others of your merit if you plan to secure funding.
Step 2: Secure funding or loans
Once you’ve set a budget and calculated projected profits and losses, you’ll need to secure funding. How much you’ll need depends on where you intend to operate your business and what equipment you’ll be using. Some start-up dry cleaning businesses require as much as $500,000 in capital just to start. Be sure to consult with an accountant or financial advisor to determine how much funding you’ll need to get your business started.
Step 3: Select a name and register as a legal entity
Now it’s time to name your business and establish it legally as an LLC, sole proprietorship, partnership, or corporation. Establishing a legal business entity such as an LLC or corporation is crucial as it protects you from being held personally liable if your dry cleaning business is sued.
Step 4: Open a business banking account
Having a dedicated business banking account is essential for personal asset protection. When your personal and business accounts are mixed, your personal assets will be at risk if your business is ever sued. This method also makes accounting and tax filing easier, as all business-related transactions can be tracked in one place.
Step 5: Obtain necessary licenses and permits
Before starting your own dry cleaning business, you’ll need a special permit and license to operate it, both of which will have to be renewed on a regular basis. Educate yourself on state and local licensing requirements as well as labor laws so that you’re always in compliance. Additionally, your building will need to be certified with a certificate of occupancy that confirms that all building codes, zoning laws, and government regulations have been met.
Step 6: Research the market and select a location
Starting a business in an oversaturated market won’t do you any good. Before you get your heart set on a specific part of town, you’ll want to make sure it doesn’t work against you. Determine the population in your area by checking the census and search online for other dry cleaning businesses in the area. This way, you’ll be able to strategically choose a well-populated location away from the competition to best ensure a potential customer base.
Step 7: Get business insurance
Your business will need insurance to protect its financial well being in the event of a covered loss. There are several types of policies to choose from; if you’re unsure, begin with General Liability Insurance as it’s the most common. Workers’ Compensation Insurance is also a notable policy. If your business will have employees, there’s a good chance your state will require you to carry workers compensation coverage.
Step 8: Buy equipment and technology, including a POS system
Renting or buying equipment for your business is a considerable expense. While it may be tempting to buy cheap equipment to save on upfront expenses, it could end up costing you more in the long run. To avoid this, buy from reputable manufacturers and dealers, or consider buying working equipment from a dry cleaner who is going out of business. Don’t forget to purchase a point of sale system that includes all the features you need to run your business. While laundry equipment is the focal point of your business, your POS is the command center behind your internal operations and should require just as much mindfulness in choosing.
Step 9: Hire and train your staff
Hiring staff with relevant experience in the dry cleaning industry is preferred; however, training will be required either way. Ensure that you train your staff thoroughly to handle the basics of the business as well as a variety of scenarios. Keep in mind that you’ll have to pay competitive wages in order to incentivize potential employees to choose your establishment over another. It’s also important to remember that even when you have a staff, you’ll still need to spend a lot of time at the store yourself, especially upon launch of your business.
Step 10: Market your business to local customers
Marketing is essential to bringing in customers. To maximize your reach, utilize a good mix of online and offline marketing. Handing out flyers with a discount coupon, putting an ad in the phone book, or putting up signage outside of your storefront are all great offline marketing methods. As for the web, you can leverage social media as free advertising and encourage customers to follow your business online. Run regular promotions to get customers’ attention, such as “drop off four items, get one item cleaned for free.”
There are many things to consider when learning how to start a dry cleaning business. With the right planning and execution, starting a dry cleaning business can be an enjoyable and rewarding experience. Through it all, it’s important to remember that the center of your operations is your POS; you need to be able to make the process of dropping off, picking up, and paying for services as easy and convenient as possible. How? The answer is dry cleaning POS software from Fabricare. Contact our team of experts today to increase efficiency, effectiveness, and profitability throughout your dry cleaning business.