Are you willing to start a laundry business with limited investment, and want to grow up in just one year? If you are one of them, then do not leave this article before reading the last line.
Honestly speaking, most people are not aware of the potential of the laundry business in India.
And whoever starts, gets failed very few times, because he does not follow the proper strategy of starting the laundry business.
You might not know that you can start a laundry business from home also if you have a small dedicated space in your home.
I am going to show you how to start a laundry business from home and unit as well step by step with the investment and profit information in detail.
How to Start Laundry Business With Limited Investment
Hence, we are going to explore how to start a laundry business in-depth step by step, before that let me give an overview of the investment and profit ratio in the beginning so that your interest gets kept on reading the article.
If you are thinking about the investment, then let me tell you that you should start the laundry business on a small scale in the beginning.
As long as your business grows up, you get more customers, then after that, you should think about the upgrade.
You should have a minimum of 2 lakh rupees to start a laundry business on a small scale. You can also start with a lower amount also, but if you start with this amount, I can tell you that there is less than a 1% chance of failure.
Talking about the profit margin, it is a 20% to 50% profit margin depending on the nature of the consumers and deals.
We are going to discuss how to start a cloth cleaning business step by step, so without wasting time, Let’s Start!
Customers and Consumers
It is very mandatory to have data about the user and buyers of the product of the business, if you start any business without analyzing the customers’ data, you may be stuck in any problem anytime.
Before starting a cloth cleaning business, you have to specify who your targeted customers are.
Here your targeted customers will be mentioned below.
- Nuclear Family
- Old age homes
- Schools and college students
- Hospitals -> Healthcare industry
- Hotels and Decorators
Nuclear families are your prime targeted audience, most of them do not have enough time to perform such activities of washing the cloth, spending more time.
Old people mostly face the problems of washing their clothes properly and making them clean completely, so that old age people can become your potential customers.
The students of hostels and boarding schools are your regular customers, as they can not wash their clothes by themselves.
If there are big hospitals and healthcare centers nearby, you can have a very huge source of regular work for your laundry business.
Many patients come to the hospitals one by one, there are several nurses, and all the clothes of all these people are supposed to be washed on a daily basis.
The clothes of the hotel staff are your very good customers because they need to wash their apparels on a daily basis.
Now, you should differentiate your customers into the category of individual customers and commercial customers.
The margin of individual customers will be high and volume will be low, and for the commercial customers, the margin will be low and volume will be high.
Find Your Customers
Finding customers for starting a laundry business is a crucial task because the business area of the laundry business is small.
You will be getting the customers from the 3 to 5 Km of the radius of your unit of the laundry business, it’s quite understood that none of the people will come to you for clothes washing from 10-15 kilometers, right?
You can find your customers from online sources and offline sources, adapting both marketing strategies.
While doing online marketing, you can go for digital marketing and it will give you the biggest advantage of targeting the audience within a decided area.
Nowadays, online marketing is a very potent way to grab the maximum number of customers at the lowest cost.
Along with that, you are not supposed to ignore the offline promotion of your laundry business, like printing and sticking banners, distributing the pamphlets, etc…
Location to Start Laundry Business
What will be the desired location to start a laundry business? There are three types of areas in India.
Now, before starting a laundry business, you need to find out in which area you are coming from, and do the people of your area need your clothes washing or clothes cleaning service or not?
If you are thinking of starting a laundry business in a rural area, then leave this idea, it will not work in the rural areas.
Because, in the rural area, people have much time and less money, and they can not afford the rate of washing the clothes by the laundry.
If you are living in a semi-urban area, then you have some chances to grow your business with enough speed, but profit will not be too much.
The urban area is the perfect location for starting a laundry business because here people have enough purchasing capacity and less time to perform these kinds of tasks.
Now as I told you earlier there are all kinds of people in an urban area like old age homes in clear families, hotels, hospitals, and boarding schools and you can correct all the customers for your laundry business very soon.
Doing laundry is the urban area where you are supposed to brand your business then using some call to action contacts could work very nicely for you and your business.
Required Licenses For Starting a Laundry Business in India
You will need a trade license first to start a laundry business in India, which you can get from the local municipality, or else you should get the help of your lawyer or CA to obtain the trading license.
If you are dealing with commercial customers majorly, and most of the revenue is coming from them, you need the ISO certificate as well.
Hence, it’s not mandatory, you can also get it issued later on when your business boosts at the top edge.
The next license is GST, if you are running the business on a commercial basis, you need a GST, but until your threshold crosses 40 lakhs, you don’t need GST.
As you are working in the intra-state, you are not working on the interstate, so GST is not mandatory.
Capital Investment For Laundry Business
Capital investment is the most important for starting any business anywhere, and the laundry business is also one of them which requires some investment.
Now, how much investment is needed to start a laundry business on a small scale, I will explain to you in-depth.
Here, you will get each of the details of how much money you should have, and how much money you can sustain your laundry business without revenue.
If you want to build up a successful business model for the laundry business, you should have 2 lakhs rupees in your hands.
You can consider the working capital as a recurring expense which represents the amount required per month to sustain the laundry business.
You will need the employee expense, property rental, electricity and internet, and marketing & sales expenses.
In the employee department, you will need a washer, delivery boy, management, and accountant.
As a small business, in the beginning, you can manage the work of delivery, management, and accounting yourself, you can save the cost.
For the washing work, you will need to hire a washer, and for that, you will have to pay the salary to him.
The salary of a washer depends upon the locations and territories, however, if we consider the average salary in India of the washer, you should fix the budget of around 8,000/- per month for a washer.
As long as you receive more clothes to wash and gain more customers, you can hire two or more washers as well.
Also, you can hire a sales team like telecallers to grow the sales of your business or to promote the offers for the customers.
So, if you hire employees for other work than washers, then the maximum expense of employees will be around 12,000/- per month.
Here, the property stands for the space to run the business, and in the beginning, it is not mandatory to acquire any land on rental or lease.
You can also start a laundry business from home if you have a small dedicated vacant space in your home.
Else, if you are willing to borrow the property on the rental, then it will cost around 5,000/- to 8,000/- per month for the required space.
Again, in the beginning, you are not supposed to purchase a high featured fully automatic washing machine for washing the clothes.
You can purchase a basic washing machine for washing the clothes of the customers, and as long as you receive more clothes to wash, you can buy an upgraded and advanced commercial washing machine, which is beneficial.
Electricity and Internet
For washing the clothes, you will have to use the washing machines continuously, and well, you will be using other equipment like a fan, light, or cooler, etc…
For the electricity expense, you are supposed to arrange the budget of 3,000/- to 5,000/- approx.
Marketing and Sales
Marketing is a very crucial aspect of every business, well, it’s clearly understood that you will need to do marketing for the laundry business also.
When you start a laundry business, you need to adapt both marketing strategies, online marketing strategies, and offline marketing strategies as well.
For the online marketing strategy, you can approach the digital marketing strategy, where you will be able to spread your business to more people at less expense.
There are several platforms where you can run your ads and make the targeted people engaged with your business.
Facebook ads, Google ads, Instagram ads are the best of them, and yes, you should not avoid Whatsapp as well.
You need to share your business details, services, and offers on the WhatsApp stories in different formats every day.
Multiply By 6
You may be reading this heading the first time here in articles you read till now, right? Let me explain to you what it is.
If we make a total of all investments that you need to start a laundry business, then it becomes around 22,000/- per month.
Now, you must have the investment for 6 months without expecting and getting revenue to sustain the business so that you do not think about giving up in the middle.
So, you need 22,000 X 6 = 1,32,000 rupees before starting a laundry business in India anywhere.
Now, you still have 68,000/- in your hand, that you can spend on other important aspects like marketing, giving offers to gain more customers, or you can invest in equipment, so you can work fast.
Working Business Model For Laundry Business
For the laundry business, you can adapt the B2B business model, B2C business model, and B2B2C business model.
The nuclear families, old age homes, and boarding schools students are your B2C customers, and the hotels, hospitals, and decorators are B2B businesses.
Profit Margin of Laundry Business
Profit margin also differs with cities, states, and territories, but considering the average profit margin of the laundry business is as below.
- B2C: 40% – 50%
- B2B : 20% -30%
Conclusion on Starting a Laundry Business in India
After reading an entire article about starting a laundry business, I believe you have a perfect guide about it.
Hence, I recommend you to keep the investment of at least 6 months for sustaining the business without a massive profit.
Because this is a very massive profitable business idea but it takes time to become profitable.
It may take a little time also, and it depends on your working strategy. This article contains a step-by-step guide to starting a laundry business.
You can do more research on it by taking advantage of already existing laundry business owners as well, and it is the niche approach.