How to set up a Dry cleaning Business

Dry cleaning is the business of providing laundry and other cleaning services bordering janitorial, upholstery and other domestic cleaning including of rugs, walls (especially tiles) and windows. Also included sometimes are services rendered to corporate and commercial entities. The business of dry cleaning is a highly specialized venture requiring a great deal of expertise and efficiency. A variation of dry cleaning business is the laudro-mart which is very common in western countries.

In Nigeria there is only one well known laudro-mart at Lekki. However a large number of dry cleaning businesses exist providing mainly services for individuals’ clothing. A business like this requires a number of specialized equipments for use.

The business thrives on the premise that busy executives and socialites want to have their expensive clothing properly cleaned and maintained. Some of the methods used by dry cleaners include; starching, dying, warm rinsing and use of chemicals to remove dirt and stains from clothes and adding fragrance to them as well. Dry cleaning just like selling cars in Lagos Nigeria is a location dependent and back end business, meaning where you site the business and how well you satisfy your existing customers are major factors affecting sales.

Opportunities

The market for this business cuts across all age groups but is typically patronized by upper middle class and upper class folks. Most people who patronize professional dry cleaning businesses do not want to leave their clothes in the hands of people who will not do a good job or who might contract it to other dry cleaners thus charging a higher than normal fee. So being efficient and cost effective at the same time is tantamount to getting a pass mark from customers and the possibility of referrals. Remember the post about efficient service delivery? It could also be of help to you as you try to uncover the opportunities this business offers.

Challenges

Electricity supply is highly unreliable meaning that all your machines will have to be powered mostly by diesel generators. The location is another important factor. A good dry cleaning business should be located in an easily accessible place in a high brow area. Places like Allen Avenue, Adeniyi Jones, Victoria Island, Isaac John Street in Ikeja GRA, Ikoyi, Lekki and Ajah. Finding a suitable site in one of these places is a major challenge especially since the rents are very high.

Start up Summary

The cost of setting up a dry cleaning business is listed below;
• Rented space preferably measuring 50 sq metres or more =N= 800,000 for 2 years
• Machines and Equipment =N= 600,000
• Working capital =N= 900,000 for 6 months
• Generator =N= 200,000
• Others =N= 300,000
• Total =N= 2,800,000

Marketing and sales plan

To effectively market your services you will need to do a lot of marketing

1st year Projections
Sales projection


• Annual Sales =N= 4,400,000
• Expenses =N= 1,600,000
• Taxation =N= 980,000
• Net profit =N= 1,820,000

Investment and Returns analysis Projections

• Return on Investment = Net profit/Total Amount invested
= 1,820,000/2,800,000 or 65%
• Return on sales/margin = Net profit/ Total sales
= 1,820,000/4,400,000 or 41.3%