Given the high average number of household members, lack of time, and hectic lifestyle, more and more Filipino families are opting to outsource tiresome and stressful domestic chores like doing the laundry. Instead of spending their precious weekend hours washing piles of dirty clothes, many homemakers are choosing to bring them to the nearest laundromat so that they could have someone do their laundry for them and they could do the things they enjoy instead.
Because of this increasing demand, the laundromat business has evolved into one of the most lucrative and stable ventures in the Philippines. Although many industries suffered amidst the COVID-19 pandemic, the laundry market prospered even more as the situation highlighted the importance of keeping clothes clean.
Perhaps you are one of the many enterprising Filipinos who realized the profitability of setting up a laundromat business, and now you are seriously thinking about starting one. If so, you may want to consider the following.
Finding the ideal place to set-up your laundry business is one of the keys to success. Since your target customers have convenience at the top of their list of priorities, it is best to consider a location that is accessible to people.
Renting a space near apartment complexes and condos is one option, but you may also go after college students who are too busy with their academic work to care about cleaning their clothes. In that case, you may want to explore rental spaces in dormitories or areas around universities and colleges.
You may also start small. Instead of spending thousands of pesos on rental costs, you can do your business at home by offering pick-up and delivery services. Try providing laundry services to neighbors and friends at first to know if this set-up is workable. Nonetheless, whether you find a place to rent or you opt to conduct your business at home, ensure that you have enough space and sufficient water supply to get the work done.
A laundry business cannot succeed without high-quality and durable laundry equipment. How can you serve your clients well if you are using mediocre machines?
When choosing a washing machine for sale, it is best to opt for units with a large capacity and a decent size drum. Moreover, it would be best to look for washers that can complete the laundry cycle more efficiently so that you can finish several loads in a day.
Because high-quality laundry machines are expensive, you should compare prices, seek expert opinions, and review customer feedback as you search for reputable shops. When you do the work, you can surely find an appliance store that offers superior washing machines at affordable prices.
Apart from equipment, you also need to think about laundry products, such as detergents, liquid soap, and fabric conditioners. While you are naturally drawn to inexpensive products, you should never sacrifice quality over cost.
Find the balance between the two by testing different products, keeping a record of how much product you use for every load, and searching for a reputable supplier before buying in bulk. Perhaps, the more expensive brand is the more practical choice if you end up using much less detergent per wash compared to the cheaper brand. You can only know for sure by testing several detergents and taking note of your usage and the costs you incur.
Since a large portion of your expenditures will go to laundry products, avoid shortcuts. Try and test as many brands as you can to find the best in terms of quality and price.
Business Permits and Licenses
Operating a business without the necessary government permits in the Philippines could mean hefty penalties and a prison sentence. To avoid such troubles, you must register your laundry business with the Department of Trade and Industry (DTI) if you are the sole owner or the Securities and Exchange Commission (SEC) if you are contemplating a joint venture or corporation set-up.
Once you are done registering your venture, the next step is securing a business permit from the municipal hall. Note that you need to go through several processes and pay various fees to secure this permit. You also need a certificate of registration and tax identification number from the Bureau of Internal Revenue (BIR). Be sure to set aside at least PHP 40,000 to secure the necessary permits/licenses for your business.
For a home-based business, you can probably operate solely with the help of family members. But if you are opening a self-service laundry shop, you have no choice but to hire at least one employee to assist the customers at the onset. You can just employ additional staff depending on the demand.
Take note that you need to register your business with PhilHealth and Social Security System (SSS) if you have five employees or more. If you plan on operating in Metro Manila, the minimum salary for laundromat staff is PHP 12,000, plus benefits.
A laundry business has the potential to become a profitable venture. But just like any other business, succeeding in this industry requires proper planning and sound financial sense. Make sure to consider the factors above if you are seriously contemplating setting-up your laundromat service so that you will have a better appreciation of what this business entails.