How to Start / Open A Laundry Business in Kenya

Laundry Business Plan in Kenya

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This guide refers to the business of “wet “washing of clothes. This is as opposed to dry cleaning. The target customers are individuals, households, hotels, lodgings and other small and midsized corporate customers.


Overview

In urban areas consumers wash their clothes themselves, hire permanent salaried staff often in form of house helps, use casual workers commonly known as mama nguos or go for commercial washing services commonly known as laundries which are the focus of this guide.

Although there are Dry Cleaners which also serve as Laundries the focus of this guide are laundries which do not have dry cleaning service. We will cover Dry Cleaners in a guide of its own.

For many years laundry business used to be fully a manual affair. Clothes were washed by hand, dried out in the sun, ironed and then picked by the customer after three days. This kind of laundry shop still exists in some estates.

However since the mid 2000 there has been adaptation of machines. This started as a way to compete and differentiate; machines could save on labour costs, dry clothes faster and somehow give a sense of professionalism.

Then as laundry machines became more available, affordable and pushed to the mainstream through supermarkets and publicity by the household items companies more of the laundry businesses acquired them. Today there is a mix of manual and ‘semi automated’ laundries which use machines.

Another change in the last four or so years, has been the rise of semi professional house cleaning and laundry services. Take this to be better organized mama nguos ; branded , offering a cleaning package, more thorough and not necessarily middle aged and old women but also young ones in uniform.

These services are found within estates, especially in Nairobi’s mid income estates. The concept has gradually been catching though at rate lower than expected. Related to this are the slightly advanced forms of such services; these pick clothes, wash, iron and deliver. They could have cars, motorcycles and permanent premises. They also cover a relatively wider area and put more effort in marketing. Some focus on corporate clients only while others are open to retail customers too.

Since 2015 there has been development of local internet platforms, which essentially try to make the process of having your clothes washed easier and more efficient. These include Dobi and Kisafi.

Dobi launched first but is not yet to gain much traction. Their business model is like being the “uber of laundry”. They find people with spare and idle capacity in their washing machines and outsource to them. The latter soft launched in March 2016 and has been investing quite a bit in marketing especially on the internet. Sometime in April they were offering free one week washing. Presently Kisafi covers Westlands, Kilimani, Kileleshwa, Lavington, CBD and environs.

A notable difference is their business model where rather than charge per piece or kilograms as other laundries do they bill by an “all you can fit bag.”

To break even these services will need to attract a significant number of consumers. Their target market is also limited to the better organized and accessible estates where it’s easy to give directions and move door to door picking or dropping laundry. With the rise of gated communities, and if they are able to attract volumes while keeping the prices affordable then they could be a threat to the traditional laundry services in mid and high income areas. But it will take more effort and time to penetrate the lower and more ‘disorganized’ mid income areas. Think of Nairobi’s Eastlands, an estate like Umoja.

Licenses

Single Business Permit – This is the major license required to run a laundry business. This is the usual license that is issued by the county government to all businesses operating within the county. The cost depends on the county, size of the premise, and sometimes location within the county. Budget at least Kshs. 10,000 per annum but give an allowance of the budget rising up to Kshs.15, 000.

Signboard / Branding Fee – If you will have signboard advertising your business you will have to pay the county government a fee. The amount depends on the size of the signboard and the type of branding. The exact fee will depend on the county. For instance in Nairobi the fee starts at Kshs. 2250. Budget at least Kshs.3000 per annum.

Fire Inspectorate License – Your business is supposed to have a fire extinguisher. And you need to get a license to ascertain that you have enough extinguishers for your size of premises. They also want to make sure the extinguisher is of a quality good enough. The cost averages Kshs.1500 per annum but the exact figure also depends on the county.

Equipment

As you think of equipment keep in mind that all the customer wants from a laundry is for her clothes to be cleaned and kept safe (as not damaged). How you do it is not necessarily their concern as long as the clothes are clean and not damaged.

The how depends on you. And the key considerations are capacity to handle the number of customers you have or project to have, making sure clothes are cleaned properly, efficiency, cost savings and ability to meet service level agreements. The move from hand washing to machines is informed by this.

Still if at the agreed time the customer comes to pick his clothes and they are not washed because machine has broken down or there is no power, then he might not take that as an excuse good enough.

That said here are the main equipments required for a laundry.

Washing Machine

A washing machine makes process of washing clothes faster, less labour intensive and thus more efficient.

Modern washing machines come with quite a variety of features, capacities and brands. So here are some of the

Things to keep in mind when buying a washing machine:

Capacity – Capacity of a washing machine is the quantity (in kilograms) of clothes that a machine that can wash at a time. Standard washing machines have capacities ranging from 5 kilograms to 14 kilograms.

For a basic laundry a capacity of 7-10 kg is good enough. Neither do you want a wash machine so small that will increase your costs both in time and money, nor a big one that will suck your capital if you have a limited budget.

Keep in mind that there is potential for your business to grow, so you need a capacity that though initially could look big for your business , can at least accommodate more customers in the midterm, before the business stabilizes and you become capable of buying higher capacity machines. Also remember that in a laundry customers will bring things like blankets and duvets so you also need a capacity that can comfortably handle such items.

Material That Makes the Washing Drum - The Drum is the container of the washing machine where you put the clothes to clean. The drum can be made of enamel, plastic or stainless steel. As much as you could be attracted to aesthetics remember you want your machine to last as long as possible working at full capacity. Enamel drums though pleasing to the eyes tend to chip, more so under high speeds. This means that you have to treat them with ‘care’. They are not suitable for a laundry. The most preferred are stainless steel drums which are durable and tend to remain the same even when spinning at high speeds. Plastic are good too, but stainless steel is the number one choice.

Front Load or Top Load - Front load means that you open the washing for loading (unloading) from the front, the same you would a fridge. Top load means that you load (unload) the machine from the top. Beyond this there are other crucial differences between the top load and front load. Top loads either have impellers or agitators. Impellers have propellers at the bottom which ‘stirs the water to move clothes. An agitator machine has a pole with some fins which move the clothes as they are being washed.

In front loading machines the drum rotates in the process whirling and cleaning the clothes. One of the advantages of top loading machines is that you can add clothes in the middle of the cycle. They also tend to have a shorter wash cycle. On the flip side on average they tend to use more water and impellers sometimes tangle clothes.

Front loads tend to be more efficient in terms of power and water. Presently it’s agreed they wash clothes better than top loads. On the flip side they cost more, are bulkier and for best performance require a permanent water connection under pressure.

Other than the above factors when deciding between top load and front load consider the space you have. A front load requires more space. Not only to place the machine but to open its door and load clothes.

Spin Cycle – To remove the amount of water in clothes after cleaning a washing machine spins them. The speed of spinning is measured by revolutions per minute. The higher the revolutions per minute the faster it will dry the clothes. You should go for a machine with a range of spin speeds; the lower levels for more delicate clothes and the higher levels for the heavier clothes

Settings and Features – Modern washing machines have a variety of settings. For instance some have pre sets based on the type of clothes say whites, towels, baby clothes and so forth. More advanced machines will detect the weight of the clothes and give recommendations for time, water and detergent required. Others are able to heat water; some can even produce steam to help melt stains. Other features include noise levels, extra washing and extra rinsing. All this makes the whole washing process much easier. Choose a machine with a variety of relevant settings.

Semi Automatic and Automatic - Semi automatic machines have two tubs: One for washing and another for drying. Thus once you wash the clothes you have to manually move them from the washing tub to the drying tub. An automatic machine does all this from the same place. As expected an automatic machine is more expensive. Semi automatic machines also tend to be bigger because of the two tubs. For efficiency it’s better to have the fully automatic machine.

The features and brands of modern washing machines are many; however the above should act as good guide. Remember you are in business and it’s good to keep your costs low without affecting service. Thus whatever machine you go it should be efficient in terms of power and water usage. A combo machine (washer dryer) which washes, reduces the wetness and dries is a better option for a business. Also consider the length and a condition of the warranty: a longer more thorough warranty is better.

Nowadays there are many second hand washing machines in the market. Often they are advertised on internet classifieds sites like OLX, newspapers and social media groups. Owners are people who had bought them for their household use but for a reason or other no longer need them, some are importers, others are closing down laundries or upgrading to better machines.

When starting we recommend a new machine, with a warranty. In the event that the machine is second hand test it thoroughly and compare the price and features with those of new ones. As you begin the business the last thing you want is a machine that breaks down, and when it does you are not sure who to turn to.

Prices range from as low as Kshs.17, 000 for a top load semi automatic washing machine of 7 kilograms to as high to highs of Kshs.230, 000 for a 10 kg front load washer dryer. You can budget at least Kshs.60, 000 for a front load automatic machine with a spinner. To insist a spinner will reduce the amount of wetness and thus hasten the drying process. Budget at Kshs.70, 000 to Kshs90, 000 for a front load washing machine with a capacity of at least 7 kilograms and which includes a dryer.

Dryer

A dryer is used to quickly dry the clothes after washing. A dryer can be a part of the washing machine or as separate equipment. Whether o buy a dryer as part of the washing machine or as separate equipment will depend on the capital you have, your space and the convenience that you want.

An all in one machine will wash, rinse, spin and dry in the same compartment. Spin is like squeezing the water to come out before drying using the dryer or out in the sun.

The ideal situation is to get the machine which washes, rinses, spins and dries in a few processes just by the touch of a button. However that’s not always possible because of capital limitations. There are laundries which start with a simple washing machine, which does the washing in one compartment, the rinsing in another and then the clothes are hanged out to dry. Others start with a semi automatic machine which you have to manually move clothes from the washing compartment to the rinsing tub. The washing machine, the washing part, is the most key because compared to say the dryer it improves efficiency the most. The major advantage of a dryer is that you are able to win most customers who want same day service or to pick clean, dry and ironed clothes say after a day irrespective of the weather conditions. As competition increases then a dryer becomes essential equipment as it gives an edge.

Budget at least Kshs40, 000 for a standalone dryer.

Iron & Ironing Board

Some customers will request to have their clothes ironed after drying, thus the need of an ironing gadget. A few years back there were laundries which would only offer washing without the ironing, but now it’s standard to have ironing as an option. You could have a normal electrical iron, the steam iron or charcoal iron. There is debate as to whether there are any advantages over between the esteem and electrical iron. Some laundries prefer the steam iron which they say is faster, efficient since you don’t have to keep spraying the clothes with water and that there is less likelihood of clothes burning. They are also lighter and that’s appropriate for heavy duty work. On the other hand are those who say all said and done the electricity iron removes the creases equally better, and that steam irons are not worth the extra money you pay for them. Our verdict is that for bulk ironing steam irons are better.

Just like with any electronic there are several brands with different reputations. Black and Decker was a favorite among those we surveyed. In your choice consider any extra features, warranty if any and price. You can get an iron from Kshs. 1500 or slightly below.

Related to the iron is the ironing board from where you will iron the clothes. Some laundries have modified tables to act as ironing board. You will settle on whatever makes your work easier. Budget at least Kshs.4000 for the ironing table.

Basins and Buckets

Whether you are using a machine or hand washing you will need basins and buckets to put the clothes, sometimes wash, fetch water and other such uses. Six to ten buckets could be enough depending on the scale of operations. Budget at least Kshs.2000 for these.

Record Book and Receipt Book, Rubber Stamp

You need a book to record clothes as they are they are brought in and picked up and to note down expenses. You need a receipt book not only to record sales but to issue the customers receipts as evidence that they have brought in clothes. They should show the receipt to when picking clothes. Both the record book and receipts will help you calculate your profits. Budget at least Kshs. 2000 for this or even Kshs.5, 000 if you are going to have receipts specially printed with your name. Generic receipts books cost as low as Kshs.60. A rubber stamp is necessary more so if you decide to go for generic receipts as sold in supermarkets. Rubber stamps are charged based on the type and the letters on the stamp. At the very least set aside Kshs.600 for a basic stamp.

Chairs, Racks, Tables

You need a chair to sit on as you wait for customers or even the clothes to be clean, a table to act as a reception area , and other tables and racks to place buckets or machines if need be. Budget at least Kshs. 6000.

Miscellaneous

Hangers, Pegs ,soap dishes, gloves, brushes, mops, dusters, polythene bags, clothing line ,staples, stickers, cello tapes and other miscellaneous items – You need these for various purposes when you are doing any form of washing. The hangers could be used to hang

coats after cleaning, pegs for holding clothes on the line, polythene bags for protecting clothes like clean coats from dust, and perhaps giving a sense of professionalism. Stickers are used to note the receipt number associated with a cloth, wrapping it with cello tape then stapling it on the cloth item so that when the customer comes to pick it you can identify which item belongs to whom. Budget at least Kshs.5000 for these items.

Suppliers

You can get almost all the above equipment, including the washing machines, in a well stocked supermarket. But for washing machines and dryers it could be better to compared by visiting appointed dealers of specific brands. This again will depend on your location as such dealers are not found everywhere. In Nairobi you can check Hypermat, Mombasa Road (020 824455), they supply Ramtons products including washing machines

Hotpoint, Sarit Center, Westlands deal in LG, Von, Samsung and other brands.

Some shops along Luthuli Avenue also stock a variety of washing machines. Major supermarkets like Nakumatt and Tuskys have a wide variety of washing machines.

Online shops like www.jumia.co.ke also offer a variety, and it could be a good place to compare even before you hit the ground shopping. For tables you can have a local carpenter make to your specifications. Remember if a table will be constantly coming in touch with water, metallic is better than wooden. For custom printed receipt books visit a local printer. There are many all over. In Nairobi you can check Luthuli Avenue and Sheik Karume road which is off Mfangano Street.

Premises

A washing machine takes a space of about a meter by a meter at most. But when thinking of the premises you need to look beyond the space. The room should have

-Electricity to power the washing machines and iron

-Water to do the washing. If there is no water in the building then there should be a convenient source of water nearby

-There should be enough space for the washing machine, dryer, to iron clothes, fold, and store as you wait for the customer. There should also be a reception area to receive the clothes.

-A good laundry shop should also be easily accessible. This does not mean that its should be necessarily at the front but at a place where it’s easy, safe and convenient to walk to.

-Ideally you should have a space to air and dry the clothes outside. This however is not always possible in urban areas. Some laundries will use a shop as a drop off point while the actual washing is done somewhere else, sometimes at their houses.

Capital

 

Item

 

Breakdown

 

 

Total

 

 

 

 

 

 

 

(Kshs.)

 

 

 

Licenses

 

 

 

 

 

 

 

 

 

 

 

 

Single User Business Permit

 

1

 

 

10,000

 

 

Signboard License

 

1

 

 

2000

 

 

Fire Inspectorate

 

1

 

 

1500

 

 

Sub Total

 

 

 

 

13,500

 

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washing Machine (Combo with dryer)

 

Kshs.86,000

 

 

86,000

 

 

Tables

 

3 @ Kshs.3000

 

 

9,000

 

 

Chairs

 

3 @ Kshs.700

 

 

2100

 

 

Fire Extinguisher

 

1

 

 

6000

 

 

Signboard

 

 

 

 

10,000

 

 

Record Book and Receipt Book, Rubber Stamp

Various

 

 

3000

 

 

Iron and Iron Board

 

1 each

 

 

4000

 

 

Basins and Buckets

 

Various

 

 

2000

 

 

Hangers, Pegs ,soap dishes, gloves, brushes, mops,

Various

 

 

5000

 

 

dusters, polythene bags, clothing line staples

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sub Total

 

 

 

 

127,100

 

 

 

 

 

 

 

 

 

 

 

Premises

 

 

 

 

 

 

 

 

 

 

 

 

 

Rent

 

2 months deposit + 1

 

27,000

 

 

 

 

month rent. Will depend

 

 

 

 

 

 

on location. (@

 

 

 

 

 

 

 

Kshs.9,000 per month)

 

 

 

 

Renovation and Remodeling

 

Repainting and any

 

15,000

 

 

 

 

branding

 

 

 

 

 

Sub Total

 

 

 

 

42,000

 

 

 

 

 

 

 

 

 

 

 

Working Capital

 

 

 

 

 

 

 

 

 

 

 

Salary

 

3 months @ Kshs.6000

 

18,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per month ( 1 employee)

 

Electricity

3 months @ Kshs.2000

6,000

 

per month

 

Water

3 months @ Kshs.900

2,700

 

per month

 

Sub Total

 

26,700

 

 

 

 

 

 

Grand Total ( Adding all the above sub totals)

 

209,300

Some Notes on Capital:

We have rounded up the figures of items

Prices could vary depending on where you are buying from. But the above is a good guide

How much you pay for the premises will also vary with your location. And so will the renovation you need and the deposit requested.

Working capital could also vary. But even in the worst case scenario have at least two months working capital.

The cost of the washing machine could also vary depending on the features, brand and supplier.

Download A Laundry Business plan - Kenya PDF➥

Operations

In a nutshell the basic operations in laundry involve receiving clothes from customers, washing and ironing them, then the customers picking and paying. But let us look it into detail into actually what happens.

A customer brings a pair of cotton trousers and blue short. The first thing is to take clothes have a look at them, you know look at their conditions if they are torn or have some permanent sustain. This is so as to guard against the customer coming back later and saying the clothes were torn or stained at the laundry and that you should compensate him. You definitely do this without telling the customer that’s actually what you are checking lest he is disappointed that you insinuate dishonesty in him.

Second is to mention the price, and ask the customer whether he wants extra services such as ironing. It’s good to display the prices clearly. If you agree on the price then record the clothes details in the black book and the receipt book. You give the customer the original receipt and you are left with the carbon copy. Some customers will pay the full amount upfront, others a

deposit and the rest when they pick while others will pay the full amount as they collect the clothes.

Be flexible to all these payment methods but it’s always better if the customer pays the full amount or some amount upfront because this will make the customers come collect the clothes and not use the laundry as a store .

Next thing is to ‘label’ the clothes. This will depend on the method you are using, but you could get a sticker (the small stickers used to display prices in supermarkets), wrap it with cello tape and then staple it. If possible it’s advisable to do this when the customer is there to avoid confusion when he leaves. But if you are better organized then you can do that shortly after the customer leaves.

At this point is where you should ask when the customer wants to pick the clothes. You could give the customer a free say in this or set some Service Level Agreements (SLA(s)). The latter is where you say if you bring the clothes today the earlier you can pick them is tomorrow or some other reasonable time.

SLAs give you more control and less pressure to work with the customers schedule which are not practical at times. If you give customers so much allowance then you will at times be under excess pressure to deliver as agreed. The best way is to set some SLA, and then if a customer shows intent to pick the clothes earlier than your standard time then you can allow it depending on the circumstances and workload. Standard SLAs also help you to plan and manage your work better. For example you can schedule to wash in the morning, dry mid morning, iron in the evening or other such timetable that helps you satisfy customers without so much unnecessary stain which could compromise the quality of your work and profits.

There are various SLAs used by different laundries. For some laundries if you bring the clothes in the morning they tell you to collect in the afternoon, or the following morning. Others give two days, for some if you bring in the afternoon they assure you the clothes will be ready for collection in the evening. Set as short a SLA as is profitably possible.

Now that you have the clothes the third major thing is to sort them out. You can sort them by fabric, dirt, colour, running colours and other such. For running colours it’s preferable to use a bucket and hand wash. The risk of soiling other clothes is too high.

Once you have sorted the clothes you prepare the detergents and initiate the washing process. You load the clothes in the machine then start. Modern machines will alert you when you overload and they won’t start. Overloading may also affect the durability of the machine and the quality of the washing. Like we mentioned at the start there are machines where you can set how long you want the clothes to be cleaned, while others will alert you when they perceive the clothes to be clean. Use the features as need be.

Once the clothes are clean and rinsed, you then decide whether to dry them out in the sun or use the dryer. When the weather is favourable and you have some lead time in trems of when the customer should collect the clothes then you can dry them in the air, this will reduce your electricity costs. Of all the parts of a washing machine the dryer consumes the most power, and

if you are able to save on it the better. But when you have to deliver within a short time, you want to work faster, and when the weather is not good for drying clothes then you have no option but to use the dryer.

Remember not to trust the washing machine 100%. Once you wash the clothes then it’s important to check, just to confirm if they are totally clean.

The other thing is you should have knowledge of removing various stains, for some customers will come and say my shirt has this and this stain, and they expect you the expert to know what to use to remove the stain. Some machines will have stain removal options, for instance if it’s an oil stain the machine will wash the item in high temperatures and the stain melts. You can Google the information since there are a hundred and one stains, and various methods of removing them. Like using turpentine to remove paint stains.

Once the clothes are dry, and then iron those that need to be ironed. When that is done fold all the clothes. You could stack them by day or type of clothes. Choose a method that makes it easier for you to retrieve them when the customer comes.

Now that the clothes are ready you can alert the customer via text or call to come and collect them. They should come with the receipt, show it, you pick the clothes and give it them. You should be left with the receipt.

In Summary:

The above is just a general operations guide of the laundry business. Nothing is cast in stone and you can modify as need be. Just to summarize here are some key things to keep in mind:

-Remember the customer could have washed the clothes themselves or hired someone to help them, but they came to you because of time limitations, quality of washing or costs. . So at the very least meet their expectations.

-Look and note the conditions of the clothes before fully accepting them from the customer. If the clothes have a major defect like a tear or stain let the customer acknowledge before you accept them.

-Note and label the clothes within a short time of receiving them. So as not to keep the customers waiting you can give the receipt then you are left labeling.

-It’s a good habit to give the customer a receipt, rather than assume you will remember him when he comes to collect.

-Set your own SLAs but be flexible to accommodate special time requests from customers. You could, if the competition and the target consumer allows, charge a premium for faster ‘express’ service. When setting your SLA try to make them as short as possible, of course without increasing your costs or messing your bottom line.

-Sort clothes before washing them. This will help you get better results and avoid damages that could come with things like running colours.

-Even after removing the clothes from the machine look to confirm that they are clean. If they are not you could hand wash them.

-To save on electricity you can dry clothes out in the sun rather than use a dryer. However go for this option when you have time enough to meet your SLA or whatever time you agreed with the customer.

-SLA can help you have a method around your washing, rather than washing clothes as they come, you accumulate enough and wash at a go. For example you can say all clothes that were brought in the morning will be washed at midday, dried and ironed in the afternoon. This could help save costs or manage time better.

-Try research and discover ways to remove different types of stains.

Revenue

Costs & Revenue

The major costs in a basic laundry business are:

Rent

Manpower

Electricity

Water

Detergents

Marketing

While the main and only source of income is from washing clothes.

Thus directly your revenue will be influenced by the costs and the income that you get.

The income you get is a function of the number of clothes that you are able to wash every day. Assuming , and almost rightly so, that on average people within an area wear the same quantity of clothes then income will be a function of foot traffic. The more customers you are able to attract the more your income. If someone wears five shirts in a week, that is not likely to drastically change in the short and midterm despite changes in income levels, price, presence of more laundries / washing options or any other such factor.

So the key thing that will influence how much you get is how many people you are able to attract to your laundry. And not only attract but trust you so that they can bring more of their clothes even those they would have preferred to wash themselves.

But before we explore this more, let us look at some real figures from a laundry in South B, in a neighborhood which is just emerging from low end but not yet so called mid class, let’s say lower mid class.

Revenue Example

Location

South B in a lower middle class area,

 

neighboring a slum

Year Started

2014

Rent - Standard Room

Kshs.6000 per month

Manpower

Owner plus one assistant. Paid Kshs.200

 

everyday

Facilities

LG combo washing machine with washer ,

 

spinner and dryer

Electricity

Average of Kshs. 2500 per month

Water

Illegal connection – Kshs.200 per month

Detergents

Average of Kshs.80 per day: Uses Ariel,

 

homemade detergents and stasoft fabric

 

softener.

Miscellaneous Expenses

Kshs.1200 per month

Opening Hours

7am to 7pm

Charges – per piece of clothes

Shirt (Normal ) – Kshs.20 to Kshs. 30

 

Trouser – Kshs.20 to Kshs.60

 

Suits – Starting Kshs.250

 

Blanket – Kshs. 100 to Kshs.300

 

Suits – Kshs. 250

 

Duvet – Kshs. 300 to Kshs.600

 

Price range depends on size , ‘heaviness’ of

 

the item

Average Daily Revenue

Kshs.2200

Average Revenue Range

Kshs.1200 to Kshs.2200

Average Monthly Expenses

Kshs.18,100

Average Monthly Gross Profit

Kshs.47,900

Average Monthly Gross Profit Range

Kshs. 26,000 to Kshs. 50,000

Actual Revenue in February 2016

Kshs. 27,300

Notes on this particular laundry:

The owner is a little eccentric and reluctant to open the laundry if he is not available personally.

The casual worker is paid on a daily basis at a rate of Kshs.200 per day.

Monthly electricity bills range, and sometimes get to a high of about Kshs.4000. The owner claims when his is not there and the assistant running the laundry shop then the power bill goes up. The most likely reason could be that the assistant prefers to use the dryer rather than use the sun. And probably just wash a few clothes, less than the capacity of the machine, at a go.

The washing prices are not fixed and there is room for negotiation.

The highest revenue is recorded during the weekends

From our survey the above is representative of other laundries targeting the same class customers. The daily revenue range was between Kshs. 800 and Kshs.3000, with a mode of Kshs.1800.

Revenue in the laundry business is influenced by:

Location – Like we have mentioned foot traffic has a big influence on the revenue you make from your laundry. The higher the foot traffic to your laundry shop the more revenue you will make, keeping everything constant.

Foot traffic will be a function of locating in the right area; this in terms of population numbers, lifestyle and target market. Preferably the best locations are urban, with more single individuals (as opposed to households) and with income of between Kshs.15, 000 and Kshs.50, 000.

Other great locations include those with a critical number of people in relatively low end careers but which require, out of law or necessity , people to wear uniform or some specialist clothing. Think of a laundry at a bus stage where touts and drivers can leave their uniform to be washed, garages where mechanics wear overalls, and other such situations. These are the kind of clothes some will prefer to wash in other places other than their homes. Drivers and touts, especially the single ones, are at times short of time them working from early to late evening. An area with a density of such careers makes a great location too.

Locations with big student population also work. But in such you have to charge what could be considered slightly below market rates. To get an idea of the number of single households you could look at the kind of houses available in the area say single, bedsitters and one bedroom. Some estates may not fit in exactly as for the single but tend to attract a youthful working population. Say an estate like Roysambu in Nairobi.

Pricing - To you, the laundry owner, price should be good enough to cover your costs and remain with profit. To the customer the price should be attractive enough to dissuade him from other options that could be available to him and cover the convenience that you are offering.

Thus if you don’t get the price right you might not be able to attract enough customers to break even, or simply cover your costs. When deciding what to charge consider your direct competition as in other laundries, indirect competition as in mama nguos, washing themselves and what you feel is the value of your service to the customer. You don’t have to charge equal or lower, your prices could be higher depending on the worth that you are offering and if you are able to market the value properly .Such value include ironing, same day service, customer service, stain removal or use of special detergents.

Pricing is also dependent on the specifics of your target market. For instance their income. You have to keep in mind what percentage of their income they are willing to spend on their cleaning. Can they pay Kshs.50 for a shirt they bought at Kshs.100? On the other hand if you are charging Kshs.20 for a shirt which costs Kshs.1000 will the consumers trust the quality of your service? And will you be leaving money on the table?

Management - Management involves the process, controls, work organization, and efforts at growth. Poor management is one of the key reasons for the collapse or poor performance of a number of laundries. Management is especially a key challenge if you as the owner are not running the businesses full time and rather have employed someone to run it business for you.

The first challenge is about the management of finances. How will you be sure the amounts stated are the actual amounts that came in that day? What if your employee does not write a receipt but still charges and washes and dispatches the clothes? What if he writes a receipt just for one shirt when he actually received three shirts? What if he cuts a deal with the customer to undercharge in return for not being issued with a receipt? Or if he understates the daily revenue and blames it on negotiations, which you allowed him to do?

There is no 100% fool proof way to prevent revenue leakages if you are not there full time , but you could put in some controls to reduce hemorrhage. Start by hiring staff with a high degree of trust. You can never be absolutely sure about how trustworthy a person is or not by looking at them but you can use recommendations and your instincts if you trust them. If you will have more than one employee you need to put one at the head, who will be responsible for the business when you are not in.

The next thing is to insist on receipts for the full amount or items of clothes. You can have a friendly but authoritative poster insisting on the need for receipts. Place it on walls where customers can see. This will not totally dissuade crafty customers and employees from not using receipts but it acts as a deterrent. Another thing is to have a central point where to put the money no matter who handles it. There are laundries where employees keep the money in their pockets, and reconcile at the end of the day. This is an avenue to conveniently forget a couple of coins in the pocket.

Management is also about how best you organize the resources in your laundry for maximum returns at the least cost. For instance by having a cleaning schedule which delivers more while saving on electricity and water costs. It’s possible to operate haphazardly without a method but you could experiment with method and see if it produces better results. Often it does.

Management will also involve how you inculcate a work ethic and good customer service habits among your staff. So that they are not only good to customers when you are present, but as a habit. And that they give their best whether you are in or not.

In the end you need to keep a keen eye on your business. If not running the business fulltime and you live near the premises visit every day. If further away and you have a trusted contact let them check on the business on a daily business. Whether you are present full time or not you need to have some controls in terms of finance and process. And since competition exists and there will always be threat of new laundries you have to work towards winning more customers. This is the kind of business that can grow very well with references and word of mouth.

Flexibility - Revenue will also be determined by how flexible you are in terms of prices and service level agreements. Say for example that your SLAs state that if a customer brings a shirt in the morning the earliest he can collect it is the next day at the same time, but the customer says that he needs the shirt in the evening because he is travelling or attending some event then you should be flexible enough to allow that.

Others will try negotiating the price a little bit if they have brought in many clothes. You could allow room for that kind of negotiations. This kind of flexibility will help you win and keep customers

Service and Customer Satisfaction - Obviously revenue will be determined by the service you offer and how customers are at the end of it. The key point of satisfaction for customers is whether the clothes are clean, and are delivered within the agreed time duration. The other will be how you treat them. The usual but sometimes ignored tenets of customer care. How you relate to them, politeness, friendly and a perceived good understanding of your work. Other consideration will be how you take care of their clothes say by the detergents you use, the softeners and even packaging after the clothes are washed.

Cost Management – If expenses re not controlled and managed in the right way they end up eating into your revenue. Cost management will start by the efficiency of the machine you use, your processes so that you save on power, water and labour costs. You could also reduce costs by buying items like detergents in bulk rather than in small quantities and on a daily basis.

Break Even Point

The breakeven point will depend on a number of factors like your location and competition. But from our survey we the break even averages 5 months. This is the point where you should start to meet all your business costs and make profit. When you open customers won’t just come rushing to you, it will be a gradual process. And the more visibility you have, the more references you develop the more you grow. You will also need to do your part of marketing.

Competition

Like we noted at the start there are various forms of competition that exist in the market. Even beyond the indirect competition say from mama nguos, house helps and semi formal washing services the barriers to the laundry business per se are low. Capital as low as Kshs.150, 000 squeezed can start the business. This means that competition will continue rising.

Demand for cleaning services in general will continue rising as urban populations expand and student numbers increase as college become devolved. And as the economy accelerates time becomes of more importance, and consumers outsource services while they grow their career or businesses. The increased demand means there will be more entrepreneurs both at an individual and professional level that will continue getting into the space.

Whether a consumer opts for this service over the other will depend on levels of trust, value that a service offers, pricing, what other options he has, quality of service, accessibility among other factors.

Factors Influencing Competition

Quality of Cleaning – How thorough clothes are washed differs from laundry to laundry. With time a laundry gains reputation on the quality of service it offers. It’s the same thing that happens with mama nguos. Within a location they gain a reputation based on how well they wash clothes.

Laundries tend to compete by positioning themselves as offering the best washing. Though it’s rare for laundries to outright market themselves as washing the clothes best, it’s an attribute that is silently promoted. Laundry owners know that if they consistently offer thorough washing then not only will customers keep coming and but will also refer other people.

Maintaining consistent level of washing is not always possible because of staff ethics, challenges in understanding how the washing machine works, over trusting the machines, wrong choice of detergents, lack of proper sorting and a keen eye. But these are things an entrepreneur can get hold of. The very basic reason customers bring the clothes to be washed is because their dirty, and if you as a laundry can’t meet this basic need then you will lose customers irrespective of what other value you offer like speed or ironing.

Speed – Like we have mentioned at times customers want their clothes as soon as possible. And if not so customers want the washing to take a reasonable period of time; they feel better when they have the clothes in their houses even though they are not wearing them immediately. So to stand out some laundries stress their ability to wash, dry and iron the clothes within the shortest time possible. Some laundries try keeping SLAs as short as possible but also leaving room for an express service which is shorter than the SLA.

Speed is able to attract a section of consumers. If there is an extra fee charged for speed then it should be fair lets it chases away customers.

Stain Removal – A few laundries have built a reputation as being able to tackle any stain. This they do by using different stain removal hacks. And with time they become known for this ability more than anything else. Consumers then reason if they can remove stains then they then it means they are also thorough in their washing. This however works if the target market appreciates the stain removal. For instance if your target market are mechanics, then stain removal might not be such a big plus. The general cleanliness is more important. On the other hand if you are targeting professional people formally employed then stain removal will be a definite plus.

Trust through Loose Branding – To build customer trust some laundries try to brand loosely. This is simple but professional looking branding. For instance by having a good signboard, a well painted and branded shops, simple uniforms and even the setting and interior of the laundry shop. This creates an illusion of professionalism which makes the skeptical consumers to trust that you are going to offer great service. This only works if your target consumer is of a relatively higher income level, if low income this could be counterproductive if it ends up giving an impression of inaccessibility and high price. But building trust is important irrespective of the location .Use appropriate methods for the target market.

Credit Facilities – In every laundry there are regular customers. Once in a while such customers will say they have no money and request to pay at a little date. To keep the customer and prevent him from going to the competition some laundries will readily agree to offer credit facilities. Credit facilities should be offered on a case by case basis, you know after making the right judgment.

Opening and Closing Hours – To have an edge over a rival some laundries open early and close late. The early opening allows those going to work to drop their clothes. The late opening allows those who work late to drop or pick their clothes. This is not the business which can exactly work with an 8-5 schedule. 7am is fair time to open, and 8am -9pm good time to close. Again this will depend on the habits of the location; say the activities or culture in the area which define if there is value in opening beyond a certain hour. Some towns sleep early and wake up late.

Picking and Delivering – Nowadays a couple of laundry shops volunteer to pick clothes from a customer’s house say on a weekly or bi weekly basis. And when clean deliver them back. This for the convenience of the customer and so that he is not tempted to go the competition. This will only be of value if the quantities are significant to cover the cost in time or otherwise in picking and delivering the clothes.

Price – There is price based competition. Sometimes within the same estate there could be price differences of between Kshs.5 and Kshs.10 for lower priced items. When the numbers of clothes are many then this adds up to a significant amount. It’s not advisable to out rightly compete on price; price at what is standard for the location and then think of extras and value. Those will keep the customers. But at whatever price you should match your competitors in terms of service.

Storage – Some laundries located in areas with a lot of activity such as bus stations and markets allow customers to store clothes there and come to change. Say a customer has 5 shirts and he leaves them at laundry, he comes everyday to change, wear the clean one and leave the dirty one to be washed. Some will offer this free of charge while others will charge customers Kshs. 300 to Kshs.500

Other Extras – Other extras used to compete include folding the clothes neatly, using fabric softeners which give a soft fresh feel, packaging the clean clothes in neat polythene bags and once in a while giving free hangars.

Opportunities, Survival & Critical Success Factors

As perhaps is clear by now on the face of it opportunities exist in the business. But as with opportunities a lot depends on the specifics of the area:

Population

Income

Habits

Direct and Indirect Competition

Critical Success Factors in the Business and which will influence its survival are:

-Choice of location

-Management

-Service

-Marketing and ability to compete and offer value

Market Entry

There are several ways that you can enter the market.

-Opening in a highly visible premises rather than a back street. Not that a hidden low rent shop won’t be able to attract customer, they can but you will need to do more to create visibility and gain customers.

-Marketing your value addition – Most of the marketing and advertising used by laundries is plain and general often in the lines of “Quality Service”. Displaying a more specific value you offer will definitely attract attention: Same Day Washing and Ironing, We clean all stains: Oil, Ink, Paint, Name it we do It., 24 Hour Service – Wash, Dry, Iron and Fold. Shirt washing and Ironing @ Kshs. 20

-And other than the safe marketing, you can use aggressive marketing in terms of posters and leaflets. Ideally you are supposed to pay the county government for these but if you are crafty you can have someone distribute leaflets early in the morning or late in the day when county officials are not likely to be around. Another way is to place small signboards at the entrance of flats. Think of how Gas Retailers do it in an aggressive manner.

-Better Branding that stands out – Say like on the outside, billboards

-Remember if you are going to be operating in an estate where mama nguos are preferred you have to offer extra value that will make it a better option to use your laundry other than the mama nguos.

Manpower

Running a laundry is a low skill job. Operating the machine and washing do not require any formal training. But for purposes of professionalism, communicating, and record keeping it would be preferable to hire someone with at least high school education.

Of all the skills in laundry ironing is the tricky one and which requires some level of expertise. The expertise can be learnt on the job but it’s better to have someone good with it already.

Other key considerations like with any business are trust, some work ethics so that they are dedicated to give their best, open and close on time and have good customer care skills.

The number of employees you require will depend on the size of the laundry. But at the least you could have two. One to mind the washing as the other does the ironing. At times one worker can handle all this, but in a busy shop it will be overwhelming leading to poorly washed and ironed clothes. To prevent against monthly commitments when starting one laundry hire staff on a daily basis, paying them between Kshs. 150 and Kshs.300 or whatever appropriate amount depending on the local market rates, responsibility and work involved

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