Laundry Business Philippines: Tips to Get Started

Are you tired of being an employee, and your salary hardly sees a raise? Are you thinking of starting up a small business? You know that having a business means your income has a chance to grow. But you also know that starting a business requires a lot of resources and courage. Many of your relatives and friends may tell you that the food industry is a good income earner. However, you need to learn more about the food business. Why not start your laundry shop? The laundry business Philippines is proving to be a thriving industry today, and it only needs hard work and capability to run it.

Venturing Into the Laundry Business Philippines

With the gradual opening up of the economy after the pandemic years, a growing labor force, and a significant part of the population working on-site once again, many people are leading even busier lifestyles than ever before and have little or no time to do their laundry.

It leads to a significant demand for laundry shops to fill a market need. Customer segments of students trying to balance school and social life. Parents struggling between work and household chores and childcare, and professionals who work hard and need to rest during the weekend. Going into the laundry shop business now means entering into a profitable business, which will continue to be so in the future as long as it is handled correctly.

How to Start a Laundry Business in the Philippines

1. Always start with a business plan

All businesses are challenging, so before investing in a laundry shop, make sure you research and make a good business plan. First, know what type of customers to target. Are you targeting dormitory students, apartment residents, or busy professionals? Research if your intended market indeed demands laundry service.

Next, make your laundry shop stand out by offering some unique things. List down the services you provide in your initial business and then add those amazing things like wash-and-fold, additional fabric conditioners, pick-up and delivery, and ironing. Also, consider something like a comfortable lounge area for waiting, loyalty programs, and special discounts.

A small startup laundry shop will need a capital of at least P900,000. It must cover equipment, workers, rent, necessities, and a survival budget. Try money-saving moves, such as starting a home-based shop to save on rent.

2. Location, location, location

Now that you have your business plan written down and know how to start a laundry business, the next thing is to find the best location. Remember your chosen target market, so ensure you are accessible to them. Try to find out how many households or apartments in your area have a washing machine because chances are, there will be few. Avoid setting up too close to the competition. If you need to start home-based, consider doing pick-up/delivery or having a pick-up station. And most important of all, make sure your location (or your home) has sufficient water supply and the water provider doesn’t turn off the water supply regularly.

3. Space and equipment

We reiterate that water supply is essential in the laundry business in the Philippines, so having the right plumbing system to produce and flush out water systematically is vital since you are using commercial washing machines. There should also be proper ventilation for the safety and comfort of the customers. If your shop is self-service, provide customers with a comfortable lounge or waiting area. Also, make sure that the electrical wiring is adequate and safe.

Don’t go cheap when investing in high-quality laundry equipment. You’re looking at a price range between P20,000 and P50,000 per machine. Choose washing machines that save electricity, with a drum of decent size and big capacity, can complete a washing cycle quickly, and can operate at least 5-plus hours daily. Opting for machines with coin or card insert for self-service may cost a little more. You can still save thousands by ordering in bulk. Choose a seller that offers laundry business packages that include setting up and renovating.

If your capital still allows, invest in a dry cleaning machine, steaming, and ironing, as these services aren’t commonly offered and can be a unique selling point for your laundry business. These exceptional services earn big in high-demand seasons, such as dry cleaning during prom, weddings, and Christmas.

4. Business permits, and licenses are important

In any laundry business Philippines, you need to have the proper legal and government permits and licenses to operate. Register your laundry business with the Department of Trade and Industry (DTI) for sole proprietorships.

In addition, you must register with the Securities and Exchange Commission (SEC) for joint ventures and corporations. Your next stop is the municipal or city hall to get a business permit. A Mayor’sMayor’s Permit can be anywhere between P10,000 and P40,000. Once secured, submit the license with the business transaction form to obtain a Certificate of Registration and Tax Identification Number (TIN) from the Bureau of Internal Revenue (BIR).

Furthermore, regardless of the number, employees of the laundry shop should be registered with PhilHealth and the Social Security System (SSS). With laundry business franchises, it is the franchisor’sfranchisor’s responsibility to record the business for permits to use its name. While all these can be tedious and expensive, it is the right thing to do if the company is to operate legally.

5. Hiring employees

Home-based laundry startups may not require staff, but for sizeable laundry shops, you must hire employees to ensure the smooth flow of operations and customer transactions. You should start with a cashier/receptionist, laundry operator, and driver (for pick-up, delivery, and supplies replenishment). Self-service laundry shops can typically operate with just 1 or 2 employees.

6. Taxes and bills

Taxes in the laundry business Philippines are around 3% to 5% of the monthly income if the annual sales are below P1,500,000. For corporations, the standard corporate tax is a hefty 30% rate. Then it would help if you contended with your monthly utility bills. For an average laundry shop with five to ten machines and an air-conditioner, be ready to shelve out P20,000 monthly for electricity and P15,000 for water. It is why it is vital to purchase energy-efficient appliances. Be sure always to keep an eye on utility usage each month.

Keeping the Laundry Business Profitable

Do the marketing

Marketing means letting people know that your laundry business exists. It would be best to find ways to inform people where you are, what services you offer, and what other extras make you different from the competition. You need to talk to people, especially those who come to the shop for the first time, and convince them to be frequent customers. Post your services and price list visibly at the shop and distribute flyers/leaflets to your target market.

Record keeping

Always keep track of your expenses, payments received, and the customers. These are all critical for the long-term success of the business. Use free online tools like Excel spreadsheets and Google to manage transactions.

Buy in bulk

Before buying anything in quantity, try them to see if they meet high-quality standards. If they do, you can save a lot if you buy supplies in bulk, such as detergents, powders, and fabric conditioners.

Put in the hard work for success

Remember that opening the shop on time is essential since customers tend to allocate a specific time of their day for laundry duty. Typical business hours for laundry shops are 7 a.m. to 6 p.m. daily, with weekends being the busiest days because of high customer traffic. Consider alternate operating hours for weekdays and weekends. For instance, you can close later than 6 p.m. during weekends.

Conclusion

Starting a laundry business in the Philippines may seem daunting at first glance, but with some simple tips, you can quickly become a successful entrepreneur. From researching the laws and regulations to calculating anticipated overhead costs, you can ensure your venture will succeed. With an incubator of resources available online, such as webinars, industry associations, and governmental offices, you have all the necessary tools to ensure your launch is smooth and profitable. Heed these steps for launching a laundry business in the Philippines, and you’ll be able to create a service that will keep customers coming back for years!