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Cleaning clothes is time-consuming work and requires lots of effort. On the other hand, there are certainly expensive and delicate garments that require dry cleaning. This is why the laundry business market is in high demand and is very profitable. 

Given below is a laundry business plan that will help you understand how to get started. 

A Step-by-Step Guide to Starting a Laundry Business

Like any other business, the laundry business also requires a proper business plan to help the entrepreneur grow and expand. Here is a step-by-step guide for starting a laundry business:

1. Initialising the Laundry Stall Setup 

First, you have to decide what kind of laundry shop you want to open. A traditional shop is where people send their clothes just for ironing, but advanced laundries provide all-rounder washing solutions. Also, some western-inspired laundry services are also available nowadays, where everything is self-service based.

2. Planning and Targeting Audience

Customer analysis is crucial for any business. Before starting a business, you should have an idea of potential customers and plan the marketing strategy accordingly. The usual customers of the laundry business are working people, students living away from their homes, old people, etc. 

Understanding your customers will also help you determine what kind of service you should offer. For example, if the target audience consists mainly of old people or working people, a self-service-based establishment may not be as successful.

3. Ownership of Laundry 

The next step is to buy a commercial property that can offer a high ROI. For this, the owner should conduct thorough market research by analysing local businesses and how they work.

 4. Location 

Any random location will not be profitable for opening a laundry, so selecting the right property location is very important. Any residential location with working people and students in urban areas may be the ideal place for this.

Keeping these facts in mind, choose a location wisely where the laundry business can bloom. However, considering the price is also important as the price can be high in many of the popular places. 

5. Establishment

After finalising the property, it is time to establish the laundry. You will need a signboard and marketing strategy to attract customers for your business. By distributing flyers or putting up ads in coffee shops or outside colleges, you can advertise your business. 

In the present day, when it comes to marketing, online ways top the chart. Create a website and social pages for your shop. Create an online laundry business plan to keep track of your business’s digital performance. 

6. Buying Machinery 

Today, every newly opened laundry has self-service functions and automatic machines, as the manual ones are not cost and time-effective. The equipment needed for laundry depends on its type. But some basic equipment that you primarily need is: 

  • Washing machines 

  • Dryers 

  • Soap dispensers 

  • Laundry carts and baskets 

Apart from these, there are several additional things you need to equip, such as security cameras, computers for billing, card payment machines, etc. Applying for a business loan to buy the machinery and products will help you cover the costs affordably. 

 7. Investment/Raising Funds for the Laundry 

It requires a good amount of money to start a laundry business, as you need to buy or rent a commercial property. You also need funds to buy the equipment, which is usually pretty expensive.

Thankfully, you can opt for a business loan from any renowned lender. Choose one that offers a lower interest rate and minimum processing charge to keep the costs low.

 8. Documentation 

There are several important documents you need to get prepared before moving on to any other steps. This is a crucial part of the business plan for laundry services as it can save you time in the application process.

 9. Registration

Once you have your documents ready, next comes the registration part. You have to register your laundry business as a legal entity with the Ministry of Corporate Affairs (MCA). It is not necessary to go to the main office for registration, as you can also apply online. 

Here is a brief explanation of the registration process: 

  • Step 1: Get a Digital Signature Certificate 

  • Step 2: Apply for name approval 

  • Step 3: Obtain Director Identification Number (DIN)

  • Step 4: Register as a new user at the official MCA website and create an account 

  • Step 5: Apply for Online Company Registration 

  • Step 6: Submit documents with MCA 

10. Licence and Permits 

The permits you need for your laundry business depend on the location of the operation. In addition to a general business licence, you also need specific licences like a water pollution control permit or a health department permit. It would be best to hire a legal consultant to help you get the licence and necessary permits hassle free. 

11. GST Registration 

Earlier, every business had to spend a big part of the working hours calculating, updating and maintaining tax payments every year. To ease up the process, the Indian Government has enforced GST. 

You have to register your business under the GST regime to get a GST number. GST registration is a very crucial part of the laundry shop business plan. Every bill you issue to your customer must have a shop address, GSTIN, tax structure, and 'Tax Invoice' label. 

12. General Insurances 

Lastly, you have to cover your business with insurance to financially protect you from any losses. Your insurance covers depend on your business needs and the location of your shop. Here are some common covers that you must have irrespective of your shop's location:

  • Hazards coverage 

  • Workers’ compensation policy 

  • General liability insurance 

  • Professional liability coverage 

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Eligibility Criteria to Get a Loan to Start a Laundry Business

If you want to take a business loan to start the laundry, you should be aware of the eligibility criteria set by the lender. This is an important part that you should know before making a business plan for laundry. Here are the basic eligibility criteria for business loans:

  • You must be an Indian citizen

  • Self-employed individuals aged between 25-65 years are eligible 

  • Business units like private limited companies, partnerships, and limited liability partnerships are eligible for this loan

Documents Required to Get a Loan to Start a Laundry Business

While making the business plan for laundry and planning to apply for a loan, you should know what documents you will need to submit beforehand. There are several papers you need to submit as you apply for a business loan.

Here is a list of common documents required to apply for a business loan. 

  • A valid ID proof such as a passport, Aadhaar card, PAN card, driving licence

  • Proof of business such as service tax, sales tax, VAT, excise registration, income tax returns, memorandum, PAN ID or municipal tax bill 

  • Address proof (telephone bill, ration card, electricity bill, passport, trade licence, sales tax certificate 

  • Financial documents, including last two years’ ITR, 6 months’ bank statements, last 2 years P & L and balance sheet audited by CA

  • Proof of age such as passport, PAN card, voter card 

Here are several other documents required specific to the applicant type. 

 1. Self-employed Non-professionals

  • The sole proprietor's registration document

  • Proof of individual identity

  • GST returns of the last 3 years

  • Income tax returns of the last 3 years

  • Last 6 months' bank statement of the primary banker

  • Copy of periodic stock 

  • Creditor's statement for the last 3 months

 2. Self-employed Professionals 

  • Identity proof of the sole proprietor: PAN card, Aadhaar card, driving licence, passport, voter card

  • Proof of address: ration card, driving licence, passport

The laundry business is becoming more popular day by day and holds an unlimited potential to generate profits. To start a laundry business that will succeed in this competitive market, you should have a proper laundry shop business plan. However, do not forget to conduct thorough research and learn more about the industry before investing.  

FAQs for the Laundry Business Plan

There are many types of washing machines, depending on the load and capacity. Some of the machines you need for this business are commercial washing machines, stacked washer-dryers, industrial washing machines, light commercial washing machines, coin-operated machines, etc.

The start-up costs will depend on several factors, such as licensing fees, equipment costs, and more. Depending on this, you would need to invest at least ₹10 Lakhs or more. 

Yes, there is a high demand for laundry business in India. Especially in the urban areas, where many people have 9 to 5 jobs and students doing higher education, the demand for laundry has risen rapidly.

You do not necessarily have to register. However, registering your establishment under the MSMED Act or the Shops and Establishment Act will make offers via government schemes more accessible. It will also ease the process of taking a loan from any financial institution.

Dry cleaning service is the most profitable operation in the laundry markets. The profit for this operation can go as high as 150% of the operating cost. Even though some people do not need regular cleaning services, dry cleaning is a common service that everyone needs at some point.

Yes, location is one of the main factors for a laundry business to succeed in its market. If the business is not easily accessible or located in a remote area, it will not be able to generate enough sales. The ideal location for laundries is in urban areas.

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