Author Topic: Wash & Fold Laundry Service?  (Read 1502 times)

Kroaler

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Wash & Fold Laundry Service?
« on: November 05, 2021, 09:18:51 AM »
Ill post over on reddit also, but I wanted to post here and see.

Does anyone own or know someone who owns a business that provides this service?

The back of the napkin math looks promising and ends up something like 30% of revenue for labor 30% for overhead and the rest would be profit.  (The napkin is always far too promising)


Im not looking into running a public use laundromat, while I hear there is good money in that, its not what I want.  I want a customer facing laundry operation that also does pick up and drop off at a rate between 1.50 lb commercial to 2.25 lb residential.  Basically just advertise and build pick up and drop off routes and bring everything back to the central wash location. (Since we arent a coin based laundry mat, I feel like the leased building could be smaller / more agile and geared specifically to this purpose. 

I'm looking into this idea because its one of the hot button marketing ideas - Giving someone more time / making their life easier.  More and more people are springing to pay for convenience in their life.  Grocery delivery - maid service - Bitesquad etc etc.  It seems fair priced laundry service wouldnt be too hard of a sell for those who value their time and are looking to leverage it.  It also seems somewhat proven as what im proposing isnt a new concept.


Kroaler

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Re: Wash & Fold Laundry Service?
« Reply #1 on: November 15, 2021, 07:08:34 AM »
Ooh still no responses huh.

So I threw it all up on my whiteboard and got the following with reasonable allowance for unskilled labor. ($18/hr)

What we end up with is $2.06 /lb revenue before expenses.   The pickup / delivery cost takes about 30 cents on every lb and then 70 cents of every lb goes to the actual wash n fold process for labor, utilities etc etc.

We end up with right at a 1$/lb after the bills come out.   Some internet digging shows the average pickup is 44lb while it's only 28lb if someone does a walk in drop off.

So $1/lb profit with the upper ceiling being limited by the labor you can find and your marketing.  From a competition standpoint, many laundromats in my area do wash n fold, only 1 out of like 40 do delivery.    So the solid thing to focus on is nailing efficiency in the pickup and delivery.

Just an idea.  Who's knows if anything will come of it.

sailinlight

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Re: Wash & Fold Laundry Service?
« Reply #2 on: November 15, 2021, 11:26:33 AM »
I think it could catch on, I'd subscribe if my wife worked. The only thing that  might be difficult is how to coordinate pickup and delivery. Easiest for you would be to have customers leave their bags outside, but many may not want to do that, or live in an apartment where it's not feasible. But your clientele will mostly be busy working professionals so likely won't be home when your driver comes.

Not sure if you were planning on a subscription model, but I think allowing people to request a pickup, say for the next day, with just one text message would be a great idea.

maizefolk

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Re: Wash & Fold Laundry Service?
« Reply #3 on: November 15, 2021, 11:44:58 AM »
One issue I can think of is that in the long term you may end up competing with App-based laundry services which have VC money and can afford to run at a loss to show high % annual revenue growth so they can get more VC money.

I didn't realize laundry pickup/delivery was a thing until I read a funny essay about it in the NYtimes: https://www.nytimes.com/2020/01/20/style/quit-convenience-culture.html).

This was the biggest one I could find at the moment and they are only in a few large markets but they'll be under pressure to either expand to hit that critical YoY growth metric: https://www.rinse.com/services-pricing/

Kroaler

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Re: Wash & Fold Laundry Service?
« Reply #4 on: November 15, 2021, 11:47:18 AM »
I certainly think delivery is the thing to focus on. As someone else said make it ez peesy.   Automate as much as possible.  Example - a text that goes out the night before (do you have anything for us to pickup?)   The more convenient you can make it the better.   Be looking for that 1% convenience improvement everyday. 

There are sooo many laundromats in the area but they are all following the tried and true model that services lower income and collects coins. 

They don't want to do "last mile" delivery which is ultimate
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the core of this conceptual business.   I think many logistics operations find that last mile is the most difficult to get efficiency on, I imagine it's that much more of an unwanted hassle to a coin based laundromat owner who wants to collect passiveish income.

I'm open to any and all suggestions. If this happens id estimate it's about 12-18 months out from being a standalone operation and about 8 months out before I could even do some trialing of the concept.    (I've just got way too many irons in the fire).

Askel

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Re: Wash & Fold Laundry Service?
« Reply #5 on: November 15, 2021, 11:48:26 AM »
A bunch of people who read a blog written by a guy that hang dries all his clothes are maybe not the best source of insight into the laundry service market. ;)   

Kroaler

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Re: Wash & Fold Laundry Service?
« Reply #6 on: November 15, 2021, 11:51:52 AM »
One issue I can think of is that in the long term you may end up competing with App-based laundry services which have VC money and can afford to run at a loss to show high % annual revenue growth so they can get more VC money.

I didn't realize laundry pickup/delivery was a thing until I read a funny essay about it in the NYtimes: https://www.nytimes.com/2020/01/20/style/quit-convenience-culture.html).

This was the biggest one I could find at the moment and they are only in a few large markets but they'll be under pressure to either expand to hit that critical YoY growth metric: https://www.rinse.com/services-pricing/

There is also sudshare.   They operate at $1 /lb.   

I actually speculated that for market trialing I could sub out my work to one of those app based operations.   I think it would be like uber, ultimately the individual owners will see they are losing money.

So it doesn't seem to be the venture cap money that runs at a loss, but more like the suppliers on the app.  From my calculations they can't run profitable at 1/lb.   I imagine there would be some turn over. 

But an excellent point.  I dont want to come across as dismissive of it.

SeattleCPA

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Re: Wash & Fold Laundry Service?
« Reply #7 on: November 19, 2021, 10:52:11 AM »
Random suggestion...

In your business planning, you want to understand how the recovery startup business employee retention credit works.

That might play into your timing....

More info in this thread: https://forum.mrmoneymustache.com/entrepreneurship/psa-that-'recovery-startup-business'-employee-retention-credit-equals-$100k/

Kroaler

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Re: Wash & Fold Laundry Service?
« Reply #8 on: November 19, 2021, 05:01:40 PM »
Do you only do local accounting work? 

Idk if accounting works more federally or if it's like law and med that needs a setup in each state they practice in.

Reason - I haven't found an accountant I like yet.

Sandi_k

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Re: Wash & Fold Laundry Service?
« Reply #9 on: November 19, 2021, 07:42:04 PM »
We used such a service when we were renovating the lower level of our house a few years back.

I selected the laundromat based on two things: drop off hours, and whether they accepted plastic. A surprising number ONLY accepted cash, and I am not good at carrying cash regularly.

I found a place near work, where the dropoff window started at 7 am, and the pickup window ended at 7 pm. Perfect!

They allowed me to bring my own hangers (small discount) and my own baskets. DH's clothes went in the "fold" basket, and my clothes went into the "hang" basket. Two baskets averaged ~ $30 every few weeks.

Worth every penny.

SeattleCPA

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Re: Wash & Fold Laundry Service?
« Reply #10 on: November 20, 2021, 06:47:14 AM »
Do you only do local accounting work? 

Idk if accounting works more federally or if it's like law and med that needs a setup in each state they practice in.

Reason - I haven't found an accountant I like yet.

Business tax accountants serve clients across the country... and for a simple reason. A multistate business (more and more common in the digital economy due to things like Amazon) files tax returns in a bunch of states.

Ideally you find someone local who "specializes" in situations like yours.

BTW I'd  be happy to look at your situation. I'm not going to post contact info here because that surely violates the spirit if not letter of forum policy. But you can track us down via the blog...

Kroaler

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Re: Wash & Fold Laundry Service?
« Reply #11 on: November 28, 2021, 01:01:05 PM »
We used such a service when we were renovating the lower level of our house a few years back.

I selected the laundromat based on two things: drop off hours, and whether they accepted plastic. A surprising number ONLY accepted cash, and I am not good at carrying cash regularly.

I found a place near work, where the dropoff window started at 7 am, and the pickup window ended at 7 pm. Perfect!

They allowed me to bring my own hangers (small discount) and my own baskets. DH's clothes went in the "fold" basket, and my clothes went into the "hang" basket. Two baskets averaged ~ $30 every few weeks.

Worth every penny.

Somehow I missed your reply! Thanks for providing the data point.  I think convenience will be key.  I own another customer service business and always looking for convenience improvements is the biggest difference for why we are overbooked on clients and I can drive around town at any time to 4 competitors and they aren't booked completely.

Just little stuff - like we are open till 8pm while others close at 5.  How the fuck is someone supposed to buy something from you if they don't get off till after 5 and you close at 5?

I definitely want to add a sustainable option at every turn where possible.  Re uses hangers and bags etc etc for frequent customers.

For pickup, you could pretty much just have them leave the bag/container out as long as it's in a dry place and for extra peace of mind, offer to replace any lost, damage or stolen items up to X amount.  If X becomes too much of a budget item then reevaluate that policy.   Heck for frequent customers you could give them a weather proof tote to use if their exchange place (porch etc) isn't weather protected.

Villanelle

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Re: Wash & Fold Laundry Service?
« Reply #12 on: November 28, 2021, 01:55:27 PM »
There was as service that did this in my old neighborhood.  Occasionally when I'd go for a walk, I'd see laundry hanging on someone's door.  (It was a old downtown area where front doors are basically right on the sidewalk.)  I think it was clean stuff because it was nicely hung.  The group was also discussed in my Buy Nothing spin-off group.

Would you have set pick-up/drop-off days for certain areas to keep down your driving costs and time? So if I live in the northeast quadrant of town, I can only leave it out on Tuesday and get it back on Thursday?  Or can I pick my own days?  Is it s subscription (or is there a discount for committing to something weekly for a term of several months)?  Would your drivers drive company vehicles or their own, and have you factored insurance for that into those costs?

And do you plan to work the cleaning line, or hire it all out?  Are you willing to fill in when someone flaks, quits, or calls in sick?  With lower paying, relatively unskilled labor, finding reliable long-term labor might be one of the biggest challenges.  It sounds like you would be paying in the higher end of the spectrum, which will help, but having a plan for when someone doesn't show up and you have pick ups to make and laundry that needs to be processed, is probably necessary.