How to Start a Profitable Laundry Business in Australia: Tips and Tricks

To meet the annual demand of over $3 billion in Australia's laundry and dry-cleaning industry, there are more than 4,600 laundry companies in operation. If you're interested in starting your own laundry business, this guide will cover everything from conducting initial research to managing legal documentation and growing your client base. Keep reading to learn how to get started in this industry.

Before starting a laundry business, it's important to consider the type of business model you want to pursue. Here are the four most common types of laundry businesses:

1. Industrial laundry: This model deals with large batches of laundry from clients, such as hospitals, hotels, or spas. To complete these jobs, industrial tunnel washers or heavy-duty washing machines are required.
2. Self-service laundromats: Laundromats allow customers to come in and do their own washing. Self-service laundry shops can either be fully automated or employ staff to provide customer service.
3. Laundry and dry cleaner shop: This involves either opening your own laundry shop or partnering with another shop owner to offer a drop-off washing and dry-cleaning service in their facility.
4. Home pick-up and delivery service: This model involves picking up laundry directly from the customer's home and dropping it off when it's finished.

Consider getting certifications and training

To start a laundry business, certification is not mandatory, but if you lack experience in this industry, it may be beneficial to take a training course. The Australian government provides training programs for individuals interested in acquiring the necessary skills to operate a laundry and dry-cleaning business, which include:

• Certificate II in Laundry Operations: Designed for beginners with little or no experience in laundry operations. This program covers essential knowledge on laundry business operations, such as identifying textiles, using washing machines, and delivering excellent customer service. The average course fee is $1,550, and the program duration is approximately 12 months. No entry requirements are necessary.
• Certificate III in Laundry/Dry Cleaning Operations: This program is intended for those with some prior knowledge of laundry operations. It encompasses managerial tasks involved in running a laundry business. The average course fee is $2,200, and the program duration is approximately 19 months. No entry requirements are necessary.
• Certificate IV in Laundry Operations and Supervision: Individuals who have completed a Certificate III may earn credits for this program. The course covers advanced topics such as assessing and improving existing laundry practices, as well as providing leadership and guidance to employees.

Choose a business structure

When starting a laundry business in Australia, you must choose a suitable business structure. There are three common business entities available, which are:

• Sole Trader: This refers to a one-person business where the individual is responsible for all aspects of the company.
• Partnership: This option involves two or more people who choose to start a business together, with each member sharing equal responsibility and control of the company.
• Company: A company is a separate legal entity owned by shareholders. Registering as a company can provide protection against personal liability.

After selecting the appropriate business structure, you must obtain an Australian Business Number (ABN) registration. If your projected annual income is more than $75,000, you must also register for the goods and services tax (GST).

Create a business plan

At the beginning of your laundry business venture, creating a comprehensive business plan can help you avoid many problems in the future. It can also be crucial if you plan to seek funding or attract investors. Your business plan should be concise and straightforward, but should include the following essential elements for setting up your laundry business:

• Business Description: Clearly define your laundry business, including how it will generate revenue and its associated costs.
• Market Analysis: Identify your potential customer base and competitors in the laundry industry.
• Risk Assessment: Evaluate potential weaknesses and threats, such as the security of your rental contract and any upcoming national or local policy changes that may impact your business operations.
• Marketing and Sales Strategy: Develop a plan for promoting and selling your laundry services.
• Projected Goals: Outline your long-term business goals, including how you envision the company's growth and success in one year, five years, and ten years.

Get any legal documents you may need

Before starting a new business, there are various legal documents required for it to operate. The necessary documents may vary depending on the type of business structure you choose. For instance, if you decide to start a laundry business with someone else, you may require a partnership agreement. You may also need a share certificate to establish legal ownership of the company. Additionally, when hiring your first employees to assist with your laundry business operations, you'll need an employment agreement.

Compliance: What you need to know

Meeting The Australian Standards for Laundry Practices may be necessary for some clients. Although it has not been revised for a while, it remains a benchmark and industry reference. As for running a dry-cleaning business, it's essential to comply with local regulations. For example, in Victoria, disposing of dry-cleaning waste in the sink, toilet, drain or rubbish bin is prohibited. Similarly, in New South Wales, compliance with the Protection of the Environment Operations Act 1997 is mandatory. Additionally, demonstrating your business's commitment to eco-friendly practices by implementing an environmental policy may appeal to some clients.

To ensure that your business is legally compliant with local and national regulations, you can seek the assistance of online legal services such as Sprintlaw for advice and confirmation.

Buy the right equipment and software

To interact with customers, a laundry business requires some essential equipment like a phone and a computer. However, depending on the specific type of laundry business, additional specialized equipment and software may be necessary.

Below is a list of some of the equipment you may require:

• Washing machines
• Credit card payment system
• Change/coin machines
• Vending machines
• Security cameras
• A high-quality website and/or app.

Frequently asked questions

What is the cost of starting a laundry business?

The cost of starting a laundry business depends on the type of business you are starting. If you start a small, local laundry business from home, your costs will be relatively low. However, scaling up your operations and investing in commercial washing machines will be more expensive. Another option is to consider franchises or buying an existing laundry business, with prices ranging from around $60,000 to $1.7 million depending on the location, size, and included equipment.

How profitable is a laundry business?

A laundry business can be profitable, but there are many costs involved in launching and operating one. The typical running costs include rent, utilities (water, electric, sewer), business insurance, employee salaries and benefits, advertising, and servicing of washing machines. To cover these costs and increase profits, laundry businesses may offer vending machines or other services while customers wait for their washing.

Are laundry businesses becoming obsolete?

No, laundry businesses are not becoming obsolete. In fact, according to research from IBISWorld, the laundry industry in Australia grew by 3% between 2015 and 2020.