Entrepreneurs typically do not consider owning a dry cleaning business but they definitely should. Buying a dry cleaning business can be quite profitable. They have low operating costs and high profit margins. This type of business also has the ability to increase current revenue by adding additional services like tailoring, clothing repair and preservation, as well as pick-up and delivery options.
Dry cleaning businesses generally have low operating costs as long as the equipment is paid for. Occupancy and payroll costs are the two largest expenses owners need to be concerned with.
Payroll is a controllable expense and can be eliminated altogether if the owner works at the business full-time. Another benefit to owning a dry cleaning business is the limited hours of operation. You don’t have to staff the business 24/7 like some other businesses.
Also, some dry cleaning businesses solely act as drop off locations and the clothes are actually cleaned at an alternate facility which helps keep operating costs low.
Make sure the dry cleaning machinery, boilers and shirt laundry equipment are modern and in good condition. Verify that the equipment meets state and federal environmental guidelines. Having to replace equipment once you take over will increase your expenses.
A great advantage to owning a dry cleaning business is the high profit margins. Mark up on services is between 150-200 percent. Provided the equipment is paid for, the cost to actually clean each item you take in will be low, leaving you with a nice profit. Consult with the current owner on the number of regular customers. Loyal and repeat customers will further contribute to ongoing profits.
Another advantage to owning a dry cleaning business is that they possess the ability to generate additional revenue by adding services. Dry cleaning services include tailoring, clothing repair, clothing preservation as well as pick-up and drop-off service.
Usually dry cleaners have the additional space in their stores to allow for tailoring and clothing repair and should definitely take advantage and make use of the space to increase revenue.
When it comes to clothing preservation, this service does not apply just to wedding gowns anymore. Customers are having military uniforms, baptismal outfits and other life-event clothing preserved. Preservation can bring in an additional $200-800 per article of clothing.
Pick-up and drop-off service, also known as route service, is growing in popularity. Customers are willing to pay for the added convenience of having their dry cleaning items picked up, cleaned and returned to them. Planning your route strategically can save you money on the cost of fuel.
A dry cleaning business is a good investment if the equipment is up-to-date. Low operating costs, high profit margins and additional revenue sources means that the dry cleaning business is cleaning up when it comes to profits.