How to Start a Laundry Pickup and Delivery Service Business – 7 Actionable Steps

The worldwide laundry care sector is forecasted to reach 405.36 billion dollars by 2031. 

This number will only go up as more and more areas around the world are urbanized. Such numbers make it clear that laundry services are highly lucrative, making it a good business option. 

However, there may be various considerations and challenges you must be ready for before you venture into it.  

For example, this one Reddit user emphasized the importance of protecting your equipment from premature wear by advising,

“Decide what items will not go into your washer or dryer and be firm with clients about it. Like shoes, heavy quilts, comforters, and rugs.”

Then there’s another contributor who had suggestions regarding pre-treating heavily soiled items:

“Do you have a slop sink? You could pre-rinse the patch workers’ outerwear.”

To answer all such queries and guide you through how to start a laundry service business, we’ve got this exhaustive guide. 

So, stay tuned to find out.

Why is Starting a Laundry Delivery Business a Good Idea?

Before jumping into any business you must understand if it is the right fit for you. A great way to do this is to look at the benefits of a business and see if they align with your goals. Since a laundry business does not require a lot of things to start, it is easy to understand its profitability.

1. Easy business model

Taking care of clothes and delivering them is as simple as it gets. While a laundry business has its own share of difficulties, it is still easier than most local companies. Starting a laundry business is indeed very simple; the real challenge is growing a laundry business. 

Growing a laundry business requires more tools, employees, and plans. Even though you operate a small laundry business it can still be a very profitable venture. This is all because of the opportunities you can tap into.

2. High demand

With the rapid global modernization, everyday time-consuming tasks start being outsourced to businesses. One such task is doing the laundry. Even if you live in a tiny town, you are sure to run into people who would gladly use your laundry services.

The demand is also very diverse. The laundry market might seem narrow, but the reality is quite the opposite. There is a market for everything from laundromats to dry cleaners, and it will only expand and create diverse options with time.

Such an open and booming market is a dream come true for any business. Though for a laundry service business, it is very much real. However, you must start your own laundry business before your local market gets too saturated.

3. Low cost of entry

It doesn’t take much to be a successful laundry delivery service as the cost of entry is limited to washing machines, laundry detergent, and materials. This fact also makes it clear that laundry services are also highly reliable businesses.

Given that you plan to start small, you can make laundry service operational for as little as 2000 dollars. It’s obvious that you wouldn’t be able to have an empire with that amount, but it is still a start.

These reasons make it easy for your laundry business to flourish. If you can handle the responsibilities of a laundry service business and keep growing, making a profit should be a cake walk journey.

7 Actionable Steps to Start a Laundry Pickup and Delivery Service

As previously stated, you will have to act fast before the market gets more competitive. This is why you need clear and simple actionable steps that you can follow to start your own laundry delivery service.

Step 1: Pick a niche 

Picking a niche or specialization early on allows a business to stand out more from its competition. At first sight, it doesn’t look like there would be any variety in laundry services. It’s not the truth, though.

Your laundry business can be of various types, such as a dry cleaning business, an industrial laundry care business, or a hotel laundry service.  

Analyze your local market to see if it is big enough to accommodate specialized laundry services. You would not want to spend a lot of money on equipment only to realize that there is zero demand for your services.

Step 2: Get your finances in order

Before you start anything, keeping your finances in order is important so your new business can proceed without hiccups.  So, you can start by creating a business bank account first. It will help you keep your personal and business-related expenses separate. You can also opt for a credit card that can help you build business credit.

You also need to offer multiple payment methods so your customers can pick the one of their choice. When customers are not limited by the choice of payment options, they are more likely to choose your business over others.      

Another aspect of financial planning is considering expenses so you can decide how much investment you want. If you have good business credit accounts, you can use them to fulfill your needs.

You can also consider raising money from individual investors interested in your business plan. The most preferred way is simply saving money yourself and starting the laundry delivery service when you are ready.

Step 3: Register your business

To legally operate your business, you need to register your company as a legal business entity and obtain the necessary permits. There are many ways to go about registering your business. However, most laundry delivery businesses register their business as either a sole proprietorship or an LLC.

There are pros and cons to all forms of registration. So, you must determine which one is right for your business. If needed, you can take the help of a legal counselor. Ensuring you handle this step with care will save you from any potential issue that might affect registered businesses. 

Step 4: Get the proper permits and licenses

While your license and permit requirements depend on your state, you will always need a general business license. Plus, you may need different licenses like a health department license or water pollution control permit.

For pickups and deliveries, you may need licenses for your fleet vehicles as well. It is always a good idea to consult a business attorney to avoid legal implications later. 

Step 5: Insure your business

Safeguarding yourself from any potential liabilities is of paramount importance. This is why getting business insurance is so important for any new laundry delivery service. Assuming that your laundry service business will not run into issues is dangerous. 

As a business owner, you need to account for every single mishap that may occur and be ready to counter them. The general liability insurance will cover most liabilities your business could face.

Step 6: Choose the right location

Selecting the right location is key to your laundry business’s success. 

Below are the factors to consider. 

• Home vs. commercial space: If your business involves pickups and drop-offs, you can consider working from home. However, if you wish to operate a laundromat business, you need to rent a commercial space.
• Plumbing & setup – Your location must have specific plumbing infrastructure, including line water hookups or structures to support them.
• Ideal customer base – Look for areas with renters, college students, or housing without in-unit laundry.
• Convenience and accessibility – You want to be at a place where your target customers are. It would be best if your laundry service business is within walking distance of them. 
• Safety & visibility – Laundry businesses are prone to theft and robberies. So, ensure your space is well-lit and easily visible to a large crowd so security risks are minimal. Having a police station nearby will be even better. 

Step 7: Get high-quality equipment

Now you have your licenses, permits, and space. It’s time to buy your equipment to make your laundry business operational. You may need around 15 washing machines and 15 dryers, though it mostly depends on your scale of operations and service area.

The other equipment you may need are: 

• Change machines, 
• The point-of-sale system, 
• Laundry carts, 
• Security cameras 
• Sanitizing chemicals
• Soap dispensers
• Tables for folding clothes
• Face masks and gloves

On average, your laundry machine can cost you somewhere between $100,000 and $400,000 based on factors, like brand and features.

How Do You Market Your Laundry Service and Get More Customers to Your Business?

There are multiple ways you can market your laundry service and gain more customers. Here are a few notable ones you can follow. 

1. Host special events & engage locally

Hosting events at your laundromat can be a good way to attract new customers. For instance, you can consider organizing your store’s anniversary or Free Laundry Day. 

Another idea is joining community groups, such as your local chamber of commerce, as it helps boost your brand awareness. Plus, you get free promotion of your services as you are a member of these groups.

2. Partner with local businesses

How about collaborating with your small restaurants, cafes, or gym/fitness centers? It allows you to cross-promote your services and increase your customer base. 

For instance, a pizza delivery business can put your fliers on their pizza boxes in exchange for free access to your laundry services. Similarly, you can tie up with universities and offer coupon discounts for new students to boost referrals.

3. Enhance your digital presence & marketing strategy

Your online presence matters a lot. So, you must ensure consistent posting across your social media channels. Then you’ve got digital ads (if you have some budget set aside for it) to widen your reach. 

Moreover, you should also tap into search engine optimization to increase your site visibility. Last but not least, you can encourage online reviews from your satisfied customers. When you let them be your brand voice, it builds your credibility. 

4. Improve physical branding & experience

Your store’s physical appearance can make or break your first impression. So, ensure you keep your exterior neat and clean. 

You can also use visible and attractive signage so people get engaged. Cleaning parking lots and windows, and trimming plants or foliage around your store to keep your store aesthetically appealing. 

And there’s one way that customers across the world love. And that’s something ‘free’ that you can offer. For new ones, there can be some promotional discount offers. For regular ones, you can have raffle prices, loyalty programs, and coupons.

5. Upgrade and diversify service offerings

If you keep doing what you are doing, you’ll keep getting what you are getting. So, you must always consider upgrading your laundry equipment and diversifying your service offerings. 

For instance, you can add fluff and fold services, offer wash-and-fold laundry service options, and provide on-demand pick-up and delivery services.

6. Conduct market research and optimize your operations

Conducting market research helps, as it gives you an idea of what they are doing. You can check them for their offers, services, and prices so you can adjust yours accordingly. 

Tapping into technology solutions like route optimization software can help create optimal routes. These delivery routes help improve your pick-up and delivery services, save time serving your customers, and minimize fuel costs.

7. Provide exceptional customer service

No matter what you do, what matters most is the quality of your service. You must stay abreast of the latest technologies and methods to improve your washing operations. 

Plus, you must not undermine the role of providing excellent customer service. Address your customers’ queries politely and be transparent about prices or wait times. In case of delays, you must keep your customers updated with a genuine reason so they can trust you.

4 Biggest Challenges Faced by a Laundry Business

A laundry service business wouldn’t be complete without its own set of challenges. Thankfully, these challenges are well known as every existing laundry business has faced one or the other of these. It is important to know these before you start a laundry delivery service.

1. Competition amongst laundry services

A low startup cost attracts a lot of people, and since a laundry delivery service is a low-cost business, many people choose to start their own. This makes the market very saturated and competitive for any newcomer.

The competition between local businesses is fierce. Especially in the laundry industry, as they target the same consumer base and struggle to maintain profitability. Small business owners are constantly on the lookout for ways to beat the competition. 

They might bring additional services, innovation, and optimization to the table to attract more customers and sway your customer base. Basically, you will be forced to constantly innovate or lose your customers to your competitors.

2. Difficulty retaining customers

The nature of the laundry industry is such that it is difficult to build a loyal customer base. Most customers of laundry service businesses are busy professionals who don’t get the time to wash their dirty laundry. 

Hence, the greatest priority for these customers is time savings. So, you can offer additional services, such as fast pick-up and delivery, dry cleaning services,  and ironing to attract customers.

3. Hard to make high-profit margins

As the industry is competitive, you may need to spend a lot to deliver a great service experience to your customer base. Your ongoing business expenses will also be high. It’s because you’ll need to hire employees who understand and cater to your target market needs better. 

You will also have to invest in a physical location. All of these things need to be within a proper accounting system so you can track your costs. This is because how much profit you can make highly depends on how much you spend.

The delivery process is notorious for being one of the biggest money hogs in a laundry service. Other customers do not realize why it costs so much to simply clean clothes and deliver them. However, you can save on delivery costs to establish a fine balance using route optimization software.

4. Complicated and time-consuming processes

A delivery business that offers pickup and delivery services is bound to run into efficiency issues. As their business highly depends on delivery drivers’ costs and expertise. Even when you have the best drivers behind the wheel, it alone won’t suffice unless you have well-planned routes to assist them.

It is where using laundry service route planning software can come in handy.  It will reduce your hours invested in planning routes to minutes. An additional advantage – you don’t have to worry about human errors. One such software is Upper, which you can try out.

Effortlessly Schedule Pickups and Deliveries Using Upper 

As a laundry business owner, you shouldn’t be wasting hours of your time creating routes for all your laundry pickup and delivery stops.  Instead, you can use our automated route optimization software to do it for you.

Upper is filled to the brim with features that chop working hours down. One such feature is the ability to directly import routes from an excel file making you add hundreds of stops at blazing-fast speeds. These efficient routes not only guarantees on-time deliveries with your delivery vehicles but also boost customer loyalty.

You also have the ability to set stops based on the customer’s preferred time slots and cruciality. This kind of unparalleled flexibility allows for effortless route planning and optimization that saves you both time and money.

Final Thoughts

While the concept of a laundry delivery business is straightforward there are still a few important topics that are often overlooked. These topics range widely from a business phone system to dedicated business banking.

Some aspects deserve special care such as business law and government regulations. Running a laundry business as a legal entity is not going to be as simple as tossing your clothes into the dryer.

Though what is easier than throwing clothes into a dryer is route planning with Upper! All you have to do is click and forget. With Upper, you can wash away all the stress related to route planning and optimization.