Laundry Business

As if my idea of selling vegetables wasn't disturbing enough for my mom, I thought one step ahead and this time decided to do laundry for people.

Jokes apart, but: Why Laundry business of all things ?

One fine day, I decided to give a thought to various forms of services that were still unorganized. (Most service oriented needs of consumers appeared to be addressed in a pretty decent way through several online businesses such as bill payments, booking air/railway/bus tickets, matrimony, career/jobs, ordering food/flowers/books/gifts etc)

Several others that I considered but did not find as compelling or ripe (for various reasons like scalability, market size, feasibility or competition) were Spa, Saloon, various extra curricular activities, tuitions, security/maid agencies and electronics/electrical/plumbing repair services.

So Laundry Service, it was to be.

Sounds boring/dull ?
Well, this is by far the most interesting business proposition of all that I have made so far.

The Opportunity:

There was tremendous scope for improving the Quality and Experience of the customer as well as Organizing the laundry market and Scaling out.

Needless to say, majority of "apes" on this planet wear clothes and among them a vast majority (leaving selected few) do wash and change clothes regularly :)

In this part of the world, the advent of dryers for clothes (ones that dry clothes completely, or in technically correct language, ones that remove 100% moisture) never happened.
Of the washing machines that are available, even the costlier fully automatic ones only shrink the clothes off the water without drying them completely. Hence, we use the sun for drying clothes, by hanging them in balconies, terrace or open grounds.

People spend so much time and energy washing and drying clothes including those who have fully automatic washing machines. Moreover, if you visit any society/household, more than half the balconies can be seen being utilized for drying clothes, in most cases taking away the look and charm of the house (sometimes all the more when the wrong set of clothes are visible to the audience)

A good capacity washing machine along with a tumble dryer (though costly) can reduce your turnaround time to less than 2 hours (with just about an hour for washing and 40 minutes for drying clothes) Hence, a customer can get his/her laundry serviced and back within 2 hours in the best case, or the same day in most typical scenarios.

I can think of 3 different models for Laundry business:

1. ATM / Kiosk model
2. Washing Plant / Bulk model
3. Retail model

ATM/Kiosk model

More suited where services/manpower is extremely costly and real estate/rentals are relatively cheaper. Self service booths with washing machines and dryers that can be operated by customer using coins for instance. These are similar to ATM's or phone booths or video game parlors based on slot machines.

Washing Plant /Bulk model

If capital investment in not an issue and you are a man of contacts and marketing expertise, then this is by far the best model. This involves setting up a centralized plant for washing clothes, preferably outside the city to reduce costs, near a river for availability of water. The location must also consider proper disposal of waste water.
The model depends on bulk orders instead of managing small orders for thousands and millions of retail customers.
i.e.: Tie up with hotels, corporates, guest houses, railways, gyms, spa, saloons etc.
(For example, the gym that I visit alone gives 200 towels for washing every day @ INR 5/-)

This requires both expertise and the adoption of right technology in the arena of washing.
If your pricing, quality and management are good, there is every reason for various businesses to outsource this task to you, rather than doing/managing themselves. This creates value for the customers, thus a win-win for both the businesses.

After all, there is a reason why Outsourcing works well for so many businesses.

Retail model

This is by far the most interesting one of the 3 models, though the toughest and most engrossing one to execute. This one actually has maximum room for innovation and requires the maximum thought and activity. For one, the model is extremely service oriented. The way clothes are arranged, collected, returned and even politeness can turn the business either way.

Above all, this requires scaling out to thousands of retail customers through an awesome network/coverage for pick up and drop points, without which you end up with low volumes and a high cost on transportation. Looking to build something extremely efficient, such as the dabba wala chain in mumbai. The cleaning and drying can happen at various(strategically located) outlets or at a centralized location (depending on what is favorable). Tagging and tracking of clothes is of utmost importance as even 0.01% misplaces in a high volume business can kill your business.

The price point has to be extremely low, ideally around 5/-or 6/- per garment (Not only less than what the local vendors charge, but also lower than the what people shell at home on washing (tangible or intangible; consciously or subconsciously)

Since the organized market needs to be built out from scratch, it is best suited to start with (target first) the bachelors and working couples in metros (one; for their lack of time and two; for the higher disposable incomes, lifestyles and mindset) So start with cities like Bangalore, Hyderabad, Mumbai, Pune, Delhi, Gurgaon, Noida...

Come to think of it, and there is so much to experiment and innovate:

• Tie up with Libraries, Theatres, Movie Halls for a small outlet. People can drop clothes when they arrive and collect them while returning (turnaround 2 hours)
• Mobile Seva: Have a couple of washing machines and water tankers fitted on truck for promotion activities. Go to a society, wash, dry and return clothes in 2 hours.
• Once you have a sizable customer base, you can do so much more from adding more services/goods to print advertising on the back of the bill to getting brand partners (one of FMCG companies for detergents)
• In fact, with a network like that, you could tie up with Logistics companies for distribution of couriers to retail customers.

The right use of technology and process will be key to the success and scale out (whether it is barcode, RFID or manual labels for tracking, pigeon hole style for sorting clothes or SMS/emails for notifications to customers)

One way to grow fast and grow right is by integrating the numerous existing local vendors into the new system. (off course, in a way that is viable for both parties. Again, this will be a major win-win-win for all parties. One, the company for it gets an immediate reach; Two, for the vendor who doesn't face competition, or lose business or livelihood; Three, for the government and economy as the employed/self-employed rates remain unaffected)

There is also a 4th model, that is doing laundry at high prices and high margins (high quality of service ), limited volumes and thus creating a niche for yourself. But this is pretty much like dry cleaning prevalent in today's world.

Happy Laundering!