As Kenya’s corporate sector continues to expand, an emerging trend is taking hold: the growing popularity of laundromats. More and more Kenyans are finding themselves caught up in demanding corporate jobs that leave them with little time and energy to tackle household chores, including laundry. This shift in lifestyle has created a significant opportunity for entrepreneurs like you to provide a much-needed service: professional laundry solutions. This post will therefore take you through how to start a laundry business in Kenya. Further, you will learn about its dynamics, expenses, and possible obstacles that you will face as you delve into this business venture.
Stay focused as we dive in!
So, what do you need to start a laundry business in Kenya?
Get a Business Plan
As discussed, in this post, business plans offer a variety of advantages to entrepreneurs that may make them stand out against competition. About laundromats, here is how a business plan will help you.
- Setting Clear Objectives – A business plan helps you define your goals and objectives for the laundromat. It allows you to outline what you want to achieve, whether it’s financial targets, customer satisfaction goals, market share objectives, or expansion plans.
- Understanding the Market – A comprehensive business plan involves market research, enabling you to gain insights into the local demand for laundry services, identify your target customer base, and assess the competition.
- Financial Planning – A business plan requires you to estimate the costs involved. This includes expenses for equipment, lease or purchase of premises, utility bills, staff wages, maintenance, marketing, and more. By conducting financial projections and creating a budget, you can assess the financial feasibility of your business, plan for funding requirements, and set pricing structures that ensure profitability.
- Operations and Logistics: The business plan allows you to outline the day-to-day operations and logistics of your laundromat.
- Marketing and Promotion Strategies – A business plan helps you define your target market segments, identify your unique selling proposition, and develop marketing strategies to reach and attract customers.
- Securing Funding or Partnerships – If you require external financing or seek potential partners or investors, a business plan becomes crucial.
Location spells out success or doom for your business.
Location = Population = Sales = Profits
[Location + Market Demand + Competitive Advantage] = [Sales + Customer Satisfaction] = Profits
Location will influence aspects such as accessibility, proximity to target customers (residential areas, office complexes, universities), visibility, parking availability, and foot traffic also influence the performance of your laundromat.
Comprehensive market analysis and careful consideration of these factors can help you identify the ideal location that aligns with your business goals and drives sustainable growth.
Capital Requirements for a laundry business in Kenya
For a GOOD laundry business, you will require at least Ksh.200,000 to Ksh.250,000. This amount will go into setting up a location, buying washing machines, and complementary items that are required by this business venture and paying for recurrent expenses such as electricity and water bills.
Note: Nothing is stopping you from investing more funds, say Ksh.500,000+ in your business. The more capital you invest, the better. All you need to watch out for is the rate of diminishing returns.
Here is the breakdown of how you will spend your capital investment:
#1. Logistics & Location Expenses
These expenses include facility expenditures, equipment costs, utilities, and infrastructure that you will need for your laundry business.
|Category||Estimated Cost (Ksh.)|
|Equipment (Washers, Dryers, etc.) × n*||100,000 × n*|
|Other Infrastructure Expenses||20,000|
*Signage – signs collectively, especially commercial or public display signs.
*n – Number of equipment/products/services you are willing to purchase
#2. Inventory and Supplies
Inventory includes all equipment that you will need i.e., washing machines, dryers, detergents, etc. Here is the breakdown.
|Category||Estimated Cost (Ksh.)|
#3. Miscellaneous Expenditures
You may have to cover miscellaneous expenses such as purchasing hanging lines, clothing pegs, marketing & promotions, emergency funding etc. It is crucial to understand that whereas this group of expenditure is important, it is not mandatory and therefore, you can choose to leave it out in case of insufficient capital.
Nevertheless, here is the breakdown:
|Category||Estimated Cost (Ksh.)||Description|
|Marketing and Promotion||20,000||Advertising, online presence, promotional materials, collaborations, etc.|
|Working Capital||20,000||Funds to cover initial operational expenses (wages, bills, maintenance, etc.)|
|Contingency Funds||15,000||Reserve for unexpected expenses, emergencies, equipment repairs, etc.|
#4. Grand Total
|Category||Estimated Cost (Ksh.)|
|Facility, Equipment, and Infrastructure||240,000|
|Inventory and Supplies||25,000|
Notice that this total exceeds our working capital of Ksh. 250,000. Depending on what you choose to invest in, your working capital will either increase or decrease.
Say for instance, that you want to purchase more than one laundry or dryer machine, each costing about Ksh.100,000. You will need to add the expenditure to our total i.e., Ksh.320,000, thus the (× n*) annotation used earlier.
Costs related to licenses will be included under the miscellaneous expenditures discussed earlier in this post.
Kenyan Law demands that all businesses must be registered and due taxes be paid. As you set up your business, you will need to pay;
- Business name registration that is around Ksh.950
- Business Permit from the county government
- Health and Safety Compliance license
- Fire & Safety compliance license
Some of these licenses will invite government officials into your business premises to assess compliance before being awarded a certificate of compliance.
Marketing and Promotion
Develop a strong marketing strategy to create awareness about your laundromat. Utilize both traditional and digital marketing channels, such as local advertising, social media, and partnerships with nearby businesses.
Firstly, you may need to add your business to Google, so that the location can appear under Google Maps. Further, online services such as Yellow Pages list businesses in Kenya, making it easier for clients to locate you. Registering for listing may boost your client base.
Secondly, utilizing WhatsApp will help you reach interested parties in NO TIME! Quite often, your first customers will be people who know you and will then spread the word and help you gain more customers. All you need to do is post your ads on different groups and wait for clients to trickle in.
Thirdly, investing in branding is crucial. People love to be associated with certain brands, and this phenomenon has been explored and implemented by the likes of Louise Vuitton, Gucci, Nike etc. Invest in a memorable brand name, attractive colours and a good business exterior and interior design.
Finally, setting up a website for your business could help you get in touch and offer support to more clients online.
Delivery and Logistics Management
Offering convenient options for picking up, drop-off and delivery of clothes is a valuable service that can enhance customer satisfaction and attract a wider customer base.
By providing flexible options, such as self-service pickup and drop-off lockers or scheduled delivery services, customers can enjoy the convenience of having their laundry taken care of without disrupting their busy schedules. Implementing a user-friendly online platform or mobile app for scheduling pickups and deliveries further simplifies the process.
This approach not only caters to customers who prefer traditional in-person visits but also accommodates those seeking a contactless experience.
By offering multiple avenues for customers to engage with your laundromat, you can differentiate your business and create a convenient and customer-centric laundry service.
Other Laundry Business Models
According to Money254, there are 3 categories of the laundry business, each differing on operational specifics. They include:
- Mama Fua Corporate Model: These are individuals, mostly women, who are hired temporarily – usually paid per day – to offer in-home cleaning services. This industry mainly operates informally and has great room for better profits if formalized.
- Home Laundromat Model – Here, you can choose to monetize your home laundry machine when you need some extra cash. This is not a formal business and you won’t need to spend as much as you would in a formal venture.
- Physical/Commercial Laundromat – This model is what we have discussed in this entire post.
What are the profit Margins for a Laundromat Business in Kenya?
Depending on your pricing structure, business premises, operational costs, efficiency, capacity etc., industry averages for profit margins in laundromats range from 15% to 35%.
Statista gives the following breakdown;
- In the Home & Laundry Care market, 0.4% of total revenue will be generated through online sales by 2023.
- The Home & Laundry Care market in Kenya is projected to grow by 4.86% (2023-2028) resulting in a market volume of US$739.00m in 2028.
By offering a convenient and reliable solution to the laundry needs of busy Kenyans, your laundromat business can thrive in this growing market. With the right combination of quality service, strategic marketing, and sustainable practices, you can position yourself as a trusted and preferred laundry service provider in Kenya