One question i always asked is, How Much To Open A Laundry Business? It can be an interesting business outlet starting a laundry business in Nigeria with urban areas adopting laundry services more and more as the days pass.
When I started looking at the idea of opening a laundry shop, I knew a washing machine and detergent would not be enough.
As in every business, there are expenses when opening a laundry shop one has to consider from machines to rent and staff to advertisement as well.
All these expenses I will breakdown into estimated figures giving you knowledge on how to budget well.
Click here to learn the washing machines prices in Nigeria.
Let’s dive into it!
How Much To Open A Laundry Business?
Let’s take a look at the process and running cost of starting this business in Nigeria.
1. Business Registration and Legal Fees
The first step to opening a laundry shop is to register the business with the Corporate Affairs Commission (CAC) in Nigeria.
The registration costs may also vary depending on your preferred business structure – whether a sole proprietorship, general partnership or a limited liability company.
The most common business entity in terms of cost is usually the sole proprietor, which costs within the range of NGN 20,000 to 100,000.00 Nigerian Naira.
2. Location and Rent
The issue as to where to open the laundry business is also of great importance. Ideally, you would want a location that is easy to get to, is busy with people, and is in the vicinity of either residential blocks or businesses that require laundering service.
Rent will vary most as to the city and location of the neighborhood itself.
For example, in Lagos, a small business space in a busy location may fall between NGN 200,000 to NGN 700,000 yearly approximately that yearly lease on that kind of property while in less populated urban locations or other smaller towns, this figure might drop to about NGN 100,000 per year.
3. Equipment and Supplies
It is compulsory to have several additional equipment when starting up a laundry shop. Such equipment includes washing machines, dryers, pressing irons, ironing tables, hangers, laundry detergents, etc.
- Washing Machines and Dryers: A good commercial-grade washing machine can cost anywhere from NGN 400,000 to NGN 1,000,000. Dryers are often in the same price range.
- Pressing Irons and Ironing Tables: Quality pressing irons can cost between NGN 30,000 and NGN 60,000 while ironing tables range from NGN 30,000 to NGN 45,000 each.
- Other Supplies: Detergents, softeners, stain removers, and other chemicals are recurring expenses. Initial stocking may cost around NGN 50,000 to NGN 100,000.
4. Utilities and Overheads
Running a laundry shop also entails recurrent expenses such as utility bills which encompass water and electricity. Given that laundry machines require considerable utility services in the form of power and water, you ought to set reasonable limits.
Electric usage costs may be between NGN 20,000 undertaking low monthly usage and NGN 50,000 when using maximum electricity on a month-to-month basis.
With regards to the water supply, this can go for around NGN 10,000 to NGN 30,000 in a month. Furthermore, a generator may be necessary if there’s no power resulting in an investment ranging from NGN 400,000 to NGN 950,000 depending on the size and type of the generator.
- Staffing Costs
In case you are planning to hire employees who will perform the tasks of washing, ironing, or delivery services, it is good to note that salaries will have to be included.
The average salary for a staff-level worker who has been employed is expected to be in the range of NGN 20,000 and NGN 50,000 per month depending upon his job position and experience.
It is best to employ only the basic workforce ensuring that smooth operations are maintained and as the business develops staff can be added.
Marketing and Advertising
To draw customers to your new laundry shop, your intent should be to spend some money on marketing. Flyers, banners, and social media are some of the tools to be employed.
A low marketing budget could go from NGN 20,000 to NGN 50,000 as the starting range. Also, word of mouth along with service quality helps in nurturing the customer base.
- Miscellaneous Costs
Finally, ensure that you also add up other costs like, or fall under miscellaneous overhead costs which may include insurance policy costs, business licensing costs, and miscellaneous fees.
There is a need for liability business insurance coverage, and the annual cost is around NGN 20,000 to NGN 50,000. Also, local permits or taxes may be applicable depending on the local government.
Initial Cost Summary
Based on the points above, here’s a rough breakdown of the initial costs to start a laundry shop in Nigeria:
| Cost Item | Estimated Cost (NGN) |
|---|---|
| Business Registration | 20,000 – 100,000 |
| Rent (Annual) | 200,000 – 700,000 |
| Equipment and Supplies | 300,000 – 1,000,000 |
| Utilities and Overheads | 400,000 – 950,000 |
| Staff Salaries (Monthly) | 40,000 – 150,000 |
| Marketing and Advertising | 20,000 – 50,000 |
| Miscellaneous Costs | 20,000 – 100,000 |
| Total Estimated Initial Cost | 930,000 – 3,050,000 |
Long-Term Considerations
When the laundry shop is stable, also late obligations such as machine repairs, equipment changes, and even more building additions may be needed.
Every single time, there is a general repair required for the equipment when in operation to maintain effective performance and, in the future, such performance will probably include leasing more space for expansion or even an addition of state-of-the-art machines.
What Type Of Washing Machines Are Best For A Laundry Shop In Nigeria?
It is essential to get the right washing machine. In most cases, it is advisable to opt for commercial machines designed to withstand severe operational activities.
Well-known brands like LG, Samsung, and Whirlpool will not disappoint as they prove reliable. Ensure optimum time for spinning and bulk handling capacity for the machine.
What Are The Most Significant Operational Costs In A Laundry Business?
Generally speaking, the largest ongoing operational expenses in such a business include utilities (power and water), wages for staff, and procurement of consumables (detergents, softeners, and stain removers).
With time, resources set for the machine maintenance program as well as the potential for machine repairs can be significant as well. An efficient control of these expenses is critical for running at a profit.
Can I Run A Laundry Shop From Home To Reduce Costs?
Yes, you can start a mini-laundry business from your house to cut down such overhead costs as rent. Since you will be working from your house, however, you should make sure that adequate space and equipment are available to cater to all laundry needs.
Watch out for excessive utility bills and investigate the regulations concerning business activities in a residential area.
Conclusion
Starting a laundry shop in Nigeria is a promising business opportunity that presents good prospects depending on how one plans and implements it.
The start-up expenditures and costs may appear to be high, but once you provide quality service, do effective marketing of your services, and run operations efficiently, then you will have a large customer base.
With a clear perception of the financial costs involved, it is possible to conquer the hurdles that one will face and establish a profitable laundry business in Nigeria.
FAQs
1. How Can I Attract Customers To My New Laundry Shop?
To attract customers, focus on providing excellent service and maintaining high cleanliness standards. Consider offering promotional deals or discounts for first-time customers. Utilize social media and local advertising, and encourage satisfied customers to refer friends and family.
2. Is It Necessary To Register My Laundry Business With CAC?
Yes, registering your business with the Corporate Affairs Commission (CAC) provides legal protection and credibility. It also makes your business eligible for various government schemes and potential funding opportunities. Registration can range from NGN 20,000 for a sole proprietorship to higher amounts for more complex business structures.