Columbia Cleaners

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Dry Cleaning Home Delivery Business Plan

Market Analysis Summary

It is necessary to establish the reasons for choosing the dry cleaning, laundry, and alteration service before doing the market research and marketing plan. "Laundries and Dry Cleaners rated in the top ten enterprises with the lowest failure rate."

  • Payment for the service is by cash, check, or credit card.
  • No capital stagnancy, receive payment every month, easy to get instant profit.
  • Capital requirement for purchasing commercial laundry equipment is minimal, therefore the risk of this business is low.
  • This service only requires a few staff.
  • Supplies a needed service for customers’ frequent demand (laundry - clean clothes).
  • Customers use this service as there are few or no alternatives (dry cleaning, carpet cleaning…).
  • The demand for using service is increasing due to changing life styles, incomes, and the increase in clothing expenditure.

4.1 Market Segmentation

Columbia Cleaners will be primarily targeting customers in the Hillsboro-Beaverton area. We will start off by offering services to the Hillsboro residents but will also aim at extending our service offering to the residents of nearby towns west of Portland, OR, including Beaverton, Cedar Hills, Tigard, and Lake Oswego.

We will be targeting both full-time and part-time employed customers who would value the convenience of our service. Demographic research shows that the total population of the Hillsboro-Beaverton area is about 350,000, of which about 250,000 are in the labor force. Of the later, approx. 220,000 are employed full time, 20,000 are employed part time and the rest are unemployed, as summarized in the table below.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Full-time employees 2% 220,000 224,400 228,888 233,466 238,135 2.00%
Part-time employees 2% 20,000 20,400 20,808 21,224 21,649 2.00%
Other 0% 10,000 10,000 10,000 10,000 10,000 0.00%
Total 1.92% 250,000 254,800 259,696 264,690 269,784 1.92%

4.2 Target Market Segment Strategy

The table in the previous topic shows estimated percentages of Hillsboro-Beaverton residents working full time in 2004, which is a lot higher than that of those working part-time. Employment, income, and GDP trends show an increase over the past several years as well. This results in increasing standard of living, which in turn leaves people having less time to do their housework (including laundry) in Hillsboro. They are often tired after the whole day of working and tend to spend money to hire someone else to do the housework for them. Moreover, the demand on clothes of these working people (particularly professionals) usually increases proportionately with their income. Buying more clothes, especially expensive clothes, makes them pay more attention to the care and cleaning of those garments. With careful research, this business focuses on working and professional class customers as a target segment market.

4.2.1 Market Needs

Research shows that one of the key factors in choosing a personal service, such as laundry and dry cleaning, is not price but the convenience of the service. As stated above, with the growth of discretionary income people tend to choose services based on how much time and effort the service will save them. Although there are several conventional drop-off dry cleaning/laundry service providers in the area, Columbia Cleaners will primarily market its convenient pickup/delivery service to those busy individuals who are willing to appreciate such service, as it saves them time for other endeavors.

4.3 Service Business Analysis

The personal service industry is very fragmented overall. The Metropolitan Portland area is no exception to that, with numerous small providers servicing the community's needs for laundry and dry cleaning. In the city of Hillsboro there are about half-dozen dry cleaners, some of which also provide laundry and garment alteration services. However, almost none of them, except Convenient Door-to-Door Dry Cleaning, provide the convenience of the door-to-door service.

4.3.1 Competition and Buying Patterns

Competition in the dry cleaning/laundry business in the Hillsboro area is not fierce. Research shows that there are seven dry cleaners in the city of Hillsboro, almost all of them offering the traditional drop-off service. The only competitor offering the convenience of the door-to-door service is Convenient Door-to-Door Dry Cleaning that provides dry cleaning and shoe repair services. We believe that initially this will be our major local competitor. We also believe that we will be able to win customers from our regular, drop-off competitors by enhancing the clients' peace of mind though a new level of convenience and saving their time.