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Dry Cleaning & Laundromat icon Laundromat Business Plan

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Universal Laundromat

Executive Summary

Opportunity

Problem

Many urban residents lack access to in-home laundry facilities, and existing laundromats may not provide a pleasant, efficient environment for customers. Additionally, environmentally conscious customers are seeking sustainable laundry options that minimize water and energy waste.

Solution

Universal Laundromat provides a clean, modern, and comfortable space equipped with energy-efficient washing machines and dryers. We strive to create a welcoming atmosphere with customer-focused amenities, while also promoting environmentally friendly practices.

Market

It’s been shown that the best method of advertising is through word-of-mouth. No major newspaper ad campaign is planned. However, we shall run weekly specials. In addition, we shall have an incentive program for referrals. Those customers who refer someone else to the store will be rewarded with two free washes, and the referee will receive an introductory gift of a free wash. In addition, we will ensure a clean environment, reliable machines, and friendly, prompt services.

Competition

Universal Laundromat would like to set itself apart from other laundromats that may offer only one or two services. Although the focus of Universal Laundromat is a washing and drying service, we do wish to offer our clients the convenience of these other services in one location. Those services include folding and potentially pick-up/delivery service, as well as online reservation and membership for pick-up and delivery. Most importantly, it’s our convenience that sets us apart from the competition.

Why Us?

Universal Laundromat is a full-service coin-op laundry (washing, drying, and optional folding) service dedicated to consistently providing high customer satisfaction by rendering reliable machines and furnishing a clean, enjoyable atmosphere at a competitive price/value relationship.

Expectations

Forecast

It is very important to note that the minimum monthly amount of loan payback should decrease as principal decreases. Furthermore, the profit projected in the table is after all expenses and monthly loan payback have been subtracted. All net profit will then be paid as an additional sum to greatly shorten the term of the loan.

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

Currently, Mr. Mihn Doung owns a small permanent shop in 7th Berryessa Flea Market selling power tools every weekend. That store brings in approximately $4,500/month on average in revenue. The profit averages out to approximately $2,500/month. Considering the potentiality in the coin-op laundromat industry, he’d like to take on further challenges by starting another venture.

To achieve this objective, Universal Laundromat is seeking $150,000 in additional loan financing. This loan will be paid by the cash flow from both the shop at the Flea Market and the laundry business, and will be collateralized by the assets of the business and steady income it brings along with an initial $75,000 down payment, and backed by the character, experience, and personal guarantees of the owner.

 

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Opportunity

Problem & Solution

Problem Worth Solving

Every person needs clean clothes. Not every family can afford a washer and dryer or laundry soap. 

Our Solution

Universal Laundromat is a full-service coin-op laundry (washing, drying, and optional folding) service dedicated to consistently providing high customer satisfaction by rendering reliable machines and furnishing a clean, enjoyable atmosphere at a competitive price/value relationship.

Our Mission: To provide convenient, clean, and friendly laundry service.

Our Motto: "Professional, convenient, friendly service and competitive pricing"

Target Market

Market Size & Segments

 

Universal Laundromat’s target market is every household that needs laundromat services within the immediate area of east San Jose. There is no market segmentation strategy associated with this potential market. The Market Analysis table indicates the estimated number of potential customers and their growth rate.

 

 

Competition

Current Alternatives

It’s been shown that the best method of advertising is through word-of-mouth. No major newspaper ad campaign is planned. However, we shall run weekly specials. In addition, we shall have an incentive program for referrals. Those customers who refer someone else to the store will be rewarded with two free washes, and the referee will receive an introductory gift of a free wash. In addition, we will ensure a clean environment, reliable machines, and friendly, prompt services.

Our Advantages

Universal Laundromat would like to set itself apart from other laundromats that may offer only one or two services. Although the focus of Universal Laundromat is a washing and drying service, we do wish to offer our clients the convenience of these other services in one location. Those services include folding and potentially pick-up/delivery service, as well as online reservation and membership for pick-up and delivery. Most importantly, it’s our convenience that sets us apart from the competition.

Keys to Success

Keys to Success

The keys to success in our business are:

  • Location: the potential business is to be located in a nice small shopping center of a poor to lower-middle class, ethnically Mexican neighborhood, where it’s the closest and most convenient place to get services. In addition, there are two apartment complexes located nearby. In addition to being the sole laundromat in this neighborhood and surrounded by residences, there is no potential for a competitor.
  • Convenience: offering clients services ranging from full-service washing and drying to optional folding, and extended business hours.
  • Environment: providing an environment conducive to giving clean, friendly, and professional service.
  • Reputation: long-term reputation resulting from friendly, professional service will encourage customers to return.
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Execution

Marketing & Sales

Marketing Plan

It’s been shown that the best method of advertising is through word-of-mouth. No major newspaper ad campaign is planned. However, we shall run weekly specials. In addition, we shall have an incentive program for referrals. Those customers who refer someone else to the store will be rewarded with two free washes, and the referee will receive an introductory gift of a free wash. In addition, we will ensure a clean environment, reliable machines, and friendly, prompt services.

Operations

Locations & Facilities

The laundromat is located in San Jose, California. It will utilize 1,500 square feet. The location is strategically situated on one of the busiest streets in East San Jose. More specifically, it’s located in a small attractive shopping center next to the poor to lower-middle class homes; therefore, there is NO possible competitor (after very careful examining). In addition, there are two apartment complexes located nearby. Surrounding it, there is a Mexican neighborhood whose residents get most of their services and needed goods in this plaza where the laundromat is located.

Milestones & Metrics

Milestones Table

Milestone Due Date
Review Q1
Mar 09, 2020
Review Q2
June 05, 2020
Review Q3
Sept 06, 2020
Review Q4
Dec 05, 2020

Key Metrics

Our key metrics are: 

  • # of reviews we receive, we shall especially pay attention to the locals
  • # of people who walk in verse make a point of calling to see if we are in 
  • the cost of running the machines

 

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Company

Overview

Ownership & Structure

The business is managed by the owner, who has extensive leadership and management skills as well as an innovative and creative character. Unlike most laundromat businesses, Universal Laundromat will have an on-site staff person(Maintenance/Cashier) dedicated not only to store and machine maintenance but who also acts as a cashier to the retail business within the laundromat. As part of the management philosophy, this Maintenance/Cashier person will be carefully evaluated for friendliness, professionalism, efficiency, and honesty. The salaries are shown in the personnel plan table. As Mr. Mihn Duong already has a steady income from his power tool shop, his salary will be less than what would be expected if this was his sole source of income.

Team

Management Team

Minh Duong is an ambitious, hardworking, philosophical leader and businessman. He has extensive business experience, and knowledge in various fields including retail sales, service and the Internet industry. Over the years, he has started various small businesses ranging from offline retail sales of a wide variety of products and services to online hosting services. He has extensive leadership skills as he had been elected to be President of five different clubs in High School. In college, Minh had founded two organizations at the University of California, Berkeley. In addition, he had also been elected to various leadership roles such as President and Vice-president of three different large organizations with membership over 500 members. School-wide, Minh had been fortunate to be elected by the student body of the university to be a Senator in the student government. During his term of office, he headed the Finance Committee that dealt with over $500,000 in student fund allocation. Moreover, he also headed the Student Affairs Committee as well as the Computing Facilities of the student government. Realizing his service and efficiency, fellow senators elected him to the board of directors of the Berkeley Student Foundation, the largest scholarship foundation for minority students sponsored by the Associated Students of the University of California. There, Minh dealt with the decision process of fund allocations to top high school minority students throughout the country. In the business world, Minh currently owns a permanent Flea Market Power Tools Shop at the Berryessa Flea Market in San Jose, CA. He is also the President/CEO of a small start-up Internet company providing business solutions to other businesses. He is currently working with five other colleagues at his college on that business. In academia, he is currently working with Professor Bradford Delong, a former Bill Clinton’s Foreign Policy Advisor Committee member, as a Research Assistant on  a book titled, 

A Time Series of Changes Due to Globalization
. Independently, he is currently working on a research paper titled, "Is Chinese Reform Sustainable? Is It Different?"

Minh is currently a fifth year Pre-med, Pre-MBA student with a triple major in Economics, Mathematics, and Statistics. He is currently 22 years old. He came to the U.S. on Nov. 7, 1990 from Viet Nam. After finishing his college education, he plans to achieve an MBA from Harvard Business School and an MD from John Hopkins Medical School.

Personnel Table

2020 2021 2022
Owner $60,000 $61,200 $62,424
Cashier $42,000 $42,840 $43,697
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Financial Plan

Forecast

Key Assumptions

Key Assumptions: 

  • People need and appreciate clean clothes 
  • People will be willing to pay 20 dollars to have someone help with the wash and fold 
  • Not everyone can afford a washer and dryer
  • Those who can’t afford them still need somewhere to do clothes. 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

We estimate $30K in startup expenses, which are mainly location fix-up, some signage, some legal. 

We estimate $40,000 in purchasing assets including the appliances, some furniture and fixtures. 

Sources of Funds

Mr. Duong will invest $80,000 of savings. He will also have $8,000 in accounts payable, left over from some assets purchased. The plan includes a 10-year SBA guaranteed loan for $75,000. 

If all goes according to plan, he will be able to pay off the SBA loan early, in the third year. However, that detail is not included in the plan. 

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $178,890 $229,512 $263,732
Operating Expenses
Salaries & Wages $102,000 $104,040 $106,121
Employee Related Expenses $20,400 $20,808 $21,224
Rent $30,000 $30,000 $30,000
Gas / Electric $8,946 $11,520 $13,260
Marketing expenses $1,139 $700 $900
Insurance $5,964 $7,680 $8,840
Maintenance $5,964 $7,680 $8,840
Amortization of Other Current Assets $0 $0 $0
Interest Incurred $2,887 $2,633 $2,370
Depreciation and Amortization $5,714 $5,715 $5,714
Gain or Loss from Sale of Assets
Income Taxes $0 $5,192 $9,969
Total Expenses $302,324 $350,456 $385,506
Net Profit ($4,124) $33,544 $56,494

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $15,000 $32,593 $67,558 $128,064
Accounts Receivable $0 $0 $0
Inventory $12,874 $14,856 $14,856
Other Current Assets $2,000 $2,000 $2,000 $2,000
Total Current Assets $17,000 $47,467 $84,414 $144,920
Long-Term Assets $40,000 $40,000 $40,000 $40,000
Accumulated Depreciation ($5,714) ($11,429) ($17,143)
Total Long-Term Assets $40,000 $34,286 $28,571 $22,857
Accounts Payable $8,000 $35,016 $37,327 $40,018
Income Taxes Payable $0 $1,456 $2,496
Sales Taxes Payable $8,082 $8,478 $9,783
Short-Term Debt $6,221 $6,475 $6,738 $7,013
Prepaid Revenue
Total Current Liabilities $14,221 $49,573 $53,999 $59,310
Long-Term Debt $68,779 $62,304 $55,566 $48,553
Long-Term Liabilities $68,779 $62,304 $55,566 $48,553
Paid-In Capital $80,000 $80,000 $80,000 $80,000
Retained Earnings ($106,000) ($106,000) ($110,124) ($76,580)
Earnings ($4,124) $33,544 $56,494

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit ($4,124) $33,544 $56,494
Depreciation & Amortization $5,714 $5,714 $5,714
Change in Accounts Receivable $0 $0 $0
Change in Inventory ($12,874) ($1,982) $0
Change in Accounts Payable $27,016 $2,311 $2,691
Change in Income Tax Payable $0 $1,456 $1,040
Change in Sales Tax Payable $8,082 $396 $1,305
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt $253 $264 $275
Change in Long-Term Debt ($6,475) ($6,738) ($7,013)
Cash at Beginning of Period $15,000 $32,593 $67,558
Net Change in Cash $17,593 $34,965 $60,506
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