Hi everyone, especially am_eniey,

I have a few questions also:

1) How do you determine whether a location is suitable for laundry shop? For example, in my area, there are at least 6-7 laundry shops operating already, and they seems to be there like forever. With 3 new condo and office projects to be completed in 2012/3, I do see potential, but how do you gauge whether there will be enough customers to sustain in the long run? Where do you find this kind of data?

2) The government subsidies of fuel price will be less in 2011, obviously this will increase everything especially utilities and gas. How much is your current utilities and gas bill per month? Are all your machines working at full capacity, meaning minimum 12 hours a day?

3) The shop lot at the flat around my area is paying monthly rental of RM1,800 - RM2,000 for about 1,200 sqft. With 2 or 3 months deposits, how does one ensure survival with such tight cash flow at start up? Does a small scale laundry shop need such a big space? What is the minimum space required? Will co-tenant work out?

Thank you.

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Added on September 28, 2010, 11:10 amAnother question:

4) Does anyone know if there is such a thing as Hire Purchase Laundry Machines in Malaysia? I am thinking it will be cheaper (in the long run) to hire purchase the machine instead of forking out cash to buy them. Although the interests are built in the hire purchase.

This post has been edited by RickOoi: Sep 28 2010, 11:10 AM

Thank you so much for your valuable input am_eniey.

Hi neuro11,

Could you please share how you go about obtaining leasing for laundry machines? I searched the web but couldn't locate any leasing or hire purchase services for laundry equipments. I wish to know more about this arrangement although I am not for it.

After am_eniey kind advice (please refer to earlier post), I feel that hire purchase/leasing is not a good idea also. If insufficient fund, just start small. Should business fail (ahem..touch wood), your initial capital outlaway is not much compared to leasing which you have to continue serving regardless.


To share with everyone regarding hotel contract service. I have a good friend in Penang that does that, after seeing how he operates - one thing which is obvious - YOU HAVE TO WORK 365 DAYS!

My friend has no resting time or time to go for holiday, even if his laundry shop is not opened on Sunday, he still work like crazy.
Imagine these:
1) You have to collect those dirty laundries and send in clean laundries 3 or 4 times a day, not a single day rest becuase hotel operates 365 days 24x7.
2) You can not be sick. Why? Yes, hotel operates 365 days. Even when he is sick, he still perform the collections, deliveries and washing of laundries.
3) Pricing is very cut-throat, and hotel wants the cheapest rates. What does that mean? It means to earn a profitable amount, you need large VOLUME...the more laundry to wash the better...that translates to working even harder.
4) Hotel pays on credit terms not COD. My friend told me they owe him about RM20-30K. What if the hotel go bust? How to recover this amount?

Although above may sound negative, my view is if you wish to tender for hotel contract, make sure you have a kilang to support you...not doing all by yourself.

This post has been edited by RickOoi: Dec 8 2010, 02:34 PM

Price per Kg
edyek is right, RM0.80 per kg is killing the market in general. As far as I know, I noticed the price per kg ranged from as low as RM1.80 to RM3 (RM3 is my area at Kuchai Lama, not very sure about those upmarket like Bangsar, Mont Kiara, etc). For what I can gather, it doesn't make sense to go below RM2, but I can't be sure of how much is each cycle run cost (electricity + water + detergent + softerner + labour = $?). Anyone?


Location
For me, the biggest problem is sourcing for the right location. So far, I have yet to find that right location. I wish to open laundry shop at Kuchai Lama or around my areas like Sri Petaling, Bukit Jalil...should anyone know of any shop leasing at reasonable rate, please let me know. I don't mind sharing the shop with other vendors like handphone shops, saloon, ...etc.

My Penang friend's shop is located inside the club house of a condominium. He told me that he took 2 years to breakeven and until this year, there are some residents from his area that told him they didn't know that there was a laundry shop in the club house. The rent maybe cheap, but it took him a long time to recover and establish himself in that area, and his laundry shop opened for 10 years already!

The area where I lives - Kuchai Lama, a ground floor shop lot rental ranged from RM3,000 - RM6,000; which I think is too high a price to pay for rental except if you are doing restaurant like Paparich, Old Town..etc Any body has any feedback or suggestiono on this?

Most property agent ignores me when I mentioned that my budget is below RM2,000. I think they also pening kepala


Shop for Sale
I saw in one of the Chinese newspaper recently (I think it was in Oct'10) whereby one of the laundry shop at Sri Petaling was selling its business. I contacted the seller in Dec'10. I asked the owner why he is selling, he told me that he is short handed. When it comes to the asking price for the shop, he said RM120,000! I was shocked. I was even naive enough to ask him is it because he has Dry Cleaning machine that's why he is demanding such a high price, he simply answered, "No". Wow! Maybe I have no experience in taking over a shop or running a business, but to pay RM120,000 for laundry shop, to me is ridiculously high Anyone who is interested in taking over his shop can get his handphone number from me, I still keep it as a 'reminder' how much a laundry shop can worth


Worker
ckm1609 raised a valid question....how much to pay the worker? RM700? RM800? Too little? Too much?
For me, I gladly take am_eniey advice again, I will work alone full time until the business grows the a point I can't handle, then I will worry about how to go about getting help. Not much of a plan, but I also believes that unless you are 100% committed to the business (no matter what business), it will not succeed. If you think of opening a shop and let someone run it for you....well, not many of us are that lucky.

Hi edyek, I am not sure how many machines the laundry owner of Sri Petaling has. He is not very forthcoming with details; only answering 'yes', 'no'. Anyway, the asking price is way beyond what I can afford.

I found out (from somewhere...forgot where) that per cycle wash cost RM6.00. That means if you are charging, say RM2.50 per kilo, then you need to set minimum kilo of at least 3kg to breakeven (including miscellaneous expenses like plastic laundry bag, etc).