How to Start a Laundry and Dry Cleaning Business

Starting a laundry and dry cleaning business can be a rewarding venture, especially in urban areas where demand for convenient and efficient garment care services remains consistently high.

Having said that, launching a successful operation involves more than simply setting up washers and dryers — it requires a strong understanding of fabric care, effective workflow management, and ensuring that each customer receives high-quality, reliable results.

In this comprehensive guide, we’ll walk you through all the essential steps you’ll need to take to start your own laundry and dry cleaning business, from conducting market research and securing funding to choosing the right equipment, setting up operations, and attracting customers.

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Industry Overview

The US laundry and dry cleaning industry — which was valued at $11.9 billion in 2023 — is experiencing steady growth, with the latest figures showing a 3.8% year-over-year increase in overall market revenue.

This upward trend is expected to continue, with the market reaching $12.3 billion in 2024 and being projected to grow to $19.7 billion by 2034, driven by shifting consumer lifestyles, rapid urbanization, and increasing demand for convenient garment care services.

The industry’s primary customer base is largely made up of busy professionals and urban residents — a demographic that is growing rapidly, which means demand for laundry and dry cleaning services is expected to increase significantly in the coming years.

Another major trend, which has come as a response to broader shifting consumer preferences, is the industry’s adoption of eco-friendly practices, using energy-efficient machines and sustainable cleaning methods to attract environmentally conscious customers.

Moreover, the rise of digital platforms has streamlined service delivery, making it easier for customers to schedule pickups and track orders online, which is expected to drive demand even further as consumers increasingly prioritize convenience.

This trend, in particular, is expected to significantly boost demand, making online integration a key driver of growth over the next decade.

Startup Costs

If you’re considering whether a laundry and dry cleaning business is right for you, the first thing you’ll need to know is whether it’s a) affordable, and b) worth the investment. I mean, how much can you actually make running your own laundry and dry cleaning business?

Well, it depends. The initial investment for a laundry and dry cleaning business varies widely based on several factors, such as:

• Commercial Equipment: You will need to invest in high-quality washers, dryers, and pressing machines, with the total cost ranging from $50,000 to $150,000, depending on the overall capacity and functionality needed for your business.
• Lease or Property Costs: You should budget for renting a storefront in a high-traffic area, which can cost anywhere between $1,000 and $8,000 per month. If you are purchasing property instead, you should expect to spend anywhere from $100,000 to over $500,000.
• Renovation and Setup: You will have to allocate $8,000 to $50,000 for preparing the space, installing plumbing and ventilation, and ensuring compliance with health and safety codes.
• Permits and Licenses: You will need to budget between $500 and $5,000 for the necessary business licenses and local permits, such as health department approvals and fire safety permits, to legally operate your laundry and dry cleaning business.
• Initial Inventory: You should set aside at least $2,000 to $10,000 for detergents, cleaning agents, solvents, and packaging supplies, depending on the scale of your operation.
• Staffing: For a standard-sized laundry and dry cleaning business, you’ll likely need to start with 3 to 5 employees, depending on your service hours and whether you offer delivery. The costs will depend on local wage rates and the specific roles needed, but you can generally expect to spend between $2,000 and $5,000 per employee each month.

Keep in mind that a laundry and dry cleaning business, just like any other business, may face unexpected costs in the beginning, such as sudden equipment malfunctions, last-minute compliance upgrades, or unexpected increases in utility rates.

This is why it’s generally recommended to have at least three to six months of working capital on hand, which for a laundry and dry cleaning business usually means setting aside anywhere from $30,000 to $100,000, depending on the size and scale of your operations.

Earning Potential

The earning potential for a laundry and dry cleaning business is generally strong, with most operations benefiting from consistent revenue and healthy profit margins.

For laundry services, typical profit margins range from 20% to 35%, while dry cleaning services usually see net margins between 10% and 25% — both of which are considered quite high when compared to other small businesses.

This is why nearly 95% of laundromats successfully survive the first five years of operation, making it one of the most reliable business models in terms of longevity and profitability.

Simply put, you benefit from high turnover, low overhead costs, and steady demand — factors that create a solid foundation for sustainable financial growth. One thing to never overlook is the importance of customer service, especially in a business where you’re handling people’s personal belongings.

This doesn’t mean that customer service alone is enough to make your laundry and dry cleaning business successful, but without it, failure is almost guaranteed — especially when it comes to dealing with sensitive issues like misplaced or damaged items.

Remember that you don’t want to be in the “one-time wash” business — you want to be in the “repeat customer” business, as nothing is more tied to your profitability than excellent customer service.

7 Steps to Starting a Laundry and Dry Cleaning Business

In order to start a laundry and dry cleaning business, you’ll need to complete the following steps:

1. Planning Your Laundry and Dry Cleaning Business
2. Registering Your Business
3. Secure Funding (If Applicable)
4. Finding and Securing the Right Location
5. Getting a Business Bank Account and Credit Card
6. Getting all Applicable Licenses and Permits
7. Obtaining Business Insurance

We’ve broken each one of these down in more detail below.

Still exploring your options? Check out other small business ideas.

Step 1: Plan Your laundry and dry cleaning business

Before diving into your laundry and dry cleaning business, you’ll need to spend some time conducting thorough market research.

To do this, you will need to analyze your local market to understand customer needs, evaluate the competition to see what services are being offered, and identify potential gaps that you can fill to differentiate your business.

From there, you will need to determine which services you will offer — whether it’s wash-and-fold, dry cleaning, stain removal, or specialty garment care — and decide which ones will help you stand out the most.

This will help you evaluate the financial viability of your project — including projected revenues and expenses — as well as determine the best location for your business.

Finding a Suitable Name

Choosing the right business name is both important and challenging.

This is because your name will need to be eye-catching, memorable, and (at least somewhat) related to your industry.

If you don’t already have a name in mind and need help, you can visit our How to Name a Business guide or use our Laundry and Dry Cleaning Business Name Generator tool.

If you do have a name in mind, we recommend researching the following:

• Your state’s business records
• Federal and state trademark records
• Social media platforms

You will also need to make sure that your business’s name is available as a domain — this is your website’s URL address.

Note: If you’re planning to operate a sole proprietorship, you might want to operate under a business name other than your own name — known as a “Doing Business As” (DBA) name. Keep in mind that this is not recommended for a laundry and dry cleaning business. ore someone else does.

Designing Your Store Layout

The next step you will need to take when planning your laundry and dry cleaning business is design your store layout in order to optimize the workflow for maximum efficiency and customer satisfaction.

To achieve this, you will need to start by mapping out where washers, dryers, and pressing stations should be placed in a logical sequence to minimize movement and keep tasks flowing seamlessly.

Think through how staff will move between stations, where each piece of equipment will go, and how to reduce any unnecessary backtracking or overlapping in their paths.

For the customer area, you should also consider where the service counter should be located to allow easy access for both staff and customers, as well as its proximity to the drop-off and pick-up zones.

Don’t be afraid to visualize how customers will navigate the space — this will help you design a truly functional layout.

Creating a Detailed Business Plan

A detailed business plan is essential for outlining your business strategy and securing funding.

When drafting one, be sure to include an executive summary, market analysis, organizational structure, product line, marketing strategy, and financial projections.

It should also detail your operational plan, including staffing, equipment, and maintenance.

For more information on this step, you can have a look at our How to Write a Business Plan guide.

Step 2: Register Your Business

One crucial aspect that cannot be overlooked when starting your laundry and dry cleaning business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they’re a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business’s debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business’s liabilities.

In practice, this means that if your laundry and dry cleaning business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

Note: If you’re interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

Step 3: Secure Funding (If Applicable)

Securing funding is a critical step in starting your laundry and dry cleaning business. Financing options include bank loans, Small Business Administration (SBA) loans, private investors, and crowdfunding.

Keep in mind that how successful you are in securing funds will depend heavily on the size of your initial investment, your credit history, as well as how solid and detailed your business plan is in demonstrating the profitability and sustainability of your venture.

Of course, the extent that this step will be applicable to you will depend on your individual financial situation.

Step 4: Find and Secure the Right Location

The next step you’ll want to take is to find (and secure) the right location for your laundry and dry cleaning business.

The best location for your laundry and dry cleaning business will depend heavily on your specific business model and who your target customers are.

For example, if you plan to focus on high-end dry cleaning, choosing a spot near affluent residential areas would make the most sense because your target customers are likely to be professionals seeking specialized garment care.

On the other hand, a self-service laundromat would perform better in a densely populated neighborhood with a large concentration of renters, as these customers are typically looking for affordable and convenient laundry solutions.

Of course, cost is also a critical factor that must always be considered — after all, a more expensive location might provide higher foot traffic and better visibility, but at some point, the added expense won’t necessarily translate into increased customer volume or profitability.

This is because there comes a point where the benefits gained no longer justify the extra costs, leading to diminishing returns that can strain your budget without a meaningful impact on your revenue.

Note: You will also need to make sure that your prospective property is zoned for commercial use and complies with all applicable local and state regulations (discussed in more detail in Step 6).

Step 5: Open a Business Bank Account and Credit Card

Using dedicated business banking and credit accounts is essential when operating as a business owner; this is because when your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) can be at risk in the event your business is sued.

In business law, this is referred to as piercing your corporate veil and is a result of the fact that not having a separate business bank account can be interpreted by some courts as evidence that you are not treating your business as a separate financial entity.

As a result, you could lose your limited liability protections even if you’ve registered a separate business such as an LLC or C Corp.

There are also a variety of practical and economic benefits to this step, such as a larger access to business loans and a more legitimate look.

Getting a business credit card can also be a great idea as it can help you build your company’s credit history from the start.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Step 6: Secure All Required Licenses And Permits

The applicable licenses and permits that you’ll need will largely depend on your state and local regulations.

Even so, we’ve compiled a list of some of the common licensing regulations that you’ll likely need to satisfy in order to operate legitimately.

Professional Dry Cleaning License

Some states will require you to obtain a professional dry cleaning license in addition to a general business license.

This license is specifically aimed at ensuring that your business meets industry standards for handling chemicals and providing safe dry cleaning services, and it often involves meeting specific training, getting certified, and complying with all applicable safety requirements.

Signage Permit

If your laundry and dry cleaning business plans to install any exterior signs, you will likely need to obtain a signage permit to ensure compliance with local regulations.

These permits are generally required to ensure that your signs comply with zoning, safety, and aesthetic standards, with the specific requirements depending on your business’s location.

Zoning and Land Use Permits

Before establishing a laundry and dry cleaning business, you’ll need to ensure that the land is zoned appropriately for a commercial facility.

Zoning regulations vary by locality and dictate the types of activities that can be conducted on a piece of land. In some areas, you may need to obtain a special use permit or a variance if the land is not already zoned for your intended use.

We recommend consulting with your local zoning authorities in order to understand the specific requirements and restrictions that will be applicable to your laundry and dry cleaning business. Alternatively, you can consult with a business attorney if you want someone else to take care of this for you.

ADA Compliance

The Americans with Disabilities Act (ADA) requires all public facilities, including laundry and dry cleaning businesses, to be accessible to individuals with disabilities.

This includes providing accessible routes, ensuring that slopes and landings meet specific gradient requirements, and removing any barriers that could impede access. Compliance with ADA standards is not only a legal requirement but also ensures that your facility is inclusive and welcoming to all patrons.

Step 7: Secure Business Insurance

In addition to securing the necessary permits and licenses, you will need to obtain the right business insurance.

Note

Even if you form an LLC, purchasing business insurance is still a good idea. This is because an LLC structure protects your personal assets, not your business’s.

While specific coverage needs may vary based on factors such as location, size, and unique risks, there are several key types of insurance that most laundry and dry cleaning businesses should consider.

We’ve briefly outlined these below.

General Liability Insurance

General liability insurance is a foundational coverage that’s essential for laundry and dry cleaning business because it protects against claims of bodily injury, property damage, and personal injury that may occur on your premises.

The average cost for general liability insurance according to recent data is $42 per month, or $504 annually, though costs can vary based on your business’s specific needs and risks.

Bailee’s Coverage

Bailee’s Insurance is specifically designed for businesses like laundromats and dry cleaners — where customers’ items are in your possession temporarily — and it covers loss, damage, or destruction of garments while they are under your care, custody, or control.

The cost of this coverage can vary based on factors such as the size of the business, the value of items handled, and the specific coverage limits chosen, but it typically ranges from $500 to $1,500 annually for a small laundromat or dry cleaning operation.

Property Insurance

Property insurance is essential for safeguarding your laundry and dry cleaning business’s physical assets, such as the building, equipment, and inventory.

The median cost for business property insurance is approximately $63 per month for plans with a $1,000 deductible and a $60,000 policy limit.

Having said that, rates can vary significantly based on factors such as your location, risk profile, and the value of the property in question.

Workers’ Compensation Insurance

If your laundry and dry cleaning business will have employees, workers’ compensation insurance is likely going to be a legal requirement depending on your state.

This insurance policy provides coverage for medical expenses and lost wages to employees who are injured during work.

The average cost of workers’ compensation insurance ranges between $45 per month, but this can vary based on factors such as payroll, location, and (once again) your business’s specific risk profile.

Ready to Get Started?

How to Start a Laundry and Dry Cleaning Business FAQs

How to set up a dry cleaning service?

To set up a dry cleaning service, you’ll need to research your local market, secure a suitable location, and invest in specialized equipment like dry cleaning machines and steam presses.

You’ll also need to obtain the necessary licenses and permits and implement proper chemical handling and safety procedures.

Is it a good idea to start a laundry and dry cleaning business?

Generally, yes, it’s a good idea to start a laundry and dry cleaning business, as it offers strong profit margins and consistent demand.

Having said that, the success of your venture will always depend on your location, target market, and ability to manage operational costs effectively.

What is the downside of owning a laundry and dry cleaning business?

One downside of owning a laundry and dry cleaning business is how dependent you are on maintaining a spotless reputation.

Your business relies heavily on customer trust, and just one mistake — such as damaging or losing a customer’s item — can really strain relationships and lead to negative reviews, impacting your bottom line.

How to start a laundry and dry cleaning business with no money?

Starting a laundry and dry cleaning business with no money is difficult but possible by exploring options like finding investors, applying for small business loans, or seeking out grants.

You could also consider partnering with someone who has the capital or starting small with a mobile laundry service to build up funds.