LAUNDRY FEASIBILITY STUDY I. INTRODUCTION a. Background b. Laundry Shop Profiling II. MARKETING ASPECT c. The Laundry Business Industry d. Target Market i. Target Location 1. Demographic Study a. Makati b. Manila c. Pasay 2. Industrial Market 3. Supply and Demand Analysis ii. Competition 1. Major Competition 2. Plotting of Laundry Shops a. Makati b. Manila c. Pasay iii. Comparative Price Analysis iv. Marketing Strategies III. TECHNICAL ASPECT e. Types of Washer & Dryers f. Operating Procedure i. Sorting ii. Preparing & Pre-Treating iii. Detergents iv. Bleach v. Stain vi. Fabric Softener vii. Loading The Washer
Transcript
LAUNDRY FEASIBILITY STUDY
I. INTRODUCTION
a. Background b. Laundry Shop Profiling
II. MARKETING ASPECT
c. The Laundry Business Industry d. Target Market
i. Target Location1. Demographic Study
a. Makati b. Manila c. Pasay
2. Industrial Market 3. Supply and Demand Analysis
ii. Competition1. Major Competition
2. Plotting of Laundry Shopsa. Makati
b. Manila c. Pasay
iii. Comparative Price Analysis iv. Marketing Strategies
III. TECHNICAL ASPECT
e. Types of Washer & Dryers f. Operating Procedure
i. Sorting ii. Preparing & Pre-Treating iii. Detergents iv. Bleach v. Stain vi. Fabric Softener vii. Loading The Washer viii. Dyer Setting ix. Laundry Shop Procedure
1. Flow Chartg. Lay-out and Machine Requirements
i. Physical Arrangement
IV. MANAGEMENT ASPECTh. Ownership
i. Manpower Requirements
V. FINANCIAL ASPECT
j. Start-up Capital k. Assumptions l. Projected Return of Investment
I. LAUNDRY INDUSTRY
A. BACKGROUND
Since the early 1990’s the household market, particularly the middle income segment, has been an emerging market since the services of household help, or “labandera” had become difficult to obtain or if available, have become relatively expensive. This demand has been manifested with the mushrooming of laundry shops all over Metro Manila. Big Laundry companies whose main focus is institutional accounts, have also expanded their business to cater to this market segment with some offering franchises.
The household market is considerably saturated in regards the number of existing laundry shops. Many households still perceives the laundry shops as an expensive alternative primarily due to their impression of laundry shops charging high prices since these establishments maintain big operating and overheads cost and put the premium on their established image. Currently 50% of the potential household market is availing the services of laundry shops.
TYPES OF LAUNDRY BUSINESS1. Large Laundry Houses (Famous, Manila Stream)2. Franchise Laundry Networks (Lavandera Ko, Metropole)3. Dry Clean & Pick-up (located in malls)4. Stand Alone Laundry Shops
B. LAUNDRY PROFILING
Chart1
0
20
40
60
80
100
120
140
160
180
Quantity
2005 2006 2007 (Projected)
Years
Registered Laundry Shop (2005-2007)
MAKATI CITY MANILA PASAY CITY
Table 1: Registered Laundry Shops
LOCATION 2005 2006 2007 (Projected) TOTALMAKATI CITY 145 176 110 431MANILA 111 98 96 305PASAY CITY 32 38 55 125Grand Total 288 312 261 861
Note: *2007 Projection is based on actual data from Jan to May then averaging for the remaining months* Monthly average for 2006 is 34 units while 28 shops for the year 2007
Chart2
TYPES OF OWNERSHIP
9%1%
90%
Corporation Partnership Sole Proprietorship
* Data was based on DTI Registered Laundry Shops
Table 2: Forms of Ownership FORM OF OWNERSHIP LOCATION Corporation Partnership Sole Proprietorship Grand TotalMAKATI CITY 13 2 129 144
MANILA 5 2 209 216PASAY CITY 1 57 58Grand Total 18 5 395 418
* 2006 to 2007 Data
This table shows that majority of laundry shops were sole proprietor which covers 95% of the total registered shops. 4% represents the corporations while 1% comprises the partnership.
Advantages of Sole Proprietorship are in complete control, and within the parameters of the law, may make decisions as they see fit. Profits from the business flow-through directly to the owner's account while on the other hand they are legally responsible for all debts against the business. Their business and personal assets are at risk. May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.
Partnerships
Advantages of a Partnership
4 Partnerships are relatively easy to establish; however time should be invested in developing the partnership agreement.
With more than one owner, the ability to raise funds may be increased. The profits from the business flow directly through to the partners' personal tax returns. Prospective employees may be attracted to the business if given the incentive to become a partner. The business usually will benefit from partners who have complementary skills.
Disadvantages of a Partnership
5 Partners are jointly and individually liable for the actions of the other partners. Profits must be shared with others. Since decisions are shared, disagreements can occur. Some employee benefits are not deductible from business income on tax returns. The partnership may have a limited life; it may end upon the withdrawal or death of a partner.
Sole Proprietorship disadvantage in terms of laundry servicing againts Corporations and Partnerships is the capacity to service institutionalized companies. It has minimal capitalization but lower chances in achieving higher revenue which corporate accounts offers. Its sustainability depends on residential and semi-commercialized clients.
II. MARKETING ASPECT
A. The Laundry Industry
Table 3: Industry Growth
GROWTH RATE
LOCATION 2005-2006 2006-2007MAKATI CITY 18% -60%MANILA -13% -2%PASAY CITY 16% 31%Grand Total 8% -20%
The above table shows that from 2005 to 2006, the industry grew by 8% while for 2006 to 2007 it indicates a decreased in growth by 20% which translates that location was saturated. Pasay City on the other hand shows an increasing trend from 2005 to 2007. Makati has a remarkable decreased of 60% while Manila is constantly declining from 2005 to 2007.
But this table does not translate to the market. Industries and households are continuously increasing every year. Practical living is mostly encouraged to households therefore. Therefore opportunities of slicing a good market share are at the hands of the marketing effort.
Chart3
GROWTH RATE Registered Laundry Shops
2005-2007
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
MAKATI MANILA PASAY Overall Growth
LOCATION
%A
GE
2005-2006 2006-2007
B. Target Market
1. Regular Accounts Residential
Residential / Commercial o Buildings
o Condominiums o Townhouses
2. Institutional Accounts Restaurants
Hotels Motels Lodging-Inn Apartelle Dorms Salons/Barber shops Hospitals, Clinics and Lying-In Facial House Massage and Spa
B. Target Market
i. Location
Location is very important aspect in any business but in consideration with the huge number of laundry shop within the three major city (Makati, Manila and Pasay), household or residential market would is not be sufficient enough to sustain business. Therefore location would be immaterial as long as you were able to expand the business horizon in offering services not only within your vicinity but as far as you can go.
1. Demographic Study
a.. MAKATI CITY
Table 4: Population (Makati)Population Area(year 2004) (km²) Population Area
TOP 10: BASED ON POPULATION Popuation RankingRizal 37,022 1Pembo 35,035 2West Rembo 28,889 3Cembo 25,815 4Post Proper Southside 25,037 5East Rembo 23,902 6Pio del Pilar 22,495 7Guadalupe Nuevo 22,493 8Bangkal 22,433 9Olympia 20,172 10
Status Level:
Upper Class - Represents the minority of the population of Makati with roughly 16% of the total population. (Forbes Park, Dasmarinas, Magallanes, Urdaneta, Carmona, San Lorenzo and etc.)
Middle Class - shows 47% share of the total population. This is also known as the working group. This group provides the higher margin in acquiring laundry services. (Poblacion, San Isidro, La Paz, Bel-Air, San Antonio, Palanan, Pio del Pilar and etc)
Lower Class - Mostly represented by residential area in makati with 37% (East Rembo, Post Proper Southside, Cembo, Pembo Rizal and etc.)
b. MANILA CITY
Table 5: ManilaArea Population Ranking
Tondo 590,307 1 Sampaloc 251,352 2 San Andres Bukid 116,998 3 Santa Cruz 107,154 4 Santa Mesa 100,997 5 Pandacan 79,003 6 Malate 77,398 7 Paco 64,184 8 Sta. Ana 60,482 9 Quiapo 24,615 10 San Miguel 16,798 11 Binondo 11,619 12 Intramuros 11,099 13 Ermita 5,969 14 Total 1,517,975
Note: NSO Data 2000
Manila’s demographic are composed mainly of household population; it represents a range from 60% to 80% of the total population. Market share in terms of industry growth is seemingly low
due to saturation of small time laundry shops.
c. PASAY CITY
In terms of area, Pasay City is the third smallest political subdivision in the National Capital Region, it has a population of 354,908 population in year 2000.
Pasay is composed of seven (7) districts, divided into twenty (20) Zones, with a total of 200 Barangays. Zone 19, Covering Barangays 178 and 191 is the largest among the zones with an area of 5.10 square kilometers. Zone 1, on the other hand, is the smallest covering Barangays 1 to 3 and 14 to 17 with an area of 100,000 square meters (0.1 sq. km.).
Just like manila, the high density of people evolved mainly to household population.
PROPOSED LOCATIONCriteria for the Selection of the Target Location are as follows;
Business Establishment Makati Manila PasayBarber Shops 44 30 13Beauty Salons 94 60 23Facial House 15 15 3Gym 71 45 13Hospitals 15 38 7Hotels, Motels, Pension Inn and etc. 117 175 53Massage 89 55 12Restaurant 1,034 866 281Spa 234 189 44Total Establishment 1,713 1,473 449* Based on clickthecity.com
3. SUPPLY AND DEMAND ANALYSIS
Table 1: Supply and Demand Analysis for Residential
SUMMARY!R21C1:R33C4RESIDENTIAL HOUSESTotal Population 472,509 1,517,976 390,399 Assumed Percentage who uses Laundry Services 60% 30% 30%POTENTIAL MARKET 283,505 455,393 117,120
Average of people per household 5 7 7TOTAL HOUSEHOLD 56,701 65,056 16,731
Laundry Shops (as of 2005-2007) 431 305 125
Laundry Shop over Total Household 131.56 213.30 133.85
RATIO 1 : 131 1 : 213 1 : 133
The analysis shows that the demand for every laundry shops it serves 131 households in Makati, 213 households in Manila and 133 households in Pasay. Since Majority of the user population came from the Middle Class which has a share of 47% of the total population the vicinity within the areas of Poblacion, San Isidro, La Paz, Bel-Air, San Antonio, Palanan, Pio del Pilar and etc has great potential for laundry shops.
Table 2: Supply and Demand Analysis for Commercial Establishment
Laundry Shops (as of 2005-2007) 431 305 125Assumed Percentage of Laundry Shops that has capacity to service 70% 60% 50%TOTAL LAUNDRY SHOP 302 183 63
Laundry Shop over Institution 3.97 4.02 3.59
RATIO 1 : 4 1 : 4 1 : 4
This table shows that for every laundry shop they are able to service 4 commercial establishments.
ii. COMPETITION
1. MAJOR COMPETITION
REPORT 1 !R41C1:R53C4TOP LAUNDRY SHOP IN MAKATI, MANILA AND PASAY (as of 2006-2007)
Number of Branches Name of Laundry Business4 LABANDERA SHOPPE - GIL PUYAT BRANCH4 LAVANDERA MO LAUNDRY4 LET'S TALK DIRTY LAUNDRY SERVICES3 BRO & SIS LAUNDRY SHOP - BRANCH 23 CLEAN CARE LAUNDRY3 LAUNDRY NI SIS -BRANCH 3 LIGHT BLUE LAUNDRY SERVICE3 MONSOON LAUNDRY SHOP3 SMART CHOICE LAUNDRY - UR CLOTHES CARE CENTER
* 49 out of 418 Registered Laundry Shops has branch with an average of 2 branches.
2. PLOTTING (see attached sheet file)
iii. COMPARATIVE PRICES ANALYSIS
Price and Service Comparative Analysis sampling is 38 shops, out of 400 laundry shops within the cities of Makati, Manila and Pasay. Result shows below.
price comparison!R57C2:R65C6SUMMARY AVERAGE MINIMUM MAXIMUM RECOMMENDED PRICE
B. Our ShopFacade area, a mimic of huge washing machine, doors are made in acrylic glass to accentuate the interior of shop. Sign of virtual/cyber will be inserted in outside features Receiving area, white drapes, white sofa and white curtains, Television set in one corner, computer sets, coffee tables and plants. Blue lightning to generate the cyber moodMusic: Bosanova musics, Shop scent: fabric conditioner or Sampaguita
B. Advertising Efforta. Set A - Teaser campaigns in support for the soft launch
i. Stickering, Inserts and Mini postersVisit your new place…Looking for FREE? Visit your new place…Be amazed and satisfy! Visit your new place….
ii. Flyering House to house flyeringBanners and StreamersReferral Bonus
Your 1st Kilo is Free…10% Discount
C. The Concept
a. Combining the following terms in laundry businessi. Our Services = Laundry (insert specifics)
ex. Dry Clean etc.ii. Cyber/Virtual = E - laundry spot, set up of computers inside the laundry shopiii. Freebies and Giveaways = (Laundry Bags, Hamper etc.) To add
client satisfaction
b. Key words to emphasize in all aspect of brand awarenessi. Quality of Service
Clean Well-ironed Clothes No Mixing of ClothesConvenienceFeels like home…
v. AffordableCompetitive Pricing
vi. ExpressShortest Processing Time
c. Value Added services
ci. Courteous EmployeesHome AmbianceFree tea while you waitFree web surfing while you wait
d. Programs (Long-Term Plan)E-Laundry Card (Acquisition of Clients)E-Laundry Discount Card (Loyalty Program)FREE laundry service (Acquisition Program)
MECHANICS
E-Laundry Card
CARD VALUE1. Membership Card, access to utilize shop’s amenities; FREE web surfing, FREE tea and Free items for every visit with NEW CLIENT2. Discount features, for every minimum amount of rendered services they are entitled to get 10% discount
FREE LAUNDRY SERVICEMaterial: 3’ x 4’ coated paper; sticker/sign/stamp
Mechanics:1. Initial Card, will be given upon pick-up or delivery of clothes2. For the next visit, customer should secure sticker/sign/stamp from assigned agent3. If they complete the 4 stickers/signs/stamps they can get FREE Laundry service for the next visit
V. Campaigns, thematic campaigns will be launch 2 weeks prior to actual celebration
a. June - Back to Schoolb. July - Rainy Seasonc. August - Huling Hataw sa Taguland. September -e. October - Octoberian Theoryf. November - Halloweeng. December - Christmas and New Yearh. January - Three Kingsi. February - Valentines Dayj. March - Graduation Monthk. April - Holly weekl. May - Summer Time!
III. TECHINICAL ASPECT(OPERATING PROCEDURE)
A. TYPES OF WASHER AND DYERS
1. Top-load washers are the most traditional and familiar. The clothes are cleaned by the back and forth movement of the agitator.
Front-load washer do not have and agitator. The wash action is created as the clothes tumble through the water (similar to a dryer). Front-loaders have larger capacity than top-loaders and can hold larger items such as comforters. These washer are available in a variety of sizes.2. Single-load dryers are similar to the dryers people use in their homes. They are found as two dryers stacked on top of each other or a single dryer (common in apartment complexes). Single-load dryer’s use a lower drying temperature, so the load may take slightly longer to dry than in
larger dryers. Wash loads from top-load washer are the right size for these dryers.
3. Multi-load dryers are usually teamed with front-load washer because they can more effectively dry larger wash loads. Two or three compatible loads from top-load washer can also be dried in this type of dryer. Since they use higher drying temperature and greater air movement, the drying time is shortened.
B. Operating Procedure
i. SORTING
Proper sorting is important to prevent color transfer, shrinking and minting. Here are the general guidelines.
COLORSeparate whites from color and light colors from bright or dark colors. Different wash water temperatures are needed from maximum cleaning and to keep colors from fading.
FABRICSome fabric (white cotton, lines and underwear)require hot water and vigorous washing; others (washable woolens and dark colors) require cold water and short was times to prevent shrinking or fading; still other like permanent press and no-iron fibers (acrylic, nylon, polyester and etc) require special treatment to minimize wrinkling.
SURFACE TEXTURESome fabrics attract lint (permanent press and corduroy), while others procedure lint (terrycloth and other cottons). Lint-givers should be wash separately from lint-catchers. In other words, DO NOT WASH TOWELS WITH PERMANENT PRESS PABRICS!
CONSTRUCTIONLoosely knit garments, items with latest trim or hand washable items required “delicate” or “Gentle” laundry procedure. For example, lingerie should be wash separately from jeans.
DEGREE OF SOILHeavily soiled work or play clothes should be washed separately from lightly soiled clothes. Wash your grubbies in a separate load from your good clothes.
ii. PREPARING AND PRE-TREATING
A. PREPARINGo Empty pockets. Overlooked tissues, crayons, lipsticks a ballpoint pen or any metal
object can create real problems when they get into the wash.o Shake out loose dirt. Brush dirt and lint out cuffs.o Close zippers, hooks and eyes. They may catch and snag other clothes in the load.
o Sew up rips and tears before laundering. Otherwise, washing may make them worse.
B. PRE-TREATINGo Refer to the stain removal section to get instructions from removing a specific
stain. The more quickly a spot or stain treated, the easier it is to remove. o Heavy soil on collars and cuffs should be pretreated. Use a liquid detergent and
water or special pre-treatment products (Clorox Stain Out, Wash or Shout). Make sure to follow manufacturer’s directions.
Since some sprays may soften fingernail polish, be careful to avoid rubbing your nail polish off on the clothes you are treating.
iii. DETERGENTS
Granular Detergents are traditional form of laundry detergent. They generally remove mud and clay better than liquids. Heavy-duty, liquid detergents are gaining popularity because they are especially good for cold water washing. They clean greasy, oily stains better than granular detergents.
Keep in mind that detergents wash best in warmer water temperatures. In fact, they are not effective when the water temperature is below 65 degrees Fahrenheit.
AMOUNT TO USE
Top-loader Washer- Regardless of the type of detergent, you should follow package instruction for the amount to be used. The recommendations are for an “average” load soil in water of “average” hardness (4-9 grams per gallon). Use extra detergent for big loads, extremely dirty clothes or hard water.
Front-loaders Washer- For best result, use a high-efficiency detergent. Follow the direction for the amount to be used. The detergent can be added either to the dispenser or directly to the clothes load.
Other detergents may be used, but it will need experiment with the amount. Too little detergent will mean poor cleaning and increased lint appearance. However, too much detergent can cause damage to the washer.
iv. BLEACH
Bleach removes stains, whitens fabrics and improves cleaning.
CHLORINE BLEACHChlorine Bleach can be identified by the word “Chlorine”. It can be use to any type of clothes except silk, wool, spandex, mohair or not colorfast fabrics. Make sure to check
labels. Liquid Chlorine is a powerful chemical and can damage clothes unless it is diluted properly. The amount to use varies with the type and size of washer.
Top-Loader Washer - Use 1 cup or less. Dilute the bleach in a one quart of water. Add it to the washer after it fills and agitation begins.
Front-Load Washer - The amount to use depends on the washer size.
o Double Load - ½ - ¾ cup o Triple Load - ¾ - 1 cup o Super Load - 1 - 1 ¼ cup
Dilute in one quart of water. Add to the bleach dispenser when the “bleach” light comes on.
NON-CHLORINE BLEACHThis bleach is identified by label comments such as “safe for all fabrics” or “all fabric bleach”. It maintains to garments that have become gray and dingy. It may be added in the recommended amount along with detergent when loading the washer.
DETERGENT WITH NON-CHLORINE BLEACHSome detergent combines detergent and all-fabric in one product. The added bleach improves general cleaning as well as stain removal. These products are convenient to use and safe for all fabrics.
Note: While all types of bleach can be use with any of the washer, powdered non-chlorine bleach is easier to use with front-load washer.
v. STAINS
The three “P’s” of Stain Removal
PROMPTNESS - Treat stains as quickly as possible before laundering. Aging and laundering before pre-treatment can set some stains.
PATIENCE - If the garment is worth saving, it is worth a little extra time and effort to follow stain removal procedure. PERSEVERANCE - Some stains are difficult to remove. It may be necessary to repeat a procedure several times before a stain is removed.
Here are some stains that are hard to remove.
Beverages such as alcohol, coffee, soda, tea and wine Blood Candle Wax Tomato Products / Catsup Gum and Adhesive Tape
Chocolate and Cocoa Cosmetics like lipsticks, eye shadow, liquid make-up and mascara. Crayons Deodorants Dye Transfer Egg, Meat Juice and Gravy Fabric Softener Fruit and Fruit Juice Grass Grease and Oil Ink and Ballpoint / Felt Tip Pen Mayonnaise, Mustard and Salad Dressing Mildew Milk, Cream and Ice Cream Mud Nail Polish Water Based Paint Pencil Lead Perfume Perspiration Rust Shoe Polish Tar Urine or Stool
vi. FABRIC SOFTERNER
Fabric softener reduces static cling, minimizes wrinkling and softens clothes.
RINSE ADDED - These softeners are added to the final rinse of the wash cycle. Brand names include Downy, Snuggle and Final Touch. Follow the instruction for use. Never pour fabric softener directly onto the clothes as it can case grease-like stains (refer to stain removal section if this occurs)
Add diluted softener to the final rinse water when the “rinse” indicator light comes on.
If the washer has a dispenser, add undiluted softener to the fabric softener dispenser at the beginning of the cycle. It will automatically be diluted and added to the cycle at the proper time.
DRYER-ADDED - When using dryer-added softeners, only one sheet per dryer at the beginning of the dry cycle. If the dryer overloaded, staining may occur (refer to stain removal section) Brand names included Bounce, Downy, Snuggle and Cling Free.
DETERGENT WITH FABRIC SOFTENER - This offers the convenience of adding both detergent and fabric softens washer at once, while buying just a product rather than two.
vii. LOADING THE WASHER
Overloading can results to poor cleaning, excessive lint and extra wear on fabrics. Load the washer loosely, with dry unfolded clothes.
Do not pack them in, since they must circulate freely in the wash basket for thorough cleaning and rinsing
For best washing action, make up the load with items of different sizes. No more than two or three sheets or similar larger items should be included unless smaller articles are added to complete the load.
viii. DRYER SETTING
Ironing can be practically eliminated by using dryer properly. Since many clothes are permanent press or “no iron” garments, the choice of ironing can be virtually eliminated by using a dryer properly. Items such as towels, jeans or underwear are much softer and more comfortable to wear and use when tumbled dried.
Although many clothes today can be dryer dried, be sure to check the care label to make sure. Never dry the following items on a heating setting:
a. Rubber-Coated Clothes b. Laminated Fabrics c. Vinyl d. Plastics
e. Clothes containing foam rubber f. Some Wool
Do not over dry fabrics. It is Norman for elastic bands in shorts, socks or bras to feel slightly damp when first removed from the dryer. The following is an example of the setting to use for different loads.
White & Colors / High Temperature - For drying non-permanent press items such as towels, underwear, jeans and diapers.
Permanent Press - For permanent press, nylon, acrylic, polyester and blends of these with other fibers. Items can be labeled “tumble dry” or “tumble dry-medium” longer “cool down” period is provided at the end of the cycle to minimize wrinkling.
It is essential to remove these garments from the dryer immediately when tumbling stops since they will become wrinkled if allowed to lie in the drum
Some garments may not perform as well as others, even though they are labeled “permanent press” or “no iron”. If laundered properly and results are poor because of faulty garment finishing touching-up ironing may be needed.
Delicates / Low Temperature - For lingerie, “hand washable” items machine wash and dry woolens, and those hear sensitive labeled “tumble dry-low” or “tumble dry-war”
ix. LAUNDRY PROCEDURES CHART
procedure!R3C2:R9C7Selection
Wash Water Temp.
Rinse Water Temp.
Cycle Description Laundry Products Dryer Setting
Whites Hot Cold Regular Wash and Spin
Any Laundry Detergent in Hot or Warm water
High Temperature (applicable to colored clothes)
Colored Warm Cold Regular Wash and Spin
Liquid or Pre-dissolved Granular Detergent in Cold Water
Bright Colors Cold Cold Regular Wash and Spin
Chlorine or Non-Chlorine Bleach Fabric Softener
Permanent Press
Warm Cold Reduces Wrinkling Any Laundry Detergent in Hot or Warm water
Permanent Press
Delicates and Knits
Warm Cold Short Wash and Soak
Any Laundry Detergent Chlorine Bleach (except spandex) or Non Chlorine Bleach Fabric Softener
Delicate or Low Temperature
Woolens Cold Cold Short Wash and Soak
Liquid or Pre-dissolved Granular Detergent in Cold Water
Delicate for "Machine Wash and Dry" Woolens Air Dry "Handwashable" Woolens
