Starting a laundromat business in Singapore can be a rewarding venture. One of Asiaโs financial hubs and a densely populated urban center, Singapore has a robust laundry services market. If you combine the island nationโs thriving economy with a service that fulfills a fundamental need, this makes it an ideal location to establish and grow a laundromat business. From understanding market dynamics to navigating regulatory requirements, your entrepreneurial journey requires careful planning and strategic execution to achieve long-term success.
Content In This Article
Overview of the Laundromat Business in Singapore
Singapore is a highly developed country with one of the highest GDP and GDP growth rates. The country has a gross domestic product (GDP) of over $50,000 per capita and a constant growth rate of 7.7%, hence it is known to have one of the most stable economies in the world. They are also known to have stable electricity, proper drainage, and business-friendly laws.
In 2024, Singaporeโs laundry care market is expected to generate a revenue of $180.80 million, and it is projected to grow at a CAGR of 2.36% until 2029. The laundry and dry cleaning market in Singapore is driven by urbanization and busy lifestyles. Laundromat businesses offer these potential customers time saving and efficient clothing care services.
These favorable business conditions, coupled with the profitability of laundromats, are reasons why you should consider starting a laundromat business in Singapore, and this article will guide you through the process.
How Profitable is a Laundromat Business in Singapore?
Laundromat businesses are quite profitable. How can that apply to you as an entrepreneur?
Letโs create a hypothetical laundromat. If you set the price at $10 for washing a 10kg laundry load, and 20 people wash that amount daily, your daily earnings would amount to $200. Similarly, charging $15 for 30 minuites of drying and handling 12 dryer loads each day would yield $180. This accumulates to a total of $380 per day.
Expanding this calculation to a weekly basis, your income would reach $2,660. Over the course of a month, your earnings would exceed $10,640. With moderate effort, you could feasibly generate $5,320 monthly from your laundry enterprise.
With the right pricing strategy and diligent management, achieving financial success in this sector is within reach. Some other advantages of entering the laundromat business include:
- A success rate of up to 95%
- Up to 35% Return On Investment (ROI)
- An average yearly income between $60,000 โ $90,000
How to Start a Laundromat Business in Singapore
Market Research
It is important for you to thoroughly research the market before you begin anything. This gets you started on the right path.
The first step to in-depth market research is identifying what you want to accomplish with it. As a laundromat business, you need to find out about the relevance of laundromats to your target market, your competitors, and your target marketโs preferences. Once you have set your goals, you need to determine how to accomplish them. You can do that in the following ways:
Draft a Business Plan
Behind every successful business is a stellar business plan. Business plans guide you through the stages of managing your business. They also identify your goals and develop the right strategy towards accomplishing them.
Your business plan should contain an overview of the company, company goals, services to be offered, and an executive summary. The executive summary is a brief but important breakdown of your entire business plan. Consequently, it should be clear, and concise.
Select a Location
As stated earlier, Singapore is a highly developed country. This means that you can easily find a location with stable water, electricity, and a proper drainage system. Despite this, other determinants are just as important as light and water. Factors like the number of residential areas, market demand, and the competition in the area should be evaluated while choosing a location. Here are a few suggestions:
- Tampines: Known for its commercial areas, residential estates, and natural environment, Tampines is an excellent spot to set up a laundromat.
- Chinatown: Setting up a laundromat in this neighborhood is a great idea, as this bubbly district attracts tourists. Correspondingly, you would attract both residential and touring customers.
- Marina Bay: Because of the Marina Bay Sands, Marina Bay is a known tourist spot. The multifaceted resort runs a hotel, a casino, and a residential area. However, this might not be the best option as the competition in this area is fierce, but hey, nothingโs impossible when you set high-quality standards.
- Bukit Timah: Bukit Timah is a residential district in Singapore, housing different classes of people, making it a strategic location forย aย laundromat.
Depending on the location and size of the space you have chosen, rental costs could vary between $2,000 โ $10,000 per month.
Business Licensing and Permits
There are various licenses you need to acquire before operating a laundromat. For this reason, licensing costs can fluctuate between $1,000 to $4,000.
Before you begin operations, you must obtain a business license. An application is submitted to Accounting and Corporate Regulatory Authority (ACRA), and this application typically costs at least S$300. The processing period is between 2 weeks to 2 months. Once the licensing requirements have been met, the ACRA issues your business license, alongside a certificate of registration and a Tax Identification Number (TIN). Your laundromat business also needs other licenses such as:
Water and Sanitary License
An application is submitted to the Public Utilities Board, and the processing period is typically between 1 โ 2 months.
Fire Safety License
Every company needs to meet up with the fire safety requirements to ensure they are not endangering their customers. For this reason, it is necessary to obtain your fire safety license. To accomplish this, the Civil Defense Force needs to process your application, and this usually takes about 1 โ 2 months.
Hazardous Substance Permit
The National Environment Agency (NEA) issues these, and there are rules guiding the application process. You need a business registration number to apply, and it takes about 7 working days for your application to be processed.
Equipment Purchase and Setup
The equipment you need is dependent on the type of laundromat you have chosen to operate. However, there are some paraphernalia these laundromats have in common. For example, washing machines and dryers, laundry carts, drying racks (yes, a drying rack is necessary even if you have a dryer because some clothes require special care), trolleys, and tables. All of these can be purchased and shipped in bulk by opening an Amazon Business account and making the requests on their site. Costs for these include:
- Washing machines: An average laundromat has at least 40 washing machines. The cost of these machines depends on the brand and model you have chosen to purchase. The machines cost $200 to $1,000.
- Dryers: Dryers are just as crucial as washers in a successful laundromat business, and a minimum of 40 is required. Commercial dryer prices range from $1,000 to $5,000.
- Detergent and other laundry supplies: Disinfectant, bleach, and fabric softeners are additional supplies needed for laundry. You should budget between $800 to $1,000 for this.
- Laundry carts and other laundry equipment: In addition to laundry carts, drying racks, trolleys, drying racks, and ironing boards are necessities in a laundromat. The budget for these laundry equipment is $1,000 to $3,000.
Please note that these are just rough estimates, not specific price ranges.
7. Marketing and Promotion
You have put everything in place, and now all thatโs left is finding customers. After all, whatโs a business without customers? There are various ways to promote your newly established laundromat business such as sponsoring popular programmes, paying for TV ads, partnering with social media influencers, and many more. Your advertisement strategy depends on your budget and preferences.
You must also ensure that you build a relationship with your customers. The laundry business depends highly on repeat service for a steady stream of customers. You can offer your customers loyalty reward points or discounts as marketing incentives for their steady patronage.
Conclusion
Like every business owner, your primary goal is to grow your customers and increase profit, but this can only be achieved when you have the right attitude. Laundromats are not a one-time investment. For your business to keep growing, it is important that you keep reinvesting in your laundromat to maintain its state. Do not let your laundromat deteriorate, or your business will too.
