Buying a business: Dry cleaners
One opportunity where you could clean up
To understand the tremendous growth the dry-cleaning industry has enjoyed for the past 20 years, and the growth it will certainly experience in the years to come, consider these factors:
- Personal garments today contain more natural fibres – wools, cottons, linens and silks. These fabrics require professional cleaning and finishing.
- There are 50% more women in the workforce today, and this percentage continues to grow.
- Both men and women require the professional services of a dry-cleaner.
- Today's hectic lifestyle dictates that we do not have time to clean and finish our clothes at home.
Add to this a whole list of new and exotic and devastatingly horrible foods and drinks that make stains that only professional cleaners can remove – saffron, turmeric, sun-dried tomatoes, teriyaki sauce, extra virgin olive oil, red wine, and pesto – all feature in the ten most common stains left on clothes in 2001 according to a report by Johnsons Cleaners – and you can see why a dry-cleaning store can provide a nice income for the owner-operator, (alternatively it can be operated as an investment with absentee management). It is also an ideal business for the entrepreneur who wishes to expand into a multiple store operation.
What is it?
Although the invention of man made fabrics is largely thought of as the start of the dry-cleaning industry the dry-cleaning industry itself is actually a lot older than you think. Dry-cleaning was discovered by accident in Paris in 1825. A Frenchman named Jean-Baptiste Jolly knocked over a lamp, spilling spirits of turpentine onto the tablecloth. Jolly noticed that when the oil evaporated that the area of the cloth was cleaner. He subsequently immersed the whole tablecloth in a bath of turpentine. He was so impressed with the result that he decided to exploit his discovery. Jolly and his son-in-law decided they would start a dry-cleaning business.
However spirits of turpentine are flammable and this meant that precautions had to be taken to reduce the risks of fire. Whilst the discovery of dry-cleaning is accredited to Jolly, records show that turpentine had been used for spot cleaning oil type stains since 1720.
A wide range of solvents have been used for the process of dry-cleaning. However the major solvent used world-wide continues to be perchloroethylene which is sometimes referred to as “perc”.
Types of dry-cleaner
There are three different types of dry-cleaners. High street cleaners that operate a bureaux service and use a third party to do the cleaning and just handle the customers coming in. The second is cleaners who do the cleaning on-site using a single machine. The last is industrial cleaners which just deal with contract cleaning and who take dry-cleaning from high-street cleaners.
What does it involve?
A dry-cleaner is not just a person who feeds a dry-cleaning machine then presses and packs the cleaned garment. There's more to it than just machine feeding and a little light pressing work.
Before cleaning, garments are inspected and classified and the length of the cleaning cycle is dependant upon the type of article cleaned and the degree of soiling. Some heavily stained garments may go through a stain removal process prior to cleaning to aid in better soil and stain removal – to work this process you'll have to be qualified as a stain removal technician.
As with all high-street based businesses the hours are what you want them to be. However if you're not open early and open until late and open on Saturdays then you're unlikely to do well. People expect to drop off their clothes in the morning and pick them up after work. They also expect to be able to drop off on a Saturday and pick up on a Saturday.
Dry cleaning is also one of those industries where traditionally you pay after the work is done, and that can either be the next day, next week or when the user remembers to come and pick up the garments. It's wise to instil some sort of cut-off point at which you can sell the items that are there over a certain time period – between 60-90 days is normal.
Dry cleaning Machines
There are various makes/models of dry-cleaning machines. But despite the differences, all dry-cleaning machines work on the same principle.
A dry-cleaning machine consists of four basic components: a base tank, pump, filter and a cylinder. The holding tank holds the dry-cleaning solvent. A pump is used to circulate the solvent through the machine during the cleaning process. Filters are used to trap solid impurities. A cylinder or wheel is where the garments are placed to be cleaned. The cylinder has ribs to help lift and drop the garments.
The operation of the dry-cleaning machine is easy to understand. The solvent is drawn from the tank by the pump. The pump sends the solvent through the filters to trap any impurities. The filtered solvent then enters the cylinder to flush soil from the clothes. The solvent leaves the cylinder button trap and goes back to the holding tank. This process is repeated throughout the entire cleaning cycle, ensuring that the solvent is maintained to give effective cleaning at all stages of the cycle.
After the cleaning process is complete, the solvent is drained and an *extract* cycle is run to remove the excess solvent from the clothes. This solvent is drained back to the bare tank. During extraction, the rotation of the cylinder increases in order to use centrifugal force to remove the solvent from the clothes
Once the clothes have finished extracting, the cylinder stops. At this time, clothes are either transferred to a separate dryer or, on most machines, dried in the same unit, a closed system. The drying process uses warm air circulated through the cylinder to vaporise the solvent left on the clothes.
Dry cleaning machines are rated in pounds of fabric (dry weight) the machine can hold. Machine sizes vary from very small (20 pounds) to large (100 pounds) capacities.
A dry-cleaning machine life is expressed in years, from the time of purchase to the time of replacement. Typically, heavy duty machines have a life cycle of 20 years, but the service life is closer to 15 years. For most machines, the life cycle is 10 years with a service life of seven years. So before you buy establish how old the machines are, what their service life is, check any maintenance records and look at the price of renewals, repairs and regular services.
Value added services
In addition to just pure dry-cleaning there are lots of other value added services you should think of and should take into account of when buying a dry-cleaner. The addition of a few industrial strength conventional washers and dryers and pressing machines can add even further revenue to your business. Service washes are normally the preserve of the launderette but an upmarket service wash like a shirt-laundering service can also complement your business. In addition you may also get extra revenue on hiring out cleaning equipment like heavy-duty carpet cleaners. You can also add additional specialist cleaning areas like curtain cleaning, duvets, leather and suede, wedding gowns, waxed jackets and things like simple repairs and alterations.
Extra revenue can also be raised from textile rental. Most textile rental services apply to larger dry-cleaners where most of the cleaning is done off site and are aimed at professional end-users like hotels, hospitals, restaurants, canteens and washrooms of large companies.
However the downside is that you have to incur fairly significant upfront investment. Costs include the stock of textile goods, transport costs as you will often need to provide a collection and drop-off service. You also get some misuse and abuse of the goods so the textile life can sometimes be shorter than you originally budgeted for. In addition there are there are complex management problems when it comes to just what you have in stock. However once started revenues can be substantial and there's also the possibility of sell on after the product has reached it's end of rental life.
How much should you pay ?
At the top end of the scale for an established business with around 10-15 years history and some value added services and no local competition then you should expect to pay around £100-150,000. For that you should be able to get a shop with a turnover of around £90-100,000 with a net profit of around £60-70,000. In terms of staff you'll probably need – as well as yourself – one full time fully trained member of staff and one part time counter assistant.
At the other end of the scale a basic shop with a single dry-cleaning unit and a short history would set you back about £60,000 and should give you a sales Revenue of around £70,000.
Rules and regulations
Solvents are an everyday essential in the dry-cleaning business. Over the past decade, the cost to the UK dry-cleaning sector of the most widely used dry-cleaning solvent – perchloroethylene (perc) – is estimated at approximately 1 per cent of turnover. However their use poses potential human and environmental hazards and, as a result, is strictly regulated. It is therefore essential to have some sort of effective solvent management to help maintain profits and reduce the impact of the business on the environment, and hence make it easier to comply with current and future environmental legislation.
Perc falls within UK and European legislation regulating volatile organic compounds. The EU's Solvent Emissions Directive (EC/13/1999) requires dry-cleaning activities to meet a total emission limit of 20g of solvent emitted per kg of product cleaned and dried or implement a solvent reduction plan. The Directive is expected to come into effect in the UK for dry-cleaners through changes to the IPPC regulations shortly in the New Year. All new installations and those modified substantially since April 2001 will have to meet the Directive requirements as soon as the regulations come into effect. Existing installations (existing prior to April 2001) have until 2007 to comply.
Help is available from Envirowise, the Government programme on the web site www.envirowise.gov.uk or on a free call to the Environment and Energy Helpline (0800 585794).
Any new equipment must conform to European standards, as specified in ISO 8230 Safety Requirements for Dry cleaning Machines using Perc.
A summary of the standard is available on the BSI web site, www.bsi-global.com. The Health and Safety Executive can also advise on safety requirements, via their Infoline (08701 545500), and has recently published a free leaflet, Dry cleaners: Are you in control?: Health and Safety in Dry cleaning.
Tips for success
- Disputes are not common but can cause problems. Before you accept garments that are heavily stained you should check with the customer that they're aware that you don't guarantee a 100% perfect result.
- A dry-cleaning machine is just like any machine: there are Rolls Royces and there are cheap imports – establish the price of a replacement. An expensive top of the range machine will set you back between £30,000 and 40,000. With typical repair costs of anywhere between £150-300 a year.
- It is a good idea to know how much solvent the business is currently using. Recording weekly perc consumption by individual machines and consolidating this data into monthly and annual figures and linking them with data on the amount of work processed can give early indications of machine faults, which can then be repaired before they become costly failures.
- The Envirowise Environmental Performance Guide (EG39) Perchloroethylene Consumption in the Dry-cleaning Industry gives useful benchmark data on dry-cleaners' perc use, and tips on how to improve performance.If the machines you are buying aren't modern closed-loop machines then retrofitting solvent recovery systems can significantly reduce solvent consumption and reduce emissions.
|Textile Services Association Tel: 0181 863 9177 Helpline:0181 863 7755 www.tsa-uk.org|
|CINET The International committee of textile care. www.cinet-online.net|
|ETSA The European Textile Services was founded in 1994 as a non-profit making association to represent and promote the textile rental services sector in Europe. www.etsa-europe.org|
|Laundry & Cleaning Today The UK Textile care industry's trade newspaper. www.laundryandcleaningtoday.com|
|Laundry and cleaning news www.connectinglaundry.com|