Starting a dry cleaning business is a rewarding venture that blends a keen eye for fabric care with solid business savvy. The industry is worth billions, fueled by consistent demand for professional garment care from busy professionals, families, and those attending special events.
This guide will walk you through the practical steps of securing funding, choosing a location, acquiring equipment, and obtaining permits to help you launch a successful dry cleaning business in the U.S.
Step 1: Plan your business and validate your idea
Begin by researching your local market. Drive through potential neighborhoods to count existing dry cleaners and gauge foot traffic. You can also use data from the U.S. Census Bureau to understand local demographics and income levels, which helps predict demand for your services.
Next, analyze your direct competitors. Use Google Maps to locate them and read their customer reviews on platforms like Yelp. Note their pricing, services offered, and what customers praise or complain about. This reveals gaps in the market you can fill.
Many new owners focus only on price. Instead, look for service gaps. Do competitors offer eco-friendly cleaning, delivery, or alteration services? Offering a unique service can be a stronger advantage than just having lower prices.
Estimate your startup costs
Startup costs can vary, but a solid budget is key. Expect to spend between $50,000 and $150,000. Major expenses include a dry cleaning machine ($40,000+), pressing equipment ($5,000+), and a conveyor system ($5,000+).
Remember to budget for rent, permits, and initial supplies. A frequent oversight is the cost of specialized plumbing and ventilation. These systems are necessary for safety and compliance and can add a significant amount to your initial build-out expenses.
Here are 3 immediate steps to take:
- Survey two or three potential neighborhoods to assess foot traffic and competitor locations.
- Analyze the top three local competitors using Google Maps and Yelp to identify their service offerings and customer feedback.
- Create a preliminary budget that includes equipment, rent, and specialized ventilation modifications.
Step 2: Set up your legal structure and get licensed
First, choose a business structure. Most new owners form a Limited Liability Company (LLC). It protects your personal assets from business debts and allows profits to pass through to your personal tax return, which simplifies paperwork. An S Corp is another option with potential tax benefits.
Once you select a structure, register it with your Secretary of State. You will also need a federal Employer Identification Number (EIN) from the IRS to hire employees and open a business bank account. You can apply for an EIN online for free.
Secure your permits and licenses
Your business will need several permits. Start with a general business license from your city or county clerk, which can cost between $50 and $400. You will also need a Certificate of Occupancy to confirm your location is zoned for commercial use.
Because dry cleaners use chemicals, you must comply with environmental regulations. Contact your state’s environmental protection agency for an Air Quality Permit. The application process can take 60-90 days, so it is wise to begin early to avoid delays in opening.
Here are 4 immediate steps to take:
- Decide between an LLC and an S Corp and file the paperwork with your Secretary of State.
- Apply for a free Employer Identification Number (EIN) on the IRS website.
- Contact your state environmental agency to understand the Air Quality Permit process.
- Check with your city clerk’s office for business license and zoning information.
Step 3: Secure your insurance and manage risk
First, obtain general liability insurance. A standard $1 million policy protects you from third-party claims like a customer slipping in your store. Expect annual premiums between $500 and $1,200. Property insurance is also vital to cover your expensive equipment from fire or theft.
A frequent oversight is skipping professional liability insurance, also known as bailee coverage. This specifically covers customer garments while they are in your care. Without it, one damaged designer suit could erase your profits. This coverage is a must-have for peace of mind.
If you hire staff, workers’ compensation is required by law in most states. In addition, if you plan to offer a delivery service, you will need a commercial auto policy. You might want to get quotes from providers like The Hartford, Next Insurance, or a local broker who specializes in small businesses.
Here are 4 immediate steps to take:
- Request a quote for a $1 million general liability policy.
- Ask potential insurers specifically about their “bailee coverage” for customer items.
- Calculate the total replacement value of your equipment for a property insurance quote.
- Contact at least two insurance providers that specialize in small business coverage.
Step 4: Choose your location and buy equipment
Look for a retail space between 1,000 and 2,000 square feet. This size accommodates equipment and a customer service area. Confirm the location is zoned for commercial use, as specific permits are needed for the chemicals and machinery involved in dry cleaning.
When you negotiate the lease, ask for a tenant improvement allowance. This can help cover the significant costs for specialized ventilation and plumbing. Landlords are often willing to contribute if it means securing a long-term, stable tenant like a dry cleaner.
Purchase your core equipment
A modern, eco-friendly dry cleaning machine from a supplier like Union or Forenta will be your largest investment, typically costing between $40,000 and $60,000. You will also need a utility press for around $5,000 and a shirt finishing unit for about $15,000.
A frequent oversight is underestimating the space needed for a garment conveyor system. These systems cost about $5,000 and require ample floor space and ceiling height, so factor that into your layout plans from day one to avoid issues after you sign a lease.
Here are 4 immediate steps to take:
- Search commercial real estate listings for spaces between 1,000 and 2,000 square feet.
- Draft a lease proposal that includes a request for a tenant improvement allowance.
- Get quotes for a dry cleaning machine and a utility press from two different suppliers.
- Measure potential locations to confirm they can fit a garment conveyor system.
Step 5: Set up your payment processing
Choose your payment system
Most customers expect to pay with credit, debit, or digital wallets. For corporate accounts, you might also want a system that supports invoicing or recurring billing. When you select a processor, look closely at the fee structure and contract terms.
A frequent mistake is to sign up for a service with hidden monthly fees or a long-term contract that is difficult to exit. These costs can add up quickly. You should look for transparent pricing and flexibility.
For a dry cleaning business that needs to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.
At just 1.99% per transaction with no hidden costs or extra hardware, it is a strong option. Many processors charge between 2.5% and 3.5%. It is particularly useful for delivery routes, where you need a simple way to take payments without extra hardware.
Here is how to start:
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.
Here are 3 immediate steps to take:
- Compare the transaction fees and contract terms of two different payment processors.
- Decide if you will offer delivery and require a mobile payment option.
- Download the JIM app to see if it fits your business model.
Step 6: Secure funding and manage your finances
Most dry cleaners secure funding through an SBA 7(a) loan. Lenders typically want to see a strong business plan and a personal credit score of 680 or higher. Loans for this type of business often range from $50,000 to $150,000, with interest rates usually set at the Prime rate plus 2-5%.
Another route is equipment financing. Since your machinery is a major expense, lenders will finance it using the equipment itself as collateral. This can free up your SBA loan for working capital and other startup costs. Look for lenders who specialize in commercial equipment.
Estimate your working capital
Many new owners focus on equipment costs but forget the cash needed to operate before revenue stabilizes. You should budget for at least six months of working capital. This covers rent, payroll, utilities, and marketing, and typically amounts to between $20,000 and $40,000.
Here are 4 immediate steps to take:
- Contact your local bank to inquire about the SBA 7(a) loan application process.
- Calculate your estimated working capital needs for the first six months of operation.
- Request a quote for equipment financing from a specialized commercial lender.
- Finalize your business plan to present to potential lenders and investors.
Step 7: Hire your team and set up operations
You will need at least two key positions: a presser and a customer service representative. Pressers operate the machinery and typically earn between $15 and $20 per hour. Your front counter staff manages drop-offs and pickups, with pay usually starting near minimum wage.
Invest in specialized skills and software
A frequent misstep is to assign stain removal to untrained staff, which risks damaging expensive garments. You might want to hire a dedicated spotter with training from an organization like the Drycleaning & Laundry Institute (DLI). The investment in a specialist is a safeguard for your reputation.
Once your team is in place, a system like CleanCloud helps manage orders and scheduling. As you build your staff, aim to keep total payroll costs between 30% and 35% of your gross revenue. This is a standard benchmark for a profitable operation.
Here are 4 immediate steps to take:
- Draft job descriptions for a presser and a front counter representative.
- Research certification programs on the Drycleaning & Laundry Institute (DLI) website.
- Review the features and pricing for a management system like CleanCloud.
- Calculate your target payroll budget based on 30-35% of your revenue projections.
Step 8: Market your business and get customers
Establish your digital footprint
Start by claiming your Google Business Profile. Fill it out completely with high-quality photos, your hours, and a full list of services. This is the primary way new customers will find you. Encourage your first few clients to leave reviews to build trust from day one.
Many new owners just wait for walk-in traffic. You should be proactive. A simple website that lists your prices and location is a modern necessity. Focus on local SEO by including your city and neighborhood names in the site content to attract nearby searchers.
Launch targeted local campaigns
Direct mail still works well for this industry. A flyer campaign in a 500-unit apartment building can get a 1-2% response rate, which means 5-10 new customers. Offer a compelling introductory deal like "25% off your first order" to encourage people to try your service.
You can also form partnerships. Approach local office managers to offer a corporate discount program for their employees. Or, connect with boutique hotels that do not have in-house laundry services. These relationships can provide a steady stream of business with minimal ongoing effort.
Here are 4 immediate steps to take:
- Claim and fully populate your Google Business Profile.
- Design a grand opening flyer with an introductory offer.
- List three local businesses, like offices or hotels, to approach for partnerships.
- Ask your first ten customers for a review on Google.
Step 9: Set your pricing strategy
Define your pricing model
Most dry cleaners use per-item pricing. You charge a flat rate for each garment, like $15 for a suit or $4 for a shirt. You can also offer bundles, such as "5 shirts for $15," to encourage volume. A hybrid model often works best.
A frequent error is to only compete on price. Instead, calculate your cost per item, including labor, chemicals, and utilities. Your prices must cover these costs and generate a profit. Aim for a gross profit margin between 60% and 75%.
Analyze your competitors and add value
To see what the market will bear, call three local competitors. Ask for their prices on a two-piece suit, a silk blouse, and a winter coat. This gives you a baseline. Do not just copy their prices, as their cost structure might be different from yours.
You can also create value-based tiers. For example, offer a standard cleaning service and a premium option with eco-friendly solvents and hand-finishing for a 20-30% higher price. This justifies a higher price point and attracts different customer segments.
Here are 4 immediate steps to take:
- Call three local competitors to get their prices for a suit, a dress, and five shirts.
- Calculate your cost to clean one dress shirt, including labor and supplies.
- Create a price list for your top 10 most common garments.
- Outline a premium service package with a 25% price increase.
Step 10: Maintain quality and scale your operations
Establish your quality standards
Your reputation depends on consistent quality. You should track your "redo rate"—the percentage of items returned for re-cleaning. Aim for a redo rate below 2%. A higher number signals issues with your process or staff training that need immediate attention.
Many owners neglect to track this metric, which quietly erodes customer trust. To formalize your expertise, you can pursue certifications from the Drycleaning & Laundry Institute (DLI). A Certified Professional Drycleaner (CPD) designation shows a high level of commitment and skill.
Plan your growth path
Once your operations are smooth, you can plan for growth. A good benchmark for hiring another presser is when you consistently process over 500 garments per week. This prevents bottlenecks and staff burnout as your volume increases.
Consider expansion when you reach a revenue milestone, such as $250,000 annually. This could mean opening a second location or a smaller drop-off store. Software like SMRT Systems is built to manage multiple locations and complex delivery routes, which helps simplify scaling.
Here are 4 immediate steps to take:
- Track your daily redo rate with a target of under 2%.
- Research the Certified Professional Drycleaner (CPD) requirements on the DLI website.
- Set a revenue goal, like $250,000, as a trigger for expansion planning.
- Compare features of growth-focused software like SMRT Systems.
You now have a roadmap to launch your dry cleaning business. Your reputation for quality care is your most valuable asset, so track every detail from stain removal to customer service. With this guide, you are well-equipped to start your venture.
As you handle payments, remember that simple is often best. JIM turns your smartphone into a card reader, letting you accept payments for a flat 1.99% fee without extra hardware. Download JIM to simplify your sales from day one.
