Feasibility Study for Laundry

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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
viii.Dyer Setting
ix.Laundry Shop Procedure
1.Flow Chart
g.Lay-out and Machine Requirements
i.Physical Arrangement

IV. MANAGEMENT ASPECT
h.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 BUSINESS
1. 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

Table 1: Registered Laundry Shops

LOCATION| 2005| 2006| 2007 (Projected)| TOTAL|
MAKATI CITY| 145| 176| 110| 431|
MANILA| 111| 98| 96| 305|
PASAY CITY| 32| 38| 55| 125|
Grand 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
* Data was based on DTI Registered Laundry Shops

Table 2: Forms of Ownership
| | FORM OF OWNERSHIP| |
LOCATION| Corporation| Partnership| Sole Proprietorship| Grand Total| MAKATI CITY| 13| 2| 129| 144|
MANILA| 5| 2| 209| 216|
PASAY CITY| | 1| 57| 58|
Grand 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...
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