AFC Consultants International

DRY CLEANING PROJECT

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY............................................................................ 2
2 PROJECT DESCRIPTION ......................................................................... 2
2.1 DRY CLEANING PROCESS ....................................................................................... 3
2.2 DRY-CLEANING WASTES ........................................................................................ 4
3 MARKET ANALYSIS ................................................................................ 4
3.1 TARGET MARKET ................................................................................................ 4
3.2 SWOT ANALYSIS .............................................................................................. 5
4 MARKETING PLAN.................................................................................. 5
5 FINANCIAL PLAN ................................................................................... 6
5.1 INITIAL INVESTMENT ........................................................................................... 6
5.2 MAJOR ASSUMPTIONS .......................................................................................... 6
5.3 PROJECTED INCOME S TATEMENT .............................................................................. 8
5.4 PROJECTED B ALANCE S HEET ................................................................................... 9
5.5 PROJECTED C ASH FLOWS ...................................................................................... 9
5.6 RATIO ANALYSIS ...............................................................................................10
5.7 BREAK-EVEN ANALYSIS ........................................................................................10
5.8 SENSITIVITY ANALYSIS ........................................................................................11
6 RECOMMENDATIONS AND KEY SUCCESS FACTORS ................................ 11
7 ECONOMIC IMPACT EVALUATION......................................................... 11
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1 Executive Summary

The project consists in establishing a dry cleaning outlet in the Minieh-Donnieh Caza region in
North of Lebanon. This outlet will cater to the Minieh-Donnieh Caza and North of Lebanon
region and will reach its peak during the summer season where all the Lebanese expatriates
come back for the summer to visit their families and a large number of vacationing residents
from Tripoli and other areas come to spend the summer season.

The initial investment for the project is estimated at $49,500 which includes $35,500 in dry
cleaning equipment, $5,000 in generator, $2,000 in furniture, $2,000 in office equipment, and
$5,000 in working capital.

The main assumptions consider average daily cleaning of 25 pieces over an average period of
6 months. This is a conservative figure due to the high demand during the summer season
and limited competition in the region. The success of the business will rely on a convenient
and accessible location.

The projections are taken over a period of 7 years. The dry cleaning outlet is expected to
provide an average annual net profit of $8,086. It will be able to distribute dividends starting
year 1.

The dry cleaning outlet provides an internal rate of return (IRR) of 30% and a payback period
of 4 years and 2 months. These results show that the project is feasible if it is well managed.

A worst-case scenario was developed with the assumption of lower number of units from 25
pcs/day to 20 pcs/day for the dry cleaning outlet, gave an IRR of 22% and a payback period
of 5 years and 6 months. A best-case scenario based on higher number of units per day from
25 pcs/day to 30 pcs/day provides the dry cleaning outlet an IRR of 37% and a payback
period of 3 years and 5 months.

The project will offer 2 full time job opportunities (including the project owner) and will
provide a convenient dry cleaning facility in the Donnieh area.

2 Project description

The project consists in establishing a dry cleaning outlet in Donnieh area in North of Lebanon.
Currently, there is only one dry cleaning facility in the whole Donnieh area, which is also
located at the borders of Minieh and is not convenient for the Donnieh residents. In fact, this
facility could not be sufficient, especially during the summer season when all the vacationing
people come to spend the summer season, running away from the heat on the coast.

Dry cleaning is any cleaning process for clothing and textiles using an organic solvent rather
than water. The solvent used is typically tetrachloroethylene (perchloroethylene), abbreviated
"perc" in the industry and "dry-cleaning fluid" by the public. Dry cleaning is necessary for
cleaning items which would otherwise be damaged by water and soap or detergent. It may be
used if hand washing needed for some delicate fabrics is excessively laborious.

The dry cleaner places cleaned clothes on metallic hangers, inside thin clear plastic garment
bags before delivering to the clients.

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2.1 Dry cleaning process

A dry cleaning machine is similar to a combination of a domestic washing machine, and

clothes dryer. Garments are placed into a washing/extraction chamber (referred to as the
basket, or drum), which is the core of the machine. The washing chamber contains a
horizontal, perforated drum that rotates within an outer shell. The shell holds the solvent
while the rotating drum holds the garment load. The basket capacity is between 9 and 36 kg
of garments.

During the wash cycle the chamber is filled approximately 1/3 full of solvent and begins to
rotate, agitating the clothing. The solvent temperature is maintained at 29.4C, as a higher
temperature may extract dye from garments, causing color loss. During the wash cycle, the
chamber is constantly fed a supply of fresh solvent from the working solvent tank while spent
solvent is removed and sent to a filter unit comprising a distillation boiler and condenser. The
ideal flow rate is roughly 8 liters of solvent per kilogram of garments per minute, depending
on the size of the machine.

Before being placed in the machine, garments are inspected for stains and soils by the
operator. Depending on the nature of the soil, a catalyst may be applied to it. This depends on
the operator's judgment of the makeup of the textile and the soil itself. Oil-based soils (such
as grease, oil, or lipstick) typically are removed well by perchloroethylene, while water-based
soils (such as coffee, wine, perspiration, blood, and semen) will need a catalyst to allow the
dry cleaning solvent to emulsify and lift them. Food-based grease soils fall in between the two,
and a milder catalyst may be applied.

Garments are also checked for foreign objects. Items such as plastic pens will dissolve in the
solvent bath and may damage textiles beyond recovery. Some textile dyes are "loose" (red
being the main culprit), and will shed dye during solvent immersion. These will not be included
in a load along with lighter colored textiles to avoid color transfer. The solvent used must be
distilled to remove impurities that may transfer to clothing.

Garments are checked for dry-cleaning compatibility, including fasteners. Many decorative
fasteners either are not dry cleaning solvent proof or will not withstand the mechanical action
of cleaning. These will be removed and re-stitched after the cleaning, or protected with a
small padded protector. Fragile items, such as feather bedspreads or tasseled rugs or
hangings may be enclosed in a loose mesh bag. The density of perchloroethylene is around
1.7 g/cm at room temperature (70% heavier than water), and the sheer weight of absorbed
solvent may cause the textile to fail under normal force during the extraction cycle unless the
mesh bag provides mechanical support.

A typical wash cycle lasts for 8-15 minutes depending on the type of garments and amount of
soiling. During the first three minutes, solvent-soluble soils dissolve into the perchloroethylene
and loose, insoluble soil comes off. It takes approximately ten to twelve minutes after the
loose soil has come off to remove the ground-in insoluble soil from garments. Machines using
hydrocarbon solvents require a wash cycle of at least 25 minutes because of the much slower
rate of solvation of solvent-soluble soils. A dry-cleaning surfactant "soap" may also be added.

At the end of the wash cycle, the machine starts a rinse cycle, and the garment load is rinsed
with fresh distilled solvent from the pure solvent tank. This pure solvent rinse prevents
discoloration caused by soil particles being absorbed back onto the garment surface from the
"dirty" working solvent.

After the rinse cycle the machine begins the extraction process, which recovers dry-cleaning
solvent for reuse. Modern machines recover approximately 99.99% of the solvent employed.

The extraction cycle begins by draining the solvent from the washing chamber and
accelerating the basket to 350 to 450 rpm, causing much of the solvent to spin free of the
fabric. When no more solvent can be spun out, the machine starts the drying cycle.

During the drying cycle, the garments are tumbled in a stream of warm air (145F/63C) that

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circulates through the basket, evaporating any traces of solvent left after the spin cycle. The
air temperature is controlled to prevent heat damage to the garments. The exhausted warm
air from the machine then passes through a chiller unit, where solvent vapors are condensed
and returned to the distilled solvent tank. Modern dry cleaning machines use a closed-loop
system where the chilled air is reheated and re-circulated. This results in high solvent
recovery rates and reduced air pollution. In the early days of dry cleaning, large amounts of
perchlorethylene were vented to the atmosphere, because it was regarded as cheap and
believed to be harmless.

After the drying cycle is complete, a deodorizing (aeration) cycle cools the garments and
removes the last traces of solvent, by circulating cool outside air over the garments and then
through a vapor recovery filter made from activated carbon and polymer resins. After the
aeration cycle, the garments are clean and ready for pressing/finishing.

2.2 Dry-cleaning wastes

Cooked muck - Cooked Powder Residue the waste material generated by cooking
down or distilling muck. Cooked powder residue is a hazardous waste and contains
solvent, powdered filter material (diatomite), carbon, non-volatile residues, lint, dyes,
grease, soils and water. This material should then be disposed of in accordance with
the municipality.

Sludge - The waste sludge or solid residue contains solvent, water, soils, carbon and
other non-volatile residues. Still bottoms from chlorinated solvent dry cleaning
operations are hazardous wastes.

Environment - Perc is classified as a hazardous air contaminant by the EPA and must
be handled as a hazardous waste. To prevent it from getting into drinking water, dry
cleaners that use perc must take special precautions against site contamination.

3 Market Analysis

Minieh-Donnieh Caza region is a perfect location for the establishment of a Dry cleaning outlet
as this part of the country has only two similar projects in Meriata which is located on the
coastal part of the caza on the border between Minieh and Donnieh. For that matter it is
advisable to locate this project towards the upper part of Donnieh, which does not have any
dry cleaning facility.

3.1 Target market

It is expected to have seasonal effects on the productivity of the dry-cleaning facility: During
the summer season, some expatriates and locals that reside in the capital and other main
cities come to spend the vacations in their native villages. Moreover, the region of Donnieh
consists in a vacationing area for residents from the coast extending from Tripoli to Minieh and
part of Akkar. These visitors flow will create increased demand for the dry-cleaning facility as
they will need services for items such as:

Suits
Shirts
Wedding events
Curtain cleaning
Dresses etc...

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3.2 SWOT Analysis

STRENGTHS WEAKNESSES

The dry cleaning facility will offer
convenient, competitively priced, quality
service to a number of villages in the area
of Donnieh and part of Minieh.
Since this business is repetitive, it is more
likely to have repeat customers from
season to season.
Pressure on cash flows of the project as
the revenues are not evenly spread
throughout the year. It is expected to
have most of the business from
vacationers and expatriates coming to
their villages on holidays and in the
summer.

OPPORTUNITIES THREATS

The Donnieh area needs a dry cleaning
facility as there is a large resident
population from vacationers to visiting
expatriates during the spring and summer
months that require dry cleaning services.
2 similar projects on the coastal part of
the caza in Meriata could add some
pressure on the sales if the prices are not
competitive or the quality of the service is
not at least comparable.

Joint ventures are possible to increase the
business volume to serve nearby villages.
Hence, small satellite shops could
quickly mushroom to share the existing
facility.
The use of easier to wash fabrics might
limit the use of the dry cleaning facility.
The difficult economic and political
situation in the country constitutes
constant threat for Lebanese enterprises.

4 Marketing Plan
The main marketing objectives include:

Direct contacts with local customers in order to quickly boost sales.

Providing an excellent service to ensure customer satisfaction for repetitive business.

It is very common to see a production facility share its resources (such as machinery,
know-how, soap and chemicals etc) with other dry clean outlets. These outlets would
not have to heavily invest in machinery and would be able to quickly launch their
business. In this case, the dry clean project owner would be able to significantly boost
his turnover.

Need to differentiate the service from the existing two dry cleaning outlets that
already exist in Meriata. That could be achieved by client awareness and excellent
prices and quality of service.

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5 Financial Plan
This section details the calculations, assumptions and methodology used as a basis for the
projections of the expected financial performance of the dry cleaner outlet.

5.1 Initial Investment

Investment Requirements
Description Quantity Unit price Amount in $
Industrial washing machine 20kg (used) 1 5,500 5,500
Table for ironing (used) 1 2,000 2,000
Drying press machine - 20kg (used) 1 3,000 3,000
Professional dry/clean machine - 20kg 1 12,000 12,000
Dryer machine - 20kg (used) 1 3,000 3,000
Generator (used) 1 5,000 5,000
Boiler sytem and exaust 1 5,000 5,000
Installations of boiler system 1 2,000 2,000
Spotting table 1 2,000 2,000
Ventillation + ducting 1 1,000 1,000
Computer and office equipment 2,000
Furniture 2,000
Total costs of equipments 44,500
Working capital needs 5,000
Total investment cost 49,500

The above table shows the various equipments needed for the establishment of the Dry
cleaning shop facility.

The initial investment for the project is estimated at $49,500 which include $35,500 in
industrial equipment, $5,000 in generator, $2,000 in furniture, $2,000 in office equipment,
and $5,000 in working capital.

5.2 Major assumptions

The assumptions are conservative and are based on market achievable levels.
They consider an average daily cleaning of 25 pieces over an average operating period of 6
months per year, which is a conservative figure due to the high demand and limited
competition in the region.

GENERAL ASSUMPTIONS
Units per day
Percentage of 25
Revenues assumptions price / item sales Total revenue / week
Shirts $1.3 20% $39.8
Pants $2.7 30% $119.4
Suits $8.0 23% $274.6
Dresses $6.6 10% $99.5
Coats $6.6 4% $39.8
Curtains $6.6 2% $19.9
Leather coats / shirts $16.6 1% $24.9
Blazers $5 10% $79.6
Totals 100% $697.5

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The project assumes an average of 25 pieces of clothing per day for a 6 day/week schedule.
The breakdown percentages of the items to be washed are also stated in the above mentioned
table. From the 25 pcs per day we assumed that 30% of them were pants, 20% shirts, 23%
suits etc. The total sales revenue per week has been calculated to be approximately
$697.5/week.

The following revenue growth assumptions are taken for the subsequent years.

Revenue growth assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Sales growth 20% 15% 10% 5% 5% 5%
Total units per year 3,900 4,680 5,382 5,920 6,216 6,527 6,853
Total units per day 25 30 35 38 40 42 44

The following table shows the main assumptions for the income statement:

Income Statement Assumptions

Working days 6 per week
Working weeks per year 26 per year
Working months per year 6 per year
Nylon garment bags (price/kg) $3.1
Nylon bags weight per garment 40 gr.
Hangers (box of 450 units) $29
Soap price per kg $1.7 1 kg/day
Soap usage per garment 20 gr.
Perclore (for dry clean) / 1 barrel $540 /year
Maintenance on equipment $100 /month
Fuel cost 15% of sales
Electricity 6% of sales
Annual rent-100 m2 premises $2,000 /year
Increase in rent every 3 years 10%
Annual increase in general expenses 3%
Annual increase in salaries 2%
Income Tax Rate 2%

As stated earlier, conservatively, the income statement is based on an average of 6 months of

operations. Hence, it will be mainly operated during part of spring, summer and part of the fall
season to accommodate the local and expatriates clients during the summer.

An annual increase in general expenses of 3% is taken into account for inflation factors. The
electricity expenses are estimated to represent 6% of sales. The fuel cost is assumed at an
average of 15% of sales.
Staff structure

The dry cleaning facility will have two full-time jobs: one manager (the owner) and one full
time skilled worker. We have to note that the shop will be operational only 6 months of the
year, hence, the project incurs wages during 6 months only, although the owner would
continue the operations alone during the low season.

The manager/owner will be responsible for running the daily operations, developing new
marketing strategies, as well as dealing with the clients while ensuring quality servicing.
Moreover, the manager will be in charge of the accounting operations of the outlet. The
manager/owner will not have a monthly salary but will be able to have dividends starting in
year 1.

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Furthermore, 1 skilled worker will be hired with a monthly salary of $300.

5.3 Projected Income Statement

Dry Cleaning project

Projected Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Total revenues
Sales revenues 18,135 21,762 25,027 27,529 28,906 30,351 31,869
Total revenues 18,135 21,762 25,027 27,529 28,906 30,351 31,869
Cost of materials-soap 673 699 723 741 751 762 773
Cost of materials-packaging 735 882 1,014 1,116 1,171 1,230 1,291
Electricity 1,088 1,306 1,502 1,652 1,734 1,821 1,912
Fuel 2,720 3,264 3,754 4,129 4,336 4,553 4,780
Maintenance of machines 600 618 637 656 675 696 716
Total cost of sales 5,816 6,769 7,629 8,294 8,668 9,061 9,473
Gross margin 12,319 14,993 17,397 19,236 20,238 21,290 22,395
Gross profit margin % 68% 69% 70% 70% 70% 70% 70%
General & administrative expenses
Salaries 1,800 1,836 1,873 1,910 1,948 1,987 2,027
Rental charges 2,000 2,000 2,000 2,200 2,200 2,200 2,420
Telephone expenses 300 309 318 328 338 348 358
Other administrative costs 1,000 1,030 1,061 1,093 1,126 1,159 1,194
Total General & Administrative Exp 5,100 5,175 5,252 5,531 5,612 5,694 5,999
EBITDA 7,219 9,818 12,146 13,705 14,626 15,596 16,396
Depreciation expenses 4,650 4,650 4,650 4,650 4,650 4,250 4,250
Tax expenses 51 103 150 181 200 227 243
Net Income 2,518 5,065 7,346 8,874 9,777 11,119 11,903
Net profit Margin 14% 23% 29% 32% 34% 37% 37%

The income statement shows satisfactory income levels with an average net profit margin of
30% starting from year 1. Of course, these results will depend on the projected sales. In
subsequent years, the dry cleaning outlet will benefit from increased marketing efforts by the
manager, and repeat business. The company reaches a net profit that exceeds $7,000 in year
3.

With constant marketing and networking efforts from the site manager, the project is
expected to reach a sales volume of $28,906 by year 5, which would provide net profits
exceeding $9,000 for that year.

The projections are taken over a period of 7 years. The dry cleaning outlet is expected to
provide an average annual net profit of $8,086. It will be able to distribute dividends starting
in year 1.

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5.4 Projected Balance Sheet

The balance sheet shows the projected assets and liabilities of the company.

Dry Cleaning project

Projected Balance Sheet Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Cash & Equivalents 9,656 14,669 19,925 25,386 30,965 36,275 41,682
Accounts Receivable 756 907 1,043 1,147 1,204 1,265 1,328
Current Assets 10,412 15,576 20,968 26,533 32,169 37,539 43,010
Equipment 40,500 40,500 40,500 40,500 40,500 40,500 40,500
Furniture 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Computer & office equipment 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Accumulated Depreciation 4,650 9,300 13,950 18,600 23,250 27,500 31,750
Net Fixed Assets 39,850 35,200 30,550 25,900 21,250 17,000 12,750
Total Assets 50,262 50,776 51,518 52,433 53,419 54,539 55,760
Expenses payable 510 518 525 553 561 569 600
Total Liabilities 510 518 525 553 561 569 600
Invested Capital 49,500 49,500 49,500 49,500 49,500 49,500 49,500
Retained Earnings 252 758 1,493 2,380 3,358 4,470 5,660
Shareholders Equity 49,752 50,258 50,993 51,880 52,858 53,970 55,160
Total Liab. & Shrholders Equity 50,262 50,776 51,518 52,433 53,419 54,539 55,760

Stat. Of Retained Earnings Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Begin. Retained Earnings 252 758 1,493 2,380 3,358 4,470
Net income 2,518 5,065 7,346 8,874 9,777 11,119 11,903
Dividends Paid 2,266 4,558 6,611 7,986 8,799 10,007 10,713
Ending Retained Earnings 252 758 1,493 2,380 3,358 4,470 5,660

The company is expected to start distributing dividends starting in year 1 at 90% of net
profits.

5.5 Projected Cash Flows

The following table shows the projected cash flows of the project.

Dry Cleaning project

STATEMENT OF CASH FLOWS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Net income 2,518 5,065 7,346 8,874 9,777 11,119 11,903

Adjustments to reconcile net income
to cash provided by operating activities
Depreciation 4,650 4,650 4,650 4,650 4,650 4,250 4,250
Change in receivables (756) (151) (136) (104) (57) (60) (63)
Change in payables 510 8 8 28 8 8 30
Total Adjustments 4,404 4,506 4,522 4,574 4,601 4,198 4,217
Cash provided by operating activities 6,922 9,571 11,867 13,447 14,377 15,317 16,120

Cash Flow from Investing Activities

Capital expenditures
Investment in fixed assets (44,500) - - - - - -
Net cash used in investing activities (44,500) - - - - - -

Cash flow from financing activities

Net Investment by owners 49,500
Net borrowings & repayments of loans
Dividends distributed (2,266) (4,558) (6,611) (7,986) (8,799) (10,007) (10,713)
Cash provided by financing activities 47,234 (4,558) (6,611) (7,986) (8,799) (10,007) (10,713)

Cash at beginning of year - 9,656 14,669 19,925 25,386 30,965 36,275

Changes in cash 9,656 5,013 5,256 5,461 5,578 5,310 5,408
Cash at end of year 9,656 14,669 19,925 25,386 30,965 36,275 41,682

The projected cash flows show the initial net investment in the equipment in year 1. This
investment is financed by capital injection of $49,500. In the same year, the dry cleaning
outlet starts operations and is able to start distributing dividends.

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5.6 Ratio analysis

The following table shows the main financial ratios for the cold storage facility.

Ratio Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Current Ratio 20.42 30.10 39.92 47.97 57.33 65.92 71.69
Working capital 9,902 15,058 20,443 25,980 31,608 36,970 42,410
Profitability Ratios
Gross Profit Margin 68% 69% 70% 70% 70% 70% 70%
Operating Profit Margin 40% 45% 49% 50% 51% 51% 51%
Net Profit Margin 14% 23% 29% 32% 34% 37% 37%
Financial Strength
Total Debt to Owners' Equity 1.0% 1.0% 1.0% 1.1% 1.1% 1.1% 1.1%
Management Effectiveness
Return on Average Assets 5% 10% 14% 17% 18% 20% 21%
Return On Average Equity=ROE 5% 10% 14% 17% 18% 21% 22%
Return on Investment = ROI 6% 14% 24% 34% 46% 65% 93%
Asset Management (Efficiency)
Total Assets Turnover: Sales / total
assets 36% 43% 49% 53% 54% 56% 57%
Total Debt to Total Assets 1.0% 1.0% 1.0% 1.1% 1.1% 1.0% 1.1%

The current ratio, which is computed by dividing current assets by current liabilities, shows
increasing and high levels throughout the years. The working capital is positive in all the
years, confirming the ability of the company to meet its short term liabilities.

The net profit margin increases gradually with the increased profitability. Starting year 2, this
margin increases from 23% up to 37% in year 7.

The return on average assets, which is computed by dividing net profits by total assets, shows
how much profit the company is able to achieve from the use of its assets. This ratio reaches
18.3% by year 5 as the Dry cleaning shop achieves higher sales volume.

The return on average investment shows healthy levels fueled by the growth in profitability.
The average return on investment is around 15%.

The total assets turnover shows how well the management is making use of its assets. The
assets turnover is computed by dividing sales over total assets. This ratio shows satisfactory
levels starting in year 2.

The internal rate of return (IRR) is 30% and the payback period, which is the period
necessary to pay back the investment, is 4 years and 2 months. These results show that the
project is feasible.

5.7 Break-even analysis

The following table shows the annual revenue levels needed for the Dry cleaning shop project
to break even. Thus, an average of $14,529 in year 1 is a minimum level for the outlet to
break even.

Dry Cleaning project

BREAK-EVEN ANALYSIS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Total Revenues 18,135 21,762 25,027 27,529 28,906 30,351 31,869

Total Variable Costs 5,216 6,151 6,993 7,638 7,993 8,366 8,757
Total Fixed Costs 10,350 10,443 10,538 10,836 10,937 10,640 10,966

Break-even revenues 14,529 14,558 14,625 14,997 15,117 14,689 15,121

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5.8 Sensitivity analysis

A worst-case scenario was developed with the assumption of lower turnover from 25
pcs/day to 20 pcs/day for the dry cleaning outlet, gave an IRR of 22% and a payback period
of 5 years and 6 months.

In this case, the business will have an average profitability of $4,271 annually.

A best-case scenario was based on higher turnover up from 25 pcs/day to 30 pcs/day. This
scenario provided the dry cleaning project an IRR of 37%, an average profitability and a
payback period of 3 years and 5 months.

Sensitivity Analysis Worst-case Most likely Best-case

20 pcs/day 25 pcs/day 30 pcs/day
Average net income 4,271 8,086 11,901
Average net profit margin 19% 30% 37%

Internal rate of return 22% 30% 37%

Payback period in years 5 years and 6 months 4 years and 2 months 3 years and 5 months

These results show that the project is feasible, especially if it is well-managed providing
quality services and if the manager is able to market well the dry cleaning outlet to optimize
the sales and leverage the projects capacity.

6 Recommendations and key success factors

In order to achieve satisfactory results, there are some key success factors that should be
highlighted:

The management needs to invest in direct contacts and public relations efforts to
attract the largest number of clients from neighboring villages to utilize the facility.
The business should try to build a loyal clientele, which will come back every year.

The manager needs to be able to operate on his own with the help of an additional
skilled labor during high seasons in order for him to optimize his profit margins.

The plant manager should ensure proper maintenance and regular daily cleaning
services to keep the facility as clean and as efficient as possible.

7 Economic Impact Evaluation

The dry cleaning outlet will create 2 new jobs: one full time manager/owner and 1 skilled
worker, thereby contributing positively to the socio-economic environment by offering new
opportunities to Minieh-Donnieh caza citizens.

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