Chapter 1

The Problem and its background

Introduction

Today’s society is giving much attention on creating things which bring

convenience and benefits to human being. Also modern lifestyle wants things beyond the

basic needs.

Clothing is one of the basic needs of every person, just like food and shelter. For

hygiene purposes people change clothes and create laundry. There are two basic ways

in doing laundry and these are hand wash and wash using washing machine. However,

some people don’t have enough time to do their own laundry, thus, laundry shop born.

Laundry shop is an easy and convenient business to start. You can start this

business right from home. This business is profitable, as not everyone has the time to do

their own laundry because of the hectic schedules, especially those students who have

extracurricular activities in school and others don’t have time because of their work. This

is the reason why there is chance of making a lot of money because this people will seek

this kind of business.

Statement of the Problem

The central problem of this study is on how to establish laundry shop in Pasay City.

Objectives of the study

 The primary objective of this study is to determine the viability and feasibility of

establishing a laundry shop in Pasay City.

Specifically, objectives from the point of view of the different functional areas of

management are as follows:

Marketing Study:

1. To describe the products and services to be offered by the proposed business.

2. To analyse the demand and supply for the products and services.

3. To prepare marketing strategies for the successful of the proposed business.

Technical Study:

1. To determine the process of the proposed business will be provided.

2. To identify the equipment, machineries and furniture and fixtures needed.

3. To find out the location of the proposed business to be establish.

4. To establish the business hours.

5. To determine the ideal capacity of customers can accommodate of the proposed

business.

6. To evaluate the expenses needed for the proposed business.

Organizational and Human Resource Study:

1. To decide on the form of business ownership.

2. To identify the needed requirements to start the business.

3. To determine the number of workers to run the business.

4. To develop a compensation package for the workers to continue to work hard.

5. To identify the steps that will be done for the implementation of the proposed

business.

Strategic Management Study:

1. To develop the mission, vision and objectives for the proposed business.

2. To set strategic evaluation to review the operations of the proposed business.

3. To create an exit plans just in case the business do not work.

Financial Study:

1. To make realistic assumptions that will guide in the preparation of financial

statements.

2. To determine the total expenses required to start the business.

3. To determine the profitability, liquidity and stability of the proposed business.

Socio-Economic Study:

To examine the operations of the organization so as to be responsible to the

stakeholders such as customers and suppliers.

Scope and Limitations

The focus of this feasibility study is to establish a laundry shop in Pasay City. The

prospective target markets of the proposed business are the college students and

other resident doctors at Adventist Medical Center and College Manila. This study only

covers five years of operation of the business.

 Chapter 2

REVIEW OF RELATED LITERATURE AND RELATED STUDIES

Related Literature

Related Studies

The term coin laundry is defined by the American Coin Laundry

Association (CLA)—the only national trade association for the coin laundry

industry—as commercial-grade, self-service laundry equipment placed into

service in a retail space. Coin laundries are unique small business in that

they have no inventory or receivables. Today’s coin laundry industry is a

strong and vibrant one. Even more appealing is the fact that this dependable

public service industry continues to grow and thrive.

Industry Review
The coin laundry industry is approximately 70 years old and has been

growing and thriving over those years. It is especially gaining more

popularity in the recent years because most people now look to simplifying

household works and save time by depending on highly mechanized

machines.

The coin laundries are one part of the self-service laundry business;

the industry is actually comprised of two distinct segments as stated by the

CLA. The first is coin-op laundries, the second is represented by coin-

operated machines

located in apartment housing. This apartment segment of the business is

referred to as the multi-housing laundry business.

Industry growth is based on the demographics of population density,

population mix and population income. The more concentrated the

population, the greater the need for quality coin laundry facilities. National

and regional demographics indicate renters, the primary users of coin

laundries, are the fastest-growing segment in the nation. As of the 2010 U.S.

Census, 34.5percent of the nation’s 116 million households were renter

occupied. The number of coin laundry stores built over the past 70 years has

grown steadily as the population has increased and shifted to more

concentrated areas resulting in a mature, stabilized industry.

According to an industry study prepared by MSG Firm in 2011, there

are some 35,000 coin-operated laundries in the U.S., and they generate $5

billion in annual gross revenue. They serve an estimated 100 million

Americans, the majority of whom live in rental housing. This figures includes

coin laundries and coin-operated machines in apartment buildings. Today,

growth in the laundromat industry is being driven by cities, where density

and multi-family construction are expanding the market for clean clothes.

One more thing worth noting about coin laundries is that they are passive
income generators. The demand for laundry is steady month to month,

meaning that revenue is steady and accounting is easy.

Meanwhile, in the Philippines, despite the continued fluctuation and

instability of peso, doing laundry is one of the things that is a certain and

constant household duty. At present, the cost of operating a laundry

business depends

largely on the operational expenses. It involves a lot of balancing act of

lowering the cost and increasing sales to keep the business afloat. However,

with economic downturns and market uncertainties, laundry business is

evolving into a dynamic opportunity while maintaining its high rate of

success for today’s investors.

Old-school laundry owners in the country often view this as a passive

business which has allowed to new era of laundry owners to experiment and

come up with the coin-operated laundry business (Kirhat, 2016). An ordinary

laundry shop may offer as low as PhP25.00 per kilo, but the coin-operated

laundry shops offer PhP20.00 or lower per kilo for both washing and drying

plus the added feature that the customer is now assured that their clothes

will not get lost. With both the average family and business establishments

washing between 15 to 25 kilos a week, it is easy to see just how much a

coin-operated laundry business can gross in the same period.

 With all of these industry reviews, it is no wonder that more and more

coin-operated laundry shops are arising especially in populated areas such

as Manila and Makati. Meanwhile, aside from coin-operated laundry

machines, there is also the card-operated. One of which was recently built

in Lucena City, Quezon. This is evidence that the self-service laundry

industry is deemed to thrive not only in the capital region but also in the

provinces and small towns such as in Atimonan, Quezon.

SWOT ANALYSIS

I. Strengths

Using machines with quality and brand

High profitability because it is more accessible to market

Quality output and faster service

The location is on the main city nearest to the boarding houses,

apartments and schools

Location is just a walking distance

Prices are relative, competitive and accords to what the customers

want

Does not need a large amount of capital

Promotion strategies – social networking sites is very accessible as well

Accessibility of the location

II. Weaknesses

Lack of experience as this will be the first time to conquer the market
in the said location
 As the machines with brand and quality is expensive, maintenance will
be quite expensive as well

III. Opportunities

Continuous development of the city with having new establishments

for residential (apartments and boarding houses)

Students, working professionals having lack of time in doing their own

laundry

Only two competitors nearest which is 500 meters and 568.48 meters
away from location

IV. Threats

Price variations

Future competition

Definition of Terms

1. Tagging - the clothes are firstly tagged with a specific number, mentioned in the
invoice given to customers. This procedure is used for identification of clothes once
ready for collection for customers.
2. Sorting - After tagging the clothes are arranged in different sets. Some people will
sort by color. Other sort by fabric type.

3. Pre-treatment of clothes – soaking in hot water.

4. Washing - The clothes are washed in washing machine using detergent washing
powder and or bleach on white.
5. Drying - The clothes washed are transferred to dryers. (Note: one of the
machines are automatic dry)

6. Packing - Once pressed, the clothes are properly hanged and covered in the
plastic wrap and then tagged so that it can be easily identified.