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
 Doing laundry is a part of every person’s life. Just like food and

shelter, clothing is one of our necessities. To have fresh clothes every day

that we can readily wear, we allot some of our time and energy in washing

and drying our clothes. There are two basic ways in doing this, i.e. hand

washing and machine washing. However, some people either don’t have

enough time or energy or both to do their own laundry. Thus, the birth of

laundry shops.

In the essence of modernization, there is a continuous improvement

of technologies through invention and innovation. The diffusion of

technological changes helps our economies evolve and this change affects

the lifestyle of every individual. It is clearly evident in the evolution of

laundry machines. In the older times, it usually takes two or more days

before we can take back our clothes from the laundry shops. With the

emergence of coin-operated laundry machines, we can now do a week-

load of laundry in less than hour.

The coin-operated washing and drying machines offer a self-service style

of laundry wherein people may walk-in to the laundry shop, weigh their

clothes, load it in the machine, add some detergent and fabric softener,

insert the coin and press start. Because of this, the customers will be able

to decide how long they want their clothes tumbling in the machine,

maximize the amount of detergent and fabric conditioner that they want to

put plus the assurance that their clothes will not be lost.
 In a laundry market competition, it is advantageous to have a more

convenient and efficient service. Therefore, the idea of transforming a

typical laundry business into a coin-operated or self-service type one

emerges as an enticing option. The coin-operated laundry industry has

undergone a revolution. There is a trend toward coin laundries being more

comfortable for the customer. And the fact that old-school laundry owners

viewed this as a passive business has allowed the new era in laundry

business to have an opportunity for this innovation. With this, there will be

higher level of probability for the coin-operated laundry service feasibility.

(Satander, 2018)

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

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.