There are approximately 470 laundry service facilities in Israel.
There are two main sub-divisions in the industry: Laundry facilities intended for private customers, and industrial laundry facilities. This profile only regards the first type.
The industry includes laundry facilities run by chain franchisers and private laundry facilities acting independently.
The industry is based mainly on private entrepreneurship and small businesses- either independently owned or franchises. Main services include laundry, dry cleaning, ironing, and some businesses offer carpet cleaning and repair services.
Customers: Defining the Target Market and its Size, Market segmenting
Private sector customers are divided into two main groups:
- Customers who do not own washing machines (mainly singles or young couples)
- Families and mature population at a medium to high socio economic status, using laundry services mostly for dry cleaning.
Competition in the industry is mainly reflected in price and supplemental services and geographical areas with an array of laundry facilities.
Laundry facility marketing resources are separated according to characterization:
- Franchise laundry facilities benefit from cooperative chain marketing and advertising.
- Small laundry facilities that do not belong to a chain use cheaper advertisement methods such as flyers, yellow page ads etc.
- Local and neighborhood laundry facilities depend on reputation and recommendations, and normally benefit from a faithful and regular clientele.
Factors Affecting Success:
Central location, service, high availability, price levels in comparison to competitors, credibility, professionalism, and quality of cleaning.
Limitations on Entering the Industry:
The main barrier is the financial investment required for purchase of equipment and in appropriating the location according to electricity and environment requirements.
Human resources active in the industry are partly professional. Although no formal training is required, knowledge of equipment operation, types of laundry, and care is needed.
Listed below is basic equipment required for a laundry facility also offering dry cleaning services: 7-10 KG washing machine, 6-7 KG dry cleaning machine, Dryer, ironing board and a steam iron, conveyor for hanging clothing, counter, and cash register. As initial equipment cost is high, equipment is available for rent.
Additional establishment investments:
- Preparation of a three-phase electrical foundation.
- Appropriation of a drainage system, chimney, and removal of hazardous materials according to licensing requirements.
Industry revenue and profitability
Laundry facility revenue stems from a number of parameters:
- Washing machine revenue (5-7 KG)- revenue is calculated by multiplying the number of laundry cycles in a work day (approximately 12 cycles) by the number of working days in the year (285 days), machine capacity and the average price per KG.
- Revenue from a dry cleaning machine is estimated at approximately 1,200 thousand NIS per year per machine, while activity is conducted at the laundry facility. If a contractor is used for dry cleaning, the typical commission fee is 40-60% of customer price.
- Ironing revenue.
Typical Terms of Payment
Vendor credit terms usually range between EOM+30 to EOM+60.
Licenses and Certifications:
A business license from local municipality. The Ministry of Health and the Quality of Environment Ministry are also involved in the licensing process, as the materials emitted from the dry cleaning machines are considered dangerous and not environment friendly.
Business insurance (for content and inventory), third party insurance, employer’s liability insurance, loss of income insurance, and goods in transit insurance. In addition to the above, an insurance agent should be consulted in regards to the need for additional insurance.
Licensing requirements can be viewed on the Quality of Environment Ministry website www.environment.gov.il
Search Company By Name