INTRODUCTION RM 300,000.00

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1 INTRODUCTION Self-service laundry is a business that growing nowadays. This business basically operated 24 hours and with a coin operated machine, people can wash their clothes at any time and can finished with a clean dry clothes instantly. For about 50 minutes, customer can get their 14 kg clothes clean. In a town where most people are busy working, they do not have enough time to do their laundry. In the existence of this service, people need less time to do laundry in every day or even weekly. Therefore, they can have much more time for resting or do other activities. The objective of this paperwork is to get a business funds for about 300, to setup a selfservice laundry shop. We selected this business is because of: 1) The success rate for this business is about 95% by compare to normal hand wash and hand care laundry business. In any case of problem happen, the facilities that already bought are considered our assets. 2) The average return on investment is about 35%. The average self-service laundry within Malaysia are between 20% to 35% which means the investor can receive back their funds only for about 2 years. 3) This business is not tied to fluctuations in the economy because clean clothes are necessity. 4) This business is considers as a part time job and the investor does not need to resign from current job. The flexibility enjoyed by the Laundromat allowing us to customize our own business around our personal lives. 5) This business is all-cash business which means our customers pay up front which can eliminate cost and time associated with tedious accounting responsibilities. 6) For this business, there are new and innovative equipment that allows owners to maximize profit and flexibility. 7) This business contains no labor cost which means customers are the labor and our machines do the work. This business also expected to open 24 hours and can be monitored through various security systems. 8) Stable customer base. 90% of Laundromat patrons become repeat customers. 9) Good business option for the beginner because of less risk and not complicated to operate compare to other business. 1

2 LOCATION Best prospect and ideal location to setup this business is: 1) 35% or more of residents are renters 2) Located in low medium income areas 3) Nearby students college and apartment 4) Located in a clean and comfortable environment 5) Shop rental range between per month 6) square feet area 7) Generates a 3 phase electrical power 8) Highly visible location with good accessibility and ample parking 9) Desirable co-tenants include grocery, bank, convenient stores and restaurant HOW SELF-SERVICE LAUNDRY WORKS Basically most of self-service laundry consists of 3 machines; 1. Washer 2. Dryer 3. Coin Vending machine (to change paper bills to coins) The washer, basically have many different specification and size. Some of the size and maximum washing weight is 9kg, 10kg, 12kg, 14kg, 15kg and up to 24kg. The bigger the size of the washer will cost more coins per cycle. For the dryer, some of the specification of the machine is the dryer machine stacks at the top of the washer. Therefore, if there are 5 washers, there will be 5 dryer. But the other type is the dryer machine is stand-alone where some owner will put combination of for example 6 washers, 4 dryers or 10 washers and 8 dryers. That depends on how the owner wants for their self-service laundry setup. Coin vending machine is necessary for the customer to change their paper bills to coins. Most of customers will not carrying tons of coins everywhere. So, if there is coin vending machine, it will make customer life easier. Some other system and facility that can be included in the self-service laundry 1) Security system (24 hours CCTV camera monitoring online by the owner) 2) Decoration. Nice shop deco will attract more people. Comfortable environment 3) Free Wi-Fi for the customer usage while they waiting for their laundry to finish up 4) Television. As an entertainment for the customer 5) Comfortable table and chairs for customer to rest while waiting their laundry finish 2

3 OPERATION OF SELF-SERVICE COIN LAUNDRY SHOP OPERATION (Washer) Time for 1 cycle of washer (minutes) 30 min Convert to hour (30 min 60 min) 0.50 hour maximum no. of cycle can be obtained in 1 day 48 cycles for 1 machine (24 hour 0.5 hour) Consideration of loss, estimate average cycle can be obtained 16 cycles for 1 machine (1/3 of capacity) = kg machine 4 unit estimate total cycle can be obtained in 1 day (16 x 4) 64 cycle average price for 14 kg machine 7 per cycle average revenue estimation for 1 day ( 7 x 64) per day 10 kg machine 2 unit estimate total cycle can be obtained in 1 day (16 x 2) 32 cycle average price for 10 kg machine 5.50 per cycle average revenue estimation for 1 day ( 5.50 x 32) per day OPERATION (Dryer) Time for 1 cycle of dryer (minutes) 25 min Convert to hour (25 min 60 min) 0.42 hour maximum no. of cycle can be obtained in 1 day 58 cycles for 1 machine (24 hour 0.42 hour) Consideration of loss, estimate average cycle can be obtained 19 cycles for 1 machine (1/3 of capacity) = 58 3 Dryer 4 unit estimate total cycle can be obtained in 1 day (19 x6) 76 cycles average price for 10 kg machine 4 per cycle average revenue estimation for 1 day ( 4 x 115) per day Overall estimate revenue per day (washing + drying) per day Overall estimate revenue per month (washing + drying) per month 3

4 SIMPLE CALCULATION time for 1 cycle 50 min (washing+drying) convert to hour 0.83 hour average cycle for 1 day (Monday - Friday) 60 cycles average cycle per month ( Monday - Friday) 1200 cycles per month average cycle for 1 day (Saturday - Sunday) 100 cycles average cycle per month ( Saturday - Sunday) 800 cycles Total cycles in a month 2000 cycles Estimate average price per cycle 10 per cycle Estimate revenue per month per months Rent Utilities Loan Payment PROFIT DETAIL CALCULATION PROFIT SIMPLE CALCULATION 2, , , (if applicable) 20, ,

5 Profit per month PROFIT TREND Machines Revenue/cycle Average Daily Cycles per machine Total monthly cycle Revenue per cycle () Total revenue per month () Profit () Cycle vs Profit y = x Cycle per month Above table and graph shows the cycles and profit trend. It means that, the more people use the machine, the more the cycles of the machine carried out and will increase the monthly profit. It is easier to use total monthly cycle for this estimation. Generally, most of the self-service laundry shop will obtain average of 2000 cycle per month. 5

6 RETURN ON INVESTMENT Let say the funder funds 300, to setup this business; From above calculation and estimation; take monthly profit to the owner of 11,000 Therefore, in 2.3 years the funder will get back their 300, and then will start get profit for upcoming years. Please take note that the revenue per month of this business is not fixed and depends on the average monthly cycles that the self-service laundry obtained. To setup this project it will cost about 300,000 (including initial shop rental). Interested funder will be provided with finalize paperwork based from the finalize quotation and setup of self-service laundry (amount of machine combination) to ensure all activity are proper and transparent. 6

7 Some example of self-service laundry shop 7