How Profitable Are Dry Cleaning Businesses?


Dry cleaning businesses are facing three secular headwinds in the U.S.:

  • More casual wear in the workplace
  • More people working from home
  • An aging-into-retirement population

However, I was still curious what kind of profit margins dry cleaners typically get. I dug around a bit, and the first-person stories I found from people in the dry cleaning industry are listed below.

In general, a well-run dry cleaning business that is operated day-to-day by employees rather than the business owner can expect a pre-tax profit margin of about 12%.

1. John Felt (Dry cleaner owner)

“I opened my dry cleaner in 2008. Nine years later, after many mistakes, missteps, and missed vacations, I am claiming 12% from gross sales of $700,000…[Our] unit sales mix is 70% Laundered Shirt, 25% Dry Cleaning, and 5% other household cleaning…The real profit is made in the dry cleaning… Frankly, I was making $100,000 per year as an employee. [But] I am happier, healthier, and empowered by being my own boss…I am fortunate to have a prime retail location and enough money today to purchase the real estate and own the building. I have a great manager that I pay well and I can jump in my motor home and leave for weeks at a time without worry… There are four key things one needs to do in order to be successful and profitable [as a high-volume dry cleaner].

#1 Location is the most important element in the business. Dry cleaning and laundry customers come from all economic levels, but the most important and highest spending customers come from $80,000+ average household income neighborhoods. Make sure your location has over 10,000 homes that fit that profile.

#2 Don’t pay too much for a lease!… And insist on a drive-thru space or dedicated parking in front of your unit.

#3 Do not buy new equipment… Capital cost for equipment is the biggest expense for a cleaner…

#4 Your business model should define you as a quality cleaner. Do not try to make your business work by being a low price leader.”

John Felt (via Quora)

2. Howard Scott (Industry journalist at American Drycleaner)

“I reviewed a dry cleaner who does $240,000 in revenue. The business has been going for 18 years. The operation incurs $130,000 in expenses [not counting the labor of the owner-operators]. The husband and wife, who both work 50- to 55-hour weeks, take out [the remaining $110,000] as income…[Assuming the owner hired two employees to replace him and his wife at $40,000 per year each] profit is now $30,000… That’s a 12.5% return, which is more or less in order with existing small drycleaner figures.”

Howard Scott

Ricky Nave

In college, Ricky studied physics & math, won a prestigious research competition hosted by Oak Ridge National Laboratory, started several small businesses including an energy chewing gum business and a computer repair business, and graduated with a thesis in algebraic topology. After graduating, Ricky attended grad school at Duke University in the mathematics PhD program where he worked on quantum algorithms & non-Euclidean geometry models for flexible proteins. He also worked in cybersecurity at Los Alamos during this time before eventually dropping out of grad school to join a startup working on formal semantic modeling for legal documents. Finally, he left that startup to start his own in the finance & crypto space. Now, he helps entrepreneurs pay less capital gains tax.

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