Buying A Business -- Dry Cleaner
Today, more and more personal garments are made from natural fibres such as wool, cotton, linen, and silk. These fabrics require professional cleaning and finishing. Further, in today’s hectic lifestyle, most people do not have the time to clean and finish clothes at home.
Couple that with stains caused by foods and drinks which only professional cleaners can remove, and you can see why a dry cleaning business has the potential to provide a nice income.
Types of dry cleaning business
- High street cleaners – cleaners that operate bureaux service and use a third party to clean and handle the customers coming in.
- On-site cleaning – cleaners which clean the clothes on-site using a machine.
- Industrial cleaners – deal with contract cleaning and take dry cleaning from high street cleaners.
Licenses and permission
Dry cleaners are all subject to local authority regulations concerning their air emissions. It will be an offence to operate using organic solvents without applying for a local authority permit under the Environmental Permitting (England and Wales) Regulations 2016.
You will be issued an operator’s permit on condition that all equipment meets the required standards once your business is registered with the local environmental health department. You will incur an annual permit fee which varies depending on your council.
Further, the Guild of Cleaners and Launderers (GCL) provides information to its members on Solvent Emission Directive and how to get the permit. You can also gain a qualification in the safe handling of dry cleaning solvents.
Besides pure dry cleaning services, you should also think about other value-added services when buying a dry cleaner. If there are industrial strength, conventional washers and dryers and pressing machines can add even further revenue to the business.
You can also generate further revenue by hiring out equipment like heavy-duty carpet cleaners and offering specialist cleaning areas such as curtain cleaning, duvets, leather and suede, wedding gown and waxed jackets.
However, the downside is that you will incur a relatively higher upfront investment cost.
This process involves asking a lot of questions about the business. Such as how new business is generated, whether the business is reliant on regular customers or is there contracts with local businesses, and whether there are additional receiving points.
You will also need to review the financial records, especially for the last three years. You need to ensure that all the licenses and permits are up to date. Further, you should also examine any current employee and customer contracts.
Click here to find more about due diligence.
Top tips for success
- Disputes are not common but cause problems. You should make sure that the customer is aware that a heavily stained garment will not be 100% perfect once it has been dry cleaned.
- You can buy an expensive dry cleaning machine or a cheaper import. A more expensive piece of equipment will provide value for money but set you back anywhere between 30 thousand pounds to 40 thousand pounds.
- It is also good to record how much solvent is being used and consolidate the data in annual or monthly figures. This will help you in keeping the bills in control.
You need a solid contract
You, as the buyer, will have to produce the sale document. This agreement will have to cover the mechanics of the deal – what is being sold, where it is, how it is to be transferred, and so on. This is where warranties come in. Click here to download a business sale agreement if you are purchasing a dry cleaner business.
Warranties are legally binding promise as facts about the business, which provide information relating to the business. Click here to know about how warranties work and why they are important.
Other documents you need
Additionally, you may need assignment and novation agreements to transfer contracts the seller is a party to.
If company shares are being sold, then you will need directors service agreements, board minutes to document approvals to changes, and possibly, a new shareholders agreement and new articles of association.
We can help you find exactly what you need for your circumstances if you contact us and ask.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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