Unlike hotels and restaurants which are in the service business, commercial laundries are essentially production plants. There may be people needed to run these plants, but their profitability is significantly defined by how much owners can maximize their capital assets: their machines.

And there are a lot: In a DIY laundry environment, you’d have the standard commercial washer and dryer. In a hotel, the washers and dryers will be significantly bigger, and with a lot more equipment such as the flatwork iron (How do you think hotels have ironed huge bed sheets so well?) And when you talk about industrial laundry, you’d have to involve tunnel washers that can process as much as a ton of dry weight per hour and industrial boilers that create steam to power the plant’s operations.

When personnel get sick, a reliever kicks in to do the work. When chemicals run out, a delivery can be arranged. It’s different with machines, which require specific expertise and a longer time to fix.

Yet that’s just the tip of the iceberg. When you think of maximizing your machines, you must also consider the inputs – energy, soiled clothes, labor, and water, among others – which form your costs.

And when you try analyzing your costs from that lens, you will discover one fascinating reality in the business: You spend more in drying than washing.

Why you spend more in drying

It costs more to dry than to wash in terms of electricity, labor, production, and even real estate rent.

I learned this more than 20 years when I was helping operate one of the biggest steam-powered commercial laundry facility in the Philippines.

In the early 2000s, we were processing 50,000 to 60,000 kilograms of soil every day in our tunnel washer. We became concerned, however, about our costs. The owner tasked me to analyze the situation and see how I can reduce our spend.

I first evaluated our costs and determined that I must focus on the most significant ones, such as fuel. We were spending PHP 2.5 million on bunker oil for our boilers (boilers produce steam, which powers everything) and significantly too on electricity.

I then analyzed the wash process and discovered an interesting finding: The moisture content of our cakes is significantly high.

For you who are unfamiliar with a cake, it is the term we call the batch of clothes that have just been washed and whose water we’ve extracted. In household laundry, this is after spinning your clothes. In a tunnel washer, that batch is pressed by a machine instead of going through a spinning process. That said cake will then be sent to dryer.

The ideal moisture content of a cake before you subject it to drying is 40%. Even when you do laundry at home, the spin must have removed at least 60% of water content.

During our investigation of many weeks, our cakes reached around 60% moisture. This means that during our investigation, we had 1 metric ton of excess water that should never be going to the dryer.

It means our dryer was working harder and longer to remove more water, therefore consuming a lot of fuel. That fuel is steam, which is produced by our boilers, powered by our PHP 2.5 million monthly bunker oil fuel.

We were requiring our people longer shifts to operate our machines given the inefficient processes, thereby affecting labor cost.

When you are renting space, that is affected as well. If your laundry is inefficient, you are paying the same rent to produce less outputs.

After addressing this chain of problems, we saved PHP 1 million a month from bunker oil and a significant amount on electricity. We reduced the shifts of people from 3 down to 2.5 and eventually to 2.

This is a great lesson for owners of laundry businesses, even small shops:

  • Retain great service and marketing but focus on your machines.
  • It’s not a problem to try do comparative pricing against competition; but focus on your cost. Do not sell without understanding your cost, because you could be selling at a huge discount without your knowing.
  • Good preventive-maintenance teams are hard to come by these days, so find a good vendor to do so.
  • Understand the science of laundry and cleaning.

It is exciting to start a business, but it is a headache to sustain it.