Legal Requirements For Starting A Laundry Business [2024 Edition]

•

Updated: January 20th, 2022

Are you looking to start a laundry business?

When starting a business, you need to research the legal requirements to launch your laundry business, so that it is profitable and compliant.

So, what are the legal requirements for starting a laundry business?

Keep reading to discover the legal documents you need to launch a compliant laundry business.

The Legal Requirements For Starting a Laundry Business

1. Obtain the City Business Permit / License

Validity: 1 Year

The local business permit allows you to do business within the defined jurisdiction. Ideally, the local government will charge a certain fee before issuing the license.

In addition, the local authorities will visit and examine the business premises before issuing the business permit.

Note that you must abide by the requirements to avoid business permit revocation. Besides, the business permit should be renewed when due. Business owners can apply for a new business license or renew the existing business license online.

2. Insurance cover

Validity: 1 Year

Business insurance protects your business against financial loss. Therefore, it is a good idea to ensure you purchase business insurance in order to protect your laundry startup from potential risks.

Some common business insurance options are:

General liability insurance: Protects your laundry business from financial loss including property damage, injury, medical issues, or lawsuit judgments.
Commercial property insurance: Covers your business from loss or damage to company property because of a natural disaster, vandalism or accidents.

3. The Federal Tax ID Number

The federal tax identification number or the employer identification number allows the business owners to hire and pay employees, file employment tax returns, and operate as a corporation.

Therefore, if you plan to hire employees or register your laundry business as a corporation, apply for the federal tax ID number through the IRS website.

4. Building and Construction Permit

Validity: Custom Period

If you plan to renovate the property, install electrical wiring or plumbing to set up the commercial laundry business, visit the planning and building department for the relevant permits.

Note Separate plumbing, mechanical and electrical permits may be required.

5. Fire Prevention Information/Fire Inspection Certificate

Validity: 1 Year The fire inspection certificate or the fire safety and prevention certificate is issued by the city fire department.

The laundry business may be subjected to annual fire safety compliance, which also covers the hazardous material permits.

6. Hazardous Material / Waste Management Certificate

Validity: 1 Year

In some states, various businesses are required to undergo a hazardous waste inspection, before issuance of the relevant certificate.

This is considering that businesses such as commercial laundry will probably generate some hazardous water based on the detergents used.

Under the Resources Conservation Protection Agency, you are required to follow certain practices and procedures associated with the safe management of hazardous waste.

Check with the environmental protection agency in your city to ascertain the requirements and fees required for the issuance of hazardous waste management permits.

7. Fictitious Business License

The fictitious business name is a registered name representing a business whose legal name is different.

Some jurisdictions require a fictitious business license so that consumers and those seeking legal action against the business can determine the right legal entity or the owners behind the business.

8. Discrimination Law

Department of Fair Employment and housing prohibits harassment or discrimination based on race, ancestry, national origin, color, sex, or even sexual orientation.

Therefore, employers must post the harassment or discrimination in employment notice and provide workers with a copy of the act.

9. Occupation Safety and Health Certificate

Validity: 1 Year

Laundry businesses with employees must prepare the injury and illness prevention plan.

Check with the local department of industrial relations to ascertain the permits, licenses, and certifications required for compliance with the health and safety standards.

10. Sellers Permit

The seller's permit gives your business the authority to collect the sales tax on behalf of the state.

Therefore, if the laundry service is subject to the state sales tax, you are required to have the seller's permit.

Visit the department of revenue for instructions on how to apply for the seller's permit.

Setting Up Your Laundry Business (Formation and Legal)

When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.

The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.

These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.

LLC: All income and expenses from the business are reported on the LLC personal income tax return.
S corp: Owners pay themselves salaries + receive dividends from profits.
C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.

Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.

Learn more about securing the right permits and licenses ➜

Need to start an LLC? Create an LLC in minutes with ZenBusiness.

Is A Laundry Business Profitable?

If you pick the right site, the laundry business remains a profitable venture. In addition, with low expenses and recurring revenue, a laundry business can be an excellent way to build a passive income.

How Much Does it Cost to Start a Laundry Business?

According to Nerdwallet, the amount of capital to start a laundry business may range anywhere between $200K and $500K. Remember that the type of laundry business will depend on the amount of capital you decide to invest.

How Can I Get More Customers for My Laundry Business?

Marketing your business is the best approach for getting more orders. In addition, you need to consider delivering a high level of customer satisfaction so as to earn recommendations from current and past customers.

Check out our database for additional business growth ideas.

What Risks Do Laundry Businesses Experience?

Like any other business, laundry startups experience different challenges. some of the common challenges associated with laundry businesses include: - Equipment malfunction - High utility bills - Low cash-flow - Power Outages

When starting a laundry business, make sure you have a solid plan for dealing with the above and related challenges.

Can I Operate A Laundry Business From Home?

Yes! You can start and operate a laundry business from home. All you ought to do is to ensure you have all the required licenses, and verify that the zoning laws allow you to operate the business from the residential zone.

How Much Profit Does a Laundry Business Make?

The amount of profit at the end of the business day depends on the expenses incurred that day, and the number of customers you have served that particular day. However, according to the entrepreneur, the annual gross income from one store ranges from $30K to $1M.

Conclusion

Despite the constant need for cleaning clothes, many people often lack the time to complete the household chore. Therefore, setting up a laundry business can be a great idea.

We have highlighted some of the licenses and permits required to start a compliant laundry business.

For further advice on the requirements and the fees required to apply for the licenses and permits, consult the local authorities.

meet the author

David Gitonga

"The best life hack of all is to just put the work in and never give up" - Bas Rutten (UFC Heavyweight Champion). Hey there! I am a talented freelancer passionate about writing and researching all topics business and entrepreneurship.

See full profile