I Built A $318K/Year Business By Digitalizing The Laundry Industry
Hello! Who are you and what business did you start?
Hello! My name is Nishant Tripathi, and I founded Dhobilite, a premium online dry cleaning, and laundry service. I started this company in 2011 with a vision to pioneer laundry service in India.
I started as a consumer/retail business and later on also ventured into a B2B vertical. And, in the year 2015, we disrupted the laundry market by using smartphone technology and took our business online. Our company is India's first app-based, on-demand cleaning service provider.
We offer on-demand garment care and cleaning services. Indeed, laundry forms a significant part of our company's operations, but we also provide dry-cleaning, car wash, shoe cleaning, and other home furnishing services. We take orders through our website, app, and phone, pick up the laundry from customers' home and deliver it back within 48 hours. We make our customer's life easier with our online laundry services. We have got them covered when it comes to laundry and dry cleaning, right from garments and fabrics, comforters, sofas, area rugs, shoes to the car, and much more.
Our flagship product is laundry. We then diversified into dry-cleaning. As a result, our revenue is equally distributed between dry-cleaning and laundry. Dry cleaning is our primary revenue source in Tier- 2 and Tier- 3 cities, but laundry becomes a highlight because that is not common in Tier- 2 and Tier-3 cities. It is equally distributed in Tier-1 cities and metros, but in these cities and metros rather than the product, the ease of service is more important.
Depending on the type of services, our customers vary. Our customers include bachelors, students, homemakers. They take our premium laundry and dry-cleaning services.
We started operations in the year 2011. Over the years, we experimented with and developed our business model and software. In 2015, we disrupted the laundry market and became India's first app-based, on-demand laundry service provider. We have expanded into more than 15 cities in the last two years and have around 20+ stores today. In addition, we have 30 plus franchises. We also have factories in Gurgaon, Noida, Lucknow, Hyderabad, and Faridabad.
What's your backstory and how did you come up with the idea?
I always wanted to have something of my own and tried my hands to start something new on different levels. In Jan 2011, I met an old friend at a wedding, and we discussed life plans. Both of us got inspired and thought of starting a Gym but financial and other things occurred, so we had to shelve our idea.
People can afford to fail, but what they can't afford is not learning from it and the inability to fix the mistakes and move forward.
Though many ideas were brimming in my mind and one such idea was to start a Handicrafts business. However, my friend was looking to enter the laundry business. Even though I was not convinced of this idea at first, we both started researching and analyzing the future of laundry and dry-cleaning in India and laundry functionalities in other developed countries.
Our search results somehow convinced us that this path is less trodden in India, with high future potential. The challenges like changing people's mindsets, meeting people's expectations, and interacting with people from different walks of life were enticing enough to compel us to start a laundry business.
In this new and evolving India, we took the challenge of changing the concept of "dhobi". We took the less trodden path to explore new possibilities and be the new face of laundry service in India. This is how we came up with this business idea and started our venture.
I didn't have any expertise in the laundry industry. My only expertise was the software background. So, in the initial four and five years, I didn't implement any software technology into this business and spent those years understanding the laundry market and experimenting with ideas. I entered the industry and only then learnt the ropes of this industry. Once I understood the model and gained knowledge about this industry, I leveraged my expertise in software to automate processes so that they could be scaled and replicated.
To validate the idea, I began by understanding the laundry business and gaining knowledge about the industry. Then, I started by launching our services in the Noida market to see if there was demand and traction for our services. Finally, in the year 2015, after seeing potential and demand for our services, we rolled out our App.
I used my savings to start this business. Apart from my savings, I also took a personal loan. I started the company with an initial capital of INR 10 lakhs and slowly infused INR 40 lakhs more into my business. When my business started generating revenue, I used it for further expansion.
Take us through the process of designing, prototyping, and manufacturing your first product.
I began by listing the requirements to start the laundry business, and the question in my mind was simple: what do we need to get going? Washing machine, washing chemicals, water, electricity, a place to keep all these things, some people to work and name of the company. But, little did I know that fulfilling this simple list of requirements would be one hell of a ride.
Initially, I catered to the consumer/retail business, and building name and trust was a time-consuming activity, and it needed a lot of patience. I got the idea of venturing into B2B from a learned business person while roaming around in a wholesale market in Delhi. He told me to venture into B2B as it is a constant money churning section of the business market.
So, I kept the top-line in mind and started the B2B vertical of DhobiLite which we found has its own challenge, and also less creativity can be fused in so we came back to the B2C market.
To design the App and the initial features, I asked consumers, friends, and peers about what features they will look for in one such App or website. Then, I researched what features would make booking online laundry services easier and hassle-free. I rolled out the beta version, tested it in the market, and took feedback from customers, peers, and friends. I implemented much analytics to understand how consumers interact with the App and what makes them abandon it.
The initial feature in the App was just to place an order. My focus since the beginning was to divert the bookings being made through calls to App or website. The reason being orders coming over the phone required more workforce, and scaling operations in this scenario was difficult. I made the changes in the layout of the App and website some seven to eight times and used the feedback constructively to enhance the UI/UX of the App and the website.
I initially started with the capital of INR 10 Lakhs and later infused INR 40 Lakhs. I also invested the revenues generated from the business for further expansion. If someone wants to start a full-fledged business like ours, they will require around INR 2 crores. On the legal front, you will have to take care of pollution norms, employee norms and other legal norms any and every business is required to meet. I also got our brand name, logo and trademarks patented. I am also planning to get a patent for my business processes.
Roadblocks will come; believe in what you are doing and be prepared for hard work as there is no shortcut to success.
Describe the process of launching the business.
Doing laundry is a necessity and a time-consuming chore, and I saw a business opportunity in this. I realized that it would work if I could provide laundry services to people who value convenience and high quality.
So, in 2011 I launched my services and started by catering to just one sector in Noida. As a founder, I made an initial investment of Rs 10 lakh (around $13.5K) in DhobiLite. My startup broke even in April of 2015. The revenue for 2015 stood at around Rs 60 lakh (around $81K).
There weren't many organized players in this sector. As this was not something there in the market. So, I started by testing the market and demand for such services. I researched what services people are looking for and what they value in such a service. Many phases came when I thought I would see traction now and have a large number of customers. But the problem was whenever I tried to scale, I found bottlenecks. So, I adopted an agile model; I solved all issues and then scaled and repeated this process. Around 2015, I started seeing traction. It took me around five years or so to see a good number of customers.
When I created an initial online presence for my business, in those times, the use of SEO, keywords in search results were less. So, ranking on search engines was much easier. In addition, I built my website in phases; that is, I made the website, tested it in the market and took feedback from consumers, peers and friends and kept updating it to improve the UI/UX of my website.
I feel working in this industry before starting my own venture would have provided me with valuable insights. Still, on the other hand, I also think one can innovate better when they explore and learn things working their way from the bottom to up. So, there are both sides to it; gaining experience would have given me an added advantage. Learning from scratch after starting my venture helped me innovate better as I didn't follow anyone's footsteps or copy the processes of an already established company.
Another lesson I learnt was that highs and lows come in every business, but you must keep progressing in the right direction and, while doing so, fix the mistakes you made. Accept there will be downs and lower their impact by learning from the downs. Organisations are not built in a day, and you will have to work continuously to make them a success.
Since launch, what has worked to attract and retain customers?
I started with a vision to solve the hassle of doing laundry simply and effectively. Unfortunately, things slowed down a bit after the initial spurt in traction as people were either unaware of DhobiLite or were unwilling to trust a new company with their laundry. My growth advice for aspiring founders is to make plans, implement them and then retrospect what went right and wrong. I still do this, and it helps me a lot in improvising my business model.
The best possible way to win and retain customers was to provide them with impeccable service quality and honour the commitments, and I intend to keep providing it no matter what. I make sure we use the most advanced techniques and technologies for laundry and dry-cleaning. We use only premium quality detergents and cleaning agents to ensure the clothes are not damaged in the cleaning process. I hire skilled staff with in-depth knowledge of fabric and garments.
I also upskill my employees continuously. Each employee at DhobiLite takes extra care of the clothes to make sure the laundry is delivered clean and unscathed and maintains the highest quality. In addition, I try to automate as many processes as possible to avoid errors and offer impeccable service to our customers at affordable prices.
For customer acquisition, I followed 360-degree marketing techniques such as niche marketing, social media marketing, referral marketing, freebie marketing, undercover marketing and hidden marketing. For customer retention, I believe the key is to provide impeccable service consistently. I make sure the online and offline marketing goes hand-in-hand. In online marketing, I focus more on the organic reach. Paid online marketing strategies are dependent on factors such as time, business, location, and others.
Though we are an online player, we still depend on offline methods to gain traction and capture the market. In offline marketing, we use canopy marketing, pamphlet distribution, print media ads, man-to-man marketing, branding in lifts of housing societies, referral marketing and cross-marketing methods.
How are you doing today and what does the future look like?
I believe I entered the market at the right time in 2011, and it gave us the right exposure, time to experiment and valuable experience regarding the market and technology. Today, the market is set to explode, and DhobiLite is in the best position to exploit the fruits of expansion completely.
We started as a dry cleaning and laundry service for garments, but today our gamut of services has expanded and includes garments and fabrics, comforters, area rugs, sofas, shoes, cars, and much more. Currently, we are serving 15 plus cities and have 20 plus outlets.
The future looks pretty bright, and our expansion plans are further strengthened by the online traction we see for our services. We have over 120k+ downloads on Android and over 40k+ downloads on iOS. We have recently launched in cities like Panchkula, Rajasthan, Varanasi. We are also expanding our wings in Orissa and Hyderabad.
Over the years, we have minimized our customer acquisition costs because of the high organic growth rate, which can be primarily attributed to our online presence and our mobile application's better ranking in Play Store or App Store. As a result, our advertising budget is less than two percent.
The demand for our services surged during the COVID pandemic, and we have expanded our services to Tier-1, Tier-2 and Tier-3 cities during this time; the best part is that all our outlets have reached break-even within two-three months of starting operations. The successful operations in Tier-2 and Tier-3 cities prove our model is not just limited to Tier-1 cities but is also suited for Tier-2 and Tier-3 cities. It is just that the services change like in some cities, dry cleaning forms a significant part of our operations, and in some others, it is laundry that constitutes a substantial part of operations.
Overall, we have come a long way and see robust demand for our services in the near future. I spend around 2% of my expenditure on advertisements and promotions. In the pre-COVID economy, my business grew at a rate of 4o%. During the last year, my business grew at a rate of 60%. As a result, we plan to expand our operations PAN India.
Through starting the business, have you learned anything particularly helpful or advantageous?
When we started our journey, the lack of brand name and trust created obstacles in our path, but I realised that what was lacking in the form of brand name, I could make up for it with impeccable service quality. So, I focused on providing my customers with excellent service quality.
Secondly, Noida, the area from where we started our operations, became our comfort zone and moving away from our comfort zone also created a new set of challenges. One such challenge we faced was when we started our operations in Gurgaon. Initially, we had a plan to set up a plant in Gurgaon, but later on, we decided to serve Gurgaon from our Noida plant.
This opened Pandora's box and brought to the fore the issue of logistics. It required us to pick up the orders from Gurgaon, transport them to Noida, process them and then transport them back to Gurgaon. To keep up our promise of delivering in 48 hours, we had to walk a tightrope as any slip-up meant slipped timelines and unsatisfied customers. Many unforeseen issues such as vehicle breakdown, machine breakdown, rains, winter fog, etc., added to our problem. All this meant DhobiLite had to work like a clock to uphold our commitments to our customers.
But thanks to our strong fundamentals, DhobiLite met all these challenges, and when we launched our Delhi operations, the same Gurgoan model worked very well for Delhi. Later with more demand we opened a new plant in Gurgaon.
Apart from these challenges, a few decisions worked in our favour, and one such was to take DhobiLite online. So, in October 2015, I took DhobiLite online and harnessed the power of the online platform to increase our revenue and reach. Moreover, my decision to expand through a franchise also offered an easy and fast way to grow. I have three kinds of franchise models. The first model is the master franchise of the city where the factory is established. Then there are retail franchises which are pick-up and delivery points.
These retail franchises help in penetration. We also have a standalone model where live cleaning is done, and machines are installed within shops. My advice for fellow entrepreneurs is that the franchise model is bundled with the experience of the owners. It is a partnership model where the owner wants you to take the franchise and take it to the next level and share the brand name and reputation with you. The owners advise you and help you flourish. The overall time needed to establish a business on your own is more, but if you go with a franchise model, you can expand quickly, but the franchise model is not the guaranteed return investment.
Expanding on your own or through franchises will have its own challenges and benefits. I started giving DhobiLite's franchise when I felt the model could be replicated. Still, you need to have guidelines and marked procedures on who will do what so that everything goes smoothly when someone enters from outside. DhobiLite's franchise model is a plug-and-play model, and it has yielded us great results so far.
What platform/tools do you use for your business?
My business is highly tech-enabled and executes to deliver a beautiful consumer experience. All technology we use has been built in-house. The entire work we do is paperless, and we create all SOPs. In addition, we have automated all these SOPs through in-house tools. We do not use any external tools. Field runners, tagging, call centre all these tools are integrated into our system and created by our in-house team.
At DhobiLite, we have developed a customer feedback and ticketing system that is very easy to use to ensure that all complaints and feedback gets collected by our system efficiently. DhobiLite provides three interfaces, which include a mobile application, website and customer-care number. The entire system has been created in-house, from order placement till fulfilment everything.
What have been the most influential books, podcasts, or other resources?
Though I am not an avid reader, I do follow Acharya Prashant, and his teachings have left deep impressions on me. Acharya Prashant is an Indian philosopher and Vedanta teacher. Apart from watching his YouTube series, I have also read his books, including Karma: Why Everything You Know About It Is Wrong and Advait in Everyday Life.
Advice for other entrepreneurs who want to get started or are just starting out?
My advice for fellow entrepreneurs is that there is no one recipe for success. Something that worked for me might not work in your case, but something that didn't work for me may yield success for you.
So, I would advise them to do things the way they want to and then retrospect and see what worked and what didn't. Then, go to the root cause of the problems you faced and fix them. The only advice I would give is not to take any advice and do it, learn and retrospect.
People can afford to fail, but what they can't afford is not learning from it and the inability to fix the mistakes and move forward. Roadblocks will come; believe in what you are doing and be prepared for hard work as there is no shortcut to success.
Where can we go to learn more?
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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