We have years of experience in this industry for the valuation of the business, equipment and real estate. Let us help you with our valuation consultation in all areas of the valuation of dry cleaner businesses. Below is a brief synopsis of the industry.
Description of Business
Establishments primarily engaged in dry cleaning or dyeing apparel and household fabrics other than rugs.
General Industry Information
A vast majority of this industry is comprised of smaller businesses, with annual revenues less than $300,000. The presence of individually owned operations translates into little union activity and an abundance of competition at local levels. According to the recent US Census, there were approximately 28,000 dry cleaning operations.
The dry cleaning business is associated with long hours, arduous working conditions, and slim profit margins. Many operators offer alterations and tailoring in addition to dry cleaning services to supplement revenues. Increasingly, franchise operations are beginning to emerge in significant numbers, where machinery is uniform and advertising is emphasized.
This industry has been subject to heavy environmental regulation. Concern over toxic chemical emissions from several types of cleaning solvents has led to formalized efforts to minimize hazardous waste. Newer carbon dioxide machines are available, although the price for such equipment is significantly higher than the price of conventional machines.
Red Flags and Risks
If owners wish to be “passive owners” they will need to spend time finding an employee, given the high turnover in this business. The work is arduous, with warm rooms from the steam machinery and equipment. The most significant and damaging risk to this industry is the threat of competition. Many smaller dry cleaning plants experience the negative effects of heavy competition when faced with the emergence of new plants and chain-operated franchises within proximity to the business.
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