It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:
- Identify the strength and weakness of your laundromat business competitors.
- Search for opportunities to distinguish your laundromat business from competitors.
The first step is to determine who your direct and indirect competitors are.
The direct competitors consists of other laundromat businesses that offer essentially the same services to the same people in the same neighborhood as you do.
Indirect competitors are other laundry businesses, laundormats installed by property managers and self-service dry cleaners. Though it seems that there are not many competitors for this industry, the fact that it is basic need invites many players.
There is fierce competition inside the industry. The laundromats compete on price, quality of service, working hours, technology, and addons like wash and fold or dry clean.
This competition pushes prices down and laundromats operate in a narrow range of prices in an area.
The forecast also shows that the competition will further increase and margins may shrink over time.
Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your laundromat business— but keep an eye on the indirect competition as well as they can determine if and how you should innovate or relocate your business.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they offering cheaper laundromat services? Is low price their only strength?
- Quality – Are they offering many addons on the laundry services, or their machines are quick and efficient? Do they also offer dry cleaning, folding, etc.
- Customer service – How they respond to their customers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. For example, will you offer long work hours so that busy professionals can use your services in the evening or night? Are you open on weekends and holidays? Can you pack the laundry for an additional cost? Do you offer special package for property managers, hostels, university students, etc.? How can you attract more business by improving customer support?
Consider how you will outperform your competitors and include them in this portion of your laundry business plan.