Laundry Shop Business Plan

1.0 Overview

The company we have chosen comes with the name of WM Laundry Sdn. Bhd.. The company was incorporated on 2nd February 2009 and it is founded by Mr. Ooi Wei Tiong. The targeted customer group for the company focuses mainly on the residents of Taman Seri Gombak as the company itself is located at such place. Due to the fact that many residents are working in the city centre of Kuala Lumpur with long working hours, WM Laundry aims to provide the best and fastest laundry service to the residents to ease their burden. The core business of the company is providing common laundry services such as washing, dry cleaning, and ironing services.

WM Laundry provides laundry services for variety of fabrics ranging from clothing to curtains.

The maintenance department is expected to be allocated to all production cost centres at the ratio of 50%, 40%, and 10% respectively. Assuming the total cost of maintenance department is RM 1000, then RM 500 of the total cost will be reallocated into washing department and RM 400 will be reallocated into dry cleaning and RM 100 in ironing. The reason for allocation and reappointment the cost is to ensure that better pricing for the laundry service can be determined as the pricing of a service is influenced by the total cost of service. The total costs for a service should consist of direct costs plus indirect costs and overhead

In service industry, as for laundry service, final goods will be used in providing services such as laundry detergent, softener and plastic bag. We are unable to estimate accurately on how much it will cost us while we used the product on the services that provided to customer. The amount of profit we earn from the customer may not be accurate to determine what we earn is actually what we should be paid for in term of material, whereas for manufacturing firm;

They manufacture their product in-house with raw material, therefore they are able to accurately estimate their production cost from the overhead of facility of manufacturing, cost of parts and also consider the cost on manufacturing activities.

3. Service costing usually involves a more complicated format to determine the cost accurately. Basic principle of measuring costs, such as fixed and variable costs; type of method of pricing, such as market based pricing, and different methods of allocating costs, such as per service hour, and per kilogram washed, these will be taken into consideration of costing a service (Stephen Devaney, 2015). The decision of the best approaches to use can be very complex as it varies for every different services provided, whereas for manufacturing