While opening a laundromat probably wasn't everyone's childhood dream, few business ventures are as low-risk as investing in a laundromat. ASpeed-Queen-Studioputs the success rate for laundromats at 94.8%, and while that may be compelling, few would argue against the fact that dry cleaners do good business, attract regular customers, and stay open for decades.
The reasons opening a laundromat is such a dependent investment are simple: 1. People need clean clothes and 2. Not everyone has a washer and dryer at home. Risk-averse entrepreneurs who want to start a small business but are reluctant to venture into dynamic and demanding industries such as hospitality or retail can find a home in the grim and harsh world of the laundromat.
In this guide, we'll look at some of the characteristics that make a first-time small business owner a great choice for opening a laundromat, and then dive into the step-by-step process of opening a laundromat.
it is a laundromat the right business for you?
The relative mundaneness of the laundry industry may put some people off, but those with the right skills and temperament to run a laundromat will find a lifelong calling. Here are some signs that you're the right person to start a laundromat.
You are not looking for thrills in your professional life.
People come in and wash and dry their dirty clothes. Some choose to pay for dry cleaning or laundry and folding services (if those services are provided). Occasionally someone forgets a sock or a machine breaks down and needs repairing. That's all.
Running a laundromat isn't the most exciting thing in the world, but many people thrive and find meaning in a solid, predictable routine. If this describes your personality, running a laundromat might make you feel right at home. Plus, you probably have plenty of free time to focus on other projects.
You have mechanical and/or electrical knowledge.
Washing machines and dryers that are in constant use inevitably break down or clog up from time to time. Laundromat owners who know how their machines work and who can fix most problems without having to call a technician save a fortune in maintenance costs.
You have the means to finance a laundry.
While laundromats are not very expensive to run (although the monthly water bill is very high),Starting costs can range from $100,000 to $300,000due to the number of machines that need to be purchased initially.
It's a lot of money, and not everyone will be able to raise the amount needed to open a laundromat, even with loans and other outside help. Those looking for a small business opportunity with lower startup costs should look elsewhere.
Overview of coin laundering industry statistics
- there are around35.000Operated laundries throughout the national territory.
- American laundromats have an average return on investment of20-35%
- Coin laundries can generate anywhere in between15.000 $mi300.000 $Per year.
- More than half of coin laundromats offer laundry and folding services.
- 70%of laundromats have two or fewer employees.
- Low-income renters are the most common laundromat users60%of sponsors are women.
- 87%of the laundry's customers live within a mile of the area, and90%become regular customers.
Fuentes:Coin Laundry Association,speed queen,Martin Ray Laundry Systems, Inc.
Open a laundry step by step
1. Choose a location
Since laundromats typically attract a specific customer base, low-income renters, you can't just open a laundromat somewhere and expect it to be a success.
Instead, you should open your laundromat in an area with a high concentration of people in your target market. This usually means opening a business in a working-class urban neighborhood.
However, there are exceptions: There are affluent urban areas where apartments with washing machines and dryers are expensive, and laundromats also have their place in rural communities.
Do your research and try to find a good location for your business in a densely populated area with high customer acquisition potential.
2. Decide what services you want your laundry to offer
It's time to create a business plan: what features will make your new car wash stand out from the rest?
Self-service washers and dryers of various sizes are a given, but many laundromats offer additional laundry services, includingchemical cleaningmiWashing and folding serviceThis could separate your clothes from the pack and attract a different clientele. Get creative with your business ideas.
Since people are likely to spend at least a few hours in the facility, this is recommendedFree public WiFiand provide the children with books, toys, or other distractions.
3. Calculate your expenses and buy equipment
As we mentioned earlier, opening a laundry binCosts from one hundred thousand to several hundred thousand dollars(this coupleYou bought an existing laundry room for $105,000 (which is always an option), so be prepared to make a big investment.
The following are some of the main expenses of opening a laundromat:
- Rent or buy commercial space– The cost of selecting a location for your laundry business can vary significantly depending on local real estate prices and square footage. A laundry room should be at least 2,000 square feet to house all the equipment and provide room for people to move, while many are up to 4,000 to 5,000 square feet.
- washing machines and dryers- Equipping your business with machines will be expensive - Top loading washing machines work the same way.$ 400 - $ 700,while front-loading washing machines gofive to ten timesThis quantity. Industrial dryers are also expensive, with aaverage cost of $5,000 per unit.
Buy as many washers and dryers as you can within your budget, at least 8 of each. Don't forget: If you invest in more attractive models now, you can save on maintenance and repair costs in the long term.
- a slot machine– Customers need to convert their money into coins, so you need at least one. The price of a slot machine.ranges from $700 to $2,000.
- vending machines- Providing snacks and drinks from vending machines selling washing powder, hair dryers, fabric softeners and more is a great way to add another revenue stream.
- Card reader or a card system– It is beneficial if you can configure your washing machines to accept debit and credit cards.
- carts and tables– To spread out clothes and provide space for folding clothes.
- a set of tools– Your machines need regular maintenance so get a good tool kit to keep them in place.
4. Obtain financing, select a business entity, register your business, and obtain federal and state tax identification numbers
see oursHow to start a business guidefor instructions on how to complete these essential steps.
5. Obtain the required licenses and permits
Opening a laundromat may require you to obtain some licenses or other certifications depending on local laws. Here are some you may need:
- local business license– Certain municipalities require companies to obtain a specific local business license to operate in the area.
- building permit- Required if changes need to be made to the facility before the laundry opens.
- fire permits– Required when installing fire alarms or sprinkler systems.
- sewer connection fee– Laundromat owners usually have to pay a fee to connect each washing machine to the sewage system.
6. Buy insurance coverage
Insurance coverage is an essential protection for any business, including laundromats. If your laundromat has full-time employees, the federal government requires you to have two types of insurance, while other types of commercial insurance are recommended or required at the state level.
Here are forms of insurance to buy for your laundry room:
Required insurance forms for all companies with employees:
- workers compensation:Covers medical expenses and disability benefits if an employee is injured or ill on the job.
- unemployment insurance: Provides workers with benefits in the event of a job loss through no fault of their own.
Recommended forms of insurance for all companies:
- Professional Liability Insurance:Covers losses resulting from property damage, medical expenses, libel claims, defamation and negligence.
- commercial property insurance:Property damage to business assets and property as a result of fire, theft or storm is insured.
7. Market your laundry business
No laundromat can be successful without local advertising and a well-established online presence. Here are the key steps to promoting your laundry business:
- create a website. Register a domain name for a business website (you candominio.com,host Azul,GoDaddy.com, ÖNamecheap.com). Hire a web designer to develop the website (or do it yourself). Be sure to provide detailed contact information on the website.
- Open social media accounts. Register accounts on popular social media services (Twitter, Facebook, Instagram)
- Register a Google profile. This allows you to add photos of your business, respond to positive customer reviews, and address customer concerns.
- Respond to customer feedback online. Register accounts on business review platforms like Yelp and TripAdvisor. This allows you to write thank you notes in response to rave reviews and respond to negative reviews.
- Remove ads from billboards and local publications.. It's still worth increasing visibility by buying ads in local newspapers and highway billboards.
Business resources for laundries
- Deliver Norton– A leading wholesaler of coin operated washers, dryers and other essential laundry and dry cleaning equipment.
- underwear– Another reliable supplier with a large selection of machines and fair prices.
- Coin Laundry Association– Becoming a CLA member is a necessary step for every laundry owner. The organization offers a variety of products, training materials, and other essentials, and regularly releases industry-specific demographic reports.
FAQs
How hard is it to open a laundromat? ›
Running a laundromat is fairly straightforward – the equipment is easy to maintain, labor costs are low and there's no inventory involved. It's also a reliable source of income, as you can expect a steady stream of customers at any time of the year.
How much money do you need to invest in a laundromat? ›On average, it costs between $200,000 and $500,000 to open a laundromat. It depends on whether you're buying an existing laundromat or starting from scratch, as well as the average property prices in your city.
How much does a laundromat make a day? ›The average laundromat makes between $450-$500 per day. This includes revenue from the washers, dryers, and other secondary income streams such as vending revenue. The range of daily income from self service laundry is around $100 per day to $1,500 per day.
Is owning a laundromat good money? ›Laundromats in the U.S. see an average cash-on-cash ROI of 20-35% (9)—much higher than most alternative investments. And when you factor the flexibility and low labor costs, laundromats just make sense.
How much profit does a laundromat make a month? ›The good news is, despite expenses, laundromat owners report an average of $5,000 to $7,000 of net profit each month. Hooray! But this doesn't mean you shouldn't crunch the numbers before buying or building your own laundromat.
How do I write a business plan for a laundromat? ›- Location of Your Laundromat. ...
- Type of Machines: Coin, Coin & Card, or Card Only. ...
- Additional Services and Amenities. ...
- Hours and Staff Considerations. ...
- SWOT Analysis. ...
- Who is Your Competition? ...
- Who is Your Target Market? ...
- Financial Costs/Sales Forecasting.
High Success Rates
However, one study found that laundromats have an extremely high rate of success – approximately 95% of laundromats succeed over a five-year period.
Owners are required to be flexible and respond to emergency situations whenever they occur, day or night, which could infringe on vacation or other planned time away from the business. Moreover, laundromats are a customer service business, and customer complaints can occasionally be stressful and challenging to manage.
What are the threats in laundry business? ›Moreover, the unavailability of the customers at home during pickup or delivery, the inability of field executives to reach customers on time, locating the customers' address, and miscommunication between customers and laundry boy are the very common problems.
Can a laundromat make you a millionaire? ›Dave Menz's initial purchase of a run down laundromat he found on Craigslist has led him to becoming a millionaire. Here's how he did it – and you can, too. As of 2022, there are 18,264 laundromat businesses in the United States that generate about $5 billion in combined nationwide gross annual revenue.
How do you calculate laundry cost? ›
The formula is relatively simple: first, price is divided by life expectancy, and the weight of the item is multiplied by the laundry cost per pound. Cost per use can then be calculated by adding the two results together.
Is owning a laundromat passive income? ›In the traditional sense, no, laundromats are not passive investments. They are, however, a business that dissociates your time from income and requires relatively little time to manage.
Is a laundromat a good first business? ›The high rate of success, excellent ROI, flexibility, scalability, and easy-to-manage cash flow make laundromats a smart choice for new and experienced small business investors.
How much does a laundromat profit a month? ›How much does a laundromat make a month? On average, a laundromat nets between $10,000 and $40,000 per month. But again, it boils down to location. In NYC, for example, a laundromat can bring in $50,000 or more per month.
Is a laundromat a good side hustle? ›Laundromats can be highly profitable, recession-resistant, and flexible businesses, making them highly attractive for entrepreneurs. However, as with any business investment, there are risks to owning a laundromat which potential investors should carefully consider before diving in.