Running A Business

13 Reasons to Open a Laundromat

Jul 22, 2020 • 7 min read
Open laundry machines at a laundromat
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      Laundry is not the flashiest option for self-employment. Those who dream of owning a small business probably see themselves opening a popular restaurant or working flexible hours as a consultant. Maintaining long days, 7 days a week, in a humid, fluorescent-lit mini-mall storefront might not fit the bill.

      But laundry businesses can be great investments for the right businessperson. They require a lot of startup capital, but the amount of hands-on investment varies depending on what services you want to offer and whether you want to hire staff. One thing is for certain, though: people need to wash their clothes. Plus, who doesn’t love the smell of fabric softener?

      In this article, we’ll look at all the reasons you should consider a laundromat for your investment or small business.

      1. Laundromats Are a Necessity

      Clean clothes are a household essential. Even in a recession, laundromats will see consistent business—perhaps even an uptick, as households wait to repair their own laundry machines. At most, laundries might see customers waiting longer between trips, but it’s unlikely people will stop doing laundry altogether.

      2. Laundry Is Consistent Year-Round

      Almost all businesses have to deal with seasonal cycles but not laundromats. Unless you’re in a town with mostly seasonal residents (like a beach community), customers will be visiting your business at about the same frequency in winter, spring, summer, and fall.

      3. Americans Have Less Time To Do Laundry

      With increased commute times, multiple jobs, and longer hours, Americans don’t have a lot of free time to do laundry. That means they are more willing to pay extra for wash-and-fold services, which more and more laundromats are offering. Some households with their own laundry machines are even choosing to go to laundromats to save time on multiple loads: a row of industrial-sized washers can go through a family’s dirty clothes in one cycle, while a home machine would take hours of separate loads to complete the task.

      4. Laundry Can’t Be Ordered Online

      Customers can’t order clean laundry from Amazon. When you open a laundromat, you have a relatively captive group of consumers in your area.

      The only exception might be laundry pickup and delivery services—however, these services are usually attached to a local laundry business. You can add a delivery component to your laundromat. Online-only services like FlyCleaners are still limited to major cities.

      5. Laundry Is Local

      There’s not a single national chain of laundromats in the US. There are some small regional ones, but most laundromat owners operate just 1 or 2 locations—so you won’t have to worry about losing customers to the McDonald’s of laundromats. While some neighborhoods have 2 or 3 laundromats competing for business, others are dependent on a sole option. With the right location, you could provide a lifeline to a large apartment complex.

      6. Laundromats Are Profitable

      We wouldn’t be discussing laundromats as a small business idea if they weren’t lucrative. According to Entrepreneur, most laundromats gross between $30,000 and $1 million per year, with about 35% profit if managed well. This couple describes a case study of $150,000 in annual revenue, with almost $50,000 in profit.

      7. Laundromats Can Be (Mostly) Passive Income

      A self-serve laundromat requires little active involvement. Someone needs to open and close the business each day, clean up, and collect quarters—and that last task is negotiable if you choose a card-based payment system. Equipment needs to be maintained and repaired periodically. Some owners choose to hire staff for these tasks, reducing their personal workload even more (but adding management responsibilities for the owner).

      8. Laundromats Have Multiple Revenue Streams Under One Roof

      Dingy, cramped laundromats are a thing of the past. In recent years, coin-operated laundromats have been renovated to feature well-lit, comfortable waiting areas and other amenities. Owners have realized that many customers are happy to pay for diversions like vending machine snacks and arcade games while they wait for their clothes to dry. With fixed location costs, adding these revenue streams won’t affect your overhead much.

      However, the most popular amenity addition to a laundromat is wash-and-fold service. This service will change the nature of your business from a self-serve, passive operation to one that requires much more hands-on work and constant attention. But many owners have seen a worthwhile investment and increase in revenue by courting customers too busy to do their own laundry.

      9. No Experience Is Required

      Few laundromat owners have experience in the business before they buy their first location. Some general familiarity with small businesses is recommended. 

      10. You Can Work With Your Hands

      Handiness with machinery is also a plus. You can hire a repairman when needed, but many owners find they keep costs down by learning basic machine repair themselves.

      11. You Can Use Your People Skills

      Laundry owners, especially those with wash-and-fold services, will be interacting with customers frequently. If you enjoy talking to people and learning their needs, this might be the perfect job for you. Soft skills for customer service can come from many industries, further lowering the barrier to entry for laundry workers. 

      12. High Up-Front Costs Limit Competition

      There’s no way around it: Buying and opening a laundromat requires a lot of money. The industrial equipment is expensive, and many newer laundromats have a large real estate footprint. The Entrepreneur article estimates that laundromats require between $200,000 to $500,000 in starting costs. However, this barrier to entry is an advantage for those who can overcome it. The high up-front costs and relative security are what make laundromats so appealing to people who have saved a nest egg and are looking for an investment or second career.

      13. You Can Finance the Investment

      Remember, you don’t have to provide the entire half-million-dollar investment yourself—and you probably shouldn’t, even if you could. Use financing to retain some of your cash. If you provide a down payment, you can secure additional funding through small business loans, lines of credit, equipment financing, and more. (Lendio can help you apply to multiple lenders with one simple application.)

      For example, this couple describes buying a laundromat for $105,000. With a 35% down payment, they secured a 5-year loan. With additional startup costs of $12,400, they paid $49,150 up front, out of $117,400 total in initial costs.

      For all these reasons and more, we hope you’ll give this essential service another look. If you want a consistent, lower-risk business and have the initial investment saved, you could do a lot worse than opening a laundromat.

      About the author
      Ben Glaser

      Ben has almost a decade of experience covering personal finance and business. From 2014–2017, he was blog editor and spokesperson for the shopping website, where he regularly appeared on programs like Good Morning America and Fox and Friends to offer consumer advice. Ben graduated from Harvard with a BA in English and lives in the Hudson Valley of New York.

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