If you're interested in the laundry industry, have a knack for entrepreneurship and want to provide a valuable service to your community, starting a laundromat business can be a rewarding opportunity and most importantly, a profitable one. With the laundromat industry seeing about a 95% success rate and averaging between 20-35% for the return on investment (ROI), it’s easy to see why you might be interested in starting one of your own.
In this guide, we'll walk you through the process of launching your own laundromat business, all the way from building a business website to marketing, making sure to cover all the crucial steps to get you started on the right foot.
What is a laundromat business?
A laundromat is a type of business that involves providing self-service laundry facilities to customers. Customers typically visit a laundromat to wash and dry their clothes using coin-operated or card-operated machines. As a laundromat owner, you'll be responsible for maintaining the machines, providing a clean and comfortable environment, and offering additional services like vending machines (see how to create a vending machine business plan), folding tables and seating areas.
How profitable is a laundromat business?
While specific ROI figures can vary, a common range for ROI in the laundromat industry might be around 15% to 30% or more annually. This means that for every dollar invested, you might expect to earn a return of 15 cents to 30 cents or higher per year, depending on various factors.
Before investing in a laundromat business, it's crucial to consult with financial advisors or accountants to get a more accurate understanding of potential ROI and profitability based on your specific circumstances. You'll need to also factor in your corporate tax liability, if any, as well.
Make sure to take into account all expenses to calculate your net profit.
How to start a laundromat business
When it comes to starting a business in the laundromat field, follow these essential steps:
01. Research the market and plan your business
Conduct market research to understand the demand for laundromat services in your area. Analyze the demographics, competition and potential customer base. For example, older people may be less likely to use them due to the physical labor involved. Make sure to develop a comprehensive business plan that outlines your goals, marketing strategies, executive summary and operational procedures. You’ll also need to consider your financial projections and whether or not you need to raise money for your business.
Once you've written your laundromat business plan, write a concept statement to outline your vision.
For more inspiration, you can check out these service business examples to help get your creative juices flowing.
02. Choose your business structure and register your business
Select a legal structure for your laundromat business, such as a sole proprietorship, partnership, limited liability company (LLC) or corporation. Consult with an attorney or accountant to determine the most suitable structure or business entity based on your circumstances.
Register your business name and obtain the necessary permits and licenses to operate legally. If you’re unsure how to name a business and haven’t settled on one for yours yet, consider using a business name generator to come up with a catchy and memorable option.
If you're considering launching a laundromat business within a particular state, you can take a look at these resources to ensure you’re compliant with state-specific regulations and get all the relevant information for your specific location:
03. Find a suitable location
Look for a location with high foot traffic, convenient parking and accessibility. Consider the demographics of the area and target customers who would benefit from a nearby laundromat. Lease or purchase a space that meets your requirements in terms of size, layout and utilities.
04. Acquire the right equipment
Invest in high-quality commercial washers and dryers that can handle the expected volume of laundry. Consider factors like capacity, energy efficiency, durability and programmable features. Install vending machines for detergent, fabric softener and other laundry essentials.
05. Set your pricing and services
Determine your pricing structure based on factors such as the size of the machines, the local market rates and the cost of utilities. Consider offering additional services like drop-off laundry, dry cleaning or repairs to diversify your revenue streams and cater to different customer needs.
06. Create a comfortable and safe environment
Design your laundromat to be clean, well-lit and inviting. Install seating areas, folding tables and amenities like Wi-Fi and televisions to enhance the customer experience. Ensure the premises are secure with surveillance cameras and safety measures for customer protection.
07. Develop a marketing strategy
Promote your laundromat through various channels to attract customers. Establish an online presence by building a website using platforms like Wix. Showcase your facilities, highlight your services and pricing and provide information on operating hours and location. Implement marketing strategies such as local advertising, distributing flyers, offering discounts for first-time customers and engaging with the community through social media.
Thinking of starting another type of business? Check out some of these creative service business ideas to help get you started.
Tips for managing a laundromat business effectively
Once your laundromat business is up and running, it's important to manage it effectively to ensure long-term success. Here are some tips to tricks to help you manage:
Regular maintenance: Establish a routine maintenance schedule for your washers, dryers, vending machines and other equipment. Regularly inspect and clean the machines, address any malfunctions promptly and keep spare parts on hand for quick repairs.
Efficient operations: Optimize your laundromat's operations by managing peak hours effectively, ensuring machines are always available and providing clear instructions and signage for customers. Maximize the use of your space by organizing seating areas and folding tables efficiently.
Customer service: Train your staff to provide excellent customer service, addressing any concerns or issues promptly. Create a welcoming and helpful environment where customers feel comfortable and valued.
Embrace technology: Utilize technology to streamline business operations, such as implementing a card-operated system for easy payments, offering online booking or scheduling and using software to track inventory and financials.
Gather feedback: Regularly seek feedback from customers to identify areas for improvement and address any issues promptly. Encourage customers to leave reviews and ratings on online platforms to enhance your online reputation.
Tips for promoting your laundromat business
Before you start promoting your business, make sure you’re happy with your brand name, logo and website. Design a professional logo for your business, whether you decide to collaborate with a talented designer or make use of a logo maker. Don't hesitate to draw inspiration from similar industries, such as cleaning logo ideas, for some creative inspiration. A well-crafted logo will add a touch of professionalism and uniqueness to your brand. Now that you’re ready to promote your laundromat business and attract customers, consider the following marketing techniques:
Grow an online presence: Optimize your website for search engines and consider implementing online booking or scheduling features for customer convenience.
Use social media marketing: Leverage social media platforms such as Facebook, Instagram and X to promote your laundromat. Share engaging content, offer tips on laundry care and run promotions or contests to attract new customers. Encourage customers to tag your laundromat and share their positive experiences.
Utilize local advertising: Advertise your laundromat in local newspapers, magazines, radio stations or community newsletters. Consider partnering with nearby businesses to cross-promote each other's services and offer joint discounts or loyalty programs.
Create referral programs: Implement a referral program where existing customers can earn rewards or discounts for referring new customers to your laundromat. Word-of-mouth marketing is powerful and incentivizing referrals can help expand your customer base.
Engage with your community: Participate in local events, sponsor local sports teams or charities, or host community initiatives like clothing drives or educational workshops on laundry care.
Why start a laundromat business? Top benefits to consider
Starting a laundromat business can be an attractive option for several reasons:
Constant demand: The need for laundry services is ever-present. Regardless of the economic climate, people will always require clean clothes. This ensures a steady stream of customers and revenue for your laundromat business.
Passive income potential: A well-managed laundromat business can generate passive income. Once you set up the facilities and establish routines, the business can run with minimal supervision, allowing you to pursue other ventures or expand your laundromat empire.
Scalability: You have the option to start small with a single laundromat and gradually expand your business by opening additional locations or acquiring existing laundromats. This scalability allows you to grow your business and increase your profits over time.
Low labor costs: Unlike other businesses that require constant staffing, a laundromat business can operate with limited labor. Customers handle the laundry process themselves, reducing the need for extensive employee coverage.
Multiple revenue streams: On top of self-service washing and drying, you can generate additional revenue through vending machines offering detergent, fabric softener, snacks and beverages. You can also provide services like drop-off laundry, dry cleaning and garment repairs.
Recurring customer base: Once customers find a laundromat they trust and are satisfied with, they are likely to become repeat customers. This creates a loyal and consistent customer base that contributes to the ongoing success of your business.
Community engagement: Laundromats often serve as community hubs, providing a gathering space for people while they wait for their laundry. By fostering a friendly and welcoming environment, you can build relationships and create a sense of community.
Challenges of running a laundromat business
While starting a laundromat business offers numerous benefits, it's important to be aware of the challenges you may encounter. You'll need to really understand the cost of starting a business in your chosen industry:
Initial investment: Starting a laundromat requires a significant upfront investment and startup capital. Costs to start this type of business include leasing or purchasing a suitable location, renovating the space, acquiring washers and dryers, and setting up the necessary infrastructure.
Equipment maintenance: Regular maintenance and repairs of washers, dryers and other equipment are essential to keep your laundromat running smoothly. Budgeting for ongoing maintenance costs and finding reliable technicians can be a challenge.
Utility costs: Laundromats consume significant amounts of water and energy due to the constant operation of washers, dryers and other equipment. Managing utility and operating expenses and finding ways to increase energy efficiency can help optimize your expenses.
Competition: Depending on your location, you may face competition from other laundromats in the area. To stand out, you'll need to differentiate your business through factors such as cleanliness, machine quality, amenities, customer service and pricing.
How much does it cost to start a laundromat business?
The cost to start a laundromat business can vary depending on a number of factors, such as the size of the laundromat, the type of equipment you purchase and the location of the laundromat. However, in general, you can expect to spend between $200,000 and $500,000 to start a laundromat business.
Here is a breakdown of some of the typical start-up costs for a laundromat business:
Lease or purchase of a commercial space: $50,000-$200,000
Purchase of commercial washers and dryers: $50,000-$100,000
Purchase of other equipment, such as folding tables and chairs: $5,000-$10,000
Signage and marketing: $5,000-$10,000
Permits and licenses: $1,000-$5,000
Working capital: $25,000-$50,000
Total start-up costs: $200,000-$500,000
There are a number of ways to reduce the start-up costs for a laundromat business. For example, you can purchase used equipment, lease a commercial space instead of purchasing it and start your laundry business on a part-time basis. You can also seek out funding from investors or lenders.
If you're serious about starting a laundromat business, it's important to do your research and create a business plan. This will help you estimate your start-up costs and develop a plan for making your business profitable.
Here are some tips for reducing the start-up costs for a laundromat business:
Purchase used equipment. You can find used commercial washers and dryers at a fraction of the cost of new equipment.
Lease a commercial space instead of purchasing it. This can save you a significant amount of money upfront.
Start your laundry business on a part-time basis. This will allow you to generate revenue while you build your business.
Seek out funding from investors or lenders. If you have a good business plan, you may be able to secure funding from investors or lenders.
By following these tips, you can reduce the start-up costs for a laundromat business and increase your chances of success.
In addition to the start-up costs, there are also a number of ongoing expenses associated with running a laundromat. These expenses include:
Rent or mortgage payments
Utilities
Equipment maintenance and repair
Insurance
Employee payroll
Laundry supplies
Marketing and advertising
It's important to accurately assess your ongoing expenses when creating your business plan. This will help you to determine how much revenue you need to generate in order to be profitable.
Here are some tips for reducing your ongoing expenses:
Negotiate good deals with your suppliers. This includes your suppliers for laundry supplies, utilities, and insurance.
Maintain your equipment regularly. This will help to prevent costly repairs and breakdowns.
Cross-train your employees. This will allow them to perform multiple tasks, which can save you money on labor costs.
Market your laundromat effectively. This will help you to attract new customers and keep existing customers coming back.
In addition to the start-up costs, there are also a number of ongoing expenses associated with running a laundromat. These expenses include:
Rent or mortgage payments: The cost of rent or mortgage payments will vary depending on the location and size of your laundromat. However, you can expect to pay between $2,000 and $5,000 per month in rent or mortgage payments.
Utilities: The cost of utilities will vary depending on the size of your laundromat and the amount of water and electricity you use. However, you can expect to pay between $1,000 and $3,000 per month in utilities.
Equipment maintenance and repair: Commercial washers and dryers can be expensive to repair. You should budget between $500 and $1,500 per month for equipment maintenance and repair.
Insurance: You will need to purchase insurance to protect your business from liability claims and property damage. You can expect to pay between $300 and $700 per month in insurance premiums.
Employee payroll: If you have employees, you will need to factor in their payroll costs. The cost of payroll will vary depending on the number of employees you have and the wages you pay.
Laundry supplies: You will need to purchase laundry supplies, such as detergent, fabric softener and dryer sheets. You can expect to spend between $200 and $500 per month on laundry supplies.
Marketing and advertising: You will need to market and advertise your laundromat to attract new customers. You can expect to spend between $100 and $500 per month on marketing and advertising.
Total ongoing expenses: $4,100-$13,200 per month
It's important to note that these are just estimates. The actual cost of running a laundromat will vary. It's crucial to accurately assess your ongoing expenses when creating your business plan so you can determine how much revenue you need to generate in order to be profitable.
Choose a laundromat business model
There are three main laundromat business models: self-service, full-service and hybrid.
Self-service laundromat
This is the most common type of laundromat. Customers bring in their own laundry, wash and dry it themselves and take it home. Self-service laundromats typically have a variety of washer and dryer sizes to accommodate different needs, as well as vending machines for detergent, fabric softener and other laundry supplies.
Pros of opening a self-service laundromat:
Lower overhead costs than full-service laundromats
Easier to operate, as staff is only needed to clean and maintain the equipment
Can be more profitable than full-service laundromats, as customers pay to use the equipment
Cons of opening a self-service laundromat:
Customers may not be familiar with how to use the equipment, which can lead to customer frustration
Equipment may break down more often, as it's being used more frequently
May need to invest in more equipment to accommodate peak demand
Full-service laundromat
Full-service laundromats offer wash-and-fold services, as well as dry cleaning and other laundry services. Customers drop off their laundry and the staff washes, dries and folds it for them. Full-service laundromats typically charge more for their services than self-service laundromats, but they offer the convenience of not having to do the laundry yourself.
There are a number of hybrid laundromat business models that combine elements of self-service and full-service. For example, some laundromats offer self-service washing and drying, but also offer wash-and-fold services for an additional fee. Other laundromats offer self-service washing and drying, but also have a staff member on hand to assist customers and answer questions.
Pros of opening a full-service laundromat:
Can charge higher prices for services
Customers do not have to do any of the work, so it's more convenient for them
Can generate additional revenue from vending machines and other services
Cons of opening a full-service laundromat:
Higher overhead costs than self-service laundromats, as staff is needed to wash, dry and fold the laundry
More complex to operate, as staff needs to be trained on how to use the equipment and how to provide customer service
May be less profitable than self-service laundromats, as customers pay less for services
Hybrid laundromat
A hybrid laundromat is a type of laundromat that offers both self-service and full-service laundry options. This type of laundromat is becoming increasingly popular, as it offers the convenience of full-service laundry with the affordability of self-service laundry.
Pros of opening a hybrid laundromat:
Can offer the convenience of full-service laundry, while still maintaining the lower overhead costs of a self-service laundromat
Can generate additional revenue from wash-and-fold services
Can appeal to a wider range of customers, as some customers may prefer self-service while others may prefer full-service
Cons of opening a hybrid laundromat:
More complex to operate than a self-service or full-service laundromat, as it needs to offer both types of services
May need to invest in more equipment to accommodate both self-service and full-service customers
The best business model for you will depend on your individual circumstances and preferences. Consider your budget, your target market and your own skills and experience when making your decision.
How to start a laundromat business
How many washing machines do I need to start a laundromat?
A good rule of thumb is to start with 10-15 washing machines. This will allow you to accommodate a variety of customers and provide a good level of service.
The number of washing machines you need to start a laundromat depends on a number of factors, such as the size of your laundromat, the type of equipment you use and the projected demand for laundry services.