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How To Start A Laundromat Business

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By: Scam Risk - Expert Reviewer

How To Start A Laundromat: Easy Way To $10k?

Laundromats are unique in that customers do most of the work, and the laundromat provides the machines they use.

Opening a laundromat can be an interesting model for a business because it eliminates many problems associated with managing inventory.

You may want to open a business that will provide steady income year-round, even in recessions. Buying your own laundromat might be a good idea if this is the case for you.

This article will guide you through everything you need to know about starting your own laundromat business and what you’ll need to succeed.

Towards the end of this article you’ll find answers for some of the most frequently asked questions on how to launch a laundromat store…

But most importantly, you’ll be shown the exact system several others have used to build their own business to over $40,000 a month in mostly passive income.

Table of Contents

Business Overview: How To Start A Laundromat Business

Laundromat facilities give customers access to their dryers or washing machines. These machines can be either coin-operated or credit-operated. This allows laundromat attendants to have more time to solve problems than taking payments and monitor machine usage.

Some laundromats can be found in freestanding buildings, while others are found in apartments or college dormitories.

The industry is dominated by small laundromat franchises and chains. This is great for independent entrepreneurs.

Laundromats typically open early in the morning and close at night to meet customer’s busy schedules. Other laundromats remain open all day.

Industry Summary

IBIS World reports that the total revenue from laundromats across America was $5 billion in 2018. In 2018, 22,260 laundromats had 50,825 workers.

Martin Ray Laundry Systems, Inc. stated that the coin laundromats’ value ranges from $50,000 to more than $1 million.

These laundromats also produce cash flow between $15,000-300,000 each year.

Industry Trends

Many Americans now have more disposable income than ever and have bought their own laundry machines or opted for drop-off and pick-up laundry services. This has created competition for laundromats.

For more info about opening a laundromat, check out Coin Laundry Association’s website.

The laundry industry is being revolutionized by digital payment systems. These digital systems allow for more flexibility in pricing and are more automated, so there is less oversight.

The machines are monitored less frequently. The extra money can be used to buy other products, such as televisions, wi-fi, or other amenities to help attract customers or increase profits.

Who Is The Target Market For Your Laundromat?

Laundromats are aimed at adults who don’t have washers or dryers in their apartments or homes. Sometimes, college students may be the target audience for a laundromat.

The target audience is partly determined by the location of the laundromat. Martin Ray Laundromat Systems, Inc. states that 87% of laundromat customers live within one mile of their business, while over 60% of customers are women.

Laundromat customers have lower-incomes, with an average annual income of $28,000

Skills, Experience, And Education Useful To Start A Laundromat

While you don’t need a business degree for a laundromat, the following skills will help you get started.

  • Experience With Appliances. A laundry shop owner should have some experience with washing machines and dryers. Owners of laundromats call in technicians to fix major problems. However, a basic understanding of appliances can save you money and help you avoid hiring a professional.
  • Problem-Solving Skills. Laundromats are like any other business. There will be problems. Owners need to be creative and have problem-solving skills. It doesn’t matter if you need to work with customers or find the right technician to get to your laundromat quickly. Being able to think creatively and improvise is essential.
  • Customer Service Experience. According to industry statistics, 90% of laundromat customers return. Quality customer service is crucial in the laundromat business. It is possible to create repeat customers by listening to customers’ concerns and taking steps to address them, so they feel heard.
  • Marketing Skills. When the laundromat opens for the first time, marketing skills are crucial. Owners need to build a customer base. You can save money and hire a professional marketer, but it’s still worth learning how to market your business.
  • Business Experience. Some business knowledge or experience is required to open and manage a laundromat. Laundromat owners have to manage supplies, inventory, set pricing, and track income. Many of these skills can either be learned from business courses or by working with a mentor.

Startup Costs To Open A Laundromat

Laundromats provide on-demand washing and drying services, so they rely heavily on having enough washers and dryers to accommodate their customers.

Because this machinery is expensive, starting a laundromat requires a significant initial investment. Aside from this machinery, though, laundromats require relatively minimal additional supplies.

Average costs to start a laundromat can easily range from $200,000 to $500,000. The largest expense for a new laundromat is commercial laundry equipment like the washers and dryers.

Additionally, there will be other costs like coin machines, signs, trash cans, vending machines, TVs, security cameras, tables, laundry carts, and more.

If the facility isn’t already set-up, a new owner will also spend money on electrical, plumbing, and the water heating system.

Ongoing expenses include utilities, insurance, payroll, and miscellaneous supplies.

Steps To Starting A Laundromat

Step 1: Write Your Business Plan.

After you’ve come up with a great business idea, the next step is to write a business plan. Remember that a business plan is required by banks. Multiple studies also show that it increases the chances of starting a profitable business.

Step 2: Form A Business Entity.

A business entity describes how a business is organized legally to function. There are four primary business entities: the sole proprietorship or partnership, corporation, limited liability company (LLC), and corporation.

These business entities have their own advantages and disadvantages, including liability exposure, costs, and administrative requirements.

Step 3: Name The Business.

It can be hard to choose the right name for a business. Names must not only be appealing to your customers but also have to be readily available.

Step 4: Select Your Business Location.

Rental cost for a laundromat varies depending on its location, the modifications required to the building, and the space available.

Some laundromat owners choose to buy land to build their facility rather than lease space. However, this may require a higher upfront cost.

Laundromats should be located in densely populated areas with a higher number of renters. Locations close to college students are often ideal for laundromat use.

Step 5: Apply For Business Licenses And Permits.

There will be different registrations, permits, business licenses, required to start and operate a laundromat (i.e., water pollution control permit fees, wastewater fees, etc.). This will depend on the location.

A license from the health department or permit to control water pollution may be required depending on where you live.

Other than any specific licensing required for laundromats, general, state, and federal registrations may also be needed, including a sales tax permit or an Employer Identification Number (EIN), Occupancy Permit, and others.

Step 6: Find Financing.

Coming up with a great business idea is one thing, but it’s another to get the financing to start a laundromat.

Start-up costs can be pretty costly to open a laundromat. The banks will typically require that the borrower have good credit and invest between 15-25% toward the total startup costs.

Step 7: Open A Business Bank Account.

It’s easier to track your personal and business finances by keeping them in separate credit and business bank accounts.

Step 8: Get Your Marketing Ready.

Effective marketing is crucial when opening a laundry service. This will bring in customers and help establish the business.

Marketing an existing laundromat is a great way to increase your customer base and increase profit. Marketing costs can vary depending on what type of marketing activities are being undertaken.

Laundromats may use direct mailers and print advertising, radio ads, online ads, social media platforms such as Facebook and Twitter. Online listings may also be used like Google Local and Yelp, and even flyers to favored locations in nearby apartment complexes or other areas where the target market is spending time.

Consider implementing a loyalty program to encourage repeat business.

Step 9: Get Business Insurance.

To fully protect their business from risks, laundromats need several types of insurance.

  • General Liability Insurance. This covers legal and medical expenses for customers who are ever hurt in the laundromat. Because of the hot dryers and water in laundromats, both falls and burns can occur, business owners need to have a comprehensive general insurance policy.
  • Commercial Property Insurance. This covers the cost of replacing equipment or building damaged by a laundromat in the event of a storm, fire, or other disasters.
  • Workers’ Comp Insurance. Any laundromat which hires staff must have this document. Employees who get injured at work are covered for medical expenses and lost wages.

The cost of insurance depends on the equipment’s value, number of employees, coverage limits, deductible sizes, and other factors.

Find the best insurance policy for your laundry facility by comparing quotes from several companies. Consider them carefully.

Step 10: Hire Employees.

To fully protect their business from risks, laundromats need several types of insurance.

  • General Liability

    A laundromat may only require one or two employees, depending on its size and hours. PayScale estimates that the average hourly wage for a laundromat attendant is $9.59.

    Additional expenses include paid time off and contributions to health insurance as well as workman’s compensation insurance.

    You can also hire attendants if you don’t have enough experience with fixing washers and dryers.

    Insurance. This covers legal and medical expenses for customers who are ever hurt in the laundromat. Because of the hot dryers and water in laundromats, both falls and burns can occur, business owners need to have a comprehensive general insurance policy.
  • Commercial Property Insurance. This covers the cost of replacing equipment or building damaged by a laundromat in the event of a storm, fire, or other disasters.
  • Workers’ Comp Insurance. Any laundromat which hires staff must have this document. Employees who get injured at work are covered for medical expenses and lost wages.

The cost of insurance depends on the equipment’s value, number of employees, coverage limits, deductible sizes, and other factors.

Find the best insurance policy for your laundry facility by comparing quotes from several companies. Consider them carefully.

Step 11: Set Up An Accounting System.

It is crucial to set up an accounting system to ensure your business’s long-term success and sustainability.

Tax compliance is essential for ensuring that the business does not get into trouble with the government. The numbers can also be used to track trends and cash flow and maximize profits.

How Much Can You Potentially Make Owning A Laundromat?

Laundry business ownership can be profitable. The laundromat industry generates approximately $5 billion in gross revenue each year, and it generates roughly $15,000 to $300,000 in cash flow each year, according to Martin Ray Laundry Systems, Inc.

There is an average 20% to 35% return on investment for laundromat investors, and 63% consider their business a full-time job.

You can make additional money by selling snacks, soap, dryer sheets, and other supplies.

How To Start A Laundromat: Things To Consider Before Starting A Laundromat

Although starting a laundromat takes significant capital, mainly to buy washers and dryers for the business, it offers steady, year-round income that isn’t affected by seasonal changes, holidays, or any other factors affecting other companies.

This business model requires minimal inventory management for dispensable laundry detergent or softener. It’s a great option for entrepreneurs looking to start a business that’s not resale.

Running a laundromat facility offers a valuable service for adults, but it is vital to locate a laundromat with no washers or dryers.

One strategy is to find a place with many apartments in a low-income area. However, existing laundromats may be a better option.

Creating a new laundromat in a bright, airy, and comfortable environment can attract and develop business.

A clean and well-lit laundromat will be a crucial aspect for anyone who plans to use a laundry facility for the long term. Make sure that your attendants have the proper training and are accountable for keeping the laundromat clean.

Laundromats provide machines that customers can use. Many also offer dry cleaning, fold services, and full-service laundries.

Even though dry cleaning equipment is costly, many laundromats can still make a profit. They simply pick up the items, dry clean the clothes, and return them to the customer.

Because customers with limited time are more willing to pay for laundry services, full-service laundry companies are becoming more popular.

The best thing about owning a laundry service is the flexibility it offers. Training employees is easy because customers do their laundry.

Owners have flexibility in scheduling once the laundromat has been set up. They can also manage their other business ventures, such as laundromats.

There are some drawbacks to opening a laundromat. However, owners of laundromats can get funding for the initial startup phase if they have a business plan and a complete understanding of the area.

What Is Our #1 Recommendation For Making Money In 2021?

Our review team has come across a program in the real estate industry that is next level!

Although it’s not real estate in the traditional sense, it’s all digital.

Yup, Digital Real Estate!

With digital real estate, you have the opportunity to completely walk away from your 9-5 job!

Sound too good to be true?

Of course it does!

But it isn’t…in fact, business owners wish they had this skill!

What exactly is the skill?

Well, basically you are acting as a conduit for small business to increase their bottom line.

What we mean is…

You are helping these businesses grow!

But how?

All you have to do is build and rank a website and forward certain jobs off to a business owner in town, you could even email it to them!

This works for literally any service based business… ie: tree service, plumbing, towing, etc. 

How Do You Get Paid And How Much?

Simple, after you forward the jobs off to a business owner and he makes closes the deal, you simply ask to agree to a WIN-WIN arrangement.

A fair price to charge per lead, depending on the industry is 10-20%… let’s just use the tree service industry for example and go by worst case scenario.

Let’s say you build and rank the site and only 20 jobs a month come in. The average tree service job is anywhere from $500-$2000!

That means at bare minimum you have an asset worth $1000 a month!

See why they call it digital real estate now?

That’s a rent payment. 

The great thing is how easy it is to scale. You don’t have to answer the phone…all you have to do is get the phone to ring.

Truly passive income!

The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.

You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.

Once the training program is completed you will also have access to a Facebook group where you can ask questions and be in a community with others on the same journey as you.

Digital real estate allows you to have passive income with most of your day being spent OUT of the brick and mortar landscape.

Now, we know you probably have tons of questions… 

So, check this out to learn more.

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