Did you know that laundromats are a billion-dollar business in the United States? These businesses generate a lot of money but also have some steep expenses attached. Are laundromats profitable, and if so, how can you ensure yours is making as much profit as possible?
Are Laundromats Profitable?
How many quarters does it take to get to five billion dollars? Yes, believe it or not, laundromats across the United States generate that much money and more every single year. However, not all that money becomes actual profit for a business owner. Laundromats generate revenue, but are laundromats profitable?
Laundromats by The Numbers
To help us understand what makes laundromats profitable, it helps to understand the numbers behind the business. Every laundromat is different, and the way you manage your business can have a significant effect on your bottom line:
- The laundromat industry has a 95 percent success rate, making it a much safer investment than more volatile industries. Laundromats can also provide up to a 35 percent return on your initial investment.
- While the industry overall is secure, the profit an owner sees can vary dramatically based on their current expenses and revenue. Typical laundromats generate a cash flow of between $15,000 and $300,000 annually.
- Starting a typical laundromat can cost up to $300,000. This is because you must invest in a significant amount of equipment before opening the doors. Laundromats also have substantial utility bills and other operating costs that can eat into profits if business owners aren’t careful.
How Can I Make My Laundromat Profitable?
Laundromats have significant start-up expenses, but once you have those covered, it’s easy to see that a laundromat can be a profitable venture. A well-managed laundromat with a significant cash flow will likely stay open and generate profits for the owner. However, a laundromat where cash isn’t flowing or money isn’t managed well can quickly find itself underwater. How can you make sure your laundromat is generating the highest profits possible?
Understand Your Expenses
A typical laundromat can generate up to $8,500 in expenses every month. These expenses typically include water and utility bills, laundromat supplies, staffing, and building costs. Be sure you understand where your money is going by researching laundromat business costs and monitoring your monthly cash flow.
Look for Opportunities to Increase Revenue
Once you know you can reliably cover your monthly expenses, it’s time to see how you can increase your business revenue. Laundromat owners can add value to a customer’s experience in all kinds of creative ways, such as providing vended entertainment or additional laundry services. However, all of those methods of increasing revenue will require investments of time, money, and other resources. Expand services slowly and pay attention to customer demand to make the best decisions possible.
Invest in Quality Equipment
Investing in reliable equipment is one of the easiest ways to save money and keep your customers happy. Broken or missing machines can result in lost revenue, unhappy customers, and significant money spent on repairs and replacements. You can avoid that problem by purchasing washers and dryers with a good reputation and a solid warranty, like Speed Queen laundry equipment.
Are laundromats profitable? Their expenses are significant, but they can be real money-maker if you research and manage them well.
Ensuring your laundromat is stocked with energy-efficient washers and dryers is vital for its success. If you’re looking for a reliable distributor, check out Laundry Solutions Company, a full-service provider of premium vended, on-premises, and multi-housing commercial laundry equipment. Our leasing program provides no mileage fees, no service fees, and no parts fees. You can use high-quality Speed Queen equipment while enjoying a flexible lease and predictable payments. To learn more about our products and services, please give us a call at 800-383-9274 or contact us online. We look forward to hearing from you!