If you have ever considered owning a laundromat, you have probably also researched the expenses involved. We don’t mean startup costs (although you’ve probably considered that too). We mean the ongoing costs. The amount of money it takes to keep the doors open after your initial investment. The reality is, the average cost of a laundromat per month varies from business to business and state to state. However, with a little digging, you can find a figure that is specific to your business and that answers your questions. 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.
Average Cost of a Laundromat Per Month
Laundromats have few costly recurring expenses, but potential buyers – whether they are searching to buy an existing laundromat or to build a new store – should be aware of them all. The lease for the actual storefront will be the highest monthly expense, and buyers in the market today should look for a lease term that is suited to industry standards. In general, your ongoing expenses month to month will include the following:
- Lease or rental costs
- Employee payroll and benefits
- Miscellaneous supplies, like cleaning, bathroom, and vending supplies
According to Entrepreneur, “The expenses incurred while running a store range between 65 and 115 percent of the gross income. That means that for a store grossing $30,000 per year, at best it nets $10,500 and at worst it loses $4,500. For a store grossing $1 million per year, the profit could be as high as $350,000, or there could be a loss of up to $150,000, depending on expenses.”
So, expenses are a big deal. To start, you can estimate that your average ongoing cost will be somewhere between $4,000 and $8,500 per month. But as a savvy business owner, you should do a little more digging to find a number that will better match your business.
Factors Affecting the Average Cost
Where you choose to open your business will greatly affect the average cost per month of your laundromat. Rent and utilities are the biggest contributors here. For example, what you spend in rent will be higher in Portland, Oregon, than it will be in Wichita, Kansas. The same goes for your gas, sewer, water, and electric bills. Additionally, fire, theft, and liability insurance will vary from state to state. So when calculating the average cost of a laundromat per month, consider these specifics.
Store Size and Operating Hours
The average-sized laundromat is 2,000 square feet. Obviously, the size of your laundromat and your operating hours will affect your utilities. Longer hours, more machines, and bigger stores mean more lighting, heating, cooling, and water usage and a bigger bill. However, the convenience of round-the-clock service and zero wait time for your customers might be the edge your business needs.
Number of Employees
Many customers prefer (and feel more comfortable in) laundromats with customer service staff. However, hiring full- or part-time employees will add to your monthly expenses. Employees and their benefits should be factors you consider when calculating the monthly costs for your business.
Any time you decide to add vending machines, free coffee, or other customer perks to differentiate your laundromat, it adds ongoing monthly expenses. However, you have to spend money to make it. These types of business add-ons may very well help your business. Treat add-on expenses like investments, just like purchasing energy-efficient washing machines or hiring a new employee could increase your revenue in time.
All-in-all, the average cost of a laundromat per month depends on several factors. But an owner who runs his or her store well – who keeps it clean, repairs its equipment quickly, uses energy-efficient systems, and offers good customer service – can expect to see profit margins of about 35 percent annually (source). Owning a laundromat can offer you freedom and security in a mature market.
If you’re interested in opening a laundromat, be sure to check out Laundry Solutions Company, a full-service provider of premium vended, on-premises, and multi-housing commercial laundry equipment. Since 1976, we have been providing exceptional sales support, laundry design services, commercial laundry equipment (and leasing options), and laundry equipment service and parts. To learn more about our products and services, please give us a call at 800-838-9274 or contact us online. We look forward to hearing from you!