Before heading into a new venture, an entrepreneur must consider the profitability and risk. So how profitable is a laundromat business? Many entrepreneurs are attracted to laundromats because they seem to run on their own. Although the owner must purchase and maintain the facility and equipment, the customers typically complete the labor and the machines handle the financial transaction. However, that doesn’t mean that you can sit back, put your feet up, and expect to make a fortune from a laundromat. Profitability depends on a variety of features and can vary dramatically from laundromat to laundromat. Plus, as with any small business, what you put into your enterprise will have a great impact on what you get out of it.
How Profitable Is a Laundromat Business?
So you may be wondering what the features and aspects are that influence the answer to the question, “How profitable is a laundromat business?” Before you purchase your store, consider these factors:
Who will you be up against? If there are already multiple laundromats in the area, opening another would be very risky unless those laundromats are in very bad shape or have a poor reputation. However, it is entirely possible for two laundries to be successful in the same neighborhood, especially if they offer different services. Check out your competition to see if you’ll have an edge on their business. For example, perhaps your laundromat will be cleaner, safer, offer a wash-and-fold service, or have a TV and vending machines.
Your location can make or break your laundromat. Of course, as we just mentioned, being too near other laundromats could affect your ability to attract customers. In addition, being near a major road, having visible signage, and offering lots of parking will help you gain attention. Consider the demographics of the area as well. A neighborhood of wealthy families is less likely to need a laundromat than an area with many apartments and young people.
Your profits will heavily depend on your expenses. For example, how much will you be paying for electricity and water? If you use energy-efficient machines, you might have a high initial cost but lower bills thereafter. Will you need to hire part-time workers to keep the store clean and handle other basic duties? Will you need to employ a security service? You may need to consult a bookkeeper, accountant, and/or marketing professional as well.
Will you stick with the basics, simply providing a space for customers to do their laundry with coin-operated machines, or will you offer additional services? For example, will you have a wash-and-fold service (also known as fluff-and-fold or drop-off)? Will you offer pick-ups and deliveries?
If your laundromat isn’t well maintained, you will have a hard time attracting new customers and gaining repeat customers. So unless you hire staff to clean and maintain the laundromat, you will need to do this yourself. Plan on visiting the store daily, performing basic janitorial duties, contacting vendors for repairs, collecting profits, and handling customer complaints.
You won’t be profitable if customers don’t know that you exist and that you offer a great service. Consider placing advertisements, buying attractive signage, and building an online presence to attract attention and communicate with your customers.
According to the Coin Laundry Association, the cash flow of laundromats is typically in the range of $15,000 and $300,000 per year. To maximize your business’s profitability, carefully consider the aspects above and create a smart business model. With hard work and prudent planning, you’re sure to find success.
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!