Being a small business owner has a unique charm. While much of the focus is on the appeal of being your own boss and the flexibility that being in charge can bring, the role also requires a solid grasp of both responsibility and practicality. After all, owning your own business may be the culmination of a lifelong dream. However, that business is also an investment, and you’ll have to be ready to think of it as one. Is owning a laundromat a good investment?
Is Owning a Laundromat a Good Investment?
According to Chron, the coin-operated laundry business has an annual revenue of some $5 billion in the United States alone. If you’d like to get a piece of the pie, StartingYourOwnBusiness.com reports that the average cost of starting a laundromat is likely to be between $200,000 and $500,000. Much of this investment will go toward buying washers and dryers. However, if the building isn’t already set up for a laundromat, you may need to update the electrical, plumbing, and water heating systems as well. While the initial investment is high, owning a laundromat can offer some real benefits.
High Rates of Success
Is owning a laundromat a good investment? Consider the numbers. Investopedia reports that just 80 percent of new businesses manage to survive their first two years in operation. Meanwhile, laundromats enjoy a success rate of almost 95 percent and see an average return on investment of 20-35 percent, according to Speed Queen. That’s not too shabby.
Not Seasonally Dependent
Laundry is a year-round need, so there’s no off-season for a laundromat. While severe weather may make people less likely to venture out, there’s no need to plan for significant seasonal swings in usage.
Resistant to Recessions
While people may purchase fewer clothes and gadgets in a poor economy, the need to clean their wardrobe persists whether the dollar is up or down. In fact, laundromats often see more business in hard times because people are reluctant to purchase new washers and dryers for their homes.
Quick Payment Cycle
While many industries have to wait 60 to 90 days or more for payments, washers and dryers accept payment via cash, card, and app. That means laundromats have an incredibly rapid payment cycle. Why does that matter? As Business Insider points out, cash flow problems were cited as a factor in some 82 percent of small business failures. The laundromat’s speedy payment cycle eliminates a lot of uncertainty and reduces the time that you’ll spend dealing with invoicing, billing, and accounts receivable.
In a typical laundromat, customers do most of the washing and drying. That means there’s minimal training for employees, and you won’t need a large staff to keep things running smoothly. In turn, that means issues like scheduling, payroll, and employee management are all easier to handle. What about inventory? When compared to businesses like restaurants or retail stores, laundromats generally maintain very little in the way inventory, so there’s little to do in terms of ordering, rotating, discarding, or stocking.
Laundromats are largely self-serve enterprises, so constant supervision isn’t necessary. This gives owners greater flexibility than other, more demanding business models. After all, with today’s technology, you don’t have to be on site to be reachable. A text, call, or email can quickly alert you to a problem.
Room for Expansion
If you find that owning a laundromat is something that you enjoy, there’s always room for expansion. You could offer new services or look for a new location at a safe distance from your existing one. Laundromats can be very competitive, so if you opt for a new storefront, you’ll want to pick a location that is close enough to commute to comfortably but far enough away that it doesn’t cut into your existing customer base.
If you own a laundromat or are planning to purchase one soon, be sure to 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 will be able to 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!