How To Start A Laundromat In 8 Steps
Laundromats are an essential service and can be a great business opportunity. Want to learn how to start a laundromat small business? Check out this complete guide.
If you are wondering how to start a laundromat small business, you’ve come to the right place.
Laundromats provide an essential service to the community, and many people with busy schedules or limited access to laundry facilities rely on them. And although the number of stores is shrinking, profits remain consistent, indicating that laundromats could be a safe and viable venture.
Starting a laundromat from the ground up requires that you take a lot of factors into account beyond location, equipment, and marketing.
Let’s get into how to start a laundromat and lay out the steps that will set your business up for success.
Table of Contents
Is A Laundromat A Good Business To Open?
In a word — yes. Laundromats typically have a very high rate of success (a whopping 95%), and they can be quite profitable. In fact, between the 18,000 laundromats open and operating nationwide, they generate $5 billion in revenue before taxes.
Profit margins for laundromats are around 20% to 30%. On average, you can earn around $400 and $500 a day in profits. Some sources even claim that you could earn up to $24K a month or even $300K a year.
The other perks that come with a laundromat are that they’re low-maintenance and low-risk. It’s a type of business that will always have a market, which makes it recession-resistant. And the risks inherent to the laundromats are far more manageable than, say, general contracting, a car wash, or opening a restaurant.
Entrepreneurs who may be suited for this line of work have solid customer service and management skills in addition to knowing enough about plumbing, electrical, and machine maintenance to keep operations running smoothly (or at least to know when to hire someone to fix issues that could lead to bigger problems).
How Much Does It Cost To Open A Laundromat?
Now, don’t say we didn’t warn you — opening a laundromat is not cheap.
Numerous sources claim that it will cost in the range of $20oK to $500K to get a location working and ready to start providing services. Some state that it could cost upwards of 1 million dollars.
The two greatest factors affecting these costs are where you decide to set up shop and equipment costs.
Let’s take a look at those costs in more detail.
Startup Funding For Laundromats
If you don’t have that kind of money lying around, that’s totally understandable. Money doesn’t grow on trees…though we’ll have to get back to you on whether it grows inside the pockets of trousers you throw into the wash.
Thankfully, you don’t need to bear the brunt of these costs on your own. Different types of loans and funding are available for your laundromat startup. It’s also possible for some business owners to get a business loan with bad credit and even same-day business loans.
Let’s dive into the options:
Opening A Laundromat Step By Step
Now, let’s go over the steps you need to take to open your first laundromat business.
Best Software To Manage Your Laundromat
As mentioned in the steps to start your laundromat business, there are several key software programs that may help your business run more efficiently.
Here are our biggest suggestions:
Wash-Dry-Fold is a POS platform designed by laundry service professionals for laundry service professionals. At a glance, just a few of the notable features it boasts are:
- Organizing and viewing orders by wash cycle and due date
- Notifying customers when loads are finished via text
- Log special requests/notes for orders
- Price loads by weight
- Inventory management
While Wash-Dry-Fold does offer a cloud-based data storage system that allows you can view and manage documents and reports online, note that the hardware itself requires internet in order to function at your store.
The ways in which this POS can streamline your operations and capitalize on order turnover are very impressive to say the least. And while this is a POS system designed for laundromats, any of the best POS systems will help you manage your store.
Shopify might not be the first thing you’d expect, but it’s worth considering.
Say you plan on taking payments in person, Shopify’s POS gives you a fair amount of customizability with the types of orders customers can place through the system, effectively allowing you to ring up customers based on the washer they’re using and any additional services they might need.
Shopify also logs how long a customer has been loyal to your store, how much they’ve spent over time, and their contact information. Paired with a loyalty program integration of your choice, keeping return customers in your store is a breeze.
Should you decide to sell custom goods online, such as craft soaps, t-shirts, candles, and other handy knick-knacks, Shopify gives you the tools to build your own custom website with ease and market your business.
Square’s POS is another option for physical storefronts looking to expand into the online territory, though it’s admittedly not a great fit for laundry-based businesses.
You need a platform to track the money that’s coming in and going out of your business. This will help keep you in control of your profits, identify where you can cut back on costs, and prepare tax information when the time comes.
QuickBooks allow you to view customer credit memos, track expenses, keep tabs on customer refunds, and access receipts across all from your computer or laptop. And if you’re worried that it won’t track the financial activity on the POS you choose, truth be told, it has so many integrations that it most likely will. Check out our comparison of QuickBooks’ suite of solutions to determine which version best addresses your business’s needs.
Diversifying Your Laundromat’s Income Streams
A laundromat’s business model may seem straightforward, but there are extra measures you can take to get the most out of your earning potential.
Again, perhaps you may want to expand your business by offering new and potential customers a laundry delivery service. The convenience this offers could very well justify the price point for customers with busy lifestyles, and you may be able to draw in more sales by making the process hassle-free for those who would prefer to spend their time in other ways.
Selling extra services such as ironing, folding, and hanging clothes might be something you want to consider, too.
Additionally, there are types of franchises you can partner with that allow you to sell their products, whether through vending machines or over the counter.
Don’t be afraid to get creative as you seek out more opportunities to provide stellar service to your customers and earn your work’s worth.