Are you wondering about owning laundromat pros and cons? The life of a small business laundromat owner sure sounds appealing. However, starting a business on unknown waters can be intimidating. In this article, let’s dive into the details of owning a laundromat business. First, we need to ask ourselves:
Is Owning a Laundromat a Good Investment
The short answer is YES. However, just receiving a confirmation will leave doubts in your mind. If you’re a person who wants to have a profitable small business, I’m sure you’ve probably researched the types of businesses to invest in. There’s a high possibility that you’re still in the middle of your research and somehow landed on this article.
To help you decide if owning a laundromat is indeed a good invest here’s the pros and cons:
Pros
There’s a lot of positive benefits as a laundromat owner. Did you know that the laundromat industry earns $5 billion if the nationwide gross is combined? I don’t know about you, but that is a very satisfying amount to see. On average, each coin laundromat can generate up to $15,000 and $300,000 annually. Furthermore, in market value, a laundromat business ranges between $50,000 to more than $1M.
Alright, enough about the statistics. Here are the pros of owning a laundromat:
High Success Rate
The success rate of owning a laundromat business is about 95%. Based on the percentage alone, it builds up the confidence of pursuing a business in this industry. The great part? It guarantees a 20% to 35% ROI or return of investments. Now, how many businesses out there can claim they have a high ROI rate? Honestly, not that much.
Furthermore, owning a laundromat business ensures a 5-year survival rate. That’s double the average length for most startup businesses. Unlike retail and food startups, you don’t need to have an inventory. All you need is a good brand of detergent and fabric softener. Then you’re good to go!
Work-Life Balance
As the owner of your laundromat, you have complete reign over your working hours and days of operation. This flexibility in terms of working hours and days is favorable for a healthy work-life balance. In fact, you can even close on holidays. The best part? You can leave your employees’ work if you have a family occasion such as a reunion, holiday, or birthdays.
However, not most owners have the same sentiments. We each have our own work preferences. Some might consider the business a 24/7 full-time job while the rest consider it a part-time gig or side income. In the end, the overall business structure is entirely up to you.
Easy to Manage
On the subject of business structure and management, there’s nothing to worry about. If you’re tech-savvy, there’s a laundromat management system such as LaundryPulse to help you.
This app allows you the following features:
- Unlimited laundry site management
- Manage prices and promotions
- Keep track of your business in real-time
- Receive alerts via text or emails
- Cloud-based payment with LaundryPay
On a more traditional approach, a laundromat is usually a self-service business. You just need to have an employee act as the cashier for detergent and other necessary purchases. It doesn’t take much work, especially if you run a coin-operated laundromat system. However, some businesses offer a wash and fold service to their customers. But that’s up to you.
Great Income Source
As mentioned about a laundromat business can earn from $15,000 to $300,000 annually. That’s only for the laundry services, but owning this type of business is an ideal opportunity to have extra offers on your property. Typically, a person takes two to three hours to complete their laundry. So, if you own large space, you can have a section that offers coffee, food, beer, and wifi.
Family Business
If you succeed in maintaining a laundromat business for more than 5 years, most likely it can be passed down and introduced to future generations. Well, that’s the long-term benefit of building a laundromat empire. In terms of short-term gains, a lot of laundromat owners employ their family members.
Vast Potential for Growth
Depending on your business preferences, you can operate at a small scale or expand your business into a franchise. Other than that, once you mastered the ins and outs of managing a laundromat, you can expand your small snacks corner into a mini cafe.
From observation, some people do their work on their laptops while waiting for their laundry. I’ve been to a laundromat that offers a menu selection that has pasta and interesting cafe-type beverages. We can all agree that most people want to eat if they’re bored, or even just drink a coffee while eating a cake.
A cafe within a laundromat is a great idea to consider if you want to stand out from your competitors. Of course, this expansion requires a lot of work. In fact, you’ll need to add an inventory and a small kitchen. Also, you’ll need additional furniture.
Besides food options, you can also venture into creating your own formula for a detergent or fabric softener for customers to purchase.
Great Community
A great and supportive community surrounds the laundromat industry. To name a few, we have the Coin Laundry Association and American Coin-op. If you navigate these organizations’ websites, you’ll unlock a plethora of information available to help you. Also, there are a lot of seasoned owners that are eager to teach and learn with you.
Here’s a list of information you’ll encounter if you navigate the organizations mentioned above:
- Laundromat owners
- Investors
- Equipment distributors
- Manufacturers all over the world
Cons
Now that you’re done reading the benefits of owning a laundromat, are you tempted to go out and start now? However, even the most successful business ventures have their drawbacks. It’s not always the benefit that matters. Building a laundromat empire takes a lot of work. To approach this venture realistically, we have to embrace the downside. And by the end of this article, it’s up to you if you’re determined to push through despite the difficulties you’ll encounter.
Here’s the dark side of owning a laundromat:
Startup Cost
The initial investment for a laundromat business amounts to $200,000 to $1,000,000. Besides the startup cost, you need to consider your monthly expenses, budget, and allowance for future requirements. In fact, you’ll probably face loan financing payments, rents, and other necessary maintenance for a laundromat business.
The Downside of a Public Space
In most public spaces, other people will not have the same respect for your facilities and equipment. No matter how much effort you put into cleaning and organizing your laundromat during open hours, you’ll encounter a lot of inconveniences. There’s a possibility of some people vandalizing your property. Others might carelessly throw their garbage on the floor.
If you have benches available for customers to sit on, you might even encounter some people placing gum underneath them. To sum things up, some people can be rude, especially if it’s not their space or equipment. It’s important to prepare yourself for such possibilities.
High Utility Bill
If you have a line of washers and dryers, expect a high utility bill. Other than that, your machines, you’ll have an AC, television and other appliances. So yeah, that equipment will not power itself.
Competition
Currently, there are more than 35,000 laundromat businesses nationwide. First, you need to check if your local area has existing laundromat services. You need to know what your competitors offer and why repeat customers chose to use their services. It’s critical for a person who plans to venture into the laundromat business to study their competitor and understand the community closely.
Here’s a list of guidelines you need to pay attention when visiting your competitor’s laundromat:
- What’s their unique selling point?
- The type of ambiance the set up.
- What services do they offer?
- Check the quality of the equipment.
- What additional amenities do they offer?
- What kind of atmosphere does the laundromat emit?
Long Business Hours Required
If you want to compete with the nearest laundromats in your area, you’ll need to be available to customers as much as possible. In this industry, although there’s a high success rate, it’s a highly competitive environment. In fact, some laundromats offer a 24/7 service. So, you really need to bring out your best foot if you want your startup to be successful.
Encounter Unpredictable Situations
Working as a customer service provider, you’ll encounter a handful of unpredictable situations. Some might be a funny experience, but you might also encounter frustrating situations.
As a laundromat owner, you have to be ready to deal with the following:
- Conflicts
- Rude customers
- Customers abusing your service and equipment
- Technical problems
Jack of All Trades
Although you get to be the boss, as a startup, you’ll also fill in the role of an electrician, businessman, cashier, janitor, marketer, and all other positions necessary. Of course, this is what to be expected if you’re only a startup. To cut the costs, you’ll need fewer employees. There might be instances where you’ll be the only employee to juggle all the work.
Necessarily, you don’t have to be an expert to fill in all the roles. You just have to make things work to keep the business running.
Other Things to Consider
After learning about owning a Laundromat pros and cons, there are other things to consider:
Build or Buy
You’ll need to decide whether to build or buy a laundromat. If you buy an existing laundromat business, you’ll have a ready-to-go place that has the necessary accessories, equipment, and hook-ups. However, if the offer doesn’t include the land, you’ll need to consider that as well.
On the other hand, building a laundromat from scratch is overwhelming. You’ll need to consider the location, competition, equipment, necessary accessories, and space itself. Other than that, you’ll have to decide whether you’ll rent or buy a space.
There’s also an option of turning the first floor of your house into a laundromat. Honestly, there’s a lot of possibilities. Of course, starting a small business is often overwhelming. Every startup owner has their doubts.
Water Heater Cost
There’s also the decision of whether you’ll add a water heating system to your establishment. If you intend to offer a hot-water washer, the heating system costs about $15,000 to $40,000 at most.
Accessories
There are other accessories that you can add to your laundromat. To provide a satisfying customer experience, you’ll need to plan the accessories for the customer’s waiting area. Here are a few suggestions:
- Soda vending machine, $3,000 to $4,000.
- Security system, $6,000 to $10,000.
- Television set, $200 to $500.
- Wi-fi connection, starting price at $40
- Other necessary furniture such as sofa, table, and bench.
Interior Design
It doesn’t have to be classy, but most laundromats are paying close attention to interior design. In fact, choosing a unique design will draw the public’s interest in your services. Currently, the design trends mostly involve a contemporary or industrial style for most laundromats.
However, if you want to stand out from the competition, it’s best to opt for a more colorful and playful look for your interior. Unlike the public’s opinion, investing in interior design doesn’t have to be costly. In fact, you can do the design yourselves. Nowadays, there are easy to install wallpapers, premade shelves, and other accessories such as accent lamps for the customer’s convenience.
The number one rule in interior design you have to consider is making sure the whole look matches. We don’t want a design that will end up shooing the customers away. Why not create an instagrammable accent wall? It’s also fun to play with the mood lighting. If you’re looking for design inspiration, Pinterest has a lot to offer.
Conclusion
I hope we helped you clear some doubts after reading this article on owning laundromat pros and cons. In the end, the pros outweigh the cons if you’re determined to see this business through. After all, the high success rate of financial security and work-life balance perks are compelling enough reasons to start a laundromat business.
