Laundromats are one of the few businesses that thrive regardless of market conditions. With an average square footage of 2,700 feet and an annual cash flow of up to $300,000, they represent a tremendous profit per square foot.
Renters occupy 34% of households in the United States. Starting up a laundromat business is a smart move because laundromats are used chiefly by renters. Read on to learn how starting a laundromat business can be a successful venture.
1. Starting a Laundromat Business 101
Your plan for how to start a laundromat business should begin with a detailed budget. The cost to start a laundromat business will vary depending on the size and location, but here are some common expenses you’ll encounter.
- Storefront or other rental space: $3-$30 per sq. ft.
- Buildout for machines, customer areas, etc.: $200,000-$500,000
- Monthly utilities: $200-$8,000 per laundry machine
- Furnishings: $5,000-$15,000
- Credit card reader and change machine: $40,000-$80,000
- Water heater: $15,000-$40,000
- Additional supplies: $800-$1,200
If you’re not sure what equipment, supplies, or other materials you need, consider working with a trusted partner like Laundry South. From leasing commercial laundry machines to maintenance and repair, Laundry South is your single source for laundromat success.
2. Develop a Business Plan
Starting a new business of any kind requires planning. If you plan to own a laundromat, a business plan is essential. Here are some elements to include in your plan:
- How will my laundromat be different from competing locations?
- What can I do to market my laundromat to help customers find it?
- What are my fixed and variable costs associated with this startup?
- How much are people willing to pay for laundromat services?
- What is my profit margin per wash, and how can I maximize profits
A business plan isn’t just important for keeping you focused when starting a small laundromat business, it’s also critical if you plan to seek funding from a lender. Banks and other lenders want to see a detailed plan of how you expect to run your business. Take the time to develop a business plan.
3. Consult an Accountant or Business Advisor
If this is your first business venture, it’s vital to get advice from business experts. A CPA or financial advisor an help you register your new business as an LLC, partnership, or corporation. The way you register your company will depend on various financial factors.
You’ll also need to establish a bank account for your business, a credit card merchant account, and business insurance. These legal steps are necessary before you can open the doors of your new laundromat.
4. Find the Right Equipment
Commercial laundromats get a lot of use. Look for commercial-grade heavy-duty washing machines that can handle large loads and extensive use. Getting the right equipment is key to a successful laundromat business.
5. Location, Location, Location
College students and renters commonly use laundromats. Look for retail space near college campuses and apartment complexes. These are locations that make it easy for potential customers to find you.
Wash. Rinse. Succeed.
Starting a laundromat business can be a smart move. Startup costs are reasonable compared to other business types and they provide exceptional cash flow per square foot.
It’s important to talk with a CPA or financial planner to ensure your business is set up properly. Know the costs of the business, develop a detailed business plan, and work with industry experts to get your business started.
To learn more about starting your own business, please explore the rest of our site.