One of the best ways to ensure profit from a business idea is to cater to a need. Food, housing — basic needs demand businesses. Another of life’s basic needs may not come to you instantly: laundry. And laundry mats, or more appropriately, laundromats are essential to most neighborhoods, giving you a good potential for business income.
Is Owning a Laundromat Profitable?
Market research shows laundromats are lucrative, with $4.4 billion in industry sales. Over 10,000 companies provide laundry services across the US and the average sales for every company at $0.4 million. The average net loss for a laundromat is 12.9 percent.
But how much do laundromats make?
According to the Coin Laundry Association, laundry services pick up an annual revenue of $300,000.
Although the yearly growth isn’t phenomenal at 0.1 percent, a laundromat business is recession proof. People need clean clothes even when the economy isn’t doing well. And during a public health crisis like the COVID pandemic, clean, sanitized clothes are a necessity.
Recession-proof businesses make for safe investments.
When is the Busiest Time for Laundromats?
But owning a laundry mat doesn’t automatically mean you’ll be making money. For starters, your laundry services will be competing with others in your neighborhood or county. Some laundry shops even operate on a 24-hour schedule, making them a convenient option for people who keep odd hours.
Other laundry mats may have a bigger space, allowing for those busy hours to not be so crowded. When do laundromats see the busiest times?
For the typical coin-operated laundromat, weekends are the most crowded days. Sundays are especially busy. On weekdays, after work hours will have people coming in to do their laundry. And depending on the location of the laundry shop, some people come in during their lunch break to wash, dry and fold their clothes and linen.
Middle of the month and end of the month are also busy times for a laundry mat since people get their paychecks on those days.
Lull days are typically Tuesdays, Wednesdays and Thursdays. The hours when people are at work are also going to see your laundromat slow.
How to Start a Laundromat Business
Busy days and slow days are vital to building a successful laundromat. When you know when business is going to be slow, you’ll have a better idea to create a marketing strategy to encourage more people to come in and do their laundry.
But before you look into marketing plans, make sure you’ve got the funds to start a laundry mat.
Small laundry shops generally call for a minimum of $180,000 and a maximum of $350,000 in capital. For commercial laundry services, you may be looking at over $800,000. Once you’ve secured startup costs, through bank loans, private funding or partnerships, work on the details of your laundromat.
1. Choose a business model
Not all laundry mats provide the same service; some are only coin-operated and self-service whereas others provide washing and folding services.
2. Find a good location
What does a “good location” mean? It means more foot traffic that helps your laundry shop get customers any day of the week. You’ll want to be near the following:
- Tourist areas
- Apartment buildings
3. Check out the competition
You don’t want to open up a laundry mat in a neighborhood that has multiple laundry services. It may be tough to compete with established businesses or services that have become local necessities. If there is no other location for your laundry shop, see what the existing laundromats do not offer.
Fill a need that your competition doesn’t provide and you’ll see people walk in consistently.
4. Make a business plan
Every business that seeks to succeed for decades needs a blueprint from startup to operations. A business plan will cover your objectives, goals, strategies for realizing your plans for the laundry mat.
A well-researched business plan is also a good way to secure funding from private financiers or banks.
5. Secure the necessary permits and applications
Every state has different requirements for businesses before they can run. Check the Municode Library to learn about the laws and ordinances that are specific to your location.
What you’ll need will also depend on your laundry mat. For example, some laundry shops have a snack bar or a cafe, which means these businesses will also need to secure a health permit. If your laundromat also offers booze at certain times, you will have to get a liquor license.
6. Hire the right people
Even for self-service laundry mats, employees will still be essential. Unless you plan on managing the laundromat yourself, hire an experienced and reliable person to run the shop. Whether your laundry mat only needs one or two employees, make sure they’re personalities and experience mean good customer service.
7. Invest in quality equipment
You may find cheap laundry machines, and that may help you manage startup costs. But they’ll become more expensive in the long run if they break down consistently.
Yes, laundry machines are expensive, with some starting at $100,000. If you’re serving commercial clients, you will have to invest more in high-performance machines.
Quality machines aren’t just about equipment that last. It’s also about delivering a good laundry experience for your customers. Are the machines easy to operate? Do they come with innovative features: sanitize cycle, steam for stains and custom wash settings, among others?
8. Make your laundromat better than other laundry mats
Most people will do more than a couple of loads for their laundry. You’ll want to cater to these customers by making your laundry mat a desirable space to hang out in.
Some things to do:
- Add vending machines for snacks
- Designate a space for kids to play in
- Provide no-contact payment options
- Offer freebies, like coffee, tea or juices
- Create a comfortable waiting area
9. Attract more customers with a simple marketing plan
The marketing for your laundry mat starts even before you open the doors.
Establish an online presence on social media platforms and build anticipation with engaging posts. You could also reach out to other local businesses and partner with them, like a gym or pizza place. They could spread the word about your laundry shop in exchange for discounts on their laundry.
When you open and notice the laundry schedules of customers, get more people in on lull days by offering reduced pricing for certain times of the day. You could also offer a pickup and delivery service, specific to locals who are unable to leave their homes.
10. Get organized for daily operations
Finally, make sure your day-to-day leaves no room for customer complaints. If people line up to use washers or dryers, you may lose customers to other commercial laundry shops. And if you run your shop on your own, staying organized means preventing problems that lead to lost profits.
So make sure you’ve got a process for cleaning, collecting coins (if the machines are coin-operated) and machine use.
Laundry mats can be profitable, if you have the right plan in place. So make sure you’ve got one before starting a laundry services business.