Laundromats are attractive investments: generally considered to be recession-proof, they have a high (20-35%) return on investment, and a five-year survival rate almost double that of other small business startups.1
However, any investment carries some risk; without proper planning, unforeseen circumstances can affect the profitability of the laundromat and its long-term success. It is critical that a new investor understand the business and prepare for success, with due diligence and careful attention to the unique challenges of owning a laundromat.
To ensure the success of your laundromat venture, you must consider:
To draw in new customers and increase loyalty, it’s critical to set yourself apart from the local competition. Your laundromat could offer additional services like wash & fold, pickup & delivery, and same-day service, particularly if your competitors don’t. Or, you could take advantage of one of the many exciting developments in the industry.
Many new investors are looking at creating hybrid laundromats that incorporate a café, bar, arcade, or other fun additions into the space. Not only does this offer a way to differentiate yourself from the competition, but it also improves the atmosphere of the area while providing the business owner with an additional line of income.
New technological advances can improve the laundry experience for customers. For example, LaundryPay is a smartphone app that allows customers to check machine availability and pay for laundry through their phone, without requiring cash or coins. LaundryPay can also send an alert to the customer when a cycle is finished, eliminating the need for them to wait at the laundromat.
2. Hours of Operation
Make sure that the laundromat is open at the right time to serve customers. Keep in mind that your store will need to include hours that are outside the standard 9 to 5; a laundromat should be open when customers are available and not at work themselves, including late nights, early mornings, and weekends.
When creating a business plan, check out the competition carefully. When are your local competitors open and the most busy? Can you, an outsider to their business, spot any key areas for improvement or missed opportunities that your business could serve, either in service, amenities, or hours of operation?
3. Utility Costs
The machines at a laundromat use an enormous amount of electricity and water – and utility costs directly affect the profitability of your investment. It makes sense to focus on utility costs and to control them by investing in energy-efficient equipment and maintaining both the commercial laundry equipment and the facility.
Technology can help a laundromat investor in this area as well. LaundryPulse is a laundromat management app, allowing remote monitoring of machines from the owner’s smartphone. The laundromat management app will notify owners by text of any machine issues or errors, and owners can program machines remotely to maximize efficiency and control utility costs.
LaundryPulse also monitors laundry machines for correct timing of maintenance and servicing, to ensure that all laundry equipment is working at peak capacity. Real-time data and easy-to-navigate reports provide the information needed to make informed decisions for the business, even when you’re not on site.
A self-service laundromat can be managed remotely, in part, with the help of monitoring tools such as LaundryPulse. However, some supervision is still required to ensure that the facility is clean, equipment is in excellent working condition, and that any customer concerns are addressed and managed promptly. Owners should monitor online reviews of the business to learn more about what happens at the laundromat when you are not there.
Learn more: Is the Coin Laundry Business Right For You?
Opening a laundromat represents an exciting opportunity for an ambitious new business owner. However, there are some aspects of owning and operating a laundromat that may not be apparent to someone new to the industry. Understanding these challenges, and preparing to meet them, is critical to the success of your investment.
Contact our laundromat experts to learn how you can get started in the laundromat business with the support you need at every stage of your investment.