New investors who are considering opening a laundromat often have preconceived notions about the business. Like many industries in the 21st century, new technology is causing disruption, and some of those expectations are no longer reality. Fortunately, this evolution has resulted in a much lower barrier to entry, enabling entrepreneurs from all walks of life to take on laundromat ownership.
Whether it’s the opportunity to be your own boss, to make more money, pursue a passion, or change your lifestyle, laundromat ownership is an excellent pathway to achieve the American dream. Below you can explore four common expectations related to the startup costs, experience and time required to manage the business, and the profitability of the industry as a whole.
Four Common Laundromat Business Expectations
1. “The laundry industry isn’t lucrative”
Before conducting industry research, potential investors may be under the general impression that the laundry industry is in decline, with customers moving toward in-house laundry systems.
Reality: According to the Coin Laundry Association, there are 29,500 laundromats in the United States, generating $5 billion in revenue each year. Each laundromat can generate cash flow from $15,000 to $300,000 per year, representing a massive opportunity for interested owners.¹
In a separate survey of laundromat owners, 81.5% of respondents said they saw an increase in business (gross dollar volume) in 2018 compared to 2017, with a 9.9% average increase. Roughly 56% of respondents own a single self-service laundry, 20.4% own two or three stores, and 24.1% own four or more stores.²
2. “Startup costs are unmanageable”
Reality: Depending on the circumstances, starting up a laundromat can be costly. Variables like lease terms, store location, facility size, equipment, and municipal fees can all affect startup costs, as can the decision to purchase an existing business or build one from the ground up.
Regardless of your situation, and the unique details of your business plan, laundromat financing can be more attainable than you thought. You could apply to a regular bank for a small business loan, but working with a trusted industry partner for financing provides a deeper level of knowledge and support for the entrepreneurial journey.
Laundrylux is a full-service laundry systems partner, providing flexible financing options through Laundrylux Financing Systems (LFS).
3. “Experience is essential”
Reality: Knowledge of best practices for business can undoubtedly be helpful coming into laundromat ownership, but business acumen can be learned, and a partner with deep industry experience can help.
Laundrylux offers a comprehensive suite of partner support services, from design and layout to equipment, marketing and promotions, and more. With over 60 years in the industry, Laundrylux can help fill knowledge gaps and create a foundation for long-term success.
4. “Laundromats require significant daily management”
Reality: A new owner might believe that they should be on-site during all hours of the day and night to manage their business. While even self-service laundromats do require staff and manager oversight, new tools and technologies can help an owner to keep an eye on their business even when they are not there.
Software like LaundryPulse allows an owner to manage their laundromat from a computer or mobile device. Owners can remotely program machines, monitor usage, and set up and manage pricing promotions. Owners can also create alerts to notify them of issues with equipment so that they can address them immediately.
The laundromat business is a solid idea for a lucrative startup – resistant to recession, and with the potential for a high ROI (30-35%) when managed effectively. Selecting a partner with industry experience that offers a wide range of services can be the best decision that a new small business owner can make. The right partner can provide a startup with the skills and knowledge to fill the gaps created by a lack of experience.
Contact Laundrylux today and learn how you can turn your entrepreneurial dreams into reality.