The life of a small business owner holds a significant appeal. The idea of being your own boss, managing your own work-life balance, contributing to the community, and reaping the financial rewards of hard work is tempting to people of all walks of life.
However, starting a new business is a complicated process with many things to consider. What type of business? Are you interested in a franchise, purchasing an existing business, or starting new? How much time and resources do you have available to put into the business? Are there any legal, security, or educational requirements specific to the operation?
Owning a laundromat is an appealing choice for a potential new business owner. Laundromats are generally considered to be recession-proof, and the business has few barriers to entry. On the other hand, it is critical to understand startup and operational costs, and the demands on owners to provide customer service, maintenance, and more.
The laundromat industry in the United States is vast, reaching five billion per year in 2018; and it is stable, remaining at approximately the same level for the past five years. However, when considering opening a laundromat, there are some pros and some cons to consider:
Pros of Owning a Laundromat:
1. High ROI and Success Rates
The laundry industry has a 20-35% return on investment, and a 5-year survival rate which is almost double that of the average new business startup. Further, there is no inventory management required – unlike a retail or food startup, there are no significant requirements for ongoing ordering and stocking of items.
Related Blog: Is Buying A Laundromat A Good Investment
2. Work-Life Flexibility
The owner can set the hours of operation for the business, making it function for their preferred work-life balance. According to Entrepreneur, only half of laundromat owners consider it their full-time job, while the rest consider it a part-time gig.
3. Ease of Management
Technological advancements like laundromat management systems have made it easier than ever to manage a laundromat. Coinless payment options and cloud-based monitoring reduce the need for onsite management while simplifying record-keeping and improving accuracy.
4. Extra Income Source
With a variety of customers coming in the door of a laundromat – and many staying for two to three hours to complete their laundry, why not upgrade the experience by providing something extra like coffee, wifi, food, or beer? Not only will it make customers happy, but it can also offer your business a unique selling point in a potentially competitive environment.
Related Reading: 8 Things to Consider Before Opening a Hybrid Laundromat
5. Family Business
Owning a laundromat is an ideal opportunity to introduce future generations to the basic concepts of small business ownership. Many laundromat owners employ their family members and hand the business down to their children when they’re ready to retire.
6. Unlimited Growth Potential
Depending on the preference of the owner, a laundromat may be operated at a small scale – one location servicing a neighborhood or group; or on a large scale, with multiple locations across a city or region.
Things to Consider Before Opening a Laundromat:
1. Startup Costs
As with any small business, the initial startup costs of owning a laundromat may be significant. First, a location must be selected, and the decision made to rent or purchase. Machines should be purchased or upgraded (if buying an existing coin laundry business), while water heaters, supplies, and accessories will add to the total startup costs.
One study estimates that the startup costs for a laundromat can range from $200,000 to one million dollars, depending on the size and location of the business.
Luckily, flexible laundromat financing options are available for laundromat startups, and new technology like digital laundromat management systems allows the end user to pay for laundry with their phone, eliminating the need to invest in card readers.
2. Competition
Depending on the location of your facility, and the demographics of the neighborhood, there may already be several laundromats in the area. It’s critical for a small business owner to research and understand the local competition, and to decide upon a unique selling point to make their business stand out. This unique selling point could be reflected in the quality of the equipment, ambiance and atmosphere inside the store, or additional amenities.
3. Unpredictable Demands
Owners are required to be flexible and respond to emergency situations whenever they occur, day or night, which could infringe on vacation or other planned time away from the business. Moreover, laundromats are a customer service business, and customer complaints can occasionally be stressful and challenging to manage.
With a high success and survival rate, low barriers to entry, and the flexibility to start as a part-time or remote owner, it may represent the ideal opportunity for an entrepreneur to explore small business ownership.
While there are risks associated with any business startup, learning as much as you can ahead of time, creating a smart business plan, and using your creativity to create a unique selling point will help you to build a successful laundromat business with the potential for unlimited growth.
Easily Start and Manage Your Laundromat with Laundrylux
Laundrylux can help build your business every step of the way, just as they have done for thousands of entrepreneurs over the last 50+ years. Laundrylux provides customers with world-class commercial laundry equipment, in addition to laundromat financing solutions and marketing support.
Our expert distributors manage the entire process including construction, supplying and installing the laundromat equipment, and more. Contact Laundrylux to learn more about how they can help you start a laundromat business.
Sources:
- https://www.ibisworld.com/industry-trends/market-research-reports/other-services-except-public-administration/personal-laundry/laundromats.html
- https://laundrylux.com/wordpress/wp-content/uploads/2018/03/ELX-New-Investor-Brochure-lr.pdf
- https://www.entrepreneur.com/article/190424
- https://smallbusiness.chron.com/calculate-start-up-costs-laundromat-44480.html