Pros and Cons of Owning a Laundromat for New Investors

When you’re thinking of launching into any new business opportunity, it’s a good idea to consider the advantages and potential pitfalls of that business. Starting a laundromat is an attractive prospect for many entrepreneurs looking for a recession-resistant model that offers great flexibility, a high ROI, and the opportunity to meaningfully serve their community.

At the same time, it’s also critical to understand the startup and operational costs of a laundromat, possible competition from other laundromats, and the demands of owning your own business before jumping in head-first. We’ve compiled a list of the pros of opening a laundromat, along with some things to consider before you start your journey.

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Want to learn more about how to open a profitable laundromat business? Check out our 7-Step Guide To Starting A Laundromat.

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Pros of owning a laundromat

1. High ROI and success rate

The laundromat industry has a 20-35% return on investment and a high survival rate, with 95% of new laundry businesses still thriving after five years. That’s almost double that of the average new business startup!

2. Recession-resistant

Laundromats are essential businesses that provide a vital amenity to communities across the US. Whether the economy is in a boom or bust, people always need clean clothes, making laundromats one of the most recession-resistant businesses out there. Self-service laundry businesses even tend to flourish in a downturn as the trend towards renting vs. homeownership increases.

3. Low labor costs with little to no inventory

Because of the self-service nature of most laundromats, labor costs can be kept to a minimum, depending on the type of store you want to run. There is also very little inventory management required – other than providing your customers with laundry products like soap and softener, there is no ongoing ordering and stocking of items like in a retail store or restaurant business.

4. Work-life flexibility

Some laundromat owners see their business as a full-time operation, while others view it as an additional source of income alongside another career. When you run your own laundromat, you can choose opening hours and a schedule that works with your other commitments. Hiring laundromat staff to carry out extra duties or even opting for an unattended store means that the time you need to be on-site will be kept to a minimum.

Discover how a school teacher started a multi-store laundromat business in Texas.

5. Low barrier to entry

Unlike many careers, you don’t need to study for any degrees or certifications to open a laundromat business. A basic understanding of profit and loss is necessary for running any type of business, but once you find a trusted laundry advisor to guide you through the necessary steps, you’ll be on to a winner.

6. Easy management

Remote management systems like LaundryPulse have made it easier than ever to manage a laundromat business in recent years, with the ability to remotely check machine health and set pricing and promotions. Cashless payment options like the LaundryPay app also save you time counting coins by providing accurate revenue reports at the end of each day.

Discover how a card-only payment model made business easier for this group of laundromat investors

7. Potential for a hybrid laundromat business

Some laundromat owners choose to maximize their profitability by offering other products and services alongside laundry. If you have an interest in hospitality, why not open a laundry cafe? Or if you have a talent for pampering, why not combine your laundromat with a nail bar? The possibilities for a hybrid laundry business are endless – the right one will help you stand out from the crowd and offer a next-level experience as customers wait for their laundry.

Learn more about attended vs. unattended laundromats and discover which business model is right for you.

8. Family business

Owning a laundromat is an ideal opportunity to introduce future generations to the 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.

Learn how to invest in a laundry business that’s built to last.

9. Unlimited growth potential

Depending on the preference of the owner, a laundromat may be operated at a small scale with one location servicing a neighborhood, or on a large scale, with multiple locations across a city or region. Once you’ve created a strong laundromat brand identity and store design, it will be easy to roll out across multiple stores. Once your reputation grows, customers will recognize your business in other towns and feel confident that they’ll get the same great service!

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Things to consider before opening a laundromat

1. Startup costs

As with any small business, the initial startup costs of owning a laundromat can be significant. These can range from $200,000-$1,000,000, depending on factors like whether you are purchasing or leasing your location, and whether the project involves retooling an existing property or ground-up construction of a brand-new building. Your commercial laundry equipment, supplies, and accessories will all add to your initial costs. Around 95% of investors get financing to fund a new laundry business because most don’t have the required capital lying around.

Did you know that Laundrylux’s in-house financing service can help fund your laundromat dreams? Open your doors sooner with our express approvals, and start growing your business with our low monthly repayments. Contact us today to get started!

2. Competition

Depending on the location of your store, there may already be several laundromats in the area. It’s critical, therefore, to research and understand your local competition so you can create ways to stand out from the crowd.

The first way to do this is to equip your store with commercial laundry equipment that offers more reliability and faster laundry times than anywhere else in town. Creating custom wash and dry programs that meet the specific needs of your customers and providing them with easy payment options, like LaundryPay, can all add to their experience and build loyalty to your business.

By using neighborhood demographics, you can learn more about the needs of your target audience and offer extra laundry services like wash and fold and commercial laundry that speak to them. Creating a great store design and amenities that offer customers more convenience, like free WIFI and USB charging points, could also help them choose between your store and another laundromat.

3. Ongoing running expenses

The key to building any profitable business is to maximize revenue while keeping running costs as low as possible. When you run a laundromat business, your primary recurring costs (aside from loan repayments or lease payments) will be your monthly utilities like electricity, gas, and water. If you don’t invest in commercial laundry equipment that effectively targets these ongoing expenses, your hard-earned revenue could end up leaking out of your business.

Luckily, Electrolux Professional and Wascomat washers and dryers come fully loaded with the industry’s most advanced utility-saving features to help you keep these costs to a minimum and successfully grow your bottom line.

4. Unpredictable demands

Store owners are required to be flexible and respond to situations whenever they occur, which could infringe on vacation or other planned time away from the business. Moreover, laundromats are a customer service business, so complaints (though rare) can occasionally be challenging to manage.

Servicing your commercial laundry equipment at regular intervals is recommended to keep your washers and dryers at optimum health. Luckily, Electrolux Professional and Wascomat equipment is built with ground-breaking balancing technology (PowerBalance and SuperBalance) that offers greater durability, extends machine life, and keeps out-of-order signs at bay.

While there are risks associated with any business, learning as much as you can ahead of time, understanding your customer demographic, and partnering with a trusted advisor will help you to build a successful laundromat with the potential for unlimited growth.

Easily start your laundromat business with Laundrylux’s turnkey solutions

For over 65 years, Laundrylux has helped countless entrepreneurs achieve success in the laundromat industry. With decades of experience, a nationwide distribution network, and specially-designed solutions like location and equipment selection, financing, and laundromat marketing, we have everything you need to reach your goals.


Editor’s Note: This article was originally published on April 16, 2019, and has been completely revamped for accuracy.