Running a laundromat is a perfect choice if you want to enjoy the best of both worlds. That is, earn through your own business and still keep your freedom. A laundry store collects money on a daily basis, but it doesn’t require you to be on-site 24 hours, and you only have to manage a few employees.
Moreover, in a laundry business, you’re almost always sure that not a single day will pass without a customer dropping in, simply because doing the laundry is a necessity for us humans. And because busy people couldn’t be bothered with doing the laundry themselves, you’re sure to attract customers if your store is located in a place teeming with employees and students.
Interested in venturing into the industry? We got you covered. Read on to get an idea of the costs you will face if you’re considering a future in the laundromat business.
How Much Does it Cost to Start a Laundromat?
Starting a laundromat requires a considerable amount of money. Based on a list of expenses from Entrepreneur magazine, we can sum up the start-up cost to be around US$500,000 to US$1 million.
The high capital will cover most of the requirements for a laundry start-up, including:
- Construction or remodeling of an average-sized (about 2,000 square feet) laundromat
- Sewer connection fees
- Licenses and permits
Despite the high costs, or because of it, starting a laundry business promises a handsome profit. According to the Coin Laundry’s Association, a single laundromat store has a projected annual gross income of US$30,000 to as high as US$ 1 million. Comparatively, the expenses incurred in running the laundry for a year range from 65 to 115 percent of the gross income.
That means, if the business is doing well, a store with a gross income of US$30,000 will possibly have a net income of US$10,500 and those grossing US$1 million has a projected profit of US$350,000.
Constructing or Remodeling a Laundromat
One way to put up a laundromat is through buying an existing store. This method will save you time looking for a location and will be an advantage if the laundry space already has a customer base.
However, it is rare to find an owner who will sell his business if it’s doing well. If an owner is selling you his laundromat, it will be wise to investigate the store’s history of sales to make sure that you won’t be inheriting a business with a bad reputation. Also, keep an eye on red flags signaling that the store is suffering from unpaid debts, improper management, and questionable accounting.
Another way to start the business is to build one from scratch. Putting up a new store is advisable if you desire greater freedom in constructing your laundromat. It will also help you avoid setbacks that come with buying an existing laundry store.
So, how much does it cost to start a laundromat if you buy an existing one or if you opt to build one from scratch? Well, you will likely spend around US$200,000 to US$500,000 regardless of your choice. That’s the average cost for a 2,000 square feet laundry space, inclusive of the equipment installation and putting in tables, chairs and other paraphernalia for the store.
License, Permits, and Sewer Connection Fees
Costs for applying for license and permits for a laundromat business vary depending on your chosen location. You’ll have to check with the municipality to know what documents they require before allowing you to operate.
The usual papers may include a business license, fire department permit, air/water pollution control permit, sign permit, and public improvement fees. The US Small Business Administration has links to several state’s web pages showing their license and permit requirements.
Sewer connection fees also vary. Depending on the municipal water district, the cost ranges from US$200 to US$10,000 per washer, and some areas even charge a separate fee for sewer and waste water. As you still need money to buy equipment, it will be cost-effective to choose a location with a reasonable connection fee.
A document posted by Santa Clarita Valley Sanitation District in Los Angeles shows an example of how municipalities charge sewer connection fees. The said municipal water district charged a connection fee of US$5,500 per capacity unit in 2014. Hence, a 1,000 ft2 laundry store with a capacity unit of 14.45 had to pay $79,475 in the said year.
Laundromat Equipment and Supplies
Learning how to start a laundromat doesn’t end with knowing about the daunting costs of construction and sewer connection fees. More importantly, you should prioritize selecting top-notch equipment for your store. If you start your business with the best machines, it will create a positive impression on your customers and will spell success in the long run.
Here’s a list of equipment essential to a laundromat business:
- Top-load Washers – US$500 to US$700
- Front-load Washers – US$3,500 to 20,000 (depending on size)
- Stacked Dryer – US$5,000 to US$6,000
- Card System – US$40,000 to US$80,000 (including readers on the machines, card dispenser and cards, and software)
- Change Machine – US$1000 to US$3000
- Water Heating System – US$15,000 to US$40,000
- Soap Vending Machine – US$500 to US$1,500
- Laundry Carts – US$50 to US$75 each
- Supplies (cleaning equipment, signs, clocks and trash cans) – US$750 to US$1,000
Running Costs of a Laundromat
Now that you have an idea about the start-up expenses, you should also learn how much it will cost you once your laundromat is up and running. A laundromat business cost includes the rent, utilities, insurance, employee payroll and benefits (if you want to hire a staff), and supplies. The monthly total cost for all of these varies with each laundry store, the volume of customers each month, and how much an owner is willing to pay employees.
A laundromat business cost is hard to predict, but an owner may look for ways to cut down on running costs. One is to learn how to repair laundry machines yourself, so you won’t have to pay for repairs. You can also consider putting up an unattended laundry store in a strategic location to cut down on staff costs.
Aside from saving money, you can also add revenue to your laundry business by adding something to your store. For example, you can put up a snack bar inside so customers can nibble on something while waiting for their clothes to dry.
Creating a Name in the Laundromat Business
You might be starting to consider venturing into the industry now that you know how to start a laundromat business, but before that, we have another piece of advice for you. To be able to grow your business, you have to set your laundromat apart from the rest!
A way to make your business stand out is knowing what your target customers want. Customers reportedly prefer a pleasant and friendly atmosphere when visiting a laundry store, and they will return if the laundromat has perks like play centers for kids, an internet connection, or a snack bar. Most importantly, customers will remember a laundry store if it has an accommodating and efficient staff.
Being able to determine what your customers want is the initial step. After that, to stand out from the rest, you have to think of something unique and incorporate it in your store. It could be an offer that is unheard of, a never-before-seen store design, or anything, as long as it’s something new, interesting and that it makes sense for your business and your customers. Once you’ve convinced yourself that you have a concept that is worth all the investment, then go ahead!
Welcome to the laundromat business and good luck!