Sure, laundromats are a great investment option for entrepreneurs who want to break into a recession-proof industry with 20-30% profit margins and passive income opportunities; but it's also an opportunity to join a historical mission to make the lives of Americans easier and keep clean clothes on the backs of millions ...
Answer: Monthly profits can vary widely based on the location, size, and operational efficiency of the laundromat. On average, smaller laundromats might earn between $1,500 to $5,000 in profit per month, while larger, well-established ones in prime locations might see profits of $10,000 to $30,000 or more per month.
And, laundromats and similar businesses can be managed much the same as rental real estate, making them even more low-maintenance than they already are. This makes them an excellent, nearly passive income source.
By providing an important service in a strategic location, your laundromat can generate a steady flow of passive income, contributing to your financial stability and growth. This endeavor requires upfront effort, but with excellent planning and execution, the rewards can be more than worth it.
Laundromats are a stable investment, offering a 95 percent business success rate. That's especially impressive when you compare laundromats to restaurants at 20% or retail stores at 47% after four years in business.
High Return on Investment
The typical return on investment (ROI) for laundromats ranges from 20% to 30%. This far exceeds the average returns on other types of business ventures such a real estate (7-10%) and the financial sector (4.7% dividend yield).
A coin-operated laundromat can be a profitable business, but there's also a high risk of it attracting thieves. You'll also need to keep cash on hand to provide customers with change for the washers and dryers.
Utilities are a significant ongoing expense for laundromats. Since the business relies heavily on water, gas, and electricity, you can expect to pay between $4,000 and $8,500 monthly, depending on the size of your operation and local utility rates.
We talked to the Laundromat Millionaire, Dave Menz, who owns four laundromats and makes nearly $2 million annually. He even helps other business owners navigate the industry to get more customers, become a full-service laundromat, and outshine absentee owners.
Setting up a new laundromat will initially take time as you get to know your customers and their needs, but there is generally very little maintenance once you get established. Depending on the type of store you want to open, you could manage your laundromat in just a few hours every week.
Ever wondered how the average laundromat, with its steady hum of washers and dryers, can generate enough revenue to spin profits on rinse and repeat? Think of it like this. In 2024 alone, the global laundromat industry is projected to hit a whopping $204.6 billion.
Laundromats can be highly profitable, recession-resistant, and flexible businesses, making them highly attractive for entrepreneurs. However, as with any business investment, there are risks to owning a laundromat which potential investors should carefully consider before diving in.
“Fires pose a serious problem to laundromats. “ According to Jim Everitt, a code consultant and owner of Everitt and Associates, the biggest fire-related risk is lint. Your stores must have lint under control, which means installing the proper equipment and keeping everything in good working order.
Profitable businesses include consulting, legal services, food trucks, and real estate. Fast-growing sectors for investment are online retail, healthcare, and social media marketing. Best passive income options: digital products, affiliate marketing, online education, and dropshipping.
Neglecting or mismanaging your business
Bad management is the top reason why many laundromats eventually fail. All too often, a person will purchase a laundromat with the idea that as long as they collect their earnings every week or two, the business will continue running.
How much do laundromats make a year? According to Dave Menz, the average laundromat makes around $300K in revenue per year. Depending on the location, competition, number of machines, and additional services, a laundromat business may make more or less than this estimate.
In densely populated areas with rising property prices, such as San Francisco or Boston or New York (what Richard Florida calls superstar cities), coin operated laundromats simply can't generate enough revenues. They are being replaced by either upscale housing or retail businesses with high per-square foot sales.
Bonds and Other Fixed-Income Securities
If you invest in bonds yielding 5% annually, invest $720,000 to achieve $3,000 per month. Though returns might be lower compared to stocks or real estate, their risk level is typically lower, offering stability and consistent income.
If you make $2,000 a month, your hourly salary would be $11.54.