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.
Are laundromats a good investment? Laundromats make great cash-flowing investments. With an average, unleveraged return of 20-30%, the average laundromat investment is far superior to the average real estate investment, which will produce between 7-10%.
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.
Understanding laundromat value
U.S. Laundromats post impressive numbers with a 95% average success rate and 20 - 35% profit margins. But whether or not your laundromat can meet (or exceed) these industry standards depends on some important factors.
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.
On a typical scale, launching a laundromat will set you back anywhere from $200,000 to $500,000. Your financial footprint hinges on whether you're breathing new life into an existing establishment or embarking on a ground-up venture, coupled with the prevailing real estate climate in your locale.
Entrepreneurs normally spend between $100K and $1 million to start a new laundromat or buy a laundry business for sale. Dave suggests that you should normally spend between two and five times revenue, but that you should base your business valuation on what it's worth to you.
It's easy to understand why: Laundromats are a stable, recession-resistant business that can generate passive income with a strong return on investment. But how much does it cost to open a laundromat? Opening a laundromat typically requires an initial investment of $200,000 to $500,000, plus ongoing expenses.
For most laundromat owners (and most entrepreneurs in general), an LLC is the best choice. That's because you'll have fewer regulatory requirements than S Corps or C Corps, but you'll be able to keep your personal assets separate from your business assets — something you couldn't do with a sole proprietorship.
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.
A great laundromat location is on a main roadway, highly visible, and has plenty of parking with easy access. Also take note of the surrounding businesses and what type of clientele they draw in. Grocery, convenience, auto parts, and check cashing stores make excellent neighbors for laundromats.
You're able to set your own hours and it's highly unlikely you'll have to be at your store 40 hours per week, especially once you get the hang of running your business. Some investors even work another full-time job or use additional time to pursue a hobby more seriously.
Even without a lot of capital, you can open a laundromat by renting equipment, providing services to local businesses, or using a crowdfunding platform like Kickstarter to raise funds. Coupled with a solid business plan, commitment, and smart management, a laundromat can be a worthwhile investment.
Laundromats have long been seen as steady and reliable businesses. But if you're considering entering the laundry industry, you're likely asking, “Are laundromats a smart investment?” The answer, for many, is a resounding yes. Typically, see an ROI return on investment) of between 25-30% a year.
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.
1. High Success Rates. A recent Gallup poll found that 66% of potential entrepreneurs are held back by the fear of business failure. However, one study found that laundromats have an extremely high rate of success – approximately 95% of laundromats succeed over a five-year period.
The cost of equipment required to start a laundromat varies from around $20K to as much as $500K or more. Initial startup costs can be quite significant for a seemingly 'set-and-forget' kind of operation. However, the lack of required labor once a startup is complete can outweigh the cost of starting a laundromat.
With a historically stable ROI, attractive profit margins, and versatility in operation models, a laundromat can be a smart investment decision if done correctly. However, like any business, they come with their challenges—from ensuring regular maintenance to staying ahead of industry threats.
Revenue per Laundromat: The average laundromat generates about $150,000 in revenue per year. Profit Margin: The average profit margin for laundromats is around 20-35%. Cash Flow: Coin laundries generate cash flow between $15,000 and $300,000 per year.
While not legally required, there's a compelling case for starting your laundromat as a limited liability company (LLC).
Whether you're creating a brand-new business or buying an established company, it isn't uncommon for entrepreneurs to spend anywhere from $200,000 to $500,000 opening an average-size laundromat. The funds you'll need to open a laundromat have everything to do with the type of laundry business you're starting.
Laundry pickup and delivery model has seen rapid growth, especially post-pandemic, and now represents about 40% of the organized laundry market. Initial investments range from ₹10-20 lakhs ($12,000-$24,000 USD), with potential monthly revenues of ₹1.5-3 lakhs ($1,800-$3,600 USD).