Often you'll need to put down anywhere from 25%-40% of the purchase price to qualify for a loan. This means for a $500,000 loan you'll need to come up with anywhere from $125,000-$200,000 for the down payment, not including all of the other expenses you face when you purchase a laundromat.
Tina Gough, senior finance sales specialist, Alliance Laundry Systems: If it is a new investor getting into the industry, there is a down payment requirement of 15-30%, depending on the type of transaction (new build, acquisition of an existing laundry that is opened and operating).
Initial costs range from $200,000 to $500,000, encompassing purchase or leasing, renovations, equipment, and legal expenses. The exact figure varies based on location, size, and equipment quality. What are the costs and risks of owning a laundromat?
You'll need to have been in business for six months and bring in $10,000 in monthly revenue. If you satisfy those conditions and have a credit score of 650 or higher, you can qualify for a business line of credit.
SBA Loan for Laundromat
The SBA is a government organization that offers specific programs for loans considered higher risk, like laundromat businesses. They are based on the value of your overall collateral, which could be the equipment required for your business as well as real estate property you own.
While not legally required, there's a compelling case for starting your laundromat as a limited liability company (LLC).
How to Best Operate a Laundromat. Running a Laundromat is simple, but creating or maintaining a successful laundromat takes hard work. An owner does not need to be in the laundromat every day, but they must understand their customers, equipment and competition.
Monthly General Liability insurance costs for laundromat
Exploregeneral liability insurance costs. Most of our customers can expect to pay: Between $54 and $257 per month.
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.
By now, you know that the average laundromat makes $300K annually with 20% to 30% profit margins.
Buying an Existing Laundromat
That means taking over an existing laundromat is less of a risk. Having the financial information and business plan in place means you can act more as a manager and work to grow and improve the laundromat, instead of starting from the ground up.
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).
Generally, we advise business owners to budget for at least $200-$300+ per square foot for laundry equipment, amenities, and the buildout of an existing vanilla box. Typical laundromats range from 2,000 to over 5,000 square feet, costing $400,000 to over $1,000,000 all in.
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.
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.
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.
Finding out how much LLC insurance costs at the professional level will vary depending on your location, the number of employees you have, and more. On average, though, an LLC owner might be looking at a price tag of anywhere between $500 to $1,000 on professional liability insurance.
“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.
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.
SBA 504 loans offer a number of benefits for laundromats and dry cleaners. These loans can be used to purchase the real estate to construct a new facility, build the facility itself, renovate, improve, or retrofit an existing facility, and pay for equipment.
Yes, a business license is required to open a laundromat. Depending on where your laundromat will operate, more than one license may be necessary. Some municipalities require a local business license as well as one at the county or state level.