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).
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.
If you keep the laundromat clean, the machines in good order, and offer good customer service, chances are you'll see between 20-35% ROI (return on investment).
So, how much is a laundromat worth as per EBITDA multiples? Well, to calculate this, you need two things: the EBITDA of the business and the right multiple. For instance, as per the latest market estimates, the EBITDA multiples for laundromats range between 3.4x and 4.8x.
Profit Margins Revealed
Regular ironing and washing provide an estimated profit of 20-30 percent. This category encompasses basic laundry chores.
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).
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.
Survival Rate: Approximately 95% of laundromats succeed over the first five years of operation (higher than average for other small businesses). Profitability: Laundromat businesses average between 20-35% ROI.
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.
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.
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.
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.
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.
According to the Coin Laundry Association, laundromats in the U.S. generate $5 billion in annual revenue and have a 95% success rate over five years—a significantly higher survival rate compared to other small businesses. Laundromats provide an essential service, making them recession-proof.
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.
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. For coin stores, this will generally take place twice weekly.
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.
Case 1: a small laundromat in a low-traffic area
They rely solely on self-service operations. Assuming an average cost of $2.50 per wash or dry cycle and an estimated customer base of around 600 transactions per month (20 per day), the monthly revenue of this laundromat would be approximately $1,500.
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.
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.
The average laundromat can expect an ROI of around 20-30%, depending on factors like location, competition, and the services offered. Offering ancillary services like dry cleaning, wash and fold, pickup and delivery, sneaker cleaning, and other luxury services can boost these numbers.
Laundry Services: Offering customers additional laundry services is a common method for laundromats to gain additional revenue. Wash and fold, delivery, ironing, and dry cleaning are a few examples of laundry services that can help attract new customers and increase engagement among existing customers.
Normal Laundromat: Operates during standard business hours, typically 8 AM to 8 PM. 24/7 Laundromat: Open around the clock or 24-hour, offering services day and night without closing.