What multiple should I pay for a laundromat?

Author: Mrs. Shanelle Hettinger  |  Last update: Saturday, May 31, 2025

For instance, as per the latest market estimates, the EBITDA multiples for laundromats range between 3.4x and 4.8x. Now, if the EBITDA of a business is $576,000, I'll take 4.5x as the valuation multiple and multiply the EBITDA by it. This will give us a fair market value of $2,592,000 for the laundry.

What multiple does a laundromat sell for?

Generally speaking, Laundromats are sold based on a multiple of cash flow, before debt service. In California, Laundromats normally sell between 3.0 – 5.5 times yearly cash flow, or 36 – 66 times monthly cash flow.

How much should I budget for a laundromat?

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.

What is a good profit margin for a laundromat?

Laundromats, with a solid location and customer base, generally run 10% - 20% profit margin. That's way higher than grocery stores (0--5%), and far better than the average restaurant (-5% - +5%) but way lower than, say, online retail, franchised tax preparation businesses, and insurance brokerages.

What is a good ROI for a laundromat?

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.

Watch BEFORE Buying a Laundromat | Buyers Guide

What is the failure rate of laundromats?

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.

How much does 1 laundromat make a year?

By now, you know that the average laundromat makes $300K annually with 20% to 30% profit margins.

What are the cons of owning a laundromat?

The potential pitfalls of laundromat ownership
  • Upfront investment costs. ...
  • Maintenance and Repairs. ...
  • Competition and market saturation. ...
  • Dependence on location. ...
  • Water and energy costs. ...
  • Changing technology and consumer preferences. ...
  • Vandalism and theft. ...
  • Seasonal fluctuations.

Are small laundromats profitable?

A laundromat can be a profitable small business if you focus on the right location, smart financing, and cost-efficient operations. With small business loans and financing options, even first-time entrepreneurs can enter this industry with confidence.

What permits do I need to open a laundromat?

Here's what you need for a laundry business.
  • Health permit. This can be obtained from your county's health department.
  • Water Pollution Control Permit. Not every state requires this, but some may. ...
  • Sales Tax Permit. If you plan to sell additional services or products in your laundromat, you will need a sales tax permit.

Can you start a laundromat with 100K?

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.

How much is insurance for a laundromat?

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.

How much does the average person spend at a laundromat a month?

Washing clothes at a laundromat can offer more flexibility than laundry service or in-home laundry. You can wash and dry multiple loads at the same time. At an average cost of $3 to $5 per load, you will spend $24 to $40 per month if you do two loads of laundry a week.

Is a laundromat a good first business?

The high rate of success, excellent ROI, flexibility, scalability, and easy-to-manage cash flow make laundromats a smart choice for new and experienced small business investors. To learn more, explore our blog post “Is the Coin Laundry Business Right For You?” or contact an expert at Laundrylux today.

How can I make my laundromat more profitable?

7 Elements of a Profitable Laundromat
  1. Choose a Strategic Location. ...
  2. Install Modern Commercial Laundry Equipment. ...
  3. Provide a Clean, Bright, and Safe Laundry Facility. ...
  4. Provide Excellent Customer Service. ...
  5. Provide "Must-Have" Amenities. ...
  6. Offer Value-Added Services. ...
  7. Attention to Detail.

How to calculate what a laundromat is worth?

For instance, contemporary revenue multiples for laundromats range between 1.15x and 1.18x. So, if your business's total revenue is $425,000, I'll take 1.16x as the valuation multiple and multiply the total revenue by it. Now, this calculation will give me a valuation figure of $493,000.

What is the ROI on a laundromat?

Laundromat ROI

Laundromats can net around 20-35%, while other businesses typically see only 10-15% ROI. To give you an idea, if you invest $200,000 in opening a laundromat, you can expect to make $40,000-$75,000 in profit. It's a smart investment with a great ROI.

Are laundromats hard to run?

Running a Laundromat is simple, but creating or maintaining a successful laundromat takes hard work.

Can a laundromat make you a millionaire?

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.

What is the success rate of owning a laundromat?

Laundromats offer a strong return on investment, typically between 20% and 35%, and boast a high success rate of 94.8%.

Should a laundromat be an LLC?

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.

Can I get an SBA loan to buy a laundromat?

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.

What is the average multiple for a laundromat?

Laundromat valuation multiples have always been on the higher side of service businesses, and rose markedly after the height of the pandemic, with the average earnings multiple reaching 3.6 before settling at 3.5 through 2024.

What is the payback period for a laundromat?

Calculate return on investment (ROI)

It is calculated by dividing the initial amount invested in the laundromat by the annual cash flow it generates. For instance, if you invest $300,000 in a laundromat and it generates an annual cash flow of $60,000, the payback period would be $300,000 / $60,000 = 5 years.

Can you make a living owning a laundromat?

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.

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