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
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.
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.
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.
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.
By now, you know that the average laundromat makes $300K annually with 20% to 30% profit margins.
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.
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.
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.
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.
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.
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.
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.
Running a Laundromat is simple, but creating or maintaining a successful laundromat takes hard work.
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.
Laundromats offer a strong return on investment, typically between 20% and 35%, and boast a high success rate of 94.8%.
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.
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.
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.
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.
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.