Laundromats in the US industry analysis Urban areas with high population densities have been particularly advantageous for these businesses, where proximity to residents translates to a steady flow of customers.
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.
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.
Answer- Laundromat customers are generally renters, urban dwellers, or individuals without in-home laundry access. Income levels vary, with most customers earning between $15,000 and $50,000 annually.
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.
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 Peak Hours
Weekends: Saturdays and Sundays tend to be the most crowded days, especially in the mornings. People have more free time on weekends and use it to catch up on chores like laundry.
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.
In conclusion, while owning a laundromat may seem like a promising hands-off business, it is a venture that requires dedication, active involvement, and sound management skills. If you're willing to put in the work, it can provide a rewarding income stream and the opportunity for substantial business growth.
Finance, law, real estate, health care, and software development are among the most profitable industries in the US. If you're looking to make as much money as possible, consider starting a legal services business, a brokerage, a health care company, or a software-based venture like a virtual assistant business.
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.
How many washer and dryer units does a laundromat need? According to Martin Ray, most laundromats have between 40 and 100 units. So if we assume that you purchase new machines, your equipment cost alone could be 40 small units x 1,000 = $40,000 or up to 100 large units at $5,000 = $500,000.
Locations near supermarkets are great for coin laundry stores because customers can get two weekly tasks done in one trip — laundry and groceries. Locations between high population areas and elementary and high schools or are great also. Parents can easily visit your store after the school pick up or drop off.
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.
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.
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).
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.
Franchise Option
Buying a laundromat franchise can offer a proven business model along with brand recognition, but it typically comes with upfront franchise fees in addition to the standard startup costs. Franchise fees can range from $20,000 to $50,000 or more, depending on the brand.
If you don't have a pile of cash lying around, aim for a business that needs minimal upfront investment. Think service based businesses or an online business like freelance writing, graphic design, or social media marketing; something you can start with nothing more than an internet connection and some expertise.