The beauty of buying a laundromat is that your investment can make money with minimal staffing expenses.
We’ll tell you how to buy a laundromat and get started on your entrepreneurial adventure!
Here’s the information you need to lay the groundwork for a successful laundromat ownership experience.
1. Get the business background
Coin-operated laundromats used to be a ubiquitous feature of the American landscape.
If you’re asking yourself if you should purchase a laundromat.
This point checklist will help you determine whether or not it’s the right investment for you.
There was a day when a high percentage of households took their wash to the laundromat on a weekly or even bi-weekly basis.
Although the affordability of home-based washer and dryer units.
Means that laundromats aren’t as popular as they once were.
Laundromat businesses still exist.
And they are a profitable business model.
That requires a minimal amount of owner participation and labor expenses.
Buy a Laundromat
2. Get the brief history
The first laundromat, then called a “Wash-a-teria”, opened its doors in Ft.
Worth, Texas in the Depression-era 1930s.
Soon, the popularity of laundromats exploded and storefronts spread across the country.
The first laundromats were geared toward self-service.
Which was a change from the earlier commercial companies that laundered, folded.
And pressed clothing as a complete service.
Which means customers paid by the hour to wash their clothing using early electric coin-operated washing machines.
3. Buy a Laundromat
These coin-operated laundry machines enabled those who were affected by the Depression and couldn’t afford personal washing machines another option.
Deposit a few coins and rent a washing machine for a period of time.
Even after the rise of affordable household or in-unit washing and drying machines.
Laundromats have since never lost their enduring appeal for the convenience, economy, and ubiquity they offer.
Today, there are some 35,000 laundromats operating in the country.
Generating over #5 billion in total revenue annually.
Buying a laundromat is easy. But buying a laundromat that has the potential to become a dependable profit center . . . That’s a different story.
4. Know more about it today
Modern laundromats have had to constantly update and keep abreast of the current developments in laundry technology to stay competitive, including the addition of amenities such as free Wi-Fi, flatscreen televisions, vending machines, and children’s areas with family-friendly entertainment.
5. Buy a Laundromat
Some laundromat owners choose to stay open 24/7—upping their convenience factor—and some are completely automated, meaning an owner, manager or employee doesn’t need to be in the store at all, while some storefronts have several employees to help patrons with services like changing cash or coin into proprietary store credit for vends.
6. Buy a Laundromat
Even considering these new trends in the laundry industry, the basic model of the self-service laundry industry has remained the same as it was over 80 years ago.
Many things relating to the business model of laundromats has changed.
However, including a higher return on investment with these more customer-oriented ancillary services and the ability for many owners to self-manage their stores remotely as absentee owners.
Laundromats are so ingrained in the American landscape that it is considered to be a mature market.
One of the advantages of a laundromat is that staffing requirements are minimal. Self-service is the industry standard. While you’ll still need someone to unlock the facility and monitor activity, customers handle most of their own service requirements.
8. Coin-op support.
Coin-operated laundromats used to be the only option. Now, coin-operated machines exist alongside more state-of-the-art laundromat equipment. Although newer alternatives may be more convenient, coin-operated machines are easier to maintain so you’ll need to consider the pros and cons of both approaches.
Buy a Laundromat
9. Equipment concerns.
Typical laundromat equipment includes washers, dryers and washer-extractors. Some laundromats even come equipped with integrated computer technology. But each category of laundromat machines come in a variety of options, so you’ll need to carefully evaluate the existing equipment when you buy a laundromat.
10. Energy efficiency.
Brand name equipment is more durable than equipment that is produced by off-brand manufacturers. It also tends to be more energy efficient. Since laundromats have the potential to consumer large amounts of energy, it’s worth evaluating the energy efficiency of the laundromat’s equipment before you purchase the operation.
The location of a potential laundromat-for-sale isn’t as critical as it is for other types of businesses – but it still matters. Laundromats situated in population clusters are more productive than ones located in the middle of nowhere. Try to identify available laundromats with locations that minimize the amount of time your machines are inactive.
12. Buy a Laundromat
Laundromats have become a canny choice for investors and entrepreneurs looking to play a minor role in the day-to-day operations of a business, who want to tailor a business to their exact wants and specifications—since most laundromats aren’t franchises—and who want the feeling of security that a laundromat’s steady income can bring.
If you’re thinking of buying a laundromat, it’s best to research what to expect in the buying process, management duties, and to add up the potential expenses, costs and bills along the way.
13. Get the Location
If there were ever a time to repeat old real estate platitude, “location, location, location,” it’s when you’re doing research on buying a laundromat. Locations in urban areas near
- Clusters of apartment complexes,
- In or near a university town, or
- A tightly-knit, busy strip shopping center with other collaborative businesses and no competitors.
are the best bets for your laundromat. Multi-Housing facilities and apartment complexes usually have community area laundry rooms, but many residents are loyal to local laundromats. These types of residents that are spread across a sprawling multi-family property are the perfect demographic. Locations near colleges and universities are also attractive, with the vast majority of students using the services of a laundromat.
Buy a Laundromat
14. Don’t forget about a laundromat’s virtual location.
It is also a wise move to make sure that the laundromat business you’re interested in buying is listed on search engines, as many first-time customers choose which laundry service to patronize based on a Google search for “laundromats near me”.
If the laundromat you’re looking at has a good marketing strategy, they may even have an agency create web-based ads for the store. The more prominent a store’s presence in Google, Bing and Yahoo search engines and the higher its reviews on forums like Yelp!, the more likely the store to be profitable.
15. Expenses, Costs and Profit
Laundromats have few costly recurring expenses, but potential buyers—whether they are searching to buy an existing laundromat or even to build a new store— should be aware of each of these expenses. The lease for a laundromat’s actual storefront will be the highest monthly expense, and buyers in the market today should look for a lease term that is suited to industry standards. If possible, try to find a longer lease term that is amenable to your budget.
In many cases, however—if the current proprietor of the laundromat doesn’t own the location—they have a contract with a leasing company. This would mean that the lease would transfer over to you after you sign the contract.
16. Buy a Laundromat
Naturally, when buying any business, a solid budgetary plan is the first necessary step to factor the initial investment costs of a laundromat and recurring expenses. Whether you’re buying an existing space or building a new store from the ground up. If you are buying an existing space, the costs can range anywhere from $200,000 to $500,000.
Buy a Laundromat
Not to be overlooked when calculating overall expenses is possible renovation, which could mean the difference between a rapidly successful store and a business that sees only passersby. If you get a great deal on a store, there may be a reason the owner is selling so low. If the store is just barely hanging on, rundown with equipment in disrepair, completely revitalizing and renovating the laundromat could turn the former derelict store into a profitable business, buzzing with constant activity and foot traffic.
Buy a Laundromat
How much time an owner spends in their store is entirely dependent on the owner’s prerogative. An owner can spend as little or as much time in their store as they want. Laundromats are particularly amenable to absentee owners, due to the automated, self-service nature of the business and new technology like digital card payment systems.
If an owner invests in digital card payment systems, loyalty cards which can be used to pay for vends at that store can be dispensed automatically via a payment kiosk without the need for an in-store attendant. Customers also add value, and redeem loyalty program benefits, discounts, and promotions right from the X-Changer kiosk.
18. Get the Equipment
Check the existing equipment thoroughly. If you aren’t experienced in testing commercial laundry equipment, do some research on the washing or drying machine operation, read relevant model manuals, or call the specific manufacturer to get some information. You can also contact a laundry repair service and see if you can have a professional assist you in helping to inspect the machines.
Take a fine tooth comb to the machines, are they large industrial washers and dryers? Do they look clean? How old are they? Current maintenance or problems? Do they have digital payment systems, like FasCard and LaundryCard, or is it a coin-only laundry?
Some of the most common problems with washing and drying machines to add to your assessment checklist are:
- Noticeably broken equipment (“out of order” signs, missing components),
- Visible damage to machines,
- Age of the equipment,
- Failures in the drain systems of the washers,
- Agitation mechanism washers (e.g. too fast, too slow, not functioning at all),
- Abuse—dented, broken, or substandard quality machines
- Coin-slot mechanisms (if applicable),
- Digital displays on touchscreen card readers (if applicable).
Also, if the potential store is outfitted with digital laundry payment systems, either cashless card-only and coin-and-card systems, the possibility of a large amount of “float” could add to the appeal of the store.
Buy a Laundromat
Is the store you’re looking at buying near another laundromat, you may want to consider doing some commercial recon on your potential competition.
- Is there a competitor within a two mile radius from the store you’re looking at buying?
- Is there more than one laundromat within that radius?
- Do they have a loyal customer base?
- What is your competition’s demographic?
- Are your competitors open 24/7?
- Do they offer “fold and dry” or dry cleaning services?
If your competition looks to be fairly successful and nearby.
Then it may be a good idea to check elsewhere for a store.
Buy a Laundromat
20. Additional Revenue Sources
Does your store have a good reputation for convenience and comfort? Does it need many renovations?
Does it have extra amenities and new technology, like:
- Digital card readers for machines,
- Vending machines (both food—cold drinks, coffee, and snacks—and washing detergent and dryer sheets),
- Free Wi-Fi,
- Flatscreen televisions,
- High efficiency machines, and
- Full-time staff?
A laundromat can be one of the wisest business investments, with due diligence on the part of the investor and a few upgrades, a laundromat storefront can become and continue to be a profitable investment for years to come.
We’ve created this checklist of items to cover in detail when buying a laundromat.
With all of these tips come the caution of due diligence.
A potential buyer will want to check everything thoroughly.
Talk to multiple owners, consult relevant professionals, like real estate agents.
Laundry machine maintenance and repair companies and experts and others.