Are Laundromats A Good Investment?

For a variety of reasons, investing in a small business is appealing. The desire to be your own boss, make decisions that directly affect the company’s success and attain financial independence while providing a beneficial service to your community makes becoming a small business owner appealing.

Another significant factor to consider when starting a small business, especially a laundromat, is the ability to generate family wealth and create an asset that can be passed down to future generations.

If starting a business is something you want to do, you’ve probably thought about the various types of businesses you may start. You may not have considered the advantages of owning and operating a laundromat.

Purchasing a laundromat may be one of the best small-business investments a new business owner can make for a multitude of reasons.

What do I need to know about running a laundromat?

A successful business owner must continually keep every aspect of their organization in top shape in order to generate a profit. Many people buy laundromats because they feel they would be able to pursue other interests or jobs while generating a passive income.

Laundromats, like any other business, require devotion and hard work. You may make a lot of money if your company succeeds, but you could also lose a lot of money if it fails. Here are a few factors that might affect the profitability of your laundromat.


In this area, new investors may find themselves in over their heads. Operating a laundry may be expensive, especially in the short term. The initial costs of opening a laundry might be as much as $200,000.

This might include the cost of a down payment on a property, as well as repairs, renovations, and machinery. Several success tales of business owners who have generated big profits from their laundromats can be found online. After you’ve gotten over the initial hurdle of upfront expenses, things get a lot simpler.


Laundromats are an essential service. Whatever happens, people will have to wash their clothes. This creates an automatic demand for your services, which you can simply meet. It’s so simple, in fact, that many others are considering offering a laundry service.

You’ll want to perform some market research before opening your doors because you’ll be competing with other laundromats in your area. What services, prices, and activities do other laundromats in the neighborhood provide to keep their customers happy? How are you going to compete with these businesses?

You’ll be up against a lot more than other laundromats. Your enemy will be apartment complexes with washers and dryers. Consider what you may provide to entice them to leave their apartments and come to your business.


The location of your laundromat influences a significant portion of its revenue. Laundromats rely on locals for business since the washing industry is inherently location-restrictive.

The majority of consumers do not want to wash their laundry more than a mile away. As a consequence, you’ll want to choose a location that’s simple to reach on foot or by car, particularly in a densely populated area.

You should also consider the demographics of the location you’ve chosen. Laundromat patrons are, on average, of low income. Renters with a low income are more inclined to do so, yet many rental flats lack specialized washing facilities. These are the people who will be your most important clients. Students, employees in the service industry, and others may fall into this group.

Make sure the structure of the building you choose is sound. You don’t want to open a business in a structure that is on its last legs, whether you’re renting or owning outright. If you spend thousands of dollars on modifications and care after you buy a fixer-upper, your profits will suffer, and you may be in the red for longer than you want.


You’ll have to keep any business you start going. Whether it’s repairing broken washing machines, retiling your floors, or fixing plumbing problems, you’ll need to stay on top of everything in your business to avoid serious problems.

If you know anything about plumbing or electricity, you might be able to fix these problems on your own. If you don’t, you’ll almost certainly have to rely on tradespeople to keep your firm going.


For some individuals, running laundry might be a very passive source of money, but that doesn’t mean you can relax. You’ll need someone on the premises at least part of the day to keep an eye on the machines, do housekeeping duties, replenish any detergent dispensers, give out cash to those who need it, and so on.

If you’re short on time, hiring someone to look after your store while you’re gone is a good option. To guarantee that they can step in and manage things in an emergency, choose someone who has some electrical, mechanical, and/or plumbing experience.

Additional Services

While a simple laundromat can be a decent investment and source of passive income in and of itself, it is far from the only way to make money. Many laundromats offer dry cleaning, fluff-and-fold, and clothes repair services.

Some laundromats include wide lounging areas where customers may rest while waiting for their loads to be done.

As a result, an increasing number of laundromats are also offering food and beverages including sandwiches and coffee. Some even provide free WiFi so that customers can surf the web and work while waiting, thereby turning their laundry into a mini-café. Other laundromats provide arcade games to help their customers pass the time.

What are the benefits of investing in a laundromat?

According to a recent Gallup poll, 66% of would-be entrepreneurs are concerned about their firms failing. However, according to one study, laundromats have a high success rate, with over 95% of laundromats succeeding after five years.

Laundromats also have a very high first-year return on investment, ranging from 20 to 35 percent on average.

Furthermore, unlike a retail, restaurant, or other service businesses, which require a longer lead time before earning a profit, laundromats are relatively straightforward to create and manage once the site and commercial washing equipment are selected.

Laundromats are frequently profitable even during a slump. Self-service laundry will become more popular during a recession than outsourced laundry or dry cleaning. When money is tight, consumers may be hesitant to invest in or repair home laundry machines, opting instead to use local laundromats.

Laundromats provide a short payment cycle, with washers and dryers that accept cash, cards, and mobile payment via a laundry payment app, which is far faster than the 30-60 day payment cycle seen in many other companies.

47% of potential entrepreneurs were afraid to take the next step because they feared disrupting their work-life balance by establishing their own business. In contrast, if the owner utilizes remote monitoring software, a laundry requires relatively little in-person supervision.

Laundry management software, such as LaundryPlus, gives facility managers real-time statistics on machine usage, income, and SMS warnings for any problems that develop.

For the 84% of potential entrepreneurs who seek the stability of a constant salary, the right tools make it simple to run laundry part-time while working full-time.

What are the downsides of investing in a laundromat?

Flexibility has its advantages, but it also has its drawbacks. Your business needs you to be adaptable in the same manner that your business requires flexibility. When problems and issues arise, your business and consumers won’t care whether you’re on vacation, sick, or otherwise absent. At all hours of the day and night, you’ll most likely be working on difficulties.

It costs money to start a business, just like it does for the majority of others. Whether you build or rent a building, there are always a lot of costs. Despite the fact that there are several financing alternatives for washing equipment, there is still a large upfront cost to consider.

While rewarding, owning and maintaining a business demands a substantial amount of time, energy, and emotional commitment.

There is a danger, just as there is with any other business. You must bring your A-game if you want to be successful. You’ll be competing with other laundromats in the area, as well as multi-housing complexes (such as flats and condominiums) that may supply laundry equipment and customers who purchase their own laundry equipment.

When you manage a laundry, you’re a plumber, electrician, businessman, marketing, janitor, and a million other jobs rolled into one. You don’t need to be an expert to help, but having some experience and a basic understanding of these areas might be beneficial.

If you’re thinking about investing, brushing up on any of these skills will help you run your business more efficiently. In areas where you lack competence, finding recognized experts and cooperating with a credible distributor might help you succeed.

Electricity and rent are two of the most important challenges and expenditures for many investors. As a coin laundry owner, it’s vital to consider energy efficiency.

Customers are fun to work with and make the job worthwhile, but anybody who has worked in customer service knows that they can also be a source of issues. You must be prepared to deal with conflicts, nasty customers, and individuals misusing your equipment, just like any other business.

Matt Roberts
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