Looking for a reliable investment opportunity that’s easy to start, flexible, and cash-generating? Starting a laundromat business might be for you.
Opening a brand-new coin-operated laundromat has many benefits, including:
- Strong return on investment with attractive financing
- No inventory or receivables, meaning no franchise fees
- Minimal upfront capital investment, meaning less risk and virtually recession-proof
- Solid, steady income and growth potential without seasonal fluctuation
So, where do you get started? In this blog, we’ll explore the basic steps to starting a laundromat, from design to construction to operation.
Step 1: Pick a Location
When starting a laundromat, choosing a site is an important part of your investment and can help determine the success of your business. To help drive traffic to your store, look for these indicators:
- Large families with children
- Seniors and/or students
- A high number of rental homes or apartments
- Easy access to the property, either by walking or driving
Working with a full-service partner takes the stress and uncertainty out of picking a location as they can provide a thorough demographic study, an analysis of sales and profit potential, a competition evaluation, and, if relevant, site selections.
Step 2: Obtain the Space
Once you have an idea of where you want to be, you’ll need to obtain the space for your laundromat. Depending on your interests, this will include either buying an existing store or building new. You can be successful with either, but building new will require more upfront capital, and unlike purchasing an existing store, it will take a few years to see a return on your investment.
Buying vs. Building
What the Buying Process Looks Like
- Identifying and purchasing an existing store
- Currently installed and operational equipment
- An established customer base
What the Building Process Looks Like
- Site selection
- Construction from scratch or retrofitting a storefront
- Installing new equipment
Step 3: Find a Lender Who Specializes in Laundry
Funding is the most important component of starting any business, and getting pre-approved for financing is a smart first step. While searching for the right lender might feel daunting, a great way to narrow the field is to look for a lender who understands the laundry business. This allows the lender to provide you with valuable insights into operations, cost, and valuation.
So how much does it cost to start a laundromat and how do you qualify for a loan?
A good rule of thumb is to put down approximately 30 to 35 percent of the entire project. This includes equipment, installation, and leasehold improvement costs.
An “A” credit rating will get you the fastest funding at the lowest rates. To get approved quickly, you should have a net worth of two to three times what you’re looking to borrow, a FICO score above 650, and a minimum of two years of business experience.
Step 4: Hire Employees
People like it when they walk into a store and have somebody there to greet them. To help improve laundromat customer service, focus on the laundromat attendant. Attendants are the face of the business and often responsible for the smooth day-to-day operations of attended stores. The main reason why you wouldn’t have an attended store is just for cost purposes and time constraints.
Step 5: Market Your Store
The laundry industry is a competitive market, and unless you’re the only store in a small town, you’re going to have competition. Anything you can do to get people into the store is positive. These marketing tips will help promote your store and bring in customers:
- Signage: People are attracted to signage. Having signage (e.g., grand opening) increases visibility.
- Customer Appreciation: Increase customer loyalty by hosting a barbecue or offering a loyalty program with multiple incentives and rewards.
- Social Media: Posting on sites like Facebook, Instagram, and Twitter provides great opportunities to extend your reach.
Get Started Today!
If you’re starting a laundromat business, partnering with a proven provider will give you a head start and ongoing support that you can trust. Working with a full-service partner like Lakeside Laundry Equipment takes the stress and uncertainty out of the equation. We offer professional demographic and competitive studies and analyses of sales and profitability, as well as provide a comprehensive site drawing that meets technical specifications, customer ergonomics, and incorporates your design suggestion.