How to Start a Laundromat Business from scratch?

Laundromats are big business in the USA. Persons who invested in opening laundromats in the US are getting between 20 per cent to 30 per cent returns on their money, according to various sources.

It’s worth knowing that there are about 35,000 laundromats spread across this country. Most of these laundromats are always busy because they attract a lot of customers around the clock.

On average, opening a laundromat requires lots of money. Depending on the location and size, a typical, mid-sized laundromat would require anything between $200,000 and $500,000 as an investment.

At the same time, opening a laundromat business isn’t free of its own risks. There are cases where some laundromats couldn’t attract customers due to their location.

At other places, there were instances of laundromats being vandalized and washers and dryers being broken. Crime such as mugging, robberies and also sexual assaults of various nature have been reported from laundromats in certain areas of the US.

While the laundromat owner isn’t responsible for these instances of crime or vandalism, these places don’t attract customers and cause losses to the investor.

However, if you’re planning on opening a laundromat in the US, it’s possible to have a very profitable business. To do so, follow some of these simple steps that I will explain in this article.

Let’s begin by understanding laundromats.

Definition of a Laundromat

Laundromats are an American invention or creation in every respect. The first laundromat in the world opened in Fort Worth, Texas, on April 18. 1934. The project was the brainchild of a local investor, JF Cantrell. The first laundromat was known as a ‘wash-a-teria, ‘ which was drawn from the French popular word cafeteria.

The first laundromat featured electric-powered, coin-operated washers and dryers. Since then, the idea of public places for laundry has spread, and many have opened in the US and around the world.

The above description holds good even today. A modern laundromat is simply a large indoor place with several washers and dryers. You can go there during work hours at the laundromat and wash clothes by paying a fee.

This fee is usually paid in the form of coins that are to be dropped in the slot on the machine. The average cost of doing laundry at a laundromat ranges between $1.50 and $8, depending on the volume of clothes.

Generally, laundromats have vending machines where you can buy detergents, fabric softeners, bleach and other stuff necessary for laundry. However, most people prefer bringing their own detergents and other things when using a laundromat.

While the number of laundromats around the world isn’t known, the World Bank estimates that coin-operated laundries will generate some $31.1 billion by 2027. However, it’s worth knowing that laundromats in the US are seeing a drop in business as an increasing number of Americans prefer to do laundry at home. The trend began during the 2020 Covid-19 global pandemic and persists.

How to Start a Laundromat from scratch?

There are no cheap or inexpensive ways to start a laundromat. However, considering that you’re willing to invest the money in a laundromat, here are some steps that you could follow. It’s worth knowing that laundromat businesses are on the decline in the US.

1. Find the Investment

Opening a laundromat requires lots of money. That’s because you will require washers and dryers and the space for that on rent or purchase. Then there are expenses on plumbing and, sometimes, fixing special water tanks to supply the laundromat.

The expenses for opening a laundromat are quite high. Hence, try to find investment to open a laundromat. This could be your personal savings and investments, venture capital, money from crowdfunding or even a business loan.

2. Decide on Location

The location plays a decisive role in the success of a laundromat. Generally, laundromats located near camping grounds, student dorms and accommodations, tourist places, middle to low-income residential suburbs and certain industrial areas have the highest turnovers.

That’s because dwellers of these places use laundromats to launder their clothing. However, this works to your advantage since you can get a place for lower prices in such areas.

That means lower investment in the place. In fact, at such locations, you might even find a laundromat that can be taken over or places where a laundromat once existed.

Also Read: 10 BEST STATES FOR ENTREPRENEURS TO START A BUSINESS

3. Fix the Plumbing

Now, laundromats need an altogether different kind of plumbing network compared to other stores or homes. That’s because several persons would be using washers or dryers during the day. Therefore, a laundromat requires larger pipelines to supply water and an efficient drainage system.

Remember that no premises are going to come with such customized plumbing facilities. This means you’ve to contract a good plumbing company and get the work done. These have to be done in collaboration with the company that will be supplying the laundromat machines.

Also Read: How To Become A Plumber?

4. Find Laundromat Machines

You will need various kinds of machines for the laundromat. Basically, these include dryers and washers of industrial type, coin machines, laundry scales and so on. If you’ve ever used a laundromat, it’s easy to know the type of equipment they use. Or, you can simply visit the nearest laundromat and check the gear they have on the premises.

That could give you a fair idea of the expenses involved, too. Alternatively, find a consultant or even a plumbing company that can advise you on the types of machinery that are necessary for your laundromat.

5. Get Permits and Licenses

Permits and licenses are compulsory for laundromats. That’s because laundromats are used by people and concern humans. Additionally, laundromats also have to comply with environmental norms, such as the disposal of water and detergents without causing pollution.

In some areas, you might require clearances from the fire department, local civic authorities, environment authorities, and many more. It’s also better to check with the local police precinct about the law and order situation in the area where you intend to open the laundromat.

As I mentioned earlier, laundromats have been targeted by criminals for various reasons ranging from theft of money from machines to robbing persons using the laundromat, sexual assaults and other such things.

6. Find Detergent Companies

You would surely need a dispensing machine at the laundromat to provide detergent powder, fabric softener, bleach and other common laundry stuff. Though most locals will carry their own supplies, tourists and students tend to buy small quantities from the dispenser because they don’t want to bother with carrying the stuff around.

You can easily find companies that are willing to install a vending machine at your laundromat. However, this requires signing a contract with the vending machine company. These simple and basic steps should help you start a laundromat in the US without much hassle. If necessary, consider hiring someone to tend to the machines. 

Generally, the company that installs these washers and dryers will also provide a service contract. However, having a handyperson such as a skilled plumber to attend to emergencies can be a good idea.

Spreading the Word

Once you’re ready to start the laundromat, spread the word around. Generally, people in the neighbourhood will learn about your laundromat and spread the news through word of mouth. However, you, too, can advertise a bit about the laundromat by inserting flyers in newspapers.

Also, make sure that tourists and students in the area learn about your laundromat. You can do this through Facebook Marketplace and Google Maps. These online resources can help people find the place simply by searching with the keywords ‘laundromat near me.’

Also Read: How to Advertise Your Business with a Low Budget?

Wrap Up

Before wrapping up, I will remind you that opening a laundromat is an expensive venture. It requires between $200,000 and $500,000 as capital or investment. The business of laundromats is also on the downslide if reports are accurate.

Therefore, enter the laundromat business only if you’re confident that it would be profitable in that specific area. The machines you install will lose their price in the market almost immediately. Though returns from a laundromat business are quite high, the ventures are full of risks, too.