If you are looking for ways to bring in additional income, a laundromat may seem like the ideal business plan for you. After all, laundromats practically run themselves, so they seem like a great source for passive income.
However, this business plan is not as easy as it seems. It requires a lot of planning and marketing, and more than anything, a lot of capital.
Read on to find out more about the laundromat business and whether it’s a good career move for you.
Costs of Opening a Laundromat
Laundromats can be a pretty expensive business proposition. In addition to buying or renting a location, you need to buy the machines themselves which can run anywhere from hundreds to thousands of dollars. They will be even more expensive if they have a card swiping feature.
If the machines break down, you will also have to pay for repairs.
Other expenses include insurance, taxes, licensing, permits, sewage hookups and any money spent on promotions and marketing.
All told, startup expenses can range anywhere from $200,000 to $1,000,000.
Making the Most out of Your Laundromat Business
Lately, the face of laundromats has been changing.
People don’t like to spend long hours in dreary laundromats. As a solution, many laundromats have been taking steps to make their laundromats a livelier environment with ways for customers to multi-task.
Coffee shops with Wi-Fi, snack bars, eateries and mini-marts are all common laundromat features. Some laundromats are even considering offering concerts and children’s entertainment.
Of course, wash and fold services is a feature that has long been available for customers as well.
And while these are all features that will make your laundromat more desirable than other laundromats, they are also costly requiring more employees and more overhead when considering the resources you will need to expand.
The Financial Outlook
Laundromats are a pretty secure job option. After all, even in the direst economic circumstances, people need clean clothes. However, the truth is, business owners don’t stand to make much of a profit.
While one store can gross $30,000 to $1 million, owners can expect to spend 65-115% of this on expenses. Therefore, net profits can range anywhere from $4500 to $350,000 depending on your income.
However, there are some steps you can take to ensure that your business will be bringing in a profit that makes it worthwhile. Firstly, make sure you are opening your laundromat in an area that is thriving with a considerable population that is expected to grow in the coming years.
Another smart economic move is to take a laundromat that has recently shut down, or is about to shut down, and take it over and renovate it. This way, you will already have a space that is perfect for laundry and possibly even still has working machines. If the business had a following, you may also be able to hang on to some of their previous customers.
The Passivity Factor
At times, you may come into a laundromat and there seems to be no one running it. After all, almost everyone knows how to do their laundry. Owners may feel like it’s okay to take a day off every now and then or make it a plan to come in every so often to do some maintenance and collect coins.
However, this is not the best business move for entrepreneurs.
Although there is no experience necessary to run a laundromat, people do want to see a friendly face. Therefore, it’s a good idea to be prepared to have someone in your laundromat at all times, whether that person is you, or an employee.
And if you think that hiring an employee is the best move, be aware that it may take time before you are making enough of a profit to do so.
In the beginning, it’s also best to constantly supervise your business. You can do so remotely using a remote security system and cloud-based software, but it will still require a lot of your attention.
Starting a laundromat may seem like a great way to bring in passive income, but there is a considerable investment involved when it comes to time and money. Research carefully to determine if this is the best move for you. We wish you luck, no matter what path you choose to take.