Starting and operating a business is a large component of the American Dream, with more than 28 million businesses currently conducting business in the United States. However, many people don't have enough time to contribute to business endeavors, not wishing to leave their current occupations, spend extensive time away from family members, and deal with difficult decision making outside of their regular lives. One way of circumventing these very real possibilities is through creating a business that yields passive income, with little to no intervention from its owners.
One such way of creating passive income opportunity is through a laundromat. Everybody needs to wash their clothes, the vast majority of people choosing not to do so by hand, scrubbing garments one at a time in their sinks or bathtubs, hanging them to dry - or get rained on - outside on clotheslines. Let's peer into the start up cost for laundromat business opportunities, price of maintenance, labor required, and most other financials you'll need to know.
How much does it cost to start a laundromat business?
Many investors often struggle with figuring out their ever-common questions of "How much to start a laundromat business, anyways? Washers and dryers - that's it, right?"
In short, the cost of starting a laundromat is far more complex than just washers and dryers, and can't be measured accurately without analyzing necessary components individually. Don't take advice from past owners, friends, family, or coworkers, as they're likely not aware of current costs of the many facets of laundromats.
State and local licensing
While this cost holds true for every entrepreneurial effort, the cost of licensing can vary wildly. For example, California's costs range from $115 to upwards of $306, while Alaska only requires owners to pay $50. Further, if your machines or equipment carry materials that aren't environmentally friendly, some states or localities may add on additional fees. The only way of figuring these costs out is to contact government authorities in your local city or county, as well as your state, to be 100% certain of licensing fees.
To buy, or to build? That is the question
Existing laundromats often don't cost as much to purchase as do building them from scratch. However, laundromats for sale might have subpar or failing equipment, bad reputations from former management, be suited in locations with people that often damage machines, or not have many people willing to use them.
Conduct a market analysis - better yet, contact a marketing firm to do so - of the areas in which laundromats are located. Market research is always a must in any business. Laundromats typically perform better in low-income neighborhoods than ones with larger endowments, as well as in college towns than cities without universities. Reach out to residents on their opinions of how many people attend them, as well as their perceptions of nearby laundromats you're considering purchasing, in particular. Also, it wouldn't hurt to contact a consultant specializing in laundromat operation to accurately answer your question of "How much money do I need to start a laundromat?"
Laundromats typically offer higher profit margins when operated for long periods of time. If you'll be living in the area directly surrounding your planned facility, buy it. However, if you're uncertain about your area of residence, or of a clothes-washing business, consider leasing for a few years.
Entrepreneurs who can afford to allocate time several days per week to maintaining a laundromat won't spend anything on hiring employees. Further, if you're willing to learn to repair washers and dryers yourself, you're likely to save more than those who aren't directly involved with their laundromats, increasing the likelihood of success.
What kind of machines do I need?
Low-income areas, those without few competitors, and those with high nearby traffic like hotels should consider buying high-end commercial washers and dryers. If cost-effective, search out machines that are environmentally friendly as to avoid government fines and fees.
For example, White and Bright Laundrette, the owner stated that since choosing to have certain types of dryer installed she immediately saved $20 in gas costs per week, per dryer.
This means that you should take your time to do some research and calculation. You should also consider buying two or more types of washers and dryers, giving consumers the commercially-stimulating freedom of selection.
Electricity and water
Something many entrepreneurs overlook in laundromat opportunities is the cost of electricity and water. Every area in America doesn't give away either one for free. However, smaller localities may be willing to provide discounts for entrepreneurs willing to build laundromats in their area from the ground up.
"How much does it cost to open a laundromat," you say? We hope this guide is helpful to your endeavors. Carefully calculate the startup and its ongoing costs, and always remember to trust your gut.