Avoiding the pitfalls typical of failing laundromats (2024)

FAQs

Why do most laundromats fail? ›

Neglecting or mismanaging your business

Bad management is the top reason why many laundromats eventually fail. All too often, a person will purchase a laundromat with the idea that as long as they collect their earnings every week or two, the business will continue running. However, this is not the case.

1. High Success Rates. A recent Gallup poll found that 66% of potential entrepreneurs are held back by the fear of business failure. However, one study found that laundromats have an extremely high rate of success – approximately 95% of laundromats succeed over a five-year period.

Common customer complaints include bad locations, difficulty using the laundromat equipment, and an uninviting environment. While investing time in cleaning and maintenance will help you avoid many of these issues, you should still make sure the customer experience is front and center in your business planning.

Nearly 94.8% success rate (5)

All the benefits of a profitable investment––without all the risks.

Dave Menz's initial purchase of a run down laundromat he found on Craigslist has led him to becoming a millionaire. Here's how he did it – and you can, too. As of 2022, there are 18,264 laundromat businesses in the United States that generate about $5 billion in combined nationwide gross annual revenue.

The average laundromat makes between $450-$500 per day. This includes revenue from the washers, dryers, and other secondary income streams such as vending revenue. The range of daily income from self service laundry is around $100 per day to $1,500 per day. You might be thinking, that's a huge range!

As a general rule, laundromats are most crowded on weekends. Since most people work Monday to Friday, they save their visits to the laundromat for Saturday or Sunday.

In fact, thanks to low operational costs, the average laundromat can achieve an ROI as high as 30 percent or even higher in the right location – and the immediate cash-for-service exchange that takes place prevents many of the cash flow problems that commonly plague other industries.

Bed bugs can hitchhike from home to home through laundromats.

Is it OK to leave clothes at laundromat? ›

Do Not Leave Clothes Unattended After Washing/Drying Cycle. No one wants to be that person who has their clothes removed from the machine if they are left unattended. Proper laundromat etiquette is simply setting a timer on your phone for your load's cycle. Laundromat cycles typically last 20-40 minutes.

Running a laundromat is fairly straightforward – the equipment is easy to maintain, labor costs are low and there's no inventory involved. It's also a reliable source of income, as you can expect a steady stream of customers at any time of the year.

While not entirely passive, laundromats do provide a high rate of return, usually 20-25%+, for a minimal amount of time investment. Any business that deals with people and equipment will need some managing, but there are ways to set up your laundromat business to make it relatively passive.

Metal objects such as coins, keys, and screws can damage the inner drum and outer tub of your washing machine. Gum, tissues, and cash can clog your washer drain. Any of these items that make it inside your dryer are going to cause damage to the inner workings there, too.

Laundromats are projected to continue to grow

Grand View Research did a study that shows that the laundromat market is $14.6 billion annually. That number is projected to grow at 9.4% per year until 2027.

Don't Overload the Machine

Putting too many items in the machine leaves less room for water, so water circulation decreases, which limits effective cleaning. Clothes should be distributed evenly and loosely inside the machine. Even a large load of laundry should not fill the washer tub more than three-quarters full.

As we just saw, laundromat businesses typically have a ~80% gross margins (excl. rental costs).

How can I increase my laundromat profit? ›

How much does a laundromat make in a year? A typical laundromat returns between 25%-35% return on investment (ROI).

That number is 30%. So 30% of the US population (317,000,000) is 951,000. I believe these numbers are plausible as I work in a real estate office and this is based on trends. Why is laundromat usage so common in the US compared to the rest of the world?

Cost of the machinery and installation and maintenance. Cost of the clerk and accountant and shopkeeper and painter and cleaner. Cost of insurance and health care and social security of the clerks and attendants and the accountant and the tax specialist.

The average lifespan of commercial washing machines is 10 to 14 years, which is quite a noted accomplishment when considering that the machines are constantly in use. There is no difference in the type of cycle being used, whether delicate or heavy duty, all cycles equal one wash load.

Let's start with a rough estimate. Generally, it takes about 30 to 40 minutes to dry an average load of laundry on a medium setting. However, some loads will only take 20 minutes, and others may require 60 minutes or more.

Try washing before 4 p.m. or after 7 p.m. – Many energy companies charge extra for electricity during their “peak hours,” which see increased energy usage. During the summer, run your washer early in the morning – energy use peaks on hot afternoons.

If you keep the laundromat clean, the machines in good order, and offer good customer service, chances are you'll see between 20-35% ROI (return on investment).

During the pandemic, laundromats were one of the few businesses that remained open, proving that the industry is extremely resilient and will continue to provide store owners with dependable income in 2023 and beyond.

After years of ownership, many sellers find themselves ready to retire from the semi-retired life of laundromat ownership. They may want to travel more, spend time with family, care for health concerns, or a combination of reasons. Owners who are ready to retire from the business are some of the more common sellers.

Is it safe to wash bedding at laundromat? ›

Many people take their comforters to be washed at a Laundromat since most have high capacity washers that will give your comforter enough room to be washed correctly. It's best that your comforter be loosely placed and not firmly packed inside the washer.

Extreme temperatures are the best way to kill bed bugs. Washing your clothing and bedding in a high heat wash should effectively kill off any bugs, as well as any eggs they've possibly laid. It's important to exercise caution in moving infested linens during the process to avoid spreading the bed bugs to other rooms!

Washing Bedding At the Laundromat

Commercial washers and dryers in laundromats are perfect for washing these types of items. Choose a machine at the laundromat where your bedding fits in with some space left so that it gets cleaned properly.

Combining all of these factors, the average cost of a load of laundry is $1.27. At this cost, if you do one load per week, doing laundry costs $66.04 per year. If you do four loads per week, doing laundry costs $264.16 per year. If you average eight loads per week, doing laundry costs $528.32 per year.

A Pocket Full of Coins or a Refillable Cash Card

Determine how you must pay at the laundromat, then set aside enough money for a load or two extra. If the detergent did not rinse or the clothes did not dry, you'll thank yourself for bringing more money.

Always bring your own laundry detergent, softener, and dryer sheets. While you can purchase these items at the laundromat, they may cost you more. Bringing everything with you ensures that your laundry will go smoothly, and you won't have to leave your clothes unattended while you run to the store.

Take full advantage of the windows in the room for natural lighting. Having a good overhead light is important too. A nice small chandelier fixture in a laundry room will give the space an elegant and stylish look. Lighting under the countertops is another way of adding functionality and personality to the room.

Wash and dry heavier items, like towels, separately from lighter weight clothes to prevent damage to finer fabrics and to ensure even drying. Wash delicates and durable fabrics separately on the appropriate washing cycles to avoid damage to fine fabrics. Separate items with zippers and buttons from knits and lingerie.

Spontaneous combustion is a critical risk factor for commercial laundries. It's a by-product of spontaneous heating, which occurs when linens increase in temperature without drawing heat from the surroundings.

What are risks in laundry business? ›

There are a number of risks associated with laundry operations including fire, water damage and health and safety, which if appropriately identified and managed can be greatly reduced or even avoided.

A successful laundromat follows three main principles. First, the successful laundromat is clean, bright, and welcoming. Second, successful laundromat owners reinvest in their laundromats. Third, successful laundromat owners utilize effective marketing and promotions.

The clothes will dry more quickly and with fewer wrinkles. Be sure you get everything in the dryer before you start it up. Opening and closing the door loses heat and time. Bring a large Plastic Bag – After getting those clothes dry, be sure they arrive home that way.

When you use a laundromat instead of the washing machine in your home, you will use less water. Each individual wash uses less water in addition to other conservation benefits all of which add up over time.

Laundromats are actually quite recession-resistant. Unlike other businesses, people still need to wash their clothes even when money is tight. So, while you may see a decrease in business during a recession, it is unlikely that your laundromat will go out of business.

How profitable can a laundromat possibly be? Turns out, they can be very profitable. According to the Coin Laundry Association [1], the average laundromat in the US can have annual revenues of around $300,000. Statistics show that owning a laundromat is a very safe investment, too.

The average laundromat makes between $450-$500 per day. This includes revenue from the washers, dryers, and other secondary income streams such as vending revenue. The range of daily income from self service laundry is around $100 per day to $1,500 per day. You might be thinking, that's a huge range!

Laundry Services: Offering customers additional laundry services is a common method for laundromats to gain additional revenue. Wash and fold, delivery, ironing, and dry cleaning are a few examples of laundry services that can help attract new customers and increase engagement among existing customers.

Laundromats are actually quite recession-resistant. Unlike other businesses, people still need to wash their clothes even when money is tight. So, while you may see a decrease in business during a recession, it is unlikely that your laundromat will go out of business.

Can you make money doing other people's laundry? ›

That's the idea behind a startup called SudShare. It's sort of like Uber for laundry. Once you sign up, you agree to wash other people's dirty laundry in your own home. You pick up, wash, fold and deliver the clothes back within 24 hours or even the same day for extra cash.