Thinking about investing in a laundromat business? Good call! A laundromat is a sound business opportunity that’s practically recession proof, with minimal operating costs. If you have the entrepreneurial spirit, a laundromat is a great way to be in business for yourself.
However, it’s not turnkey! Like any business venture, there are a lot of variables to consider. This is certainly the case when it comes to figuring out the costs associated with buying a laundromat. Since this will be your business, you won’t be restricted by franchise guidelines or licenses.
However, make no mistake about it, there will be plenty of ways to spend money. Most of these will be beyond your control. Therefore, the key is to focus on how to save money while making sure your new business is both welcoming to customers and profitable, as well.
Opening a Laundromat: Costly Decisions Add Up
While this is hardly a comprehensive list, it should be enough to get your planning process started.
- Location, location, location
- Size of your business (square footage)
- Type and mix of equipment
- Amount of construction or refurbishment that is required
Generally speaking, you can expect to pay approximately $200 to $300 per square foot, for a typical size and location. Of course, those numbers can be higher or lower depending on your geographic market.
However, if you’re looking to lease a space in a new, high-volume strip mall, it only makes sense that your overhead will be higher compared with a location that’s a bit off the beaten track and older.
Remember, though, it’s important not to base your decision solely on costs. You want to locate your laundromat where people who need laundry services live, not necessarily where they shop. When it comes to doing laundry – no one’s favorite activity – convenience is key.
Give Me a Hard Number
Ah, if only it were that easy to calculate. As you can see from the short list above, your bottom-line costs will depend on your own choices.
- If you opt for a great location with a high rent, your overall costs reflect your decision.
- Same thing goes with equipment. More machines can accommodate more customers – which means more income – but the startup costs to buy the equipment as well as the utilities to run them will impact your monthly bottom line.
- If you embrace technology upgrades, you can provide the best possible user experience while also increasing your monthly income.
One way many new laundromats, and forward-thinking established laundry facilities, are upgrading is by installing the ShinePay app on machines. ShinePay allows laundromat owners to skip the expense and hassle of coin boxes and save on labor costs.
By installing this cashless system on your machines, customers will be happy they don’t need coins to do laundry and you’ll be loving the fact that all deposits are made directly into your business’s bank account for easy budgeting and bill paying.
Is Financing an Option?
Depending on your personal financial situation, you may be able to finance your new laundromat business with 30 percent of the purchase price as a down payment. (Exact numbers vary depending on locale and your relationship with your lender.) Lenders may require first-time buyers to secure their loan, meaning they must have something to put up as collateral.
Be careful! If you default on your loan, your collateral will be at stake. (Think twice before leveraging your family home, for example, against your new business.)
Another thing to consider, if you’re purchasing an existing laundromat, you may be able to work out a financing deal with the seller. Everything is on the table when it comes to negotiations. Depending on the length of time the business is on the market or how badly the owner needs to sell, you could negotiate a great deal.
Opening a new business isn’t without risk. However, if you make smart decisions based on solid research, you will be well positioned to enjoy tremendous success. Making wise investments in your new business, including installing energy-efficient washers and dryers, installing the ShinePay cashless payment system, and choosing a cost-effective, well-situated location, will surely position you for success in your new endeavor.