Are you seeking an exciting business venture? If so, why not consider investing in a laundry business, with a remarkably high success rate and a potentially great return on investment? If you’re interested in a business with a remarkably high success rate and a potentially great return on investment, then learning how to start a laundromat business could be the perfect option for you.
To make the most of the laundromat business and maximize its potential, you need to provide attractive and varied services and facilities, market to local communities, and maintain a sanitary business environment.
1. Determine What Kind of Laundromat You Want to Have
Various kinds of laundromats are available, such as self-service (coin laundry), fully-staffed, wash and fold, and dry cleaner. Every one of these offers differing advantages to both the owner and the customers, and they all function in different ways.
- Self-service – Customers at a self-service laundromat do all their own washing and drying, with no staff to help them. These places are usually found in areas where there are a lot of college students and the customer base is younger.
- Fully staffed – The opposite of a coin-operated laundromat is a full-service laundromat, where customers drop off their laundry. Then your staff does everything from washing to folding to ironing.
- Wash-and-fold – At a wash-and-fold laundromat, all the work is done for the customer. A team of experienced laundry professionals do the washing, drying, and folding for them. All the customer needs to do is drop off and pick up their items, or some businesses may even deliver them straight to their house. These kinds of laundromats are normally found in areas with more families and higher incomes.
- Dry cleaner – Dry cleaners provide cleaning services for delicate, specialty fabrics and/or expensive clothing using a chemical solution instead of water. Operating a dry cleaning business can be quite lucrative, as the cost to dry clean clothes is usually higher.
2. Make a Business Plan
When you have decided what services will be provided, it’s time to initiate making a business plan. Here are the major components that should be included:
- Executive Summary – What issue is your target customer facing, and how will you be providing resolution? Furthermore, what other services, such as tanning, will your laundromat offer?
- Overview – What’s the background of the business? Who makes up the management team and what type of business structure have you established, such as an LLC or INC?
- Industry Analysis – What does the laundromat industry look like in your area, including size, potential, current trends, and required regulations? Is there a chance for suppliers to enhance their bargaining power?
- Competitive Analysis – Who is your competition, both direct and indirect? Direct competition would be laundromats that share the same niche as you, while indirect are those that offer similar but not identical services.
- Marketing – How will you reach your target audience? Could you use social media, organic search, or advertising? Will you hire external contractors to help with your marketing efforts? Note – Facebook and PPC advertising are the most successful for laundry businesses.
- Management – How is the ownership structured, including internal management and external management (consultants, lawyers, accountants, etc.)? What special abilities does your management team have when it comes to fixing or running machines?
- Operations Plan – How will your daily operations be conducted? What facilities and equipment (lavatories, appliances, and other extras) are necessary to attract and retain customers?
- Financials – What are your approximate cash flow, expenses, and profit predictions for the first five years of business?
3. Decide What Area You Want to Specialize In
Developing a unique attribute is essential when formulating a business plan. Your specialty is the factor that will make your laundry business stand out from its competitors in the local area.
It may be an insurmountable task to cater to every type of customer. Nevertheless, some may attempt to do so. Examples of such specialties include, but are not limited to:
- Medical – There are some laundromats that provide services specifically for medical linens and scrubs. However, they are not very widespread, making this a potentially lucrative market to explore.
- Hospitality – Many commercial laundromats will handle the textile-based needs of hotels or restaurants. You may want to focus exclusively on this sector and make sure the supply of hospitality establishments in your region is sufficient.
- Consumer Apparel – This is what is most likely to be seen in a laundromat. Offering either a full-service or self-service coin option for customers to clean their clothes is an in-demand service.
4. Find Your Unique Selling Point (USP)
What makes your laundry business stand out from the rest? Is there something that differentiates it? Could it be that you accept credit cards? To make the customer experience even better, you could provide certain amenities. For example, you might offer:
- Refreshments and snacks
- Vending machines
- Cozy seating
- Wi-Fi access
- Charging docks for phones
- Video games
- Machines with a card-reading system
5. Choose a Great Business Name
Having the opportunity to be creative is one of the enjoyable elements of commencing a business, and one of these is selecting a name. If one is looking for guidance, we would recommend that the name chosen should be a reference to the service(s) being provided.
6. Scout For a Great Location and Acquire Equipment
When looking for the perfect location for a laundry business, consider the necessary space and the services you intend on providing. Ask yourself the following questions about any property you’re seriously considering:
- What is the populace and average salary in the area of interest?
- Is the property in an area where local residents are unlikely to own their own washers and dryers?
- Does the area have convenient public transport?
- Are you looking to buy a pre-existing laundromat or a new one? The process of doing so will be very different in either case.
- Do the nearby establishments have anything to offer your clients? For instance, are there places nearby where someone could get something to eat while they wait for their laundry?
- Are you going to be renting or purchasing the space?
- Is the rental agreement competitive?
- Will there be enough storage room?
- Will the customers have enough space to wait while their garments are washed?
Once you’ve determined the best place to set up shop, the next step is to acquire the necessary equipment. Regardless of the type of business, you’ll need to acquire:
- Industrial washers and dryers
- Seating for waiting areas
- Transportation carts for laundry
- Tables (one for the reception and a potential second for the office)
- Computers and related hardware
- Point-of-service payment system (for selling products like soap, etc.)
- Wireless internet
- Cleaning supplies
- Disinfecting agents
- Trash receptacles and recycling containers
- Protective face masks and gloves
7. Get Financing and Create a Practical Budget
Opening a laundromat can require an investment of up to $500,000, mostly due to the cost of the washing machines and dryers. If you don’t have this kind of money, you can consider getting business startup funds from a bank or credit union, crowdfunding, venture capital, or a private investor, such as a close colleague or trusted family member.
Bear in mind that your laundromat business may not turn a profit for at least a year, so be sure that any investors you bring in are aware of that.
8. Prepare All of Your Necessary Documents
Now that you know how to start a laundromat business, you just need to prepare all your necessary documents.
a) Register your business name and emblem as a trademark
Defending your brand name and logo is essential to stop someone from taking it without permission.
b) Secure your business name with registration
Prior to initiating your business, it is essential to register the business name with your state. Also, you’ll need to decide on a business structure, for example, a Limited Liability Company (LLC) or corporation.
c) Submit a Request for an Employer Identification Number (EIN)
Obtaining an Employer Identification Number (EIN) is a quick and straightforward process that is needed to identify a business when filing taxes, similar to a social security number. It can be obtained at no cost in a few minutes from the IRS website.
d) Receive necessary authorizations and certifications
Getting permission and authorization is essential for the successful running of any enterprise. It can fluctuate significantly depending on the area, but may include a health clearance, water pollution control authorization, sales tax license and more.