8 Reasons Owning a Laundromat Can Be a Lucrative Business, and What Factors to Consider?

Are you thinking about jumping into the laundry business? That's great! Laundromats are a solid choice for entrepreneurs because they tend to hold up well, even when the economy doesn't. Plus, they offer a good return on investment, plenty of flexibility, and a real chance to contribute to your community.

But before you take the plunge, getting a handle on a few things is important. You'll need to consider the costs to get started and keep the place running, what other laundromats you might be up against, and the nuts and bolts of running a business. Our team has been supporting laundromat owners for several decades. We've compiled a list of the upsides of opening a laundromat and some important points to consider as you prepare for this adventure.

The Basics of Owning a Laundromat

1. High ROI and Success Rate

The laundromat industry is not just thriving; it's outperforming many sectors with an impressive 20-35% return on investment. This sector also boasts a high survival rate, with 95% of new laundromat businesses thriving after five years—nearly double the average survival rate for new startups. This makes owning a laundromat an appealing investment for entrepreneurs looking for stable and profitable business opportunities.

2. Recession-Resistant Nature

Laundromats perform a crucial service—providing clean clothes—that remains in demand regardless of economic conditions. This essential nature makes laundromats exceptionally resistant to economic downturns. In fact, during recessions, when more people opt to rent rather than own homes, the reliance on public laundry facilities often increases, bolstering the stability of this business even further.

3. Low Labor Costs and Minimal Inventory

One of the most attractive features of laundromats is their operational simplicity. Most are self-service, which dramatically reduces the need for staff. Besides minimal labor costs, inventory requirements are straightforward, typically limited to stocking basic laundry supplies like detergents and fabric softeners. This simplicity helps keep ongoing operational costs low.

4. Work-Life Flexibility

Laundromat ownership offers remarkable flexibility, making it ideal whether you’re looking for a full-time business or a supplementary income. Owners can operate with flexible hours, choose to run their laundromat as an unattended facility, and significantly reduce the time they need to be physically present, effectively balancing personal life and business demands.

5. Low Barrier to Entry

Starting a laundromat is an attractive option for many aspiring entrepreneurs because it doesn’t demand specialized degrees or complex certifications, making it relatively easy to get into. All you need is a solid understanding of basic financial management. However, you don’t have to go it alone.

Many new laundromat owners find it beneficial to consult with experienced advisors who know the ins and outs of the laundry business. These advisors can provide invaluable guidance, from choosing the right location and equipment to marketing strategies and day-to-day operations. This level of accessibility opens the door for many people to enter a potentially lucrative market, providing a straightforward path to owning a business that can offer substantial financial rewards.

Note that our team can enhance this journey by offering comprehensive services tailored to the needs of laundromat owners. Our dedication to timely and effective service includes everything from laundry design and site selection to workflow optimization and financing. We also pride ourselves on our after-sales support, providing technical equipment servicing and maintenance. We strive to deliver parts and technical service within 24 hours to keep your operation running smoothly. Choose Skyline for a partner committed to your success from start to finish.

6. Hybrid Business Potential

Innovative owners can enhance profitability by integrating additional services within their laundromat, transforming it into a hybrid business. Concepts like adding a café, nail bar or offering dry cleaning services can differentiate your laundromat, enhance the customer experience, and increase revenue streams.

7. Family Business Opportunity

Laundromats can serve as a foundation for a family business, providing opportunities to involve multiple generations. Many owners find value in employing family members, fostering a team atmosphere, and planning to pass the business on to the next generation, thereby securing a family legacy in the community.

8. Unlimited Growth Potential

The scalability of laundromats is a significant advantage. Owners can start with a single location and expand to multiple outlets across a city or regionally. Establishing a strong brand identity and maintaining consistent service quality can facilitate this expansion, enhancing profitability and customer loyalty.

Factors to Consider Before Opening a Laundromat

While starting your laundromat has its advantages, there are a few key things you'll want to consider before jumping in. This section will walk you through the essential factors every aspiring laundromat owner should consider. From figuring out your startup costs to sizing up your competition and keeping an eye on your day-to-day expenses, we're here to help you make smart, informed decisions that set the stage for a successful business. Let’s dive into what you need to know to get your laundromat running smoothly.

1. Startup Costs

The initial investment for a laundromat can be substantial, ranging from $200,000 to $1,000,000. This variation depends on whether you're purchasing or leasing the location and whether the project involves renovating an existing property or constructing a new building.

The cost of commercial laundry equipment, supplies, and accessories will also add to the initial expenses. Since most investors don't have this available capital, around 95% seek financing to fund their new laundromat.

Tip: Skyline's in-house financing service can help fund your laundromat dreams with express approvals and low monthly repayments. Contact us today to get started!

2. Competition

If several laundromats are in your area, it's crucial to research and understand your local competition to differentiate your business. Equip your store with reliable commercial laundry equipment that offers faster laundry times, and create custom wash and dry programs tailored to your customers. Use neighborhood demographics to learn about your target audience and provide additional services like washing, folding, or commercial laundry. Enhancing your store with conveniences like free WiFi and USB charging points can attract customers.

3. Ongoing Running Expenses

To build a profitable laundromat, you must maximize revenue while minimizing running costs. Major recurring expenses include monthly utilities like electricity, gas, and water. Investing in commercial laundry equipment with advanced utility-saving features can help keep these costs low and improve your bottom line.

4. Unpredictable Demands

Laundromat owners must be flexible and responsive to unexpected situations that could interfere with vacations or planned time away. As a customer service business, occasional complaints can be challenging to manage. Regular maintenance of your commercial laundry equipment is essential to keeping washers and dryers in optimal condition.

While any business venture carries risks, gaining as much knowledge as possible beforehand, understanding your customer demographics, and partnering with a trusted advisor can help you build a successful laundromat with unlimited growth potential.

Start Your Laundromat Journey with Skyline Laundry

Ready to start your laundromat business? Contact our team to turn your vision into reality! Our experts are here to guide you every step of the way. Reach out now and embark on your path to success!