Business ideas
8 min read

How to Start a Profitable Laundromat Business [11 Steps]

Learn how to start a successful laundry business in 11 easy steps! Discover tips on setting up a profitable laundromat, from finding the right location to setting prices.

By Nick Cotter
Updated Feb 02, 2024

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This page may feature products from our affiliate partners, which could influence the products we discuss due to potential compensation. Despite this, our evaluations are impartial, based solely on our independent analysis. The content here is intended for informational purposes and should not be seen as legal advice. For professional guidance, consulting with a legal expert is recommended.
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1. Perform market analysis.

Before diving into the laundromat industry, it's crucial to understand the market landscape. A comprehensive market analysis will help you identify potential customers, understand competitor strategies, and determine the best location for your business. Here's how to perform a market analysis:

  • Research the demographics of your targeted area to determine the demand for laundromat services. Look at factors like income levels, age distribution, and the percentage of renters versus homeowners.
  • Analyze the competition by visiting local laundromats. Take note of their services, pricing, equipment, and customer volume. Identify any gaps in the market you could fill.
  • Examine the foot traffic and accessibility of various locations. Locations near apartments, college dorms, or busy urban areas often see higher demand for laundry services.
  • Investigate local regulations and zoning laws to ensure you can legally operate a laundromat in your desired location.
  • Consider the potential for partnerships with nearby businesses or housing complexes, which could provide a steady stream of customers.
laundromat business image

Why do laundromats fail?

Laundromats (and similar businesses, like dry cleaners) tend to fail because they are commodity businesses. It means that there's nothing special about them so that people will go to the cheapest one in town. Laundromats also tend to be dirty and smelly, which doesn't make them very inviting.

A laundromat needs to find a way to differentiate itself from its competitors to be successful. It could mean having better customer service, offering more services (like laundry folding), or finding a unique location. If it can't find a way to stand out, it's likely to fail.

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2. Draft a laundromat business plan.

Creating a comprehensive business plan is a crucial step in launching a successful laundromat. It should outline your business goals, strategies, and financial projections. Key elements to include are:

  • Market Analysis: Research local demographics and competition to identify your target market.
  • Location Selection: Choose a convenient and accessible location with high foot traffic.
  • Services Offered: Detail the range of services, such as self-service, full-service washing, drying, and folding.
  • Financial Projections: Include startup costs, operational expenses, and revenue forecasts.
  • Marketing Plan: Outline strategies to attract and retain customers.
  • Management Plan: Describe the operational structure and staffing requirements.

How does a Laundromat business make money?

Laundromat businesses make money by charging customers a fee to wash and dry their clothes. Customers usually pay for each machine they use, or for each load of laundry. Additionally, many laundromats also offer additional services such as dry cleaning, folding, and ironing for an extra fee. A typical target audience for a laundromat business is busy individuals who do not have a washer and dryer at home, such as college students, travelers, and people who live in apartments or small houses.

3. Develop a laundromat brand.

Creating a strong brand for your laundromat is crucial in differentiating your business from the competition and attracting loyal customers. Your brand should reflect the unique value proposition of your laundromat and resonate with your target audience. Here are some key points to consider when developing your laundromat brand:

  • Identify your target market and tailor your brand to meet their preferences and needs—this could be families, young professionals, or college students.
  • Choose a memorable and relevant name that conveys the essence of your laundromat and is easy to recall.
  • Design a distinctive logo and visual theme that will be consistently used across all your marketing materials, store signage, and website.
  • Develop a brand message that communicates your key benefits, such as convenience, cleanliness, affordability, or state-of-the-art facilities.
  • Ensure your brand voice and tone are consistent in all communications, whether it's friendly and casual or professional and reassuring.
  • Consider the customer experience and how your brand will be reflected in the layout, design, and services offered at your laundromat.
  • Implement a social media strategy to engage with customers and build a community around your brand.

What is the startup cost for a laundromat?

The startup cost for a laundromat can vary depending on the size and location of the business. Generally, you can expect to pay between $30,000 and $100,000 for equipment and machinery. Additional costs may include rent or lease payments, permits, signage, and marketing materials.

It's important to consider how much you'll need to charge customers to cover your costs and make a profit. Most laundromats charge around $2 per wash and about $1 for each load of dryer time. 

So, if you're looking to break even, your average customer would need to spend at least $4 per visit. Keep in mind that not everyone will do both the wash and dryer, so you'll likely have some customers who only spend money on one service or the other.

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4. Formalize your business registration.

Starting a laundromat business requires not only planning and equipment but also ensuring that your business is formally registered according to local and state regulations. This step legitimizes your business, allowing you to operate legally, hire employees, and pay taxes. Here's how to navigate the process:

  • Choose a business name: Make sure the name is unique and check with your state's business registry to ensure it's not already in use.
  • Decide on a business structure: Common structures include sole proprietorship, partnership, LLC, and corporation. Each has different legal and tax implications.
  • Register your business: File the necessary paperwork with your state's Secretary of State office or business agency. This often includes articles of incorporation or organization, depending on your chosen structure.
  • Obtain an Employer Identification Number (EIN): Apply for an EIN through the IRS for tax purposes, even if you don't plan to hire employees immediately.
  • Apply for necessary permits and licenses: Depending on your location, you may need a general business license, a health department permit, or a specific laundromat license.
  • Understand your obligations: Be aware of ongoing requirements such as annual filings, tax returns, and renewing licenses and permits.

Resources to help get you started:

Explore top resources designed for laundromat entrepreneurs to gain insights on market trends, operational best practices, and strategic advice for business growth:

  • American Coin-Op Magazine: Offers articles, news, and resources related to the coin-operated laundry industry. Visit site.
  • Planet Laundry: The official publication of the Coin Laundry Association, providing industry news, business tips, and member stories. Visit site.
  • Laundrylux Blog: Features business advice, trend insights, and success stories for laundromat operators. Visit site.
  • Eastern Funding's Laundry Business Blog: Offers financing advice, operational tips, and market analysis for laundry businesses. Visit site.
  • Laundry Ledger: A comprehensive news source covering the latest in laundry and dry cleaning innovations and market trends. Visit site.
  • Laundromat Resource: Provides a plethora of tools, podcasts, and guides for starting and growing a profitable laundromat business. Visit site.

5. Acquire necessary licenses and permits for laundromat.

Starting a laundromat business requires compliance with various local, state, and federal regulations. Ensuring you have all the necessary licenses and permits is crucial to operate legally and avoid any potential fines or business interruptions. Follow these steps to acquire the necessary documents:

  • Business License: Check with your city or county clerk's office for requirements on obtaining a general business license to operate within the local jurisdiction.
  • Zoning Permits: Verify with local zoning authorities that your chosen location is zoned for a laundromat, and secure any necessary permits.
  • Health and Safety Permits: Depending on your location, you may need health department permits, especially if you plan to serve food or beverages.
  • Environmental Permits: Because laundromats use chemicals and large volumes of water, check with your state's environmental protection agency regarding any required permits.
  • Sign Permit: If you plan to install signage, you may need to obtain a sign permit from your local government.
  • Fire Department Permit: You might need a fire department permit, especially if you will have a large capacity of machines or an on-site fluff and fold service.
  • Special State-Issued Permits: Some states require special permits for laundromats due to the water usage and waste produced; ensure you understand and comply with these requirements.

6. Open a business bank account and secure funding as needed.

Opening a business bank account and securing funding are critical steps when starting a laundromat business. A dedicated business account will help you manage finances effectively, while proper funding ensures you have the capital necessary for equipment, renovations, and operations. Follow these guidelines to get started:

  • Research various banks to find one that offers business accounts with favorable terms and low fees. Consider banks that provide additional support services for small businesses.
  • Gather required documentation such as your business formation papers, EIN (Employer Identification Number), and personal identification to open your business bank account.
  • Estimate your initial startup costs, including machines, renovations, permits, and working capital, to determine how much funding you need.
  • Explore different funding options such as small business loans, SBA loans, private investors, crowdfunding, or personal savings to finance your laundromat business.
  • Prepare a solid business plan that outlines your business model, market analysis, and financial projections to present to potential lenders or investors.
  • Consider equipment financing if you need to purchase a large number of washers and dryers; this can alleviate the upfront financial burden.
  • Ensure you understand the terms and conditions of any financing or loan you accept, including interest rates, repayment schedules, and any potential penalties.

7. Set pricing for laundromat services.

Setting the right price for laundromat services is crucial to attract customers while ensuring profitability. Consider local competition, operating costs, and the value you provide to determine competitive yet sustainable pricing. Here are some key points to consider:

  • Research local market rates by visiting nearby laundromats to understand the standard pricing for washing and drying services.
  • Calculate your operating costs including utilities, maintenance, lease or mortgage, insurance, supplies, and labor to ensure your prices cover these expenses and yield a profit.
  • Consider offering different pricing tiers based on load size or machine type, such as standard, high-capacity, or high-efficiency machines.
  • Provide value-added services such as wash-and-fold or dry-cleaning at a premium to increase revenue streams.
  • Implement a loyalty program with discounts or rewards to encourage repeat business and foster customer loyalty.
  • Adjust pricing periodically based on changes in operating costs, customer demand, and market trends, but always communicate changes clearly to your customers.
  • Ensure prices are clearly displayed in your laundromat to avoid confusion and maintain transparency with customers.

Are Laundromats A Dying Business?

Initiating a laundromat business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $114000 for launching such a laundromatbusiness. Please note, not all of these costs may be necessary to start up your laundromat business.

8. Acquire laundromat equipment and supplies.

When starting a laundromat business, selecting the right equipment and supplies is critical to ensure efficiency, reliability, and customer satisfaction. To ensure that your laundromat is adequately equipped, it's important to research and invest in high-quality machines and necessary supplies. Here's a guide to help you with this crucial step:

  • Commercial Washers and Dryers: Choose durable commercial-grade washing machines and dryers, preferably from a reputable manufacturer known for longevity and ease of maintenance.
  • Payment Systems: Decide whether to use coin-operated machines, card systems, or digital payment options. Consider a mix for customer convenience.
  • Change Machines: If opting for coin-operated machines, install change machines that are easy to use and reliable.
  • Laundry Carts: Provide sturdy laundry carts for customers to transport their clothes easily within the facility.
  • Seating and Tables: Ensure you have enough seating for customers waiting for their laundry, as well as folding tables for convenience.
  • Vending Machines: Stock vending machines with laundry supplies like detergent, fabric softener, and bleach, as well as snacks and drinks for customer comfort.
  • Signage: Invest in clear signage to guide customers on operating machines and laundromat policies.
  • Security System: Install a reliable security system including cameras and proper lighting to ensure the safety of your customers and your investment.
  • Maintenance Supplies: Have on hand essential maintenance tools and supplies for regular upkeep and quick repairs.

Is owning a laundromat profitable?

There are a lot of factors to consider when answering this question. For example, what part of the country are you looking at? What's the cost of utilities and rent in your area? How much does it cost to purchase and maintain machines?

Generally speaking, owning a laundromat is very profitable if you're strategic about it. For example, try to find a spot with high foot traffic but low competition. Make sure your machines are well-maintained and offer customers a discount for bulk washings. Promote your business through word-of-mouth and social media. And most importantly, be passionate about running your laundromat!

9. Obtain business insurance for laundromat, if required.

Getting the right business insurance is crucial for protecting your laundromat against potential risks and liabilities. It can cover everything from damage to machines to customer injuries on your premises. Consider the following steps to ensure you have the appropriate coverage for your business:

  • Assess Your Risks: Understand the specific risks associated with running a laundromat, such as water damage, theft, or machinery breakdown.
  • Shop Around: Contact multiple insurance agents and compare quotes and coverage. Look for an insurer with experience in commercial policies for laundromats.
  • Choose the Right Policy: Typical policies for a laundromat might include general liability, property insurance, equipment breakdown, and business interruption insurance.
  • Consider Additional Coverage: Depending on your location and services, you may need flood insurance, vandalism coverage, or workers' compensation if you have employees.
  • Review and Update Regularly: Reassess your insurance coverage annually or whenever there are significant changes to your operations or assets to ensure you're adequately protected.

10. Begin marketing your laundromat services.

Marketing your laundromat effectively is crucial for attracting customers and building a loyal client base. Start by identifying your target market and tailor your marketing strategies to meet their needs. Here are some key steps to get the word out about your new business:

  • Develop a Brand Identity: Create a memorable logo and color scheme for your laundromat. Use this branding consistently across all promotional materials.
  • Online Presence: Build a professional website with your laundromat's information, services, and pricing. Utilize social media platforms to engage with the community and offer promotions.
  • Local Advertising: Place ads in local newspapers, magazines, and community bulletin boards. Consider direct mail campaigns with coupons to attract first-time customers.
  • Customer Referral Program: Encourage existing customers to refer friends and family by offering them a free or discounted service.
  • Partnerships: Collaborate with local businesses to offer joint promotions or loyalty discounts.
  • Grand Opening Event: Host a grand opening event with special offers to create buzz and draw in a crowd.
  • Signage and Visibility: Ensure your laundromat is easily visible with clear signage and consider investing in an eye-catching storefront.

There are a lot of factors to consider when answering this question. For example, what part of the country are you looking at? What's the cost of utilities and rent in your area? How much does it cost to purchase and maintain machines?

Generally speaking, owning a laundromat is very profitable if you're strategic about it. For example, try to find a spot with high foot traffic but low competition. Make sure your machines are well-maintained and offer customers a discount for bulk washings. Promote your business through word-of-mouth and social media. And most importantly, be passionate about running your laundromat!

11. Expand your laundromat business.

Once your laundromat is running smoothly and profitably, it's time to consider expansion. This can be a strategic way to increase your market presence and revenue. Here are some practical steps to take when you're ready to grow your laundromat business:

  • Open New Locations: Research demographics and find underserved areas that can benefit from a laundromat. Ensure the new location has ample parking and is easily accessible.
  • Upgrade Equipment: Invest in high-efficiency machines and technology to improve service quality and attract more customers.
  • Offer Additional Services: Consider adding wash-and-fold, dry-cleaning, or delivery services to increase your offerings and revenue.
  • Franchise Your Model: If you have a successful business model, franchising can be an effective way to expand with less direct management on your part.
  • Marketing and Promotions: Increase your marketing efforts to attract customers to both existing and new locations, utilizing social media, local advertising, and loyalty programs.
  • Partnerships and Collaboration: Collaborate with local businesses or residential complexes to offer exclusive services or deals, expanding your customer base.