Thinking about owning a laundromat? The coin laundry business has a track record of 20% to 40% average return on investment. Best of all, owning a laundromat does not require prior experience, higher education degrees, or full time labor. So how do you plan and prepare for starting and operating a successful coin laundry business? Read this article to learn some important considerations when planning to start your laundromat business.
Planning to Start a Laundromat
The best way to get into the coin laundry business might be buying an existing laundromat (the business and the location lease) at the right location, and at the best price and terms.
So, you need to:
- Determine the type of store you want to buy (e.g. attended or unattended) and at what price point.
- Have your funds ready, including a reserve to start with as working capital.
- Check out some financing options from traditional lenders (banks, SBA) as well as seller financing.
- Find out for your area what requirements exist for permits and licensing.
- Do location and demographics research for your area.
Purchasing a Laundromat
- Find a few laundromats for sale that meet your criteria. Do some research online and connect with local business brokers.
- Do your due diligence on information obtained from the seller – financial statements, water analysis, lease review, equipment inspection, etc. Go back to the seller and re-negotiate if necessary based on your findings.
- Buy it right and your coin laundry business will be profitable from the start.
- Secure financing. Do you want to pay all cash or finance part of the purchase price? If you are financing the purchase then prepare a detailed business plan for your laundry business and contact local lenders or negotiate favorable seller financing terms.
- Avoid common mistakes made when purchasing your first laundromat: buying an undesirable location, over-paying because the income was over-stated or expenses were understated by the seller, not seeing major changes in demographics, etc.
Many people are attracted to the coin laundry industry because of the high success rate and good return on investment from owning a laundromat. The best way to ensure your success and maximize your return on investment is starting with a good business plan.