One popular small business found in almost all urban areas are laundromat businesses offering full-service coin-op laundry (washing, drying, and optional folding) services.
A laundromat business is unique in the sense that after the initial capitalization, coin laundry businesses have no inventory or receivables. However, it is not a business that can be started on the cheap. According to the Coin Laundry Association:
Coin laundries can range in market value from $50,000 to more than $1 million, and can generate cash flow between $15,000 and $200,000 per year. Business hours typically run from 6 a.m. to 10 p.m. The stores usually occupy 1,000 to 5,000 square feet of retail space, with the 2002 average being 2,260 square feet.
In the laundromat business,you need to consistently provide high customer satisfaction by ensuring that your machines are functioning properly and reliably. The area should be clean, safe and enjoyable, while providing competitive price and value. Some New York area laundromats are even pushing the definition of “enjoyable atmosphere” by turning their coin-operated laundromats into a party scene at night.
To succeed in the coin laundry or laundromat business, your business needs to have these factors:
1. Great Location: the location of your laundromat business is critical to its success. It has be in a high-traffic area such as along Main Street or a shopping center where lower income to middle income families abound. High income areas will have little need for a laundromat business.
It should also be in an area surrounded by residences, such as apartment buildings. Renters make very good market for a laundromat business. Check where the nearest competitor is located, and try to find a location where your business is the sole laundromat in the area.
Colleges and universities are another excellent market and location for a coin-operated laundry business.
2. Environment = the laundromat should be well-lit (especially at night), with the floors, machines and walls clean. Offer a friendly and professional service to help ensure repeat customers and make it easy for your customers to recommend your laundromat to their friends and families.
3. Safety = some people will prefer to wash their clothes at night. It is important that they feel safe doing it in your laundromat business. Be sure to prepare for the possibility that less than desirable people such as drunks and addicts will walk in at night to harass your customers.
Here are some free articles that can help you get more information about the laundry industry and help you prepare your plan for success:
- Coin Laundry: An Industry Overview http://asbdc.ualr.edu/bizfacts/8005.asp = a good overview of the industry
- IRS Market Segment Specialization Program: The Laundromat Industry = deals with cashflow and books of a laudromat business including water consumption analysis (Read IRS Guide for Laundromat Industry)
- http://www.coinlaundromat.com – California Coin Laundry Association
You can also contact and join this organization:
Coin Laundry Association (CLA)
1315 Butterfield Rd., Suite 212
Downers Grove, IL 60515
Tel (630) 963-5547
Fax: (630) 963-5864
The Coin Laundry Association offers a number of reports (both paid and free) that covers everything from inspecting an existing laundry to closing the deal, while helping you:
- Decide if the laundry business is for you
- Select the right equipment distributor
- Interpret demographics
- Conduct lease negotiations
- Start Your Own Coin-Operated Laundry by Mandy Erickson
- How to Start and Manage a Coin-Operated Laundries Business: A Practical Way to Start Your Own Business by Jerre G. Lewis