The laundromat business is a unique type of business as it does not require inventories or receivables. It is a self-service business with little need for attendants. If you are thinking of starting a laundromat business, here are important factors to consider to succeed in this business:
1. Location = Location is key to the success of a laundry mat business. Location is all about proximity to the target demographic market and placement in an area that is convenient, with lots of parking, and affordable rent (you don’t want to price yourself out of the market because your lease is too high). Most users of Laundromats will not drive 10 miles to go wash their clothes. The ideal location is typically in a nice small shopping center of a poor to lower-middle class neighborhood. Choose one with nearby apartment complexes.
2. Presence of Target Market. You want to be very near, if not really close, to your target market — poor to lower-middle class who are more likely to not have washers/driers installed in their homes.
Do a research of the area, including median incomes, facilities/utilities offered by apartment complexes in the area, and whether the population is growing or shrinking. Check also the upward mobility of the area – e.g. a low-income area being rehabilitated may turn into a high-end area full of upscale condominiums and townhouses in the next 5 years, which will not need a Laundromat and thus spell the end for your business.
It may be helpful to talk to your target market and ask them about their usage and preferences for laundry mat services.
- How often do they have to wash load-wise per visit?
- What do they look for in such a service?
- How often do they use a laundry mat?
- Are they satisfied with their current laundry mats, and why?
3. Presence of Competitors. If possible, try to find a place where yours is the sole laundromat in this neighborhood and surrounded by residences, that there is no potential for a competitor.
4. Setting Your Laundromat Ahead of Competitors. It is important to set your Laundromat apart from other competitors in the neighborhood. One way is to offer wider variety of services and focusing on convenience. Those services include folding and potentially pick-up/delivery service, as well as online reservation and membership for pick-up and delivery.
5. Environment: Your Laundromat should be squeaky clean and orderly, with space for customers to help manage their loads. It is important to provide an environment conducive to giving clean, friendly, and professional service.
6. Reputation: A reputation resulting from friendly, professional service, clean environment and reliable machines will encourage customers to return. The best method of advertising a Laundromat business is through word-of-mouth, with neighbors telling other neighbors of their favorite laundry places. You may want to boost your word of mouth strength with an incentive program for referrals. Those customers who refer someone else to the store will be rewarded with two free washes, and the referee will receive an introductory gift of a free wash.
In a previous post I did – “Starting a Coin Laundry or Laundromat Business” — I have included some geat resources for starting a Laundromat business. Also check out The Laundry Capitalist blog which is about starting and owning a laundry mat business.
Recommended Books on Starting a Laundromat Business:
- How To Find, Evaluate, and Buy a Laundromat
- Secrets of Buying and Owning Laundromats
- Investor’s Guide To Coin Laundries (Volume 1)