How To Start A Laundromat Business – The reasons why opening a laundromat is such a dependent investment are simple: 1. people need clean clothes, and 2. not everyone has washer and dryer units in their home.
You may be eager to open your doors as soon as possible, but taking the time to plan and set up your business through the proper channels can help ensure a successful start.
Do you want to buy an existing laundromat or start a laundromat?
If you buy an existing laundromat, does it need new commercial laundry equipment or is there extensive equipment maintenance needed on the current equipment? Startup costs and maintenance costs could lead to some large business expenses that you need to account for in your laundromat business plan.
If you are building a new laundromat, account for all the expenses that go into starting a new business. New laundry equipment will be a large expense that can put a dent in your business bank account right off the bat but using business credit can make it an affordable investment also.
How To Start A Laundromat Business:
1. Decide what kind of laundry business you want to start:
The most common laundry services include:
Coin laundry: As described in the scenario above, this is a public service designed for anyone needing self-service laundry.
Private laundry within multi-tenant buildings: The laundry room nested inside apartment buildings that don’t have in-unit laundry available.
Commercial laundry: Specifically for uniforms, restaurant and hotel linens, and other industrial laundry needs.
Wash and fold service: The luxury standard of laundry services. While coin laundry is a DIY service, wash and fold takes the burden off the customer and puts the laundry pros in charge of cleaning. Of course, you can charge more for a service like this.
Pickup and Delivery: A full-service experience. Pickup and delivery is the step up from wash and fold, which allows you to pick up their laundry for them, wash it, and deliver it back to their doorstep. It allows you to tack on extra charges and doesn’t force the customer to lift a finger.
2. Create a laundromat business plan:
Sole proprietorship: This means that the business is owned and run by one person with no legal distinction between the owner and the business.
General partnership: A general partnership is the simplest variety of partnerships and is created automatically when two or more persons engage in a business enterprise for profit. No state filing is required.
Limited liability company (LLC): This is one of the most popular forms of a business entity for small businesses. An LLC offers limited liability protection (shielding your personal assets by protecting them from debts and liabilities associated with the company) and pass-through taxation.
Corporation: A corporation is a separate legal entity owned by its shareholders, thereby protecting owners from personal liability for corporate debts and obligations.
3. Choose a business name:
Naming your business may not be as simple as it seems. When selecting a name, try to make the name short, easy to remember, descriptive of the business, and capable of drawing attention. Depending on the business form you choose, you may have to register and/or receive approval from the local or state government where your business is formed.
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4. Select a location:
Since laundromats usually attract a certain customer base, renters in lower-income brackets, you can’t just open a laundromat anywhere and expect it to be successful.
Instead, you should open your laundromat in an area with a high concentration of the people in your target market. Generally, this means opening up a shop in a working-class urban neighborhood.
However, there are exceptions: there are wealthy urban neighborhoods where the washer and dryer-equipped apartments are a rare commodity, and laundromats have their place in rural communities, as well.
Do the research and try to find a nice spot for your business in a densely populated area with a high potential for drawing in customers.
5. Calculate your expenses and purchase equipment:
Renting or buying a commercial space – The cost of selecting a spot for your coin laundry business can vary considerably according to local real estate prices and square footage. A laundromat should be at least 2,000 square feet in order to fit all of the equipment and give people space to move around, while many are as large as 4000-5000 square feet.
Washers and dryers – Stocking your business with machines will be costly: top-loading washers run from $400 – $700, while front-loading washers go for five to ten times that amount. Industrial dryers are pricey, too, with an average cost of $5,000 per unit.
Buy as many washers and dryers as you can afford within your budget, at least 8 of each. Don’t forget: investing in nicer models now could save in maintenance and repair costs in the long run.
A coin machine – Customers will need to turn their cash into quarters, so you’ll need at least one. The price of a coin machine ranges from $700-$2000.
Vending machines – Providing vending machines that sell laundry detergent, dryer sheets, fabric softener, and others with snacks and beverages is a great way of opening up another income stream.
Card readers or a card system – It’s a bonus if you can set up your laundry machines to take debit and credit cards.
Carts and tables – For scooting laundry around and providing places to fold clothes.
A set of tools – Your machines will need regular maintenance, so get a nice set of tools to keep on the premises.
6. Get your paperwork in order:
This isn’t the fun part of starting a business, but you’re getting close to opening day!
Trademark your brand name and logo – It is important to protect your brand name and logo to prevent someone from coming along and snatching it up!
Register your business name – Before you are up and running, you need to register your business name with the state. Also, you’ll need to pick a business structure such as a Limited Liability Company (LLC) or corporation.
Apply for an EIN – The Employer Identification Number (EIN) identifies your business for taxes. It’s pretty simple and easy to get and can be done in minutes here.
Obtain permits and licenses – Permits and licenses are a key component of operating any business. They can vary greatly depending on the location. Here’s what you need for a laundry business.
Health permit. This can be obtained from your county’s health department.
Water Pollution Control Permit. Not every state requires this, but some may. View a full list of states that do require this permit, and contact your town to ask if this permit will be necessary for operating a laundromat.
Sales Tax Permit. If you plan to sell additional services or products in your laundromat, you will need a sales tax permit.
State and local laws surrounding permit and license requirements vary, so always be sure to contact your Secretary of State to determine how to get the business licenses and permits you need to operate a laundry business.
Insuring your laundry business – Insurance is often the last thing business owners think about when starting up, but one of the most important! Here are the types of insurance coverage you will need for a laundry business:
7. Market your laundromat business:
No laundromat can thrive without local advertisements and a well-established online presence. Here are the key steps for promoting your coin laundry business:
Create a website. Register a domain name for a company website (You can use domain.com, Bluehost, GoDaddy.com, or Namecheap.com). Hire a web designer to develop the website (or do it yourself). Be sure to include detailed contact information on the site.
Open social media accounts. Register accounts on the popular social media services (Twitter, Facebook, Instagram) and even consider scheduling posts in advance so that you have a steady stream of content for your audience (e.g., scheduling Instagram stories).
Register a Google profile. This will allow you to add pictures of your business, respond to positive customer reviews, and address customer concerns.
Respond to online customer feedback. Register accounts on business review platforms such as Yelp and TripAdvisor. This will allow you to write thank-you notes in response to glowing reviews and address negative reviews.
Take out ads on billboards and in local publications. It still pays to increase visibility by buying ads in local newspapers and on highway billboards.
