Owning a Laundromat: 15 Pros and Cons to Consider
Many entrepreneurs are attracted to the laundromat business, and for good reason. When managed properly, this essential service can provide reliable income. But don’t think owning a laundromat is foolproof or easy—owning any business requires certain skills and sacrifices, and a coin laundry is no different. If you are thinking about getting into the coin laundry business, consider these 15 pros and cons of owning a laundromat before you dive in:
Pros of Owning a Laundromat
1. Simple Business Model.
A standard laundromat only requires washers, dryers, and the appropriate utility hookups to operate. While you might choose to offer additional products or services, such as wash/fold service or vending machines, these are not always necessary. As long as you maintain your washers and dryers, your business can continue to serve customers and generate revenue.
2. High Success Rate.
Laundromats have a higher-than-average success rate—in fact, about 95% of all new laundromats succeed, and the average business ROI is 20–35% (source).
3. Consistent Revenue Stream.
Laundry is an essential service, so you can count on your loyal customers to return regularly, regardless of the season or economic climate.
4. Flexible Management Schedule.
As a small business owner, you can set your own schedule. This allows you the time to balance your work-home-life, focus on a hobby, or even work another full-time job.
5. Minimal Customer Interactions.
Unlike other service businesses, as long as the equipment is in good working condition, self-service laundromat customers rarely have any reason to interact with the facility owner or staff.
6. Facilitates Additional Revenue Streams.
Depending on your market, you can generate additional revenue streams from your laundromat business by offering add-ons, such as wash/fold service, snack machines, soap supplies, video games, and more. Some laundromats even go so far as to include a coffee shop, bar, or pizzeria on site.
7. Growth Potential.
Once you have a successful coin laundry business, it is relatively easy to open additional locations that will further increase your revenue.
8. Extensive Industry Support.
Laundromat owners have access to a wide network of business support from industry experts. Some commercial laundry equipment providers, like Worldwide Laundry, offer business guidance, such as laundromat site selection, design, planning, optimization, and more. Owners can also join professional organizations, such as the Coin Laundry Association, where they can network with their more experienced peers.
Cons of Owning a Laundromat
1. High Startup Costs.
Don’t mistake “simple” for “cheap''. While a laundromat may only require a handful of items to get started, buying dozens of commercial washers and dryers can require a significant capital expenditure. Fortunately, leading laundromat equipment providers, such as Worldwide Laundry, offer lease programs or financing plans that can help make the initial expense more manageable.
2. Potential for Failure.
Even though the laundromat industry has a high success rate, there is still potential for any business to fail. Laundromat owners must do their research in selecting a location, designing the layout, outfitting it with the appropriate equipment, providing requisite value-added services, and managing and promoting the business in order to achieve success.
3. Competitive Industry.
Some areas are rife with laundromats, making for a fierce competitive landscape. Laundromats must also compete with in-home laundry machines and apartment complex laundry rooms, so business owners must be diligent to maintain an edge that will attract loyal customers.
4. Unforseeable Demands.
While you don’t have to be present at your laundromat business 24/7, you may get urgent requests at all hours of the day and night. Any time a machine breaks down, you can expect a phone call. Fortunately, some coin laundry equipment manufacturers, like Dexter Laundry, offer remote management software that makes it easy to refund customers and take machines offline using your cell phone or computer—no middle of the night trip to the laundromat needed.
5. Disorderly Customers.
Because customers can typically serve themselves, you’ll usually only hear from them when they’re unhappy—even if the issue is a result of equipment misuse. Likewise, you may have to deal with customers who disrespect your facility, mistreat the equipment, or even attempt to steal money from the machines. Some laundromat owners choose to employ on-site staff, video surveillance cameras, and/or security guards to help manage customers.
6. Significant Capital Expenses.
Laundromats must stay up-to-date in order to maintain customer loyalty. This means keeping the facility clean with modern decor, properly caring for all equipment, promptly performing repairs, and replacing machines with newer models every 10–15 years—even if the old models still work well.
7. Volatile Customer Demand.
In such a competitive landscape, it can be difficult to maintain customer loyalty. If your washers or dryers break down, your wait times become too long, your equipment becomes old, or a newer, nicer laundromat opens down the street, your customers may be gone in an instant. Laundromat owners must always be on their toes to stay ahead of the competition in order to keep their customers coming back.
Weighing the Pros and Cons
As the saying goes, “You’ve got to take the bitter with the sweet.” If you can handle the cons of owning a laundromat, you may be rewarded with the ample pros outlined above.
Fortunately, laundromat owners don’t have to go it alone. When you partner with a leading commercial laundry provider like Worldwide Laundry, you’ll have access to state-of-the-art laundry equipment as well as years of laundromat operational expertise. Contact us to speak with an expert today and learn how we can help you set your laundromat business up for success.
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