14 Jan Starting a Coin Laundry Business
No matter the state of the economy, people will always need clean clothes. As the years have passed, the coin-operated laundry industry has grown into a safe, social and convenient way to get those clean clothes. When you’re starting a coin laundry business, consider the costs, profits and other aspects of the industry to prepare yourself for success. Although starting a business may feel intimidating, researching is pivotal in preparing you to start a laundromat business.
How Much Does It Cost to Start a Coin Laundry?
Depending on the type of coin laundry business you start, it can be quite costly. Once you have a well-thought-out business plan, consider the equipment that needs to be purchased, including:
- Commercial-strength washers and dryers
- Coin machines
- Laundry carts
- Water heater system
- Detergent or a detergent vending machine
- Drain troughs, lint interceptors and lint baskets
- Front desk or counter
- Card machines
- Tools for machine maintenance
On top of equipment costs, you will need to consider other fees necessary to operate like:
- Space: Rental or building space can take a large chunk of your startup budget. Keep in mind that the area needs to be large enough to house your equipment.
- Permits and municipal fees: Visit the city clerk to inquire about what permits are needed to open your coin-operated laundry business. Think about a business license, a health department license or wastewater fees and permits, and other municipal fees.
- Utilities: Your laundry business will have recurring monthly utility expenses for wastewater, rent, electricity and more depending on your location.
- Optional extras: Think about the additions that may separate you from your competitors. For example, will you add an area where people can relax while they wait for their laundry? Maybe you are considering just a TV? What about a cold drink vending machine? These are all optional accessories that can impact the cost of starting up your business.
As you can see, starting up can require a sizable investment. Budgeting between $200,000 to $1,000,000 may be a good guideline to begin with. The exact total will depend on what you want to do with your coin-operated laundry and what other services you want to offer.
How Profitable Is a Laundromat?
A laundromat’s profitability involves numerous factors, like any business. The greatest thing we know about laundromats is that we still need our clothes cleaned no matter what state the economy is in.
According to industry research, laundromats run at an approximately 95% success rate and achieve a return on investment of 20%-35%. Another benefit to keep in mind is that you don’t have to stop at one self-service laundry business. Laundromats are a scalable business, and eventually, you could own a chain or franchise.
Some of the factors to consider when weighing whether your coin-operated laundry business will be successful include the following:
The Type of Laundromat You Choose to Open
The type of laundromat business you open can heavily influence the outcome of your success. Deciding between an off-site, fully self-serviced store or an on-site, fully managed laundromat can be a strong starting point:
- Self-service model: Having a self-service setup can be a hassle-free business option. With this model, your location could heavily influence the longevity and success of your laundromat. The range of your services may also be limited, potentially impeding business growth.
- Fully staffed model: Having a full-service, on-site manager and staff can widen the range of services you offer and bring revenue streams in turn. Your services can be tailored to your customers’ needs and push your laundromat ahead of your competitors.
In addition to the type of laundromat you run, the amount of time, effort and investment you put into your business contributes to the outcome.
Your Initial and Ongoing Investment Into Your Business
Ongoing expenses will factor into your budget throughout your journey as a business owner. Whether you start from scratch and build a laundromat, renovate an old laundromat building or rent completely new space, your business is always going to require upfront and ongoing running costs.
Once you’ve decided the type and location of your business, you need to begin the material setup. Look for high-quality commercial equipment that is high-performance — it will contribute to the turnaround time of your laundry, the satisfaction of your customers, the quality of the service your machines give and more. Deciding to rent or buy your equipment is something you may want to consider when planning your initial investment.
Although these are only two factors that play into how profitable your laundry business can be, understand that hard work, time, effort, investment and business type will be the foundation your business runs off.
Steps to Start a Coin-Operated Laundry
Let’s dive into the nine main steps to starting your coin-operated laundry business:
1. Research Everything
Gaining the knowledge you need to start your business begins with research. Understanding the industry and all the information needed to run a coin-operated laundromat can give you a solid foundation to make crucial business decisions.
Researching different topics like your target market, location, costs, types of equipment needed, laundromat type and more is the beginning phase. Adding market research to your business plan also provides potential investors or lenders a projection of where your business is set to grow.
2. Write a Business Plan
All businesses can benefit from the solid foundation of a great business plan. Think of your business plan as a guide to putting your preparations into action. Your plan will constantly change and evolve as your business changes. Your plan is a contributing factor to success as it allows you to keep track of your goals and progress and overcome obstacles.
Think about your mission statement and what the driving force behind your business will be. Highlight essential aspects like what exactly you will be doing, how you will do it and what you will need to get things done. This can help you communicate your vision and help people understand your business objectives.
If you are looking at funding your business, an investor or bank will require a business plan. Being an entrepreneur has its fair share of risks. Understanding the market your business plan is based on can help you leave less to chance and prepare for risks.
3. Consult With Contractors
After you have a business plan and find a space for your laundromat, you should consult with various contractors to determine if the space needs any renovations before you open. Having contractors inspect elements such as the HVAC system, plumbing, flooring and electrical can ensure your laundromat will be fully prepared for business and gives you time for renovations before opening. Inspecting these aspects of your space ahead of time can save you time and money down the road.
4. Set up Your Legal Entity
You may require professional services to assist you in forming a legal entity to make sure you are legally compliant and competent. Here you will also name your business, making sure it is available and something your customers will understand. Some of the other setup requirements entail:
- Setting up a business bank account
- Securing business Insurance
- Registering for taxes
- Hiring an accountant to set up your business accounting
Setting up a legal entity isn’t as daunting as it seems. With proper guidance, you can be up and running fairly quickly.
5. Obtain Permits and Licenses
There are multiple permits businesses need to operate legally, and they can differ from towns and cities to states. Specifically, there are licenses that laundromat-specific companies need to obtain. Some of which include:
- Sewer connection fees
- Sewer and wastewater fees
- Business licenses
- Fire department permit
- Construction permit, if you are renovating or building
Apply for these relevant permits and licenses as early on in your business planning as possible, just in case there are delays in the approval process.
6. Obtain Insurance Coverage
Obtaining the right insurance coverage can be critical if you run into any issues, damage or accidents. For example, if you are planning to hire full-time staff members, the government requires you to have two compulsory insurance types:
- Unemployment insurance: If at no personal fault, unemployment insurance covers workers after they have lost their job.
- Workers’ compensation: If a worker becomes ill or badly injured while on the job, this insurance coverage covers medical costs and has disability benefits.
Having other insurances like a good liability coverage and commercial property insurance can be invaluable if something out of your control happens.
7. Select a Marketing Strategy
A marketing plan is one of the most essential tools you can use to plan how potential customers will see your business. Ultimately, without customers — you have no business. Remember that setting up your brand to be unique and enticing is the first step to attracting your target market.
Consider how you will approach your customers, what advertising platforms you will use and what your logo, website, shop design, signs, business name and business cards will look like. All these components make up a successful marketing strategy. Outsourcing professionals to assist you with a marketing strategy may give your brand the unique showcase it needs. Marketing and brand management professionals know precisely how to assist you in spreading the word about your business.
8. Employ Staff Members
If you have decided on a fully serviced coin-operated laundry business, you will need to hire staff members to help run your business. These staff members could include laundry service employees who can wash, iron and pack laundry baskets, cleaning staff and maintenance staff for your equipment. Remember that staff member salaries or wages will need to be accounted for in your business plan and ongoing costs.
9. Buy Your Equipment
As a business owner, choosing between renting or buying your own equipment can be a tough decision. If you have purchased an existing laundromat, you may have all the equipment included. The machines may just require a service before they are good to go. But if you are starting from scratch, securing equipment will be a significant expense in opening your business.
For a laundromat to run efficiently, you will need to buy high-quality commercial equipment, which can be costly. Buying equipment is one part of the process, and ensuring you have the necessary service plans or warranties in place is also essential. For example, having commercial laundry solutions in place is a great way to mitigate any future issues.
Choosing Coin Laundry Equipment
Choosing your coin laundry equipment is important, especially if you’re unsure which equipment may be most beneficial. This is why completing thorough research is often necessary in the beginning phases of your coin-operated laundry to ensure your equipment remains a valuable investment for years to come.
Ultimately, you want to provide your customer the quickest service at a low running cost. The right commercial laundry solutions vary based on what your facilities can accommodate. Some aspects to consider include:
- Check out online reviews for businesses and commercial laundry solutions the industry trusts. With a reliable equipment partner, you can have peace of mind you’ll secure trustworthy products and services.
- Do your research on which equipment will be best suited for your business. There is an array of products to choose from, so researching technical language regarding washers and dryers can help you understand what features and specifications you need.
- Check if the company you are buying from offers installation, parts and services. Having a one-stop shop for all your needs can help you get repairs, equipment and parts quickly.
- Choose a provider you can build a long-term relationship with. This offers security and ensures you’ll always have someone to call when you need advice or service.
- Look for trained technicians who know what they are doing. An investment like commercial washers and dryers should be protected with expertise from trained professionals.
- Consider other equipment you may want to purchase, like dry cleaning equipment. Dry cleaning equipment can be expensive to purchase, and sometimes having it outsourced can cut down costs.
- Check time and running costs of the equipment. Sometimes we believe buying cheaper equipment will save the bank now, but we don’t realize that investing in high-quality equipment can save costs later on.
- Consider buying energy-saving and water-efficient machines to reduce your laundromat’s running costs.
Having another service provider you can count on when your machines go down is extremely valuable. Ensuring you have done your homework will help you know how to schedule and stay on top of any preventive maintenance and services down the road. Buying your equipment is an integral investment to your business. Therefore, thinking through each point above is imperative to choosing the right equipment for your laundromat.
Quality Laundry Equipment From H-M Company
There is a lot to consider when you’re starting a coin laundry business. Finding the right equipment is important to make your laundromat a success. While washing machines and dryers are obvious necessary pieces of equipment, remember that drain troughs and lint baskets are crucial as well. H-M Company drain troughs can help reduce and limit plumbing problems and help to create a more pleasant laundromat environment.
Getting in touch with the right professionals who can offer commercial laundry solutions and services makes your journey that much easier. Contact an industry leader, H-M Company, for proven laundry equipment, related accessories and service today!