How To Set Up A Laundromat

Opinions expressed by Entrepreneur contributors are their own.

Editor'south note: This article was originally published on Feb 1, 2008, and has been updated. It was excerpted from our Coin-Operated Laundry beginning-up guide, available from Entrepreneur Bookstore.

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The coin-operated laundry industry has undergone a revolution. No longer dirty, unsafe, boring places that customers must endure on a weekly basis, laundromats are becoming fun and attractive multiservice centers that customers may even savor visiting. "The industry is at present getting a facelift," said Brian Wallace, president and CEO of the Coin Laundry Clan, a national association for cocky-service laundry owners. "There's a trend toward coin laundries being more comfortable for the customer."

Newer laundries have snack bars, a place to leave off and pick upward dry out cleaning and video games. Some of them don't fifty-fifty use coins. Instead, customers use swipe cards that subtract the toll of the wash or dry, much like a telephone card or debit bill of fare. Many laundry owners also employ attendants to keep an eye on the store and assistance customers employ the equipment.

Laundromat Renaissance

The coin-operated laundry industry has changed in response to several trends. The outset is that, for virtually of us, meeting the demands of piece of work and our personal lives leads to a time crunch -- in that location but aren't enough hours in the solar day to accomplish everything we would like to. Laundry owners are capitalizing on this reality by offering their customers time-saving convenience in the form of wash-and-fold (driblet-off service) and dry-cleaning service. Some are even picking up laundry from customers' homes and delivering it back to them clean and folded.

In addition, owners have realized that they can maximize their profits by providing customers with access to multiple services. Since they're paying a set amount of rent on their commercial space, they might too use that space to its fullest potential. Many owners around the country are serving food, renting mailboxes and offering free internet access. Because newer laundries are bigger than in the past -- ofttimes three,000 or 4,000 square feet -- overhead is higher, and owners are looking for ways to cover the cost. These additional services demand petty increase in overhead because the rent is already paid for. Customers do good by being able to employ several services all in one convenient location.

Cindy Patel, possessor of Mountain Wash Laundry in Shelby, North Carolina, at time of interviewing, said that she planned opening a snack bar and a minimart in her laundry. "I accept a big space, half dozen,000 square feet," she said, "and this will help pay for it."

Paul Partyka, who edited American Coin-Op, a mag devoted to self-service laundries, said Patel's approach is the norm. "Trying to generate additional acquirement per square human foot has always been an result," he said. "But information technology's even more so now with tighter competition and utility bills growing. Everybody wants to squeeze as much money as possible out of their space. Looking for an actress service that volition piece of work is e'er on their mind."

Another trend laundry owners accept recognized is that customers prefer to visit laundromats with a more pleasant temper. Many laundry owners are building kids' centers, belongings music concerts, giving away coffee and hiring attendants who are friendly and helpful. "I don't think we'll ever cantankerous that threshold into making laundry fun," Wallace said, "simply we're making it more comfortable."

Tom Leavitt, owner of Darcies Laundry in the Seattle expanse at time of interviewing, opened three new stores, all of them nearly older, smaller laundries, most of which have since closed. Darcies offers customers a better deal: bigger stores with play areas for children and attendants on duty at all times. "Our stores are very user-friendly," Leavitt said. "They're make clean, they have a friendly environment, and they take a lot of machines, and then you tin get in and out of there as fast as possible."

The Good News

As the population of the United States grows, the number of renters -- your principal market -- is likely to grow, as well. Other social phenomena, like the prevalence of 2-income families, advise that convenient services such as wash-and-fold will continue to abound in popularity every bit working parents have less time to nourish to household chores like laundry.

According to a survey from the Coin Laundry Association, more than half of coin laundries offering wash-and-fold. "It's by far the number-one extra service for laundries," said Partyka. "It's doing well." Partyka as well notes that even people with washers and dryers at home are using self-service laundries for the sake of convenience. With the regular capacity machines used in homes, it can accept quite a lot of time to practice load afterwards load -- and that's where laundromats come in. "They just run over to the coin laundry, apply a couple of the large machines and knock it off," he said. In other words, although the bulk of laundromat customers are low- to middle-income renters, some laundries are tapping into college-income markets by offering convenience: launder-and-fold service and large machines.

In improver, role wearing apparel codes are growing increasingly less formal. And as more people wearable casual wearable (which doesn't crave dry cleaning) to work and go out the nicer duds for special occasions, yous may observe that consumers will be making more trips to the laundromat.

The Bad News

While the trends we've mentioned are favorable for entrepreneurs entering the laundry business, they don't suggest that business concern is booming. The manufacture is what experts describe every bit a "mature market place." Save for areas that are seeing loftier population growth, pretty much every neighborhood that needs a laundry has 1 -- or 2 or three -- that are competing vigorously. In some areas of the state, there are too many laundromats already.

Even so, there is room for new laundry owners. Many go into the business concern by purchasing an existing laundry and renovating it. Some also find that they tin can build a new laundry in an area with competing laundries and thrive past offering a bigger store, more services and better customer relations. Another style to go into the business is to locate your shop where there is the best potential need for a new laundry: in an area that's experiencing population growth.

As y'all consider getting into the laundry business, keep the words "mature market" in mind. Don't buy a shop just because it's for sale or build a store merely because y'all have a great thought for a new gimmick. You'll need to be very conscientious to make certain there's enough of a customer base to make your concern thrive. You may be able to describe a little actress business concern from people who like using your store better considering of its cleanliness or from people who utilize your wash-and-fold service, but the core of your concern will be people who just want to become their laundry done speedily and conveniently. If there are already enough laundromats in the neighborhood to serve their needs, they're not as likely to patronize your store.

Finally, you also need to consider that getting into the laundry business requires a large initial investment. The boilerplate-size laundromat could toll y'all in the neighborhood of $200,000 to $500,000 -- whether you choose to purchase an existing laundry or build one in a retail space.

The Laundromat Life

If you lot're planning on operating merely one or two stores, you'll be in practiced company. Three-quarters of laundry owners own but 1 store, and very few take more than two. While there are no national laundry chains, a few local chains are starting to abound in various parts of the country. These chains are nonetheless quite localized, though, and just a few consist of more than a few dozen.

For a trivial more than half of laundry owners, operating the shop(s) is their full-time chore. Others have the moonlighting approach-they manage other businesses or work a day job. Merely more than laundry owners are starting to own larger stores and more than than one store. These people are able to survive on the income larger stores or multiple stores generate.

The corporeality of coin you lot can make from a laundry varies tremendously. According to the Money Laundry Association's Brian Wallace, the annual gross income from one store can range from $30,000 to $ane million. The expenses incurred while running a shop range betwixt 65 and 115 percent of the gross income. That means that for a store grossing $30,000 per year, at best it nets $10,500 and at worst it loses $4,500. For a store grossing $1 1000000 per year, the profit could be as loftier as $350,000, or there could exist a loss of upwards to $150,000, depending on expenses.

Wallace says these turn a profit margins have less to practice with the size of the store than with its owner. An owner who runs his or her store well-who keeps information technology clean, repairs its equipment quickly, uses energy-efficient systems and offers good customer service-volition run into profit margins of about 35 percent.

The steady income that a laundry generates is a plus for many people. If yous're looking for a business that will keep the greenbacks flowing no matter what the rest of the economic system is doing, you've found it in laundries. Make clean clothes are a necessity, non a luxury, so people are going to use laundromats no matter how the stock market is performing. The business organisation is also adequately steady calendar month in, month out. And then unless you describe on vacationers' dollars in a place with seasonal tourism, y'all'll observe that you can count on a adequately steady income throughout the year.

No Experience Necessary

None of the entrepreneurs interviewed for the Coin-Operated Laundry start-up guide had experience in the laundry business when they offset started out. One had a resume that included milking cows, another was a contractor, nonetheless another ran a rental equipment business. Most simply decided that starting a laundry was a skilful business opportunity. However, they all recommend that new entrepreneurs inquiry the business organisation by talking to laundry owners, joining associations and reading the trade literature.

Tom Leavitt put some fourth dimension into planning the three laundries he opened in Seattle. "We traveled around the country, looked at a lot of other operations, and designed our prototype," he says. "We took care to figure out what would work the best." He and his partner also attended a Coin Laundry Clan convention in Chicago and took a tour of laundries in the area.

Collette Clarkson knew nothing about the business earlier she started a laundromat in Evans, Colorado, with Kim Clarkson, her business partner. Only the two got to work when Collette's uncle, who was building a strip mall, asked if she'd exist interested in operating a laundromat. "We did a lot of research," Collette says. They spoke to a number of laundry owners well-nigh the business organization and read as many issues of trade magazines as they could discover.

While no item experience is necessary, a concern background is always important. In addition, a background in machine repair or a knack for fixing machines helps. Owners who have feel with laundry equipment are able to cutting downwards on the cost of repairs. Just others take establish that they can learn near the machines and brand some repairs themselves, or hire a repairperson and avoid the headache altogether. The self-service laundry business is an open guild. With enough enthusiasm, interest and business organisation-savvy, you tin join the guild and succeed in the manufacture.

The Laundromat Personality

You may call back that the laundry business is well-nigh wearing apparel, but what it'southward actually nearly is people. It's a service business, and like any service business organization, you demand to treat your customers well if you want them to return to your store.

If yous're friendly, your customers will want to use your shop. By taking the time to talk to them, yous will likewise exist able to learn virtually their laundry needs and their preferences for services. Ultimately, this kind of information will aid you improve the quality of your business and then that y'all tin attract even more customers.

Even if you lot determine to hire employees and exit the client relations to them, yous still need good people skills to rent and supervise employees. The more than closely you lot work with them and the improve they know and similar yous, the improve job they'll do.

If yous have an unattended laundry that you visit twice a day to clean and collect quarters, you still need to greet your customers with a smile on your confront and an attitude that's ready to help. So if small talk with strangers leaves yous cold, and you lot can't stand the thought of answering customers' questions (often the same ones over and over), the laundry business may not be the 1 for you.

All the same, if yous think yous'll similar meeting new people, helping them work the machines, and listening to them talk while they wait for the dryers to finish, you'll find this business rewarding. "Interacting with customers-that's the best role," says Collette Clarkson. "I tin't even imagine how many regulars nosotros have who we know by name."

The Daily Routine

So what's information technology actually like to own a laundry business concern? Whether you do all the work yourself or hire an attendant or a janitor, there are tasks you will need to take care of on a daily basis. You volition demand to open up and close your store promptly each twenty-four hour period, clean information technology, collect money, and fill vending and change machines. You will also demand to keep track of which machines are being used and how ofttimes.

Those laundry owners who have employees volition take other duties, likewise. They'll be hiring and supervising those employees and overseeing additional services such as launder-and-fold.

The Hours You lot Shall Keep

Laundries are mostly open betwixt 6 a.m. and 10 p.grand. seven days per week. Considering weekends are ordinarily the busiest days for laundries, you should definitely keep your doors open on Saturdays and Sundays. In some instances, y'all may desire to prefer alternating hours, especially if the market you serve or the location of your shop lends itself to having open doors at other times of the twenty-four hour period.

Brian De Coster, who owns several unattended laundries in and effectually Iowa Urban center, Iowa, keeps his stores open 24 hours per day. Three of his four laundromats are in a college town, and students are notorious for keeping odd hours. "You've got the machines; you've already paid the money for the machines and the rent and everything else," he reasons. Considering his laundry is unattended, he doesn't take to pay employees to stay up all night with his store.

Tim O'Connell, who owns 24 Colonial Laundromat stores in the Syracuse, New York, area, keeps most of his stores open 24 hours likewise. "The biggest trouble we had was turning customers away," he says. "Customers would come in late and employees would want to be leaving, then it was easier just to stay open."

Other laundry owners we interviewed base their hours on surrounding businesses. Dave and Kris Anderson, who own an unattended laundry in New Glarus, Wisconsin, keep their shop open daily from 5:thirty a.m. to ten:xxx p.thousand. They chose those hours because they're the aforementioned hours the nearby gas station is open. "We experience it's working out perfectly," Dave says. "If we had kept it open after, we might take had more vandalism."

Your first duty of the twenty-four hour period is to open your store, and you must be on fourth dimension because your customers may plan their solar day effectually getting their laundry done at a sure time. You can avoid having to be at your shop early in the morn and late at nighttime by installing an automatic lock system on a timer. A typical system like this will cost you between $1,000 and $1,500.

At night, of course, you lot must close downwardly and lock up. If you desire all the customers to exist gone by 10 p.thousand., y'all should consider locking the door at 8:30 p.m., leaving enough time for the last loads of laundry to exist finished. You can either permit customers out yourself or install a lock system that allows them to leave only prevents others from coming inside.

Scrub-a-Dub-Dub

The first order of business concern for you or an employee you hire is to clean your store thoroughly, at to the lowest degree in one case a solar day. This will take about 2 to iii hours. Yous or your employee will demand to do the post-obit:

• Mop the floors
• Wipe downwards the machines
• Make clean the soap dispensers in your front-load washers
• Wash off the folding tables
• Clean the bathroom
• Empty the trash
• Wash the windows
• Clean the vending machines, modify machines and video game screens

The best time to make clean is subsequently customers have gone-that way you or your employees can clean more than efficiently. You'll also avoid the take a chance of customers slipping on wet floors or tripping over cleaning equipment. If y'all have a large or busy store, nevertheless, y'all may find that information technology requires cleaning twice a day. You can wipe downwards the machines and folding tables hands while customers are in the store, but save the floor for after they've left or for a irksome flow of the 24-hour interval.

Collecting Coins

One chore you lot're non likely to delegate to an employee is collecting money from the machines. If you have a card system, your job is much easier. All you'll have to do is empty the card machine of the bills, count them and deposit them in the bank.

But if you have a coin laundry, you'll demand to empty each machine, preferably daily. Y'all'll want to pull (take out the coins) from one type of machine at a time so you lot can determine how often your customers are using each type of car. Put a bag in one of your laundry baskets and scroll information technology from machine to machine, starting with the meridian-loaders. Count these coins and record how much money you lot fabricated on this type of machine, then follow the same procedure with the front-loaders and the dryers.

For recording purposes, you should draw up a chart with 7 rows, 1 for each day of the week, and columns for each blazon and size of equipment: pinnacle-loaders, front-loaders, dryers and vending machines. Then record in your chart how much money you withdraw every day.

Y'all should refill the change car in your shop on a daily footing, besides. When it'due south empty, your customers tin can't do their laundry, and they'll go elsewhere. If information technology'due south empty more than a few times, they may never return. No 1 wants to lug several loads of laundry to a laundromat, only to discover they tin't get alter. De Coster says if his change machine runs out, "that'south like shooting myself in the foot. I check the change car at least one time a day."

Let Us Vend

The final bit of daily business in your store is restocking the vending machines. If you own your ain soda and snack machines, you volition demand to brand sure they're total every day. If y'all contract with a vending company, they'll worry about filling them.

The most important vending car in your store will probable exist the lather vending machine, and since these machines are relatively inexpensive and rarely interruption, y'all should buy your own. Brand certain information technology is properly stocked every day. Many customers will bring their own lather, but those who don't will wait to discover soap available. An empty soap machine is almost every bit bad as an empty change car-it will cause y'all to lose business.

Keeping Rails

When yous're done with the daily in-store duties, you lot'll demand to take care of some additional office work. Many laundry owners do this at domicile, though some may find it easier to work in a rented office or at the laundromat if they have space. Owners with other businesses, such every bit De Coster who has both laundries and an equipment rental business, tin take care of everything in i function.

At your office, you'll need to have intendance of your bookkeeping and track equipment usage by customers in your store. It's of import to tape how oftentimes each type of automobile is used so that you tin determine if you've got the right mix of equipment. For case, if yous find that your front-loaders are getting six turns per twenty-four hour period (the number of times a motorcar is used each twenty-four hour period) and your top-loaders only 2, you may need to add front-loaders and remove some pinnacle-loaders. Your customers are likely waiting for the forepart-loaders and possibly going elsewhere, so y'all could be losing coin.

Startup Costs

You tin can await to run into a number of basic startup costs to go into the laundry business. Depending on whether y'all build a new laundry in a leased space or buy an existing one, your costs may include:

Market enquiry (literature/subscriptions/association fees)

The cost of an existing laundry business

• Structure or remodeling (if you are building a new laundromat)
• Washer hook-up fees (sewer connectedness)
• Licenses/permits
• Equipment

Keep in mind that if yous buy a laundry, you don't pay for licenses or sewer connection fees (unless you lot decide to take boosted washers installed). But y'all will take to pay for renovation and any new equipment you decide to install if yous desire to update the laundry.

In improver to these basic startup costs, you may likewise have a number of ongoing expenses. These include:

• Lease/rental costs
• Utilities (gas, sewer, water and electric)
• Insurance (burn, theft and liability)
• Employee payroll/benefits
• Miscellaneous supplies (cleaning supplies, soap, invoices for wash-and-fold, bathroom supplies, etc.)

Research and Development

Once you've completed your initial inquiry on the laundry business, you will demand to figure out how much it will price to build your shop-to remodel a space and fill up it with laundry equipment-or to buy an existing laundry. Whether yous determine to buy or build, you can look to pay between $200,000 and $500,000 for an average-size laundromat (about ii,000 square feet).

If you're buying an existing laundry, figuring out your major startup costs is simple-just determine the value of the business. If yous plan to renovate the existing shop by painting the interior or putting in new floor, exist certain to add together these costs to your startup expenses.

Figuring out your startup costs involves a little more work if you lot determine to build. Since you'll be leasing a space that was something other than a laundry in a previous life, the cost of the construction is going to depend on how much remodeling you accept to do. If the space you've chosen was formerly a beauty salon, for example, y'all're going to have to add plenty h2o, sewer and gas pipes for the conversion to a laundry. You'll also have to provide enough electric outlets, possibly move a few walls, and completely redecorate before it will await like a laundromat. You should hire a contractor to assistance you do all this remodeling.

In general, you can look to pay about $200,000 for the construction costs to remodel an average-size space (2,000 square feet). This includes the toll of installing your equipment and putting in folding tables and seating. The remainder of your major startup costs will be ownership the equipment itself.

Licenses and Hidden Fees

The licenses and permits you will need depend entirely on your location. Check with your municipality regarding:

• Business license
• Health department license (if yous are serving food)
• Fire department permit
• Air and water pollution control allow
• Sign permit
• Public comeback fees
• Touch on fees

Yous should also exist aware of a few bottom-known fees that volition affect you every bit a laundry possessor. In many areas around the land, municipal h2o districts charge sewer connection fees. These can price you anywhere from $200 to $8,000 per washer. If the fees are $8,000 per washer, the possessor of a laundry with 30 washers must pay $240,000 in hook-up fees-virtually what he'll pay for construction! Brian Wallace of the Coin Laundry Association tells united states of america that loftier hook-up fees are one of the biggest problems facing the coin laundry industry today. "Before you lot get as well far downward the road, make sure y'all sympathize what if any impact fees, tap-on fees, wastewater fees-they call them lots of things-there are," says Wallace. These fees are a major challenge to laundry developers. And in areas where operators are forced to pay these fees, the price of laundromats has also risen dramatically. If the fees are loftier in your chosen area, you lot may need to reconsider your entire plan.

In addition to sewer connection fees, yous may find that yous accept to pay sewer and waste water fees, too-bank check with the local municipality. Don't neglect to check on these charges when you're researching a laundry business. Afterward all, you volition exist using these utilities heavily, so y'all'll want to know if the monthly charges will be manageable from the kickoff.

The Goods

If yous determine to buy a laundry, you will already have a full complement of equipment-unless you want to supervene upon a few of the older machines or add a few more machines to meet customer demand. However, if y'all decide to build a laundry, ownership equipment will eat upwardly virtually all the rest of your startup costs. You can expect to pay betwixt $150,000 and $300,000 to fill an average-size laundromat with washers and dryers.

Tiptop-load washers cost between $500 and $700 each, and front-load washers price between $3,500 and $twenty,000 each, depending on their size. One stacked dryer (which means two dryers arranged 1 on top of the other in a joined cabinet casing) costs betwixt $5,000 and $half-dozen,000.

If you want to add a card arrangement, it will toll you in the neighborhood of $40,000 to $80,000, including readers on the machines, a card dispenser and cards, and the software to compute equipment usage and let you change prices. It's pricey, but take heart: With a card system, you lot don't have to buy a change machine, which runs in the ballpark of $1,000 to $3,000.

A water heating system volition run you between $15,000 and $xl,000, and a soap vending machine will price between $500 and $1,500. Those laundry carts that let customers transport their clothes from washer to dryer cost $fifty to $75 each. Supplies such as soap, cleaning equipment, signs, clocks, and trash cans should run another $750 to $1,000.

Setting Yourself Apart

Consider giving your store a theme or a gimmick. For example, one store in San Francisco plays classic black-and-white movies on their Boob tube, and the walls are covered with photographs of pic stars from the 1920s and 1930s. Another store in Texas displays the owner'south drove of antique laundry equipment. Iowa City, Iowa, laundry owner Brian De Coster chose sense of humor: He plays comedy channels on his TVs and places signs with clever puns, such as "We have a dryer sense of humour" and "We never clothes." (His store is open 24 hours.)

A theme gives your store more personality; customers will recollect information technology, and they'll find your laundry a more interesting place to come to. A clever gimmick may besides get you some complimentary publicity from the local press. If you desire to create a gimmick for your laundromat, remember about who your customers are and what sort of theme they will appreciate. One owner in Southern California, with customers from all over Latin America, hung his laundry with flags from several of his customers' native homelands and started serving traditional Latin American food.

For the Little Kids

Many laundry owners are realizing that they tin increase business past providing a play area for children. Oftentimes, customers need to bring their children to the laundromat, so giving little ones something to practise makes the laundry job much easier on parents. Having an area set aside for children tin also help keep them from running around and possibly getting injure or damaging equipment.

Collette Clarkson and her partner have a play area for children. They have a Idiot box with a VCR, children's videos and toys. "We wind up picking upwards a lot of toys," she says, "but they dearest it."

If you want to put in an surface area specifically for children, check with your insurance agent and your urban center or county officials regarding liability bug. These professionals should exist able to tell you how to pattern the area to maximize rubber and brand sure you won't be responsible in example a child gets injure. In fact, you lot may need to identify signs saying you're not responsible for children'southward safe.

For the Large Kids

Fifty-fifty adults volition get bored at a laundromat. After all, mostly what they are doing is waiting effectually for wearing apparel to wash and dry. Many laundries these days have one or more than TVs mounted to the wall. Some laundries keep the TVs tuned to one aqueduct, some play videos, and others let customers modify the channels themselves.

If your laundry is unattended and yous want to let customers change the channel, mount the TV depression enough on the wall so they tin achieve the channel and volume buttons. Customers are probable to walk off with a remote command, fifty-fifty if it's tacked to a table.

Many laundry owners also take pinball and video games for their customers. Clarkson says a video game vendor approached her about having a videogame panel in her store. He put a machine in at no cost to her, and they divide the profits fifty-fifty. "We've seen as much as $300 a calendar month off the video game," Clarkson says. They change the game every so oft to go on customers from getting bored.

Snack Time

It's likely that your customers will become hungry and thirsty while they're waiting for their laundry to finish. Even if your store is near a shopping expanse, many customers wisely don't want to leave their apparel. So vending machines with sodas, chips and candy fit the bill. You tin can buy a vending motorcar, make full it yourself and take all the profits. Or you can contract with a vendor who volition provide the automobile and snacks and split the profits with you lot. Enquire your benefactor nearly vending companies in your expanse.

Clarkson and her partner decided to put in a snack counter rather than vending machines. They offer their customers-and anyone else who comes in-a soda in a glass with water ice, forth with processed bars and chips. The partners chose to go that route after talking with other laundry owners. "In interviewing other people, we plant that [they] didn't like cans, they liked a fountain drink," Clarkson says.

They sell the snacks at a low toll because their shop is side by side to a mini-mart. "If nosotros had the same prices or higher, everyone would only go adjacent door," Clarkson says. Still, their snack business organisation is brisk enough that it brings in $30 to $60 a day. "Our Pepsi benefactor says we do more than [business] than some of his restaurants." Having the snack counter too improves customer relations, she says. "Our customers actually appreciate the cheap prices."

Coin-Operated Laundry Resources

Associations

Money Laundry Association

International Fabricare Institute

Magazines and Newsletters

• American Money-Op
• The Journal
• Coin Laundry News

Manuals

• California Coin Laundry Association Possessor's Transmission
• California Money Laundry Association Reference Manual

Websites

• Money Laundry Clan bulletin board
• Coinwash.com (a bulletin lath for laundry owners and marketplace of laundries for sale)

How To Set Up A Laundromat,

Source: https://www.entrepreneur.com/article/190424

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