Make 2022 the Year You Become a Laundromat Operator
“All that we need to make us really happy is something to be enthusiastic about.” – Charles Kingsley, British historian, novelist and poet
Over the years, I’ve noticed a recurring theme – it’s that the desire to start one’s own business at the beginning of each new year never seems to wane.
More than any other time, the New Year seems to bring out those who all share the same dream of becoming an independent business owner. Individuals from all walks of life and socioeconomic stripes – from corporate executives who have grown tired of the daily grind to blue collar retirees who are not quite ready to hang up their tool belts… and everyone else in between.
I’m quite certain my personal story runs parallel to many of today’s laundromat owners in that I left a solid corporate position after opening my first store. And, after three years, I had built and opened three new, fully attended operations that provided both self-service and drop-off laundry offerings.
For me, the relative security of corporate life was over. I had become a full-time, multi-store laundromat operator. I can’t tell you how many road blocks and land mines I would inevitably encounter along the way, but I had a dream, so I simply put my head down and ran toward daylight.
During a moment of doubt and fear – when I was wearing those same shoes you’re wearing right now – I remember an old friend and business mentor telling me, “Now is your time. Your parachute will never open if you don’t jump!”
Why would I choose to invest in a laundromat, as opposed to some other retail-type of small business? After all, the only thing I knew about dirty clothes was how to create them – not clean them.
Perhaps like other store owners at the time, I didn’t open my laundromat with thoughts of getting rich. I simply wanted to forge my own path, run my own shop, and wake up every morning with some place to go and something to be excited about.
Over the years, I’ve known many people whose life plans were to open more than one laundromat, make enough money to allow them to eventually leave their current jobs and finally become independent business owners.
If you’re considering investing in a vended laundry business, fast-forward your questions and concerns to the present day. The basics are still very much the same as they were more than 37 years ago when I opened my very first laundromat.
Topping the list is the bedrock fact that clean laundry has always been (and always will be) a necessity in life. During good times and bad, everyone requires clean clothing and linens. Clearly, this is not some sexy, trendy, flash-in-the-pan industry or business.
Of course, recent events bear out the staying power of the laundromat business. During the COVID-19 outbreak, federal and local governments deemed laundromats to be “essential” businesses, thus enabling stores to remain open for business throughout the pandemic – a luxury not enjoyed by many industries.
When considering investing in a laundry business, two key advantages are that you don’t necessarily need a formal business or professional background to be a successful operator, nor do you have to physically be in your facility all day (thus, allowing you to own more than one location).
If you already have a full-time job and/or other commitments elsewhere, you can operate your laundromat on a semi-absentee basis. Many entrepreneurs take advantage of this flexibility to become multi-store owners.
Going into the Laundromat Business
Today, there are a number of ways to enter the laundry business. Perhaps the most popular method for new entrepreneurs is to buy an established laundromat that is already producing cash flow.
Another option is to buy a “turnkey” store, built by a distributor or some other third party. They do all the work and hand you the key. You just have to pay for it.
A third possibility is to design and build your own brand new, state-of-the-art laundromat in a building you own or a storefront you lease within a shopping center. This way you’d be creating a successful business from scratch.
However, before you put a down payment on a building or commit to a long-term shopping center lease, be sure there are enough people in the neighborhood who will require your services. At this stage, reviewing a comprehensive demographic report of your chosen marketplace is imperative.
Also, be mindful of the fact that it’s crucial to have ample parking availability and easy access to your laundromat for those customers who are carrying heavy bags of laundry.
In addition, try to choose a location with several compatible businesses nearby – such as coffee shops, fast-food restaurants, supermarkets and discount retailers such as Dollar Tree – for your customers to visit while their clothes are washing and drying. For example, a friend of mine opened his laundromat in a shopping center, next to a popular fitness club – and his business was an instant success.
As far as your business model, you can operate your laundromat as unattended, partly attended or fully staffed from open to close.
An attended store will afford you the opportunity to offer additional garment-care services, such as residential wash-dry-fold, drop-off drycleaning, alterations, commercial accounts work, and pickup and delivery throughout the community. Priced and marketed correctly, the revenue generated from these additional services will go a long way toward offsetting attendant wages, supplies and other related overhead.
Obviously, the days and hours of operation for your laundromat can be whatever you wish. Depending on your particular neighborhood, you may choose to stay open 24 hours a day. Also, unlike most other retail businesses, your self-service customers do all the work, and you get paid immediately.
Also, due to today’s equipment technology, various payment options, and sophisticated point of sale and surveillance systems, the laundry franchise and licensed, branded laundry concepts are gaining in popularity in many regions throughout the country. In such cases, you can choose to pay an upfront franchise fee and a monthly percentage of revenue for the security of an already-established business model and ongoing support by management experts.
No matter what type of business model you choose, the resources needed to provide your services to customers will be “shipped” directly to your location every day by your local natural gas, electric and water companies, and payment will not be due for 30 days. In fact, some water bills are paid quarterly.
In any retail business, a healthy cash flow and return on your investment are critical. In the laundromat industry, it’s not unusual for the owner of a well-managed store in a good location to recoup his or her entire capital investment and become “whole” within a relatively short period.
Done correctly, a clean, well-run laundromat can become a key part of the community it serves, which then can afford the owner many opportunities to do good for the customers and area residents – such as becoming a clothing donation depot; offering free gifts and prizes to loyal patrons; or becoming involved with the Coin Laundry Association’s LaundryCares Foundation to host free laundry events or create designated literacy spaces within the store where children can spend quality time reading and learning.
Although you’ll be setting yourself up for initial success and simultaneously planning for the future – which may ultimately include the sale of your business – I recommend your first objective be hitting the “break-even point” and reaching profitability as quickly as possible so that you no longer have to dip into your reserves. Although there are no guarantees in business, some owners I’ve spoken with have accomplished this feat in as little as three or four months after their grand openings.
If you’re like most, you’ll not be putting up all the cash needed for your laundry business and ancillary equipment, so financing likely will be involved. Although there are finance companies that may allow you to make interest-only payments for a while as business ramps up, your focus must be on building your revenue stream to the point where you can comfortably begin making the whole monthly payment. At that point, you will be free to concentrate on growing your new business and moving forward.
Lastly, understand that the renter population – the backbone of the self-service segment of your business – coupled with more people using residential wash-dry-fold and app-based home delivery services than ever before, has dramatically strengthened and shifted the entire landscape of the laundromat industry over the last 30 years. And I see the future of this industry to be brighter than ever before.
With proper planning, support, a lot of determination and a little luck, your dream of finally becoming an independent business owner will come true – and I know you can get there from here!
