Have you been thinking about starting a business lately but struggling to find the right one?
You want something profitable and sustainable.
Plus, you want to provide customers with a valuable and convenient service they’ll happily pay for without going anywhere else.
This can make you wonder: What is this magical business venture?
Apparently, it’s the laundry business!
Laundry is one of those life elements that constantly need to be done.
No matter where or who you are, there’s always laundry to wash and dry!
This makes the laundry business one of the most attractive investments in today’s volatile market.
In today’s guide, we’ll tell you how to start a laundry business, how much money you can make, and what to keep in mind to be successful.
- How Profitable Is Owning a Laundry Business?
- What You’ll Need to Start a Laundry Business and the Associated Costs
- Why You Should Consider Starting a Laundry Business as a Side Hustle
- How to Start a Laundry Business in 5 Simple Steps
- Things to Consider When Building a Laundry Business
- Inspiration: Laundry Business Ideas
- Frequently Asked Questions
- Similar Businesses to Consider
- Wrapping up
How Profitable Is Owning a Laundry Business?
The short answer to this question is that owning a laundry business is definitely profitable.
The longer answer, however, is that it depends on various factors.
For starters, the laundry business hasn’t grown exponentially in the last few years—quite the opposite, actually.
According to IBIS World, the laundry industry has declined by an average of 1.4% per year since 2018.
It stopped declining recently, but its current growth rate isn’t that high, with an estimated 0.1% growth in 2023.
There’s a big chance that this is due to the industry’s fierce competition and the rise of new technologies.
At the moment, there are hundreds, if not thousands, of online and retail laundry services that already dominate the market.
Plus, there are constant updates in home utilities that make life easier for consumers and take away from the laundry business.
As a result, the average laundromat owner only takes about 40% of his gross sales. This means if he gets around 100,000$ annually, his salary will only come to $40,000.
What You’ll Need to Start a Laundry Business and the Associated Costs
Starting your laundry business requires so much more than you can imagine.
It’s not just about the machines and detergent; it’s about the entire infrastructure and how much it’ll cost you to build it from scratch.
To help you out, here’s an outline of what you’ll need:
1. Space and Location
Your laundromat’s location is crucial to its success.
You’ll need to pick an urban spot to benefit from the small apartment buildings or restaurants that need your service.
Sadly, prices vary when renting a store in the middle of a metropolitan area, so keep $5,000 to $10,000 on you.
Being a business owner, no matter the industry, comes with a lot of paperwork to sign and fill out.
Whether it’s the lease, business license, or insurance, you’ll need around $5,000 or more to cover everything.
The necessary machines to operate a successful laundromat are, sadly, rather costly.
A commercial dryer can cost anywhere from $750—$4,000, while a good washing machine ranges from $1,000 to $3,000.
Depending on your space, you can break the $50,000 limit.
4. Furniture and Supplies
Besides the equipment, a laundromat needs certain fixtures like chairs, tables, and small carts.
Their prices could vary from one supplier to the other, but you’ll need no less than $10,000 for the decoration.
Also, you’ll need to remember the cleaners and detergents you’ll use, which adds another $10,000.
Do I Need a License or Certificates to Start a Laundry Business?
To open a successful laundromat, you’ll need several licenses and certificates, such as the following:
- Business Permit
- Fire Inspection Certificate
- Employer Identification Number
- Waste Management Certificate (in some states)
- Building and Construction permits (if you plan on renovating)
- Different permits for electric, plumping, and mechanical work
Why You Should Consider Starting a Laundry Business as a Side Hustle
Starting your laundry business can help you grow even if you don’t dedicate your entire schedule to it.
That’s because the benefits can be worthwhile both financially and personally.
1. Extra Income
Owning a laundromat can help you thrive financially in numerous ways. The revenue you get can help you save for retirement, expand the company itself, or even venture into other paths.
2. Potential for Passive Income
As soon as you establish your laundromat as a success, you’ll find yourself dealing with recurring customers from the surrounding area.
This can help you generate passive income by starting subscription-based services with minimal effort.
Having a laundry business as a side hustle allows you to remove yourself from the pressures of a 9–5 job.
You can plan your schedule however you like, enabling you to spend more time with friends and family.
4. High Demand
Washing clothes, linen, and all types of fabric is a necessary household chore that we all deal with.
This means that if you start your business now or years later, there will always be a demand for your service.
How to Start a Laundry Business in 5 Simple Steps
Knowing what to consider before starting a laundry business and why it’s beneficial doesn’t mean you’re ready to dive in.
In fact, there are several steps you need to take to create one properly.
Here are the main ones:
1. Research the Market and Your Location
Before opening up your laundromat, you need to examine the current state of the laundry industry from different perspectives.
For starters, it’s crucial to determine the competition both in your area and online.
Write down what they serve and what makes them unique to their clientele.
Once you have this data, you need to consider the target market in your area.
Is it a residential area with families and kids?
Or is it full of restaurants and fast-food chains that might require help with their linen?
Answering these questions will help you decide what sort of machines you’ll need and proceed with the next step.
Plus, it’ll keep you knowledgeable about what the market requires.
2. Decide What Type of Services You’ll Offer
Knowing who you’ll serve and what you want to do can help you determine what type of laundromat you’ll have.
Here are the main types of services:
- Self-service: This is one of the most common types. The customers come in and use the washers and dryers as they please and pay for the cycles.
- Drop-off service: Here, the clients drop off their laundry and come pick it up once it’s done. The staff deals with all the cleaning required.
- Full-service: This one is similar to the drop-off service, except that your laundromat offers extra services, like pressing, dry cleaning, and more. It’s a more luxurious experience.
- Dry cleaning: This cleaning service is dedicated to delicate or expensive items. Compared to the previous service, this one is more lucrative as the cost of dry cleaning is higher.
3. Create a Business Plan
After pinpointing your target audience and competition, it’s time to draw up all of this in a business plan.
Start with a small summary that outlines the consumers, provided service, competition, and all the permits you’ll need.
Then, move on to your marketing strategy.
This is one of the most critical parts, as it’ll help you establish yourself in the community and attract clients.
First, figure out how you want to present yourself, then decide how you want to spread the word.
Whether it’s social media campaigns or outdoor advertisements, make sure you build a connection with your potential customers.
Lastly, organize the management structure within the business.
This is where you need to figure out how many members you’ll need and how much control and responsibility each person will hold.
4. Determine Your Unique Selling Proposition
Your USP is what sets you apart from other laundromats around.
It’s not just about the extra service or the great prices; it’s about the amenities you can offer the customers.
For instance, you can add a place where the customer can get a cup of coffee or a quick snack while they’re dropping off or picking up their laundry.
Also, something like free Wi-Fi or free chagrin stations in a comfortable lounge can be a huge draw for customers.
5. Plan the Finances
The last and most important step in opening up your laundry business is handling the finances.
Once you figure out your audience and the services you’ll provide, you’ll find yourself with a clear outline of what you need.
You’ll be able to calculate how much money you need, how much you can spend, and what your prices will be like.
This allows you to determine whether you need some kind of funding, like a business loan, or if you can open it using your money.
Things to Consider When Building a Laundry Business
Before diving in into the laundry business, there are many elements you need to consider.
For example, take a look at the following:
Can You Run a Laundry Business Yourself?
Yes, it’s possible to run a laundry business by yourself, but the size and complexity of it can make it a bit hard.
This means you must have the right leadership and management skills to run the business smoothly.
To achieve this, take some time to read about running a business and how to manage people.
Do You Want to Grow Into a Larger Business or Stay Small?
Determining the future of your business and its goal can help you make better decisions—especially regarding finances.
For example, you can focus on the local customers or branch out to a larger market.
There’s no right or wrong choice here, by the way.
The only wrong decision would be not to have a goal in mind.
Do You Have the Time to Commit?
Even though being a laundromat owner comes with the privilege of flexibility, it can require a lot of effort.
This is mainly in the beginning, though, as you still need to establish yourself in the market and build a client base.
Inspiration: Laundry Business Ideas
If you need a few ideas to help you get started, here are a few out-of-the-box ones:
- Laundry Service for College Students: If there’s one group of people that always needs help with laundry, it’s college kids. You’ll always have a steady stream of customers next to a college dormitory.
- Mending and Alteration With Cleaning: As you’ll already have the clothes or fabric in your establishment, you can also offer to mend them! This can be a win-win situation because the customers will turn to you for reliable repairs and cleaning.
- Eco-Friendly Laundry Service: The future is now looking greener than ever. Moving your company towards an eco-friendly approach can help it stand out from the crowd and attract many customers.
Frequently Asked Questions
What Are 3 Types of Laundry Businesses?
There are various types of laundromat services out there, but the three most popular types are:
- Self-serve laundromats: Customers deal with coin-operated laundry machines and help themselves.
- Drop-off laundromats: Clients come in, drop off their laundry, and come pick it up when it’s done.
- Full-service laundromats: These offer the same service and drop-offs with the addition of extra services like pressing and dry cleaning.
What are the Threats in Laundry Businesses?
The laundry business suffers from three main problems:
- Equipment breaking: As an establishment that mainly relies on machines for work, losing them can be very detrimental.
- Strong competition: Almost around every corner, there’s a laundry business that’s looking to take your customers, making it harder for you to succeed.
- Expensive bills: Because all of the machines are running on electricity and water, it’s easy to rack up a huge bill.
Similar Businesses to Consider
If, after reading all of this, you don’t feel like opening a laundry business is the right thing, then don’t worry.
There are many different ventures that you could look into, such as the following:
- How to Start a Cleaning Business: Instead of focusing on just laundry, how about you try a cleaning business? This could be an excellent option for you, especially if you enjoy cleaning and being your boss.
- How to Start a Car Wash Business: If you’re looking for a job opportunity that’s both unique and fun, starting a car wash might just be it!
- How to Start a Laundromat Business : Starting a laundromat business is similar to a laundry one as both revolve around laundry. Yet, this guide can help you compare the two and determine which is best for you.
What did you think of our how to start a laundry business guide?
Hopefully, you liked it!
To summarize, opening a laundry business in today’s market can be hard because of the intense competition.
However, if you plan your business well and put in the effort, you can gain a lot of profit!
All it takes is the right location, a proper business plan, and a great marketing strategy, and you’re ready to roll! Of course, don’t forget to choose the right equipment and supplies, which will help your business be more efficient.
In the end, we wish you luck in your business venture.
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