Is a Laundromat Business right for you?

It is mandatory that you do your research first.  Getting into any small business is always a risk.  Before you do decide on your course of action, you need all the information you can get.  This is what you need to know before you buy into an existing laundromat business, or build your own business or franchise.

The recession and economical crisis is over, but not out of the woods yet.  Many people are still unsure about the future of our economy.  Unless you have been under a rock for the last couple years then you should know that employment rate is dropping, spending is turning around and our economy is going again in the right direction.  This is a great thing, because this is not only a good time, it is one of the best times to start into your own business.

Starting a Laundromat business is a fantastic way to become your own boss and business owner.  Many years ago I made the choice to be my own boss through buying a franchise laundromat service.  I spent a lot of time researching and looking at other options and for me at the time this was the best choice for me.  I was a little unsure about myself at the beginning, but I was given all the tools and training I needed to succeed.

What I did learn was that there was not a lot of public information about how to run and manage a seemingly simple business as a laundromat.  If you are like me, you are probably wondering the same thing and you might be thinking that it is fairly simple.  This can be true to some point, depending on your point of view.

There are a few misconceptions about laundromats that I do hear from customers and other people who do not know the business.

Operation of a Laundromat is cheap

Starting and Operating a laundromat are two different costs and people often confuse them.  When I am talking about operation of a laundromat, I am talking about the day to day costs.  Like any other business, you need to figure out your cash flow, expenses, salaries, etc.  Then from there you can determine your net profit.  Operating costs are like any other small business and include advertising, insurance, equipment leasing, equipment maintenance, Utilities, Rent or building lease, Supplies, Taxes, Wages and other expenses you may think of.  This is definitely not a cheap business to operate, but it is a very stable and profitable one.

A Laundromat is a hands-off business

This is probably one of the biggest misconceptions out there about laundromats and ownership.  What most consumers don't realize is that the owner of the local laundromat business is the one behind the counter and doing the work.  Operating a laundromat is definitely a hands-on business in my experience.   Don't expect to get into this type of small business and sit around all day and watch the customers and money roll in.  This is a full time commitment and you need to be clear on that.

This is a business for a dedicated, hard working person.  If this is not you, then don't bother, go get a 9-5 job.

If you are still eager to know more about laundry service businesses, then there are other things you need to think about before making your decision.

I have mentioned this before: Location.  Location of your business is the key to success.  I can't stress this enough and you must put a lot of time into finding the right location for your service.  That goes for both buying an existing business for sale, or building your own service from the ground up.  Almost any small business, especially customer dependent businesses such as laundromat services, will either sink or soar by its location alone.  Picking the right demographic and location is critical in laundromats because of the traditional users of the service.  I have seen the most success in low income areas.  This is not a bad thing. 

You should be looking for locations with existing client base in high tower apartments, college dorms or high concentrations of condominiums.  The best locations are actually within close proximity to dorms.  This is because most dorms don't have adequate laundry services and having a convenient, close location to them is ideal.  Your business must be visible too, end-cap locations may cost more in rent, but will bring in 50% more clients compared to a lower rent, inner location of a strip mall.  This is true for almost all businesses.

Your Competition

The competition to your business within the "ideal location" is also vital to research.  Scope it all out, even visit each location and get a feel for the service, fees and clientele.  If you can, even talking to the customers as well and note how busy the places are and at what time of the day.  When it is busy, actually bring a load of laundry to do and talk to the other customers.  I have done this before... as you are sitting around, say this " It sure is busy today, is it always like this? "  You usually get someone commenting about it.  Follow up the conversation and get an idea of how the like the service or if there are other options around.

You will need to combine both location and customer base into usable information.  You can do this yourself or hire out a market research analyst to do the work for you.  Then again, I find a little foot work of your own gives you a far better idea in specific areas.

Asking questions

It is important that you ask the questions too.  If you never ask, you will never find out.  Even asking other business owners how their business is doing might give you insight into the area as well.  Most business owners I know love to talk about themselves. Take advantage of this and determine the feasibility of operating your own business in that market.

Laundromat businesses are well established and long term businesses.  You can be very successful in this industry if you do you homework first before you jump in.

Finding a Laundromat for Sale

The Coin Operated Laundry Business

A laundromat is like any other small business, it has a location, staff, expenses, employees, etc. What makes them a good business to get into is that they have been around for a fairly long time, 50 to 60 years or more in some areas. Coin Operated Laundry services have always been good businesses to get into back then and even today.

Everyone, including yourself, have dirty clothes... that's millions and millions of potential customers. Your not going to get them all, but you will get some of them. The base operating of a laundromat is self service for the customer, so they are actually doing the work, you are simply supplying a location and equipment. You may already decided this and are looking for ways to find that business, either locally or in another area.

Finding a laundromat for sale

To find a commercial business, you'll need to be looking in the right place. Browsing your local newspapers will usually not provide much, you might get lucky and actually find a great local laundromat to buy, but the odds are low. What you will need to do is find a commercial Realtor or commercial business listing. Some that you can look at online include www.business.com and/or www.loopnet.com . Both have great listings on available businesses for sale.

Buying a Laundromat

As I have said before, there is a lot that you need to consider when buying a laundromat. Everything from the location, equipment, laundry supplies, commercial laundry machine servicing, the building itself, leasing options, legal issues, customer demographics, earning potential and especially the reasons as to why an existing laundromat is for sale in the first place.

If you are looking at buying an existing coin operated laundromat business, you need to know why it is for sale. If the current owner is retiring, illness, or something that would prevent them from continuing in the business, then it would be a good location to consider. However, if you cannot determine the exact reason, then it is likely that the owner is not earning enough, or is loosing money. This could be because of the location, equipment failures, pour service or something that is keeping the potential customers away.

Not only should you look at existing laundromats for sale, but you should look at some that are not for sale. See if you can get in touch with other owners, preferably on the other side of town. If you related to another business owner and you show that you don't have any competition with them, they will be more likely to help you out. Most small business owners that thrive are proud of their achievement and I have found that they often like to talk about it. Be straight with them, tell them you want to get into the business and that you are curious as to why they have done so well. Complements do work wonders, even if the place is a dive.