Laundromats can be reliable and flexible businesses — but are they profitable? With the right strategies, tools and resources, laundromats can be a sound investment. They can bring in stable income that typically is not as affected by economic fluctuations as other types of businesses. Owning a laundromat also offers other possible financial benefits, including the potential for multiple locations and expansion.
Are Laundromats Wise Investments?
Investing in a laundromat can be a good decision that pays off financially. Several key factors make the average return on investment of a laundromat stand out:
- A steady demand: Clean clothes are a basic necessity. Since not everyone has the facilities and tools for washing and dry cleaning their clothes at home, you can enjoy a consistent customer base. Renters, holiday goers, college students and even commercial businesses can make up a regular flow of clientele.
- Provides excellent ROI: Like many businesses, the initial startup costs for a laundromat are the most significant expense. The benefit of having a laundromat is that once established, it can be an good source of income and provide an excellent ROI. Many laundromats can be partially, if not fully, self-service, which means you often won’t have to be on-site but can still generate a steady income.
- Low labor costs: Labor costs are generally minimal for laundromats since many are self-service and require few employees to assist. Additionally, much of your laundromat can be automated — including payment options. Of course as you add other services such of Wash-Dry-Fold, labor costs will significantly increase.
- Great potential for growth: There is good potential for a laundromat to grow and expand once you have established a solid brand.
- Stable business model: One of the most unique aspects of a laundromat’s business model is its ability to withstand a recession. Laundromats tend to be more stable during economic downturns, as they provide a basic essential need.
- Low-inventory risk: You can run a laundromat without needing significant inventory. Even with excess stock, laundry services and products are nonperishable or have an extremely long shelf-life, which also minimizes inventory and financial losses due to products expiring.
- Good real estate value: Operating a successful laundromat may help increase property value over time, which is another excellent avenue for building wealth if you own the property where you operate.
The other benefits of owning a laundromat include the following:
- Flexible schedules: While laundromats used to be thought of as a great passive investment for the owner because not much of their time was needed at the store, this is no longer a true statement. They do offer the laundromat owner very flexible hours, but they do need to be available for emergencies such as floods, fires or customer complaints.
- No franchise fees: Laundromats are not typically franchised — if you start one, it can be your own business. The eliminates the need to pay franchise fees and lets you enjoy complete independence in your business decisions. Recently franchises have sprung up in our market. While there are fees associated with them, there are also benefits to the store owner.
- Year-round business: One of the greatest perks of investing in a laundromat is that business is not seasonal or weather-dependent. You can provide a basic service and generate income year-round. However, there are markets that have more business in the winter months. Data shows that laundromats have a roughly 94.8% success rate over five years, proving their stability.
- Simplicity: While running your laundromat requires business acumen, the day-to-day operations are straightforward. Onboarding assistant staff is simple and does not require rigorous training, as customers usually operate the machines themselves. This is not the case if you are doing Wash-Dry-Fold as extensive training is required.
- Integration of technology: Modern laundromat washers and dryers can easily be integrated with innovative technology, such as automated payment technologies linked to loyalty programs.
How to Make Money With Laundromats
Though a laundromat can be a solid investment, you still need sound strategies for maximizing business and profits. Incorporating these tips can boost how much money you can make with laundromats:
Make Meaningful Upgrades
Though upgrading old or outdated machines does involve significant upfront costs, it is vital for streamlining operations and providing reliable, modern solutions for your customers. Upgrading to more energy-efficient machines can also result in long-term savings in both utilities and maintenance. Modern features can help enhance customer satisfaction and grow your client base, adding to the long-term benefit.
Other meaningful upgrades that can boost business include:
- Exterior and interior upgrades: An effective way to appeal to more customers is to provide facilities that look good and are well-maintained. Exterior upgrades like a fresh coat of paint and interior upgrades like modern, welcoming lighting can make all the difference to your customer’s experience. You may also invest in better signage to showcase your branding.
- Added amenities: Adding amenities that cater to your customers while they wait for the laundry could be the difference in their choosing your establishment over any other. Ideas for these amenities include offering Wi-Fi, air conditioning, charging stations, TVs and vending machines. Having a LaundryCares reading center has become increasingly important to bring in families with young children.
- New technology: For many customers, convenience is a top priority when paying for a service. For laundromats to stay competitive, automating systems and providing digital payment solutions are key to your business’s growth. Flexible payment options also add another layer of convenience to your customer’s experience. With a contactless payment method right at the machine, customers don’t need to wait in line, download an app, search for quarters or purchase a laundry card.
Minimize Utility Costs
Utilities are one of the single greatest expenses of running a laundromat, as the service requires constant electricity and water use. This makes it vital to explore strategies that help you control utility costs, including upgrading to more cost-efficient washers and dryers. Consider investing in advanced monitoring tools for your machines so you can receive instant leak detection alerts. Look for features like programmable water levels and machines with a low power setting. Schedule regular cleaning and preventive equipment maintenance to help your washers and dryers last longer and avoid costly downtime.
To reduce the cost of lighting your facility, opt for energy-efficient LED bulbs that connect to a motion sensor or timer.
Focus on Strategic Pricing and Payment Methods
Pricing your service properly is essential. Research the local market to determine the most competitive prices, and consider the amenities you offer that your competitors don’t. Use this information to create a plan for keeping your business more sustainable.
Exploring web-based payment and loyalty solutions is also an excellent way to drive profits. With payment management technology like Setomatic-SpyderWash, you can gain valuable insights by monitoring your daily operations and offering loyalty rewards to customers that incentivize future returns.
Boost Your Laundromat’s Profitability With Flexible Payments
Laundromats are good investments to explore for a stable and profitable business. By following strategies that could boost your laundromat’s chances of success, you can increase revenue and streamline operations.
With Setomatic Systems, you can offer your customer base a simple payment system that connects directly to your laundry machines. They’ll love the convenience of features like contactless credit card transactions and the option to enroll in loyalty programs to gain rewards. Contact us today to learn more about how SpyderWash can support your laundromat business.
