June 26, 2024 Mark Ferguson
Last updated: June 28, 2024 by Mark Ferguson
I own two laundromats, a very small one in a small town and a medium sized one in a city of about 100,000 people. I love laundromats and they are a lot of fun, but they do have their challenges. The medium sized one is profitable, but the small one is still struggling after a year of improvements.
I believe that small laundromats have potential, but the larger they are, the more likely they are to be successful. I work as a real estate investor and real estate broker and have learned a lot about small business over the last few years. I also run a liquor store and a small grocery store in a small town. A laundromat is completely different than anything I've ever done before. Here's what I've learned:
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What is the biggest challenge of running a laundromat?
Before I bought my first laundromat, I thought it was a simple business: buy washers and dryers, people come and use them, and collect money. It's more than just buying machines and hoping people use them. The biggest lessons I've learned are:
Laundromat washers and dryers are very expensive. If you want the larger machines that people who come to the laundromat want, be prepared to pay nearly $10,000 for one. Smaller machines are cheaper, but people don't use them as much. Luckily, larger machines can hold four, five, six or more loads of laundry, so you can charge much more. It's very hard to find someone who can repair commercial washers and dryers. Appliance repair is a lost art, and many of the companies that still do it now limit themselves to warranty work for certain companies. There are also many people who claim to be able to fix these machines, but have no idea what they're doing. Ask me why I know that. In my case, the closet repair guy is over an hour away. If you run a laundromat, you need to do some of the easy repairs yourself or have someone on your team who can fix them. Otherwise, you'll go out of business because the machines break down so often. Laundromats get dirty quickly when you clean them. I've hired cleaners and cleaned it myself, but no matter how often I clean it, it's always dirty again the next time someone comes to do their laundry. People don't like dirty laundromats. A tip: make the floors as close to the color of dirt as possible. Laundromats are not passive. They require constant supervision and visitation. Collecting quarters is fun, but you also get calls and emails about machines not working, people taking money, people acting weird. If you want to attract customers, you have to respond to complaints and improve as much as you can. You'll end up paying a lot of small refunds. Laundromats attract crime. My laundromat is unmanned and I have cameras, but pranks still happen all the time. Be careful not to sleep in the laundromat, abuse the bathroom if there is one, or camp outside.
These points may turn off many people, but I love laundromats. I have a lot of fun collecting quarters, watching sales, and trying to improve my business. Here is one of the videos of me collecting quarters:
Are coin laundromats profitable?
The laundromat in the video above has been open for about 7 months and makes about $7,000 a month with expenses of $4,500 a month. That doesn't include my time collecting and managing quarters. I was very lucky to not have to buy this laundromat. I took over the lease with most of the equipment still there. I added equipment I bought used from another laundromat and had to repair some of the existing machines. It probably cost me $40,000 in machines, minor renovations, and repairs. I rent the space, but I did buy the property for my little laundromat. I don't make much ($1,200-$2,000 a month), but the property also came with an apartment, a shop, and a car wash.
While coin laundromats can be profitable and larger laundromats can be very successful, it is difficult to succeed in a smaller space because you are very limited in the equipment you can use and the number of customers you can have in your laundromat at one time.
What machinery do you need?
The biggest obstacle to my little laundromat is the small washers and dryers. A small dryer isn't a big deal, but the washers are. Many people use laundromats because they have a lot of laundry or large items they want to wash. Many people who have washers and dryers still use laundromats. Your laundromat may also have a wash and fold business that collects laundry and washes it for you. Successful laundromats almost always have large washing machines.
Larger washers come with more expensive machines, more power (often 3-phase), more water (upgraded water heater), and more support (concrete floors). My small laundromat has wood floors and 2-phase power, which makes it very difficult to add larger machines. If you are choosing a location for a new laundromat or taking over an existing one, make sure they have the mechanical equipment needed for larger machines. Most of my washers and dryers are Speed Queen, but there are many other good brands.
Below is a video of the little laundromat.
Should laundromats be staffed or unstaffed?
Most of the larger laundromats are staffed and offer a wash and fold service to pay for the staff. My laundromat doesn't offer this service, but maybe one day they will. You can still make money without wash and fold, but you'll have a better chance of making money if you decide to go that route. Wash and fold services do the laundry for the customer. Some laundromats also offer pickup and delivery. The nice thing about laundromats that have wash and fold and are staffed is that there is usually someone there to help customers and tidy up if things are messy.
If you are hiring full-time staff for your laundromat, that is a big expense and you have to do a fair amount of washing and folding to cover that cost. If you run a small laundromat, you have to make sure your washing and folding business isn't taking up machines that your patrons want to use. Of course, the biggest challenge is finding the right employees who are reliable and willing to work hard. I have the same challenge in my real estate business.
Bonus income from laundromats
My laundromat does a decent amount of business, but I also get a decent amount of bonus income from it. People love watching them collect their quarters. I have a huge social media following and a decent sized YouTube channel (110k), all of which generate income for me. In a bad month I make at least $1k off a video, and in a good month I make close to $5k. If you love social media and making videos, the laundromat is a great place for a content creator.
Conclusion
It's impossible to cover everything about the laundromat business in one article. Well, maybe if it were 50 pages… But I hope this article helps you get an idea of what the laundromat business is like. I'm releasing weekly videos on my YouTube channel explaining the pros and cons of both mats. I'm happy to answer questions here, but I check the comments on YouTube more frequently.