You have probably heard that the Laundromat business is highly profitable. Earnings from the Laundry industry are estimated to be $15.35 billion in 2023 in the United States, with the market expected to grow at a compound annual growth rate (CAGR) of 3.05% to 2026 (Source: Statista)
Worldwide the laundry service market is projected to expand at a CAGR of 5.3% to reach 186.47 billion in 2027 (Source: Business Wire)
These statics could leave you wondering how to open a Laundromat business. Worry not; we got you covered in this guide.
Here are the steps to start a Laundromat business:
- Know the Industry
- Choose the Laundry services to provide
- Choose a suitable business name
- Create a business plan
- Define your Brand
- Choose a location
- Obtain necessary permits
- Purchase or lease equipment
- Obtain financing
- Market the business
Let’s begin. You might also enjoy reading: What Permits Do You Need to Open a Laundromat?
Step 1: Know The Industry
Investing in an industry you don’t know well will be a mistake. It is a sure way of making losses. So, the first thing you want to do is to gather updated information on the industry. Your research will help you know your competition and how they charge and market their services.
You should also know your target market and whether a Laundromat business is profitable. But where can you find this information? Several organizations provide relevant information through their websites and dedicated publication. Consider a few of these sources:
- Coin Laundry Association provides free industry overviews
- The Textile Rental Services Association provides free benchmarking reports
- IBISWorld offers detailed reports on the Laundromat business
- Of course, you can find Laundromat information on this site.
Step 2: Choose The Laundry Services To Provide
While you may be excited that you have settled on a business idea you are passionate about, you need to research and plan on what Laundromat services you intend to offer.
There are different types of Laundromat businesses. For instance, you can settle for an open Laundromat where customers use your washing machines to wash their clothes.
Alternatively, you could offer to do the washing and ironing, allowing customers to drop off their laundry and collect it later.
Some standard laundry services include:
- Coin laundry and self-service that enables customers to start the washers upon inserting coins
- Commercial laundry for cleaning linens, uniforms, and facilities
- Private Laundromat equipment for servicing multi-tenant buildings
- Pick-up and delivery
- Wash-and-fold services.
Depending on the resources and employees you have, you can choose to offer some or all of these services.
You can also learn about other potential businesses that can complement the laundry business in your area and partner with the owners. It is about giving your customers value so that they can keep coming.
Step 3: Choose a Suitable Business Name
The next step is choosing a suitable name for your Laundromat business. Take your time brainstorming to create a memorable and ideal business name.
You can choose a trendy or catchy business name, but ensure the name can stand the test of time. The business name should also describe your core business.
If you are stuck, you can check out Project Catalog to connect with slogan writers who can help you generate a suitable name for your Laundromat business. Alternatively, you can use an AI tool- Laundromat Name Generator, to create a name for your business.
And once you have selected a few names, check whether they are available. Ensure you also conduct a trademark search using the name you want to avoid potential legal issues.
If you own a Laundromat (sole proprietorship), you would want to use a name other than yours. You can also research your business name on social media and web domains. If it is available and memorable, go for it.
Step 4: Create a Business Plan
Now that you have named your business, it is time to spring into action and develop a plan. A business plan helps with the following:
- Setting direction for the business
- Planning your budget
- Attracting investors and lenders for funding
- Identifying potential weaknesses
- Making sound decisions
- Setting short and long-term goals
I know it can be challenging to write a convincing business plan that appeals to investors. If you face this problem, you can outsource experts like Wise Business Plans or market research analysts.
Besides researching and designing a business plan, the expert will offer insight into the dos and don’ts if you own a Laundromat business.
With a sound business plan, you can attract partners and investors to jumpstart your operations. Consider some free business templates that you can customize:
- Startup business plan template
- Laundromat business plan.
- Business Guide by SBA
- The Complete Business Plan Course.
- Service Corps of Retired Executives (SCORE) resources
Step 5: Define Your Brand
How do you want it to be known when you open a Laundromat business? A brand goes beyond a business name and logo; it involves how your target customers perceive your business.
Do you want your establishment to be known as budget-friendly or as a more premium option targeting high-end clients? Your brand should bring out these aspects.
A Laundromat should also be clean and attractive if you want to have return customers. Your machines should be well-maintained so that customers are not kept waiting. This can damage your reputation as an unreliable business.
Your customer service or customer experience with your employees will also determine the strength of your brand. A strong business brand will put your business above the competition because customers will remember and talk about it.
Step 6: Choose a Location
While it is possible to run a small Laundromat business from home, you will need a commercial space if you deal with several customers.
So, how do you know when a location is suitable for a Laundromat business?
- First, you want to confirm the rules and regulations about the Laundromat business location from Municode Library.
- Second, look for an area or building with specific water lines and plumbing.
- Third, ensure the business space is located near a place with a confirmed need for laundry services. You can open a Laundromat business near:
- College students
- Apartment buildings
- Large families
- Hotels and motels
- Tourist areas
- Older neighborhoods that don’t support laundry equipment.
Step 7: Obtain The Necessary Permits
All states require you to meet certain legal obligations to start a business. Therefore, speak to a legal consultant to establish the local business permits and licenses you need before opening your business doors.
You may need the following permits:
- Health Permit
- Sales tax permit
- Water pollution permits
- Liability insurance for employees
- Property insurance
The best way to know which permits are necessary for your business is to confirm with the state’s Secretary of State Office.
And if you have or plan to hire employees to work for you, ensure you have Employer Identification Numbers.
Step 8: Purchase Or Lease Equipment
You need laundry machines and supplies to run a Laundromat business. The type of utilities and equipment required will depend on your services.
If you have a limited budget, you may hire or lease laundry equipment instead of buying a new one.
Whatever you decide, here is some essential equipment you may need:
- Laundry machines
- Coin or change machines
- Soap dispensers
- Laundry carts
- A credit card payment system
- Door hangers
- Security cameras
Step 9: Obtain Financing
Some friends ask me how to open a Laundromat with no money, and the answer lies in financing. While you can use your savings to invest in this lucrative business, you can choose other financing options to begin operations.
With a good business plan and projections, you will likely convince investors to put money into the business.
Here are some viable financing options for the Laundromat business.
- Friends and relative
- Angel investors
- Loans from traditional banks and credit unions
- Small business administration loans
- Personal savings
Step 10: Market The Business
Marketing is an integral part of any business that wants to make profits. You want your target audience to know your services and identify with your brand.
A good marketing campaign can help you attract more customers and generate greater revenue. Marketing also enables you to stand out from similar businesses in your area.
Establish platforms your target audience like to visit and promote your business on these platforms.
For instance, if you target college students, you can use posters around the college premises, coffee shops, local libraries, and nearby apartments. You can also advertise your business on Facebook and Instagram, targeting local groups.
Additionally, you can build a user-friendly website using Siteground or Bluehost, leveraging search engine optimization to boost your discoverability.
Ensure your business address, contact details, and operating hours are updated. Good customer service is also a way of promoting your business through positive business reviews. But if you get a negative review, approach it with care since you do not want to sound offensive to your customers.
What to read next:
- Is Owning Laundromat Profitable? (11 Pros and cons of owning a Laundromat)
- How Much Do You Need To Open a Laundromat? (with costs breakdown!)
Are Laundromat Businesses Worth It?
Yes, a Laundromat business is a profitable venture you can turn into a side hustle or a full-time job.
If you choose the right location, define your brand, conduct an excellent marketing campaign, and choose a catchy and memorable business name, you will attract more customers and make good profits.
I hope this guide helps you start your own Laundromat business and make money.