The laundromat industry offers numerous opportunities to entrepreneurs wanting to enter a stable, potentially lucrative business with low risk. There are many ways to enter the coin operated laundry business and there are many ways to grow your business once you have started. Here are some of the top coin laundry business opportunities.
Buy a Coin Laundry or Start Your Own?
Most entrepreneurs enter the laundromat game by buying an existing business. If you do your due diligence and find a laundromat that is performing well then this is a great way to get started with a business that is already profitable. You can guarantee yourself a good return on your investment if you know how to value a laundromat and negotiate the right price.
Starting your own coin laundry can be a much more risky endeavor with the startup costs and considerations that are involved. It is hard to know if a location will be profitable if you have no sales records to prove it. However, if you start your own laundromat from scratch and know what you are doing then the potential for high profits is far greater.
A Coin Laundry Chain
Many self serve laundry business owners only have one or two laundromats. However, there are excellent opportunities for savvy entrepreneurs to scale up to much larger operations that involve multiple locations.
The great thing about laundromats is that they can be left unattended for large parts of the day. One owner operator can easily drive around and service a number of locations. A more likely scenario though is that after your first one of two coin laundries are open you would hire attendants or janitorial staff. You could then focus on growing your business even more.
Surprisingly, franchising has not been a common practice in the coin laundry industry. The franchises that have sprung up are usually only local operations and there are currently no national franchises that we are aware of.
Some of the machinery manufacturers like Maytag offer deals that are similar to franchise agreements but have much easier terms. They will basically allow you to use their branding without charging franchise fees if you buy your equipment from them.
If you have spent time setting up laundromats and have refined your operating systems and relationships with suppliers then you may be in a position to become a franchisor. In exchange for lending your brand name and expertise to industry newcomers you can earn a percentage of their monthly profits. This will of course depend on the franchise agreement that you have with them.
Buy and Flip
Laundromats are usually fairly easy to sell if you can prove to buyers that they are profitable. As they are a fairly stable business you can generally expect to reach a sale price of between four and five times the level of annual net profits. Business brokers love to have laundromats on their books and would have no trouble helping you sell yours if it is making money.
Some entrepreneurs specialize in buying laundromats that are making a loss or performing well below their potential. They then pick them up for bargain prices, get them profitable, flip them on to new buyers and make a tidy profit on the deal.
The key with this approach is to learn how to spot good opportunities. You need to be able to identify coin operated laundries that have been poorly marketed and you must have a plan to turn them around. It may be that the current owner has badly misjudged the local market. By doing some remodelling or offering better solutions for local people in terms of machinery, services and atmosphere you may be able to increase the number of regular customers.
You may also be able to uncover information on demographic trends or other changes in the local business environment surrounding a laundromat. These factors could lead to an increase in business over the coming year.
One of the great opportunities that laundromat owners often overlook is to try and squeeze more revenue out of each of their existing locations. You may as well have each property in your portfolio optimized before you go about acquiring more.
In addition to basic clothes washing and drying services there are a number of other services that you can offer. If you have an attendant stationed at your coin operated laundry you can offer premium services to customers. Allow them to simply drop off their washing for full service treatment by your employees instead of doing it themselves. Your services may include washing, drying, mending, ironing and even dry cleaning if you can set up an arrangement with a nearby dry cleaner. You can even make extra money by offering unrelated products and services such as coffee or Internet access.
If you own a busy laundromat then you will find that the owners of vending machine businesses will want to place their machines inside or outside of your store. If people are sitting around waiting for their washing they may consider buying a drink or a snack from a vending machine. You can usually get a small commission on sales if you make an agreement with a vending machine business operator. Some kinds of machines are more lucrative than others so it pays to do some research and shop around.
Once you have become successful in the coin laundry business you will find that you have gained an extraordinary amount of knowledge along the way. Many newcomers to the business will be interested in picking your brains to find out what kinds of insights and tips you have to offer.
The great opportunity here is to offer your services as a consultant. As long as newcomers are not going to be in direct competition with you then it can be a rewarding experience to guide and mentor them into their own successful businesses. And of course, you can charge a fee for such consulting services.
There are many ways that you can get started in the laundromat business. Once you have your business up and running there are also many ways to increase profits and expand. Keep your eyes open and you will find that there are an endless number of coin laundry business opportunities out there just waiting to be discovered.