Owning A Laundromat: Pros & Cons for New Investors 

Owning a laundromat has pros and cons, but the upsides, like stability, flexibility, and opportunities, often outweigh the challenging hours and competition. Though no business is truly effortless, a laundromat that’s set up right can provide a seamless revenue stream, without the typical hassles most small businesses face. To make your entrepreneurship highly profitable, you must understand the risks and rewards of ownership and how to turn potential negatives into advantages.

After decades as a leading laundry equipment distributor, the experts at Martin Ray have helped a fair share of laundromat investors. Since our start in 1980, we’ve witnessed the successes and struggles investors face, and we want to pass on these lessons to you. Use this list to weigh the pros and cons of owning a laundromat so you understand what you’re getting into, and find pro tips on how to sidestep potential pitfalls in your journey.

Pros of Owning a Laundromat

One of the inherent advantages of the laundry business is that people will always need clean clothes. This offers a dependable source of income regardless of the season, economy, or market. That steady demand and self-service business model is a successful combination, allowing an owner independence and flexibility from the daily grind. With the right foundation, a laundromat can evolve, providing long-term income and opportunities for growth:

Great ROI 

One of the most enticing advantages of investing in a laundromat is the excellent potential return on investment. How many entry-level businesses can enjoy a stable customer base, a high success rate with a steady cash flow, and low labor costs? Not many. 

Pro Tip: Offset fluctuating (or rising) energy costs and inflation by investing in highly efficient vended laundry equipment to minimize utility expenses and lessen the impact on your bottom line.

Minimal Inventory Requirements  

Unlike traditional retail or service businesses, laundromats have very little physical inventory. That means minimal ordering, rotating, or discarding products, which makes management easier. The steady, predictable business volume means you won't have to worry about over-ordering expensive inventory to meet demand. 

Pro Tip: If you have a surprising surge in business, laundry equipment distributors keep vended supplies in stock and ready for pickup.

Reliable Business in Every Season and Weather

Many businesses’ sales fluctuate season-to-season or during holidays, but laundromat revenue doesn’t see wild swings based on these factors. While severe weather and high or low temperatures may impact whether or not people venture out, they will eventually need to do laundry, so the impact on your business is minimal. 

Pro Tip: Take advantage of slow days in the laundry business and clean, maintain machines, and take care of other tasks to keep your shop neat and running smoothly, with minimal customer disruption.

No Franchise Fees

Generally, laundromats are not franchised like fast food restaurants or service chains, which eliminates pricey franchise fees. You also won't have specific rules to follow, meaning your business is yours to build, brand, and operate as you see fit.

Pro Tip: Borrow the discipline of a franchise model to develop consistent processes, clear systems, and repeatable standards for your laundromat. Then, if you decide to expand, you can scale and still feel confident that customers will have a positive experience no matter which of your stores they visit.

Minimal Employee Management

Many laundromats operate with minimal employees, especially those operating as self-service models. Not having to deal with scheduling and management responsibilities for a large team can make day-to-day operations, payroll, and other tasks easier.

Pro Tip: Even if you only have a couple of employees, invest in commercial laundry training from the start. Your staff should understand basic machine maintenance and troubleshooting to prevent small problems from becoming major issues.

Recession-Resistant Operations

One of the biggest laundromat ownership pros to overcome cons is that demand is virtually recession-proof. People need clean clothes, and those living in rentals or temporary housing are not likely to purchase a washer and dryer. The laundry industry isn't impacted by economic recessions as much as hospitality, tourism, or real estate. Even when someone moves and you lose their patronage, a new renter—and potential customer—takes their place.

Pro Tip: When the economy dips, customers look for value. Consider introducing loyalty rewards or frequent-user discounts to encourage return customers without hurting your margins.

Flexibility 

Running a laundromat usually only requires the owner to be present part-time, which is one of the biggest perks of this industry. You're able to set your own hours, and it's highly unlikely you'll have to be at your store 40 hours per week, especially once you get the hang of running your business. Some investors even work another full-time job or use additional time to pursue a hobby more seriously.

Pro Tip: Use your flexible schedule wisely and consider investing some of your time back into your brand to promote your laundry business with DIY marketing or customer engagement—the return will often be worth the effort. 

Simplicity

In a typical laundromat, the customers do the majority of the work to sort, wash, and dry their clothes, and they pay upfront. This simplifies many aspects of the business, including labor and invoicing logistics, at least in comparison to many other service businesses.

Pro Tip: Don’t mistake simple with hands-off. Though fewer needs for accounting and billing are laundromat ownership pros, the cons of failing to track revenue, machine performance, and other metrics can threaten your long-term success.

Potential for Multiple Locations and Expansions

Due to the pros of a laundry business—flexibility, versatility, and necessity—there are generally tremendous opportunities for growth. Once you’ve mastered your flagship store, expansion can be an excellent option to increase your revenue and grow your brand. There isn’t only one way to expand your laundry business, either. You could find a prime laundromat location for a second store, expand your current facility, or offer dry cleaning or full wash-dry-fold services to attract a larger customer base.

Pro Tip: Remember that expanding your business isn’t just about adding storefronts or services. It is about replicating your brand, the environment, and all the features that made your first venture successful.

Join a Great Community

Just do a quick search online, and you'll find a really great community surrounding the laundry industry. From the Coin Laundry Association to American Coin-Op to laundromat owners, investors, equipment distributors, and manufacturers all over the world, there's a plethora of information available and people eager to learn and teach.

Pro Tip: Give your customers the same welcoming feeling that the laundry industry provides to you. Work on small touches to create a clean, inviting space, and consider hanging up a bulletin board for notices to turn your lobby into a hub for local happenings.

Cons of Laundromat Ownership

Now that you’ve seen the pros of the laundromat business, let’s talk about the cons. Machines break, customers may be difficult, and costs rise, but most of these problems are fixable, once you know what to expect. The hardest parts of the laundromat business are finding ways to offset the high initial expense and ongoing costs, but even these drawbacks can be overcome with smart, responsible ownership. Here’s what to watch out for before opening your laundromat, and how to turn common challenges into opportunities.

Irregular Work Hours

As much as you can flex your schedule to suit your needs, you also have to manage your availability, which can require working odd hours or inopportune times. When emergencies and issues come up, your business and customers won't care if you're on vacation or sick. You'll likely be tackling problems at all hours.

Pro Tip: Martin-Ray Laundry offers preventive maintenance for commercial laundry equipment, and it’s performed by trained service technicians to keep your machines running like-new, resulting in fewer unexpected breakdowns and disruptions.

Substantial Investment

Investing in efficient commercial laundry equipment is the biggest expense for owners, and it’s unavoidable. Thankfully, there are pros to owning a laundromat, and selecting your equipment is a big one. Choosing the right machines to meet your customers’ needs and fit your business model will pay off in the long run. With flexible financing options for laundry equipment, you can make choices based on your best interests (and rely on the industry’s healthy ROI to help).

Pro Tip: Don’t ignore the time, energy, and emotional investment required for running a laundromat. If you’re not committed, you may not stay in the game long enough to reap the rewards. 

Competitive Industry

There is risk involved in owning a laundromat, but it isn’t an overly risky business because the demand is always there, as long as you can outperform your competition. Not only are you competing with other laundromats in the area, you’re also trying to attract people who use the laundry rooms in multi-housing facilities, apartments, and condos. Impressing customers requires more than a cheap price. You need to outperform others in every aspect to provide the best environment, machine capacities and capabilities, plus amenities.

If you think investing in a laundromat might be right for you, let the Martin Ray Laundry Systems consultants help. We provide laundry equipment sales & service, and laundromat consulting to Colorado, New Mexico, Wyoming, west Texas, and western Nebraska. Get in touch with us today:

Pro Tip: Success requires a strategy that begins long before planning your opening day. Selecting a convenient location and modern, high-capacity equipment from the start can set your business apart and give potential customers (even those with washers and dryers at home) reasons to choose your laundromat.

Requires a Large Skillset

When it comes to owning a laundromat, you're a plumber, electrician, businessman, marketer, janitor, and a million other things all rolled into one. You don't have to be an expert necessarily, but experience and basic understanding in these areas come in handy. 

 Pro Tip: If you're considering investing in a laundromat, a partnership can be beneficial. Martin-Ray Laundry Systems can help you thrive in all the areas where you aren't as experienced.

Rising Operating Costs Threaten Profits

Many investors note that utilities and rent are some of their biggest ongoing hurdles and expenses. As prices for gas, electricity, and water continue to rise, laundromat owners must prioritize energy efficiency to remain profitable. If your equipment needs updating, partner with a laundry distributor like Martin-Ray Laundry—our sales and service team is just a click away.

Pro Tip: Selecting energy-saving equipment isn’t where your efforts should end. You’ll need to maintain and repair the machines to keep them performing efficiently. Also look for other areas to add incremental savings, like installing LED lights in the store, motion-sensing lights in the restroom, or running promotions for cold-water wash cycles.

Customers

While customers can be a joy and make the job worth it, anyone who works in a customer service position will tell you they can also cause their fair share of issues. You have to be ready to deal with conflicts, unruly customers, and patrons who abuse your equipment, just like any other business.

Pro Tip: Minimize customer-related issues by posting policies clearly, installing security cameras, and increasing signage for proper loading and cycle selection.

What’s Next?

After reviewing the pros and cons of owning a laundromat, it’s clear that this is your best business investment option. Not only will you achieve a flexible, reliable, and manageable income stream, but each challenge has an actionable solution. Let the Martin-Ray Laundry Systems consultants help. We provide equipment sales and service, and offer consulting to potential owners in Colorado, New Mexico, Wyoming, west Texas, and western Nebraska. Get in touch with us today!