Coin Laundries: A Smart Investment Decision?

Investing in a laundromat can be a profitable business move, but it also comes with its own set of challenges and risks. One of the main advantages is the high success rate, with approximately 95% of laundromats succeeding over a five-year period. They also have a high return on investment, averaging 20-35% in the first year. Additionally, laundromats are relatively easy to set up and maintain, have flexible work-life balance options, and are recession-resistant. However, there are also significant costs involved, including maintenance, repairs, utilities, and marketing. It is also a competitive market, and owners need to be prepared to deal with customer service issues and unpredictable operating costs. Overall, while owning a coin laundry business can be a good investment, careful consideration and planning are necessary to navigate the potential pitfalls.

High success rate

Coin laundries have a high success rate and are a relatively low-risk investment. According to one source, 66% of potential entrepreneurs are deterred from starting a business due to the fear of failure. However, a study found that 95% of laundromats succeed over a five-year period. This is a significantly higher success rate than most other businesses.

Coin laundries are also relatively easy to set up and maintain. They have a low barrier to entry, with minimal start-up costs and few employees required. The simplicity of the business model means that training and onboarding are minimal, and customers pay upfront, making accounting and tracking easier.

The flexibility of the business is another key advantage. The owner can set their own hours and does not need to be present at the store for 40 hours per week, especially once they get the hang of running the business. This flexibility means that investors can even work another full-time job or pursue a hobby more seriously.

Coin laundries also have a high return on investment, averaging 20-35% in the first year. They are recession-resistant, as people will always need to do laundry, regardless of the state of the economy. During a recession, more people will turn to self-service laundry rather than outsourced laundry or dry cleaning.

Overall, the high success rate of coin laundries, combined with their ease of setup, maintenance, and flexibility, make them a compelling investment opportunity with a low risk of failure.

Recession-resistant

Coin laundries or laundromats can be a good investment, offering a high success rate, flexibility, and recession resistance.

Laundromats are considered recession-resistant businesses because people will always need to wash their clothes, regardless of the economic climate. During a recession, more people may opt for self-service laundry options rather than more expensive outsourced laundry or dry cleaning services. Additionally, people may be less likely to invest in purchasing or repairing home laundry machines during tough economic times, making laundromats a more attractive and affordable option.

The laundry industry is not as susceptible to economic downturns as other industries, such as hospitality, tourism, and real estate. This is because laundry services are still in demand regardless of the financial situation of individuals.

Laundromats also have a relatively short payment cycle, with customers paying upfront for their laundry services. This pay-as-you-go model eliminates the uncertainty of extended payment cycles and improves cash flow for the business. According to Business Insider, 82% of small businesses fail due to cash flow problems. The short payment cycle in the laundry industry helps to mitigate this risk.

Furthermore, laundromats have low inventory requirements, which means minimal ordering, storing, and managing of products. This simplifies management and reduces costs associated with maintaining a large inventory.

Overall, coin laundries or laundromats can be a wise investment during a recession due to their consistent demand, short payment cycles, and low inventory requirements. These factors contribute to their reputation as a recession-resistant business.

Low start-up costs

The start-up costs of a laundromat are relatively low compared to other businesses. The initial investment is usually much lower than that of a restaurant or retail store. This is because laundromats have very little physical inventory and don't require a large amount of expensive equipment. The main costs are rent, utilities, and the purchase or lease of commercial laundry machines.

Laundromats can be started with a relatively small amount of capital, making them an attractive option for entrepreneurs with limited funds. They also have minimal operating costs, as they don't require a large number of employees and have low inventory requirements. This makes laundromats a good option for those seeking a low-cost business opportunity.

In addition, laundromats often have low franchise fees and no specific franchise rules, giving owners the freedom to build their business as they see fit. The flexibility of the laundromat business model also allows owners to set their own hours and work another full-time job if desired.

Laundromats are also simple to operate, as customers do most of the work themselves. This reduces the need for extensive training and labour costs. Additionally, customers pay upfront, making accounting and tracking easier.

Overall, the low start-up and operating costs of laundromats make them an attractive investment opportunity, particularly for those with limited capital.

Flexible work-life balance

Investing in a laundromat can be a great way to achieve a flexible work-life balance. Here's how:

Remote Monitoring Tools

Laundromat owners can invest in remote monitoring tools, such as laundry management software, to receive real-time information on machine usage and revenue and get text alerts for any issues at the facility. This enables owners to manage their business remotely and minimise the need for in-person supervision.

Part-time Supervision

The nature of the laundromat business allows owners to work part-time, especially if they have another full-time job. This flexibility can help entrepreneurs maintain a steady income while pursuing their business venture.

Minimal Employee Management

Laundromats typically operate with a small number of employees, reducing the need for extensive scheduling, management, payroll, and other HR-related tasks. This means less time spent on administrative duties and more time for other priorities.

Flexible Hours

Coin laundries can be operated with flexible hours to suit the owner's needs. While emergencies may arise, owners generally have control over their work hours and can set their own schedule, especially once they become more experienced in running the business.

Outsourcing Operations

By hiring and outsourcing operations to reliable people, owners can free up their time and make the business more of a passive income source. This can be a great way to reclaim time for other pursuits while still benefiting from the business.

Family-Friendly Culture

Laundromats can be a great way to generate family wealth and create an asset that can be passed down to future generations. With the right approach, a family-friendly culture can be cultivated, contributing to the economic health of the community and the country.

Multiple streams of income

Coin laundries can be a great investment, but they can also be risky. One of the biggest advantages of owning a laundromat is the potential for multiple streams of income. Here are some ways you can increase your revenue and create multiple streams of income:

• Wash-and-fold service: Offer a convenient service for customers who want their clothes washed, dried, and folded for them. This is a great way to attract busy professionals or families who don't have time to do their laundry.
• Dry cleaning: Provide dry cleaning services in addition to the self-service laundry. This can be a valuable service for customers who need to clean delicate or formal items.
• Vending machines: Install vending machines that offer laundry supplies such as detergent, fabric softener, and laundry bags. You can also include vending machines with snacks, drinks, and other items to cater to your customers' needs.
• Entertainment options: Add video games, massage chairs, or toys for children to keep your customers entertained while they wait for their laundry.
• Advertising: With high foot traffic in your laundromat, you can generate additional income by selling advertising space. Consider placing billboards or advertisements inside and outside your building.
• Additional services: Think about adding other services that can bring in extra revenue, such as installing a turnstile to use the bathroom or offering an ATM service.

By offering a range of services and amenities, you can create multiple streams of income and increase the profitability of your coin laundry business. These additional income streams can also enhance your customers' experience and keep them coming back.

Frequently asked questions