When budding business owners learn how much a laundromat can make in revenue, they may be tempted to rush to opening. Unfortunately, poor planning causes many new businesses to fail. If you’re planning to start a laundromat, make sure you steer clear of these four common mistakes:
Poor Research and Planning: Know How Much it Costs to Open a Laundromat
It pays to be prepared before you commit to your coin laundry business. Skimping on research and planning often spells disaster for laundromat entrepreneurs because there are numerous factors that affect how much opening a laundromat is going to cost. Rushing to find coin laundry equipment for sale to install in any available space with just surface information is a bad idea. Take time and consult people who already know the business in your preliminary research.
Start by finding knowledgeable people to answer questions and guide you through the groundwork to avoid a needlessly hard road to success. In this business, you need to ask a lot of questions and know the right questions to ask about the location, the current market, projected developments in the neighborhood, and financing and startup fees. Having a seasoned professional coach you through the process can help prevent you from being taken advantage of or from not budgeting enough money for the whole endeavor.
Whether you’re starting from scratch or converting an existing but non-working “zombie” laundromat into a new one, you’ll need to do a laundromat market analysis to determine that the location is a good one that will generate income. You’ll need to look into regional demographics, competitors, traffic flows, utility costs, and more to understand whether your proposed location is a good fit. This can be extremely time-consuming and tedious if you’re trying to go it alone. When you choose to work with Western State Design as your commercial laundry equipment distributor, our Laundry Service Expert will help you develop a professional market analysis for your location so we can work together for your success.
You also need to have a realistic idea of your startup fees and financing options if you want to be successful. This includes the obvious items, like building overhead, renovations, labor, and new commercial laundry equipment fees, as well as some less obvious fees.
An important aspect of any coin laundry business is water supply and utilities. You need to confirm that your space and/or building has reliable power and water. You also need to know what tap fees are and be prepared to pay them upfront. Tap fees, also called sewer impact fees, can be shockingly steep depending on where your laundromat is located. These fees might be a hookup fee, a charge per machine, or a flat fee based on how much water the city or county assumes your machines will use. These fees could add up to hundreds of thousands of dollars—which you have to pay before you can start your buildout—though there may be some options for negotiating with local governments to reduce your fees. Again, working with a laundry equipment supplier like Western State Design gives you access to Laundry Service Experts who can help you understand these fees and how they will affect your start-up costs.
Trying to Do It Alone: A Successful Laundromat is a Group Effort
The idea that anyone succeeds in business without help is false. Everyone needs people on their team to help navigate the legal, financial, and industry insider details necessary for success. Your team doesn’t have to be big, but it’s smart to have a trusted lawyer, a reliable consultant, and access to maintenance professionals like plumbers and electricians. While you’ll be able to do some negotiating, planning and equipment maintenance on your own, it’s good business to know your limits and when to call in professionals.
Seeking advice, wisdom, and counsel from someone who is already running a successful laundromat (or five) helps you avoid rookie mistakes like buying pre-owned, outdated commercial laundry equipment or getting roped into a bad lease or real estate deal. If you choose to work with a distributor like Western State Design, you’ll have a Laundry Service Expert on your team who knows the business and is invested in your success.
Ignoring the Market and Not Having a Marketing Budget: Understand and Engage Customers for the Life of the Laundromat
A common myth is that laundromats are too small to fail, they’re guaranteed passive income with little-to-no effort, and laundromat owners barely need to be involved to rake in a profit. If that sounds too good to be true, it is.
A laundromat can be a very lucrative small business with huge growth potential, but setting one up properly takes planning, work, money, and a willingness to adapt and change with the market. Laundromat owners who do not educate themselves about the industry and the market surrounding their laundromat cripple themselves. It’s a mistake to think a laundromat is going to be an automatic success no matter where you put it—or, that your laundromat will be lucrative with no effort on your part.
This “if you build it, they will come” mentality has caused countless laundromats to struggle or fail. Starting a laundromat means you need to know what you’re getting into, and learning the local and national market as well as having your advertising and social media dollars ready to go will help you be ahead of the curve on opening day. Marketing—especially having a website and social media presence—is important for attracting and engaging customers. And remember: good customer service generates great word-of-mouth advertising and can set your coin laundry apart from the competition.
Fearing Technology: Embracing Change Means Embracing More Cha-Ching
Traditionally, the coin laundry industry has been 1) very old school and 2) coin-based. With the digital age, social media, and increasing dependence on phones and apps, the vended laundry industry is adapting to use more technology. Modern innovative commercial washers and dryers come with software that supports payment apps so customers can select their wash and dry cycles, choose any add-ons, and pay with their phones. Embracing change and including the latest technology in your laundromat will help you stand out from your competition and attract more customers.
Simply put, laundromat owners who are afraid of technology and refuse to upgrade their equipment and payment options will miss out on a lot of revenue and future customers. Embracing technology and the changes of the digital world means you won’t be left behind. If you choose to buy from a commercial laundry equipment distributor like WSD, you’ll have access to the most innovative industrial laundry products on the market.
So, there you have it: what not to do when you’re starting your laundromat business. If you want to be successful, make sure you conduct thorough research and get a solid game plan together. Gather a trustworthy team to help you and rely on professionals for maintenance help when necessary. Know your market, your competition, and keep a healthy marketing budget. And last but not least, embrace technology and see how it can benefit your bottom line.
As always, Western State Design goes all-in with each of our laundromat clients. We are invested in your success and will guide you through options for your commercial laundry equipment as well as partner with you during every step of the process.
If you want to talk more about opening a laundromat, give us a call at 1-800-633-7153 or contact a WSD Laundry Equipment Expert to find out what we can do to help you get started.