Why Should I Invest in a Laundromat?
Why Should I
Invest in a Laundromat?
If you’re looking to invest in a business, there’s a good chance
a laundromat has never crossed your mind. But why not? There must be a reason so many people explore this business, right? Laundromats are categorized as recession-proof; people need to do their laundry. Even
when the economy is struggling, people still need to keep their clothes
clean!
In fact, during a recession when consumers have less discretionary
income to buy new clothes, they are likely to try and take better care of the
clothes they have by washing them regularly, so they can keep the same clothing
for a while.
One of the first services people cut back on when things start to get tight is dry cleaning. They will actually start buying clothing that is washable so they can avoid paying to go to the dry cleaner. On top of that, more and more work places are shifting to casual dress, so Laundromats seem to have consistent sales regardless of the economy.
One of the first services people cut back on when things start to get tight is dry cleaning. They will actually start buying clothing that is washable so they can avoid paying to go to the dry cleaner. On top of that, more and more work places are shifting to casual dress, so Laundromats seem to have consistent sales regardless of the economy.
Another great thing about owning a Laundromat is that if
your revenue is impacted by a recession, it is likely that you have very little
overhead to worry about meeting.
Most Laundromats have 1-3 employees at most. Unless it offers wash and fold services, the employees are typically responsible for collecting money from the machines and for cleaning the facility.
If you are functioning as an absentee owner and having someone else do these tasks for you, they are easy and not too timing consuming, so you could take them over should you ever need to cut payroll costs. Couple those needs, with a convenient location and affordable solutions, and the result will be steady demand and, in turn, steady income.
Most Laundromats have 1-3 employees at most. Unless it offers wash and fold services, the employees are typically responsible for collecting money from the machines and for cleaning the facility.
If you are functioning as an absentee owner and having someone else do these tasks for you, they are easy and not too timing consuming, so you could take them over should you ever need to cut payroll costs. Couple those needs, with a convenient location and affordable solutions, and the result will be steady demand and, in turn, steady income.
The Coin Laundry Association reports there are
currently “about 29,500 coin laundries in the United States, generating nearly
$5 billion in gross revenue annually.” One of the biggest benefits of investing
in a laundromat is flexibility. You’ll have the freedom to be as hands-on (or
hands-off) as you wish, choosing to be involved in daily operations or hiring
staff to manage.
Purchasing an existing laundromat (vs. building new) has the added
benefits of proven financial data and existing customer base. While this may
sound like the perfect opportunity, some due diligence before investing is
highly recommended. A laundromat is a business and you need to be prepared to
think about expenses, human resources, maintenance, marketing, and cash flow
management. A well thought out business plan with financials is a great place
to start.
What should you look for if you decide to purchase an existing
laundromat?
Location
·
Are you near apartment complexes or in a college town?
·
What is the surrounding demographic?
·
Check out the crime report for the area.
Competition
·
How close is the nearest competitor?
·
If any are within two miles, do they have a loyal customer base?
·
What are their hours and do they offer ancillary services, such as
dry and fold or dry cleaning?
Analyze
·
Hire an inspector to check out the property to ensure the
electrical and other systems are up to code.
·
Thoroughly test the existing equipment to ensure machines are clean
and functioning properly.
·
Review sales and expense history so you have a better financial
picture. As for bank statement, tax returns, profit and loss statements.
Expenses
·
Anticipate expenses for at least the first year and ensure you have
enough capital to cover.
·
This will include payroll, workers’ compensation, taxes, repairs
and maintenance to facility and equipment, cleaning supplies, security system,
and marketing.
·
Ask the owner for past repair receipts and records; owner’s manuals
for equipment; and other paperwork to legitimize the potential expenses.
The basic model of the self-service laundry industry remained the
same over the years; however, technology has created some competition for the
most positive experience. Free Wi-Fi, televisions, high-efficiency machines,
vending machines (food and laundry products), card systems with loyalty
incentives, 24/7 convenience … the list goes on. If you take the time to
research the industry, the specific property, and the opportunities, you’ll
have a better handle on whether a laundromat is the right investment for you.
Coin Laundry Asset for Sale
FOR SALE: This Coin Laundromat is in a high-density area situated close to 100's of homes, apartments, businesses that need off-site laundry services. Parking lot contains 16 spaces. 38 hd dryers; 2 maxi 8 load washers; 4 mega 4 load washers; 10 triple loads; 12 double load; 12 top loaders. The business has a long-lease with no increase until 10/20. The property is 2,350 sf for $4,428/ month and the purchase price is $89,000. Click Here to Contact Agent and Download NDA.
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