Starting a coin laundry business can be a lucrative way to make money. However, it is not as easy as just setting up a shop and waiting for the customers to come in. There are several steps that you need to take in order to start a successful laundromat business. In this blog post, we will discuss those steps and how you can make your coin laundry business thrive!
How to Start a Coin Laundry Business
Learn about the coin laundry industry
Before you start a coin laundry business, it is important to learn about the coin laundry industry. This includes understanding how coin laundries work, what services they offer, and what the competition is like. You can do this by talking to other coin laundry owners, reading industry publications, or searching online. Of course, Laundromat Resource, The Laundromat Resource Podcast, and the Laundromat Resource YouTube channel are all full of great information on how to buy and run a coin laundry business. You can also check out the resources that the coin laundry association offers.
Pick a laundry business model
The first step in starting a coin laundry business is deciding which type of business model you want to have. There are two main types of coin laundries: full-service and self-service.
Full-Service Laundries
Full-service laundries offer a wide range of services, such as wash-and-fold, dry cleaning, and ironing. This type of laundry is usually more expensive than self-service laundries, but it can be a good option if you want to offer your customers a one-stop-shop for all their laundry needs.
Self Service Laundries
Self-service laundries, on the other hand, are typically lower in price and allow customers to do their own laundry. This type of laundry is often less labor-intensive for the owner, but it requires more space since customers need to be able to move around the store easily.
You need to determine which type of laundry services you want to offer to fit your business structure.
Obtain financing
Starting a laundromat business requires an investment in the initial phase that can be made through financing. You need to have enough money to cover the costs of leasing or buying a space, purchasing laundry equipment, and hiring employees (if needed).
One option for financing your business is to take out a small business loan through the small business administration (SBA). You can also look into grants or funding programs that are available to small businesses. The SBA will want to see a business plan that outlines your business structure, your financial situation, and the finances of the business.
Another option is to use personal savings or raise money from friends and family members. Perhaps one of the best options is to use a laundromat-specific lender as they are familiar with the laundromat business and can help you ensure you purchase your business the right way the first time.
A coin laundry lender will help you develop the right business model, determine startup costs, determine expected business expenses, introduce you to people and resources in the laundromat industry, connect you with other laundromat owners, and help you develop a laundromat business plan.
If you’re looking for more ways to finance your laundromat businesses, check out this article that details 9 different ways you can finance your next business! The Laundromat Resource pro-community also has a lot of information and resources to help you navigate laundromat financing, including a 2-hour live Q&A about laundromat financing with Chris Michalek of Prime Capital.
Set up your business infrastructure
Business Bank Account
Along these lines, you’ll need to open a business bank account. You will want to operate your business expenses separately from your personal expenses. This means you’ll need a separate bank account for your new laundromat from your other personal and business accounts. Finding a good bank that offers good options for a business bank account is important.
Business Credit Card
Along with your business bank account, you may also want a business credit card. A business credit card will help you build business credit, which could prove important if you want to scale your business.
Business Insurance
You’ll also need good business insurance. Laundromat business insurance needs will differ depending on your business model, what laundry services you offer, if you buy or rent the commercial space, and more. If you own the property, you may also need commercial property insurance. Shop around and don’t choose the cheapest option. Choose the best option.
Find the perfect location
The next step is to find the perfect location for your coin laundry business. The ideal location will be highly visible, easily accessible, and have plenty of parking. It should also be in a safe neighborhood with high foot traffic. Once you have found a few potential locations, contact the landlord or property owner and negotiate a lease agreement.
When looking for a location, you should also consider the competition. If there are already a lot of laundromats in the area, you may have to offer lower prices or better services to attract customers.
Another important factor to consider is whether you want to buy or lease the commercial space. Buying the property could give you more control over how you run your business, but it’s a big investment. Leasing is usually cheaper in the short term and requires less upfront capital.
You’ll also need to decide how much space you need. A good rule of thumb is that each washer and dryer unit needs about 80 square feet of space. This doesn’t include storage space or space for customer seating.
If you’re planning on buying an existing laundry, consider speaking with multiple laundromat brokers and owners to find the right fit for you. Here is a video where I explain the two best ways to find a laundromat for sale in any market!
Form A Business Entity
The next step is to form a business entity. This will protect your personal assets in case your business is sued. The most common business entities are sole proprietorships, limited liability companies (LLCs), and corporations.
If you’re not sure which business entity is right for you, I recommend speaking with an attorney or accountant. They can help you decide which business entity makes the most sense for your laundromat business.
Get Your Business License
After you’ve formed your business entity, you’ll need to get a business license from the city or county where your laundromat will be located.
You may also need to get a state sales tax permit if you plan on selling laundry detergent or other products out of your laundromat.
To get your business license, you’ll need to fill out an application and pay a fee. The application process is usually pretty simple and can be done online.
If you’re not sure which licenses and permits you need, I recommend speaking with a local business attorney or the Small Business Administration (SBA). They can help you figure out which licenses and permits you need to operate your business.
Create a marketing plan
The next step is to create a marketing plan. This includes deciding how you will promote your laundry business and attract customers. Some marketing ideas for coin laundries include advertising in local newspapers and online, distributing flyers in the neighborhood, and offering discounts or loyalty programs. You can also utilize organic marketing and paid online advertising.
Make sure to track your marketing efforts so you can see what is working and adjust your strategy as needed. Determining your target market and thinking through how you can reach them is important for all small businesses.
You can head up your marketing initiatives yourself, but if you’re looking for professional marketing for your business then we have you covered. Laundromat Resource Marketing offers web design services, SEO services, branding, and paid online advertising services. We know laundromats and we know marketing and we can help you drive traffic to your laundromat or laundry service to grow your business! You can learn more about Laundromat Resource Marketing here.
Purchase laundry equipment
Now it’s time to purchase the commercial laundry equipment you need for your laundromat business. There are a wide variety of coin-operated washing machines and dryers available on the market, so it’s important to do your research before making a purchase. You’ll also need to decide how many machines you need based on the size of your laundromat and the projected volume of customers.
When purchasing laundry equipment, it’s also important to consider energy efficiency and water conservation. Look for Energy Star certified washers and dryers that use less water and electricity. This will help you save money on utility bills and be more environmentally friendly.
Hire employees (if needed)
If you’re planning on hiring employees to help run your laundromat, it’s important to find individuals who are responsible and have customer service experience. You’ll also need to train your employees on how to properly use the laundry equipment and handle customer transactions.
It’s also a good idea to develop employee policies and procedures so everyone is on the same page and knows what is expected of them.
Opening day!
After all of the planning and preparation, it’s finally time for your coin laundry business to open its doors! You’re a laundromat owner!
Make sure you are prepared for opening day by having enough change on hand, stocking detergent and other supplies, and having any promotional materials ready.
Most importantly, make sure your customers have a positive experience at your laundromat so they will come back again. You’ve already created your business plan, now it’s time to execute your plan and wow your customers!
Congratulations on taking the first steps to start your own coin laundry business! These nine steps will help you get your business up and running smoothly.
Be sure to keep Laundromat Resource in mind as your one-stop shop for all things related to owning and operating a laundromat business. Consider joining the Pro Community to take advantage of the tools, resources, and partnerships we’ve created to help you succeed with your laundromat business! We wish you the best of luck in your new venture!
