Is It Easy to Own a Laundromat?
As a laundromat coach and consultant, I get asked all the time how hard it is to own a laundromat. In fact, that’s the question I had when I first got into the industry, too. It seems so simple that it can feel too good to be true. But, is that really the case? How easy is it to own a laundromat, really?
Owning a laundromat is relatively easy as compared with other businesses. Some of the qualities of laundromats that make them relatively easy include the fact that they are cash businesses, customers pay you up front, and customers do the actual work of doing their laundry.
Laundromats aren’t without their challenges, however. Let’s explore some qualities that make them relatively easy businesses to run, and also some of the challenges that laundromat owners face. This will help you decide if owning a laundromat is the right business decision for you.
What Makes Laundromats Easy Businesses?
One of the main appeals to owning laundromats is that they are relatively simple. They can be run on the side while you work a full time job, or free up time for you to do the things that you enjoy.
This simplicity makes the laundromat business appealing for many investors and business owners. It’s what attracted me to the business and, if you’re reading this, is probably one of the things that attracted you to the business, too.
So, what are the qualities of laundromats that make them easy businesses? Let’s go through some of them here. But, warning, if you have a pre-existing heart condition try not to get too excited!
One of the great things about laundromat is that customers pay you up front. You don’t need to spend your time tracking down customers to get paid, sending invoices, following up on invoices, and getting frustrated when customers don’t pay. And there is no frustration when customers haven’t paid but you still have bills to pay.
When customers pay up front, it makes business MUCH easier. You can spend your time and energy focusing on creating a great experience for your customers instead of trying to get paid.
I have a good friend who owns a manufacturing business and he is constantly trying to juggle his cash flow. He will bill out to clients he has done work for and if they are slow to pay, he has to make sure that he has the cash reserves to cover the bills, salaries of his employees, and costs to begin manufacturing for new jobs. That’s stressful.
Being paid upfront spares you that headache. Customers pay before they do their laundry. Your cash flow is more stable and your life is much simpler.
Cold Hard Cash
The majority of laundromats are still cash businesses. Similar to the previous point, accepting only cash cuts out a lot of the headache that many other businesses suffer from. When your business receives cash, you don’t have to worry about checks bouncing, credit card claims, or any of the rest of the payment headaches.
Also, your money is available right away, since, you know, it’s cash. You have it available to pay bills, pay employees, and pay yourself right when you need it. There’s no waiting for checks to clear or credit cards to process, and no paying fees for transactions.
Cash is simple and clean. Not literally clean. Wash your hands after handling it.
Customers Do The Work
This is unbelievable. Laundromats are a business where people pay you to use your machines themselves. They pay you so that they can do the work! If you want to know why laundromats are relatively easy businesses, this is the heart of it, right here.
You’re not providing a service (there are, of course, exceptions). You’re providing a tool for other people to do their work. The laundromat business is a tool rental business.
Since the main business of most laundromats is renting out these tools, i.e. washing machines and dryers, and those tools are bolted to the ground, the amount of work to be done is minimal. This is why laundromats are easy businesses to run.
You Don’t Make Anything
Similar to the point above, laundromats don’t produce anything. There are no complex processes to manage, no manufacturing headaches, and no sales team needed. The laundromat business is not really a goods business and it’s not really a service business (unless you add Fluff ‘n Fold and/or laundry pickup and delivery). It’s a leasing business.
Ask any business owner and they will tell you that one of the hardest parts about running a business is managing employees. Keeping everyone focused, on task, and working well together is quite the challenge. There are libraries worth of books on the topic of managing employees and it is an industry in itself.
When you own a laundromat, you have very minimal employees to manage. The employees you do have generally have very simple tasks to perform. The combination of few employees and their relatively simple jobs makes laundromats easy businesses to own compared to most other businesses.
There are plenty of things that make laundromats much easier than most businesses to run. We covered a few of the bigger ones here.
However, ask any laundromat owner if owning a laundromat is easy and they will laugh. Although I would contend that laundromats are far closer to the easy side of the scale to operate, they are by no means easy to run. Let’s talk about some of the challenges you will face if you own a laundromat.
Challenges of owning a laundromat
I hear it all the time in my coaching calls.
“I want to own a laundromat because all you do is collect quarters once a week and you make a bunch of money!”
There is a bit of truth in that, but really it’s only a bit. Two huge factors that you can’t overlook when considering whether or not owning a laundromat is for you or not are:
- Laundromats are a business
- Laundromats deal with people
Both of these scream “Challenges!” Although laundromats are simple businesses, they are still businesses that must be managed as businesses. And although you’re not technically providing a service for your customer (unless you have a Fluff ‘n Fold and/or pickup and delivery service), it is still a people business. And people are…well…uh…people.
Both the fact that your laundromat is a business and that it deals with people bring up some challenges. Some of these challenges are common to most businesses and some are unique to laundromats.
Let’s get real here and talk about some of the challenges you will face if you decide to buy a laundromat.
If you’ve never owned a business before and you’ve been overwhelmed by your personal bills, brace yourself. It turns out that laundromats use a LOT of water, electricity, and gas. And, rent isn’t exactly getting cheaper. Nor is labor.
Obviously your business should cover all of those expenses, but they are still a constant presence. They still need to get paid whether there is a dip in business or business is strong. Managing those bills can be a chore, as well, if you’re not organized. It’s something to be aware of.
This really varies from one laundromat to the next, and location is especially relevant here, but generally speaking laundromats serve a lower socioeconomic status. Along with this can come some unique challenges. I will just speak from my personal experience and from the experience of other owners in my circle.
I am in no way insinuating that everyone, or even the majority, of people will pose a difficulty for you. On the contrary, I have found that most of my customers are great people who are kind, respectful, and solid community figures.
However, I have experienced a lot of difficulty from vandalism to rough use of the equipment, to just not being mindful of messes and leaving their space dirty when they leave.
Laundromats also tend to attract the homeless population. Again, many who are homeless are respectful but not all are. And even those that are respectful can put off other customers just by their presence. Right or wrong, that’s just how it is.
Again, this is a people business, and whenever you’re dealing with people there will be problems. If you are prepared for that going in, you’ll be fine. I have had many frustrating interactions with customers, but I have yet to have an issue that couldn’t be resolved.
Probably the number 1 question I get asked in my coaching calls is, “How do I know if a laundromat is a good deal?”
The reasons this question is a difficult one is because it can be very tough to really pin down how much money a laundromat makes. Sellers can lie. Brokers can lie. Numbers can be manipulated. Obstacles can be concealed. It can be very difficult to navigate the minefield of buying a laundromat.
It’s for this reason that my #1 piece of advice for people who are wanting to buy their first laundromat is: “Don’t do it alone!” Find someone who knows the industry well who can help you navigate that minefield, tell you what to look for, and show you what questions to ask.
We do offer those services and would love to help you safely navigate the minefield, but it doesn’t have to be us. But please, if you do nothing else you’ve read up until now, do this. Find someone who is on your team besides the broker representing you.
Is A Laundromat Easy To Own?
A laundromat is easy to own relative to other businesses. But, before you buy your first laundromat be sure to do your research. We offer a TON of free information here at Laundromat Resource to help you achieve financial freedom through laundromat ownership!
But if your goal is to buy a laundromat, you MUST read our free e-book and join our community of laundromat owners and prospective owners like you! It’s crucial to have the right knowledge, which the e-book will provide you. But, it is just as crucial to have a community of people who are doing what you want to do and who want to see you succeed.
That’s what Laundromat Resource is all about! Click the button below to get access to the free e-book PLUS a TON of other tools and resources to help you succeed with laundromats! All for FREE! Why wouldn’t you? See you in the forums!