Steps to Starting a Laundromat

FOR THE TIRE KICKERS

Laundromat equipment will cost anywhere from $75K-550K based on size and you should hope to make $50K-250K in revenue.  That is not a promise of future returns.

 

STEP ONE: MEET THE DISTRIBUTOR

To build a laundromat you are going to need a lot of information and help.  Please call us and let us have a kickoff meeting.  At Arrow Machinery, we are a low-pressure distributor; however, we’d like to be involved from the start to help you make the right decisions.

STEP TWO: LOCATION HUNT

If you are a property owner this step is about gauging how your location can perform. 

If you are a business in search of a location this is more about what to look for.  A real estate broker would be involved at this point.

Demographics

  1. High population.  100K+ in a five-mile radius
  2. Low to medium income.  An average income of under $55K is preferred
  3. High percentage of renters.  40% or more is good

Terms

  1. Minimum ten-year lease
  2. Two five year options
  3. Rent increases tied to cost-of-living

Physical

  1. Plenty of parking
  2. Correct size?
  3. Access
  4. Complimentary retail is good.  Check cashing, auto parts store, pawn shops, and dollar stores are good.
  5. Maximum glass front exposure

STEP THREE: EQUIPMENT MIX

You will be locked in to what you pay for rent but what equipment you choose does affect your cost structure. Water, gas, electricity, and repairs depends on your equipment choice.
Second, you don’t want to be over-equipped or under-equipped for your market.  Total washing capacity matters.


Next, the blend of equipment, from small load capacity machines to high capacity machines matters more than you think to the bottom line.  Larger machines mean more loads per square foot.  Larger machines also draw in customers who need to do loads larger than their home washer such as blankets and sleeping bags.  Often the margin on large machines can be greater.


Are you going to go with a coin or card system?  They each have their strengths and weaknesses.  Customers historically think of laundromats as coin-operated.  Card systems make collecting and counting money from your laundromat easier.  Card systems also offer the benefit of float.  It is about choosing what is right for that individual laundromat.


Finally, choosing the right accessories for a laundromat improve its efficiency.  Chairs and folding tables are a great part of the customer experience.  Pre-fabricated racks help keep a clean look and can help future service technicians with access to the machines.  Bill changers and carts matter on moving customers efficiently through the laundromat.

 

STEP FOUR: LAYOUT

Now it is the fun part, creating a layout.  If you have done your homework on marketing and equipment mix this goes easier.


With Arrow Machinery we will provide layout drawings so you can see traffic flow and function.  Some of the classic questions are: Do you have enough room behind the dryers to work on them?  Are the washers broken up into “islands” so traffic can flow around them?  Are there enough folding tables?  Do you have enough space in the racks behind the washers?  Have you eliminated as many columns or service drops as possible so that visibility is enhanced?

When your layout is complete you will have an equipment schedule and the specifications needed to compile plumbing, electrical, and venting.

 

STEP FIVE: FINANCIAL PLANNING

This is not a proforma but does lead to you coming up with the information to make financial projections with your accountant, lawyer, or financial professional.


Starting with your equipment list we come to a pricing mix.  With pricing and turns-per-day you’ll know your projected revenue.


There are alternate income opportunities to consider such as bundle wash and vending.
Based on the equipment we can project utility costs.  With the location work already done we can also plug in rent.  Labor depends mostly on the hours your plan to stay in operation.  Other costs include insurance, security, and maintenance.


Finally, we can look at financing.  Laundrylux provides great financing for Electrolux and Wascomat products.

 

STEP SIX: INSTALLATION PLAN

Now we are ready to place your equipment order.  Arrow can coordinate equipment delivery around your construction delays.  We have experienced technicians that can help install your equipment quickly and correctly.  Tools and know-how make a big difference.


Based on the pieces of equipment and your layout we can fairly well estimate how long it will take to install your laundromat.

 

RESOURCES

Laundrylux New Investor Brochure

Laundrylux: How to Start a Laundromat

Coin Laundry Association