Opening a laundromat can be an exciting venture, offering a steady income and a necessary laundry service to the community. However, you need to make sure that this is an investment that will pay off, so understanding the costs involved in opening a laundromat is crucial. As a new laundromat owner looking to open a business, having a clear idea of the expenses and average costs involved will help you plan more effectively and avoid any unexpected financial challenges. By the end of this blog, you'll be equipped with the financial knowledge needed when opening a new store in the laundromat industry.
First, let's start with the first set of costs that you'll need to cover which include finding a property and investing in all the right equipment.
Initial Costs
Property
One of the first upfront investments that you'll make when starting out in the industry is finding a property in the right business location whether you decide to build, lease or buy. Building from scratch comes with a range of costs covering aspects such as licenses, building structure, and the installation of electrics, plumbing and equipment. If you choose to lease then you will generally have to pay lower upfront costs due to the option of signing different lease agreements. You will tend to pay the regular rent plus a percentage of your revenue and the contracts can range from month-to-month to multi-year.
If you are buying a new store, then you'll need to place a significant initial investment. Purchasing a new coin laundromat can range from $50,000 to more than $1 million. However, you'll then have long-term stability and equity owning your own property with the opportunity to either sell or lease in the future.
Equipment
You'll need the all important mix of washing machines, dryers and other workstations to provide the best service to your customers. For a full breakdown of the different equipment you'll need for your business, you can check out this blog post. Today, we'll focus on laundry machines.
Top-loading washers: These are ideal if you are tight on space as laundry can be entered from the top. They are generally more affordable but they'll use more water and energy which is something to keep in mind with your utility bills.
Front-loading washers: With these washers, laundry is put in from the front. They are also more energy and water efficient.
Hard mount machines: Made for commercial use, the unit is directly bolted to a concrete foundation or a sturdy structure. The design is essential for handling the machine's vibrations and high-speed cycles which is why they are perfect for bulkier loads that tend to come from commercial clients.
The cost of an industrial-grade washer can range around $2,000 to $3,500 and a dryer costing around $1,000 to $2,500 each.
CleanCloud POS System
To manage your laundry business efficiently, investing in a specialized Point of Sale (POS) system is essential. A system which is specifically built for the laundry industry, like CleanCloud, can make a real difference to your operations. With CleanCloud, you can track every order from start to finish, manage payments, push marketing efforts, and monitor business reports all in one cloud-based platform.
We also provide everything you need to launch your own pickup and delivery service, including a driver app to help your employees track orders and navigate routes. Our pricing varies based on the package you choose, and you can opt for either monthly or annual payments, allowing you to select a plan that best suits your financial needs. Experience the benefits of CleanCloud for your new business with our 14-day free trial, available for you to start today.
The costs of opening a laundromat can quickly add up, but careful planning and budgeting will ensure that your investment pays off. Next, it's time to look at the operational costs from utilities to inventory management.
Operational Costs
Utilities
Water, sewage, electricity and gas are all 4 crucial utility costs to keep in mind when planning the budget for your property. Operating a laundromat requires a significant amount of water, making water and sewer costs one of the largest ongoing expenses. The amount you’ll spend on energy costs depends on your location, the efficiency of your machines, and the volume of laundry processed. Electricity is another major utility expense, powering washers, dryers, lighting, and other electrical systems such as vending machines.
Bills for utilities in the US can range between $2,000 to $4,000 a month, so it's worthwhile investing in water and energy-efficient machines to help reduce those costs. Plus, maintaining a regular maintenance schedule ensures your machines are operating at peak efficiency. Additionally, if your new laundromat uses gas-powered dryers, you'll incur ongoing gas costs. Gas prices fluctuate, so it’s important to budget for these changes.
Supplies and Inventory
Stocking up with laundry supplies such as detergent, fabric softeners, and dryer sheets is essential for your laundromat, especially if you are selling these to your customers. After a few months of operating your business, you'll begin to understand the quantities of items you need to stock each month. This insight allows you to allocate a specific budget for inventory more accurately. If your laundromat has machines for snacks and drinks, keeping them stocked is another cost to consider.
Regularly restocking your machines and selling additional products not only provides an extra touch of convenience to your customers but it also generates additional revenue for your business.
Staffing and Management
Employee Salaries
If you plan to run an assisted laundromat with attendees, you'll need to hire a team of employees to manage orders, look after the store and provide great service to your customers. The wages for laundromat attendants in the US can vary depending on experience and the specific duties required. On average, attendants can expect to earn between $12 to $15 per hour and are often responsible for assisting customers with their laundry, maintaining cleanliness and handling transactions. If your laundromat requires a manager, either due to size or additional services offered, their salary will be higher. Managers in the US typically earn between $30,000 to $50,000 annually, depending on their experience and the complexity of their responsibilities.
Staff Training Costs
Training your employees is essential to making sure your staff understand and perform their roles effectively. It's important to keep your staff updated on new procedures, safety protocols, and customer service skills. Initial training costs may include developing training materials, paying trainers, and compensating employees for their training time. Additionally, investing in periodic workshops, online courses, and refresher sessions can help maintain high performance levels, with costs varying depending on the depth of training required.
Marketing and Advertising
The laundry industry is quickly becoming a competitive market, so it's important to do your research and conduct a thorough market analysis in order to create an effective business model and strategy to help attract new customers. When opening a new laundromat, building brand awareness and engaging with the local community can significantly impact your business's success but, this will also come with marketing expenses.
Brand Identity
Creating a strong brand identity is the first step in your marketing strategy. This includes designing a logo, choosing a color scheme, and developing a tagline that represents your laundromat's values and services. If you need a graphic designer to help create these elements, hiring a freelancer typically costs between $30 to $50 per hour. A more experienced designer will charge slightly higher rates, usually ranging from $70 to $100 per hour.
Website Development
A professional website is essential for a laundromat business, especially if you want to accept online orders, become more accessible and promote your services to a wider audience. Your website should include information about your services, pricing, location, and contact details. You should also include an online booking system if you are offering pickup and delivery. With CleanCloud, we offer a booking tool that you can easily embed onto your website for customers to place and schedule pickup and delivery orders. Simply copy and paste the embed code onto a dedicated page, and you're good to go!
Typically, hiring an expert to develop a website for a small business costs between $3,000 and $8,000. However, as a CleanCloud customer, you can use our own website builder tool for free, complete with all the features you need. For more information, check out our article.
Advertising Campaigns
Launching advertising campaigns is a great way to build brand awareness and promote your new laundromat so it's key to factor the cost of advertising into your own pricing strategy. This might include promoting in local newspaper ads, radio spots, and digital ads. Initial advertising costs really do vary depending on the size, placements and reach of your campaigns. If you are looking to advertise in a newspaper, a small modular add can start from $50.
An alternative is digital advertising. You can create and promote your own social media page for free, or advertise your laundromat services through platforms like Google Ads and Facebook Ads. This approach helps you maintain a steady stream of potential customers. The ongoing monthly cost for digital advertising on platforms such as Google varies based on your target audience and campaign goals, with payments depending on the number of clicks and impressions your ads receive.
Opening a laundromat is a great business venture, but it's important for your investment to pay off. it is key as a new owner to understand the initial startup costs and operational expenses. In this blog, we've provided a breakdown of the key costs to consider when starting a new business in the industry, to help give you a clear picture of the budget you'll need to avoid any unexpected financial challenges.
If you are interested in trying CleanCloud for your business, book some time with one of our expert sales team who will be happy to answer any questions.