The Full Cost of Starting a Laundry Business And How to Make it Grow

1st June 2022

People are, and always will be, looking for the next best and most lucrative business idea. While some are sitting at their laptops attempting to follow a convolutional neural network tutorial in order to build the next big app, others still gravitate towards tried and tested business opportunities that are known to be rewarding when done right. One of these is starting a laundry business. 


In fact, the global dry-cleaning and laundry services market size was valued at a little over $60 billion in 2019, and it is expected to grow at a compound annual growth rate of 3.4% from 2020 to 2027. It’s a very appealing venture, particularly given the following benefits:

  • High ROI and success rates. 
  • Flexible working hours.
  • Easy to manage.
  • Potential for growth.


Moreover, there are different ways to get started: 

  • Start from scratch.
  • Take over an existing laundromat.
  • Get involved with a franchise.

 

Depending on the avenue you decide to take, there are different things to consider. This is where the importance of planning comes in. Going into a venture blindly is a very bad idea, and you'll quickly find yourself being blindsided by unexpected costs and unforeseen problems. Doing the necessary research into the topic will save you a huge headache and ensure you are fully prepared and ready to tackle this head on.

 

In this article, we will be going through each of these options and outline the costs associated with them, as well as the various ways in which you can successfully grow your laundry business


Read on to find out more!

Estimated costs

Starting a laundry business is not cheap. Unlike certain freelance work that requires only a laptop and an internet connection, a laundromat business needs a budget for better business planning and a fairly big starting investment to take off. 


Simply put, on average, you can expect this investment to be anywhere between £200,000 and £900,000 if you are looking to open up your own laundromat. This number varies greatly depending on multiple factors such as the size of the laundromat, its location, etc.

 

If you're thinking of getting into a franchise, however, you're looking at around £50,000 to £200,000, depending on the franchise and brand’s success, of course. While the upper end of the cost bracket is quite high, this option does have its advantages. You're bound to receive support, tips, and guidance from the franchise to help you get your business going.

The big expenses

Now that we've looked at the estimated costs of starting a laundry business, let's get into the particulars, starting with the more expensive elements. What exactly are you paying for?

The laundromat itself

Of course, the first cost that you need to think about is that of the actual space. This has a huge impact on your overall investment amount. It is something to think about very carefully. For instance, some areas will be much more expensive than others. On the other hand, some areas will already have many laundromats, and it would not make sense to add another. 


Picking the right location can do wonders for your business. Make sure to do your research so that your business space is situated in an area in which it is needed. This is particularly important for those looking to start from scratch. It can be a good idea to look into the typical cost of a business location in your desired area too, so that you can have your finances ready when it comes to it.


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Equipment

After successfully acquiring the space, you'll need to tackle the issue of equipment. There's the obvious stuff, like the washers, dryers, and change machines. An important factor here is that this equipment needs to be commercial grade. Since it will be used regularly, you need to purchase machines that can take constant use without needing to be replaced too often. Choosing high-quality machines will, in this way, save you in the long run, in the sense of repairs and replacements.


Having said that, even the best quality machines will still need maintenance, repair and, eventually, replacement, so don't forget to factor that in too. There are also different types of washers, and the ones you choose will affect how much money you will need to invest into your equipment. You can expect to pay anywhere between £500 to £2000 for a machine, so be ready.

 

You may also want to get insurance to protect yourself in the case of customer injury or equipment breakdown, so take that into consideration, and do your research to get the best deal possible.


There’s also been a recent increase in interest and developments when it comes to Artificial Intelligence in relation to laundromats and their automation, so keep your eyes peeled. You might end up wanting to explore the possibility of a fully automated, self-operational laundromat.

Utilities

The main cost you need to worry about when it comes to running a laundry business in terms of utilities are the water and electricity bills. Again, the costs will vary depending on many factors, such as how busy your laundromat gets and the price of your water and electricity. This can take you up to £10,000 a month depending on where you are based.


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Additional costs

Alongside the main, big expenses you can expect from starting a laundry business, there are other costs to take into account. 


For instance, you need to think about what type of payment system you want to use in your laundromat. While traditionally, it is coin laundry machines that you'd find, more and more people are now using cards rather than change. 


Making your customers' lives easier is a step in the right direction. It encourages them to come back to your business and it makes the transaction convenient for them. Investing in a card reader system would help you do just that. 


It allows customers to keep a digital balance that is stored on a contactless smart card. In essence, it works just like a normal card; you tap it onto the card reader on the machine and the balance is debited. You're free to start using the washer or dryer after that. 


Depending on the system you go for, you can even integrate QR codes to make the experience even smoother. Setting up a system like that can set you back by between £30,000 and £60,000. The additional advantage to this is that it decreases the need for employees. There’s no need to worry about employee productivity when the business runs itself.

 

Along with the big stuff, you also need to think about the smaller things. The laundry business is all about convenience. In fact, consumers are increasingly drawn to laundry services as they offer convenience at a reasonable price. The following are elements that can make your consumer's lives easier without necessarily breaking the bank, and potentially help you stand out from your competitors. 

  • Laundry carts and baskets.
  • Detergent and fabric softener.
  • Wi-Fi.
  • Vending machines.
  • A TV screen.
  • A security system.


You can even be cheeky and use the TV screen to display paid advertising (extra income for you!) or perhaps your own advertisements. And as a way of cutting costs, you can even use royalty free videos to do so.

Now that we've covered the costs of starting a laundry business, let's have a look at the various ways in which you can grow your business once you've established it.

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Ways in which to grow your laundry business 

Feedback

Getting feedback from your consumers is very important for the growth of any business. After all, you want to ensure that your customers are happy, and the best way to do that is to know what it is that they need.

An effective way to do that is to use CleanCloud's inbuilt review tool where we ask for feedback and encourage positive reviews to be pushed to public channel like Yelp, Facebook and Google but catch bad reviews and encourage the business to each out to the customer and work through the issues before it's made public.

Customer Satisfaction Score (CSAT)

Simply put, the CSAT score measures how satisfied a customer is with your business. It’s a great tool to gauge not only their satisfaction, but also whether there might be areas in which you need to improve and help you with improving your marketing strategy.

Customer Effort Score

This metric shows you how much effort a customer has to make to interact with your business. The easier it is for them, the more they are bound to see their overall experience as positive. This then means that they are more likely to engage with the business and become a repeat customer. 

Similar to the metric above, this can help you figure out how many of your customers are likely to become regulars. If the scores you obtain are low, then you know to focus some of your marketing efforts on becoming more easily accessible to your consumers.

Of course, feedback isn’t always easy to get. Consider using updated methods such as QR codes, which you can easily get using the CleanCloud Marketing Pro tool.

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Communication 

You’ve no doubt heard about the importance of communication in business. Especially for those looking to scale up successfully. 

Whilst a laundromat can run fairly independently, as you grow you will likely have to deal with increasing volumes of customer enquiries and complaints, among other things. You will have to communicate with your consumers and you want to do this in a way that best reflects on your brand. 

Lucky for us, technology has advanced incredibly quickly, and now, you have countless options to choose from when it comes to communication tools. And we’re not talking about the basics here, such as setting up small business phone numbers (although this is definitely useful and something to think about if you haven’t already done so). 

No, we’re talking about using technology such as a VoIP phone system combined with toll-free calls that allows you to communicate with staff members and facilitates cross-team interactions to ensure effective communication between staff.


Using the CleanCloud CRM, you also have access to 2-way communication via sms, push and email.

Marketing

There are many marketing strategies out there. The great thing about this is that you therefore have many options to choose from when it comes to selecting the one most suited to your business and needs.

One marketing strategy that has become increasingly accessible and popular in the last few years is sms and email marketing. CleanCloud, through our marketing pro feature, gives you access to these tools to run regular and seasonal campaigns for example 20% off on your birthday or a free wash for customers that haven't place an order in a certain period of time.

Another is setting up a social media account and creating an effective social media strategy. This will help your business connect with people, who are in need of your services, locally.

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And that’s a wrap!

There you have it. The costs associated with starting a laundry business, along with some tips on how to grow your business once it’s established. Please note that the figures provided in this article are estimates. Remember, make sure to do your research and put a plan together of all the expected costs so that you can tackle this challenge head on. Best of luck!

Bio:

Grace Lau - Director of Growth Content, Dialpad

Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Grace Lau also published articles for domains such as Vyond and Tapfiliate. Here is her LinkedIn.

Blogs from Grace Lau, Director of Growth Content | Dialpad


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