Data provided here comes from our team of experts who have been working on business plan for a laundromat business. Furthermore, an industry specialist has reviewed and approved the final article.
Are laundromat businesses profitable, and what is the average monthly income for laundromat owners?Let's check together.
Revenue metrics of a laundromat business
How does a laundromat business makes money?
A laundromat makes money by charging customers to use the washing machines and dryers.
What other services do laundromat businesses provide?
In addition to offering coin-operated or self-service laundry facilities, laundromat businesses often provide a range of complementary services to enhance the customer experience.
Many laundromats offer drop-off and pick-up services, where customers can leave their laundry to be washed, dried, folded, and sometimes even ironed by the staff, saving them time and effort. Some laundromats may also provide specialized cleaning services for delicate items such as blankets, comforters, or rugs, which require extra care.
Vending machines for detergent, fabric softeners, and laundry bags are commonly available, offering convenience to customers who may have forgotten these essentials.
Additionally, some laundromats offer repair and maintenance services for laundry machines, ensuring a smooth laundry process for everyone.
To create a welcoming atmosphere, laundromats often provide seating areas, Wi-Fi access, and even entertainment options like televisions or magazines to keep customers comfortable while they wait for their laundry.
What about the prices?
A laundromat business offers various services, each with its own price range.
Washing machines usually cost around $2.50 to $6.00 per load, with larger machines being more expensive.
Dryers typically range from $0.25 to $0.50 per 10 minutes of usage. Some laundromats offer additional services like detergent vending, which might be priced around $1.00 to $2.00 per single-use pack. Fabric softener and dryer sheets could cost about $0.25 to $0.75 each.
Some laundromats provide folding services, charging around $0.75 to $2.00 per pound of laundry.
Some may also offer commercial laundry services for businesses, where prices can vary based on the volume of laundry and specific requirements.
| Service | Price Range |
|---|---|
| Washing Machines | $2.50 - $6.00 per load |
| Dryers | $0.25 - $0.50 per 10 minutes |
| Detergent Vending | $1.00 - $2.00 per pack |
| Fabric Softener & Dryer Sheets | $0.25 - $0.75 each |
| Folding Services | $0.75 - $2.00 per pound |
| Commercial Laundry Services | Varies based on volume and requirements |
What else can a laundromat business sell?
In addition to offering self-service and full-service laundry solutions, laundromat businesses can also enhance their revenue by:
- Hosting special laundry care workshops or fabric care classes
- Allowing local textile experts to use their space for garment care events
- Assisting customers in selecting the right laundry techniques and products
- Organizing engaging laundry-themed challenges or clothing care competitions
- Renting out space for private laundry care events or filming sessions
- Teaming up with local clothing stores for exclusive laundry and clothing care promotions
- Offering online laundry care tips and virtual consultations
Who are the customers of a laundromat business?
A laundromat business typically serves a variety of customer types, ranging from regular customers who use the facility regularly to one-time customers who are in need of a quick laundry solution.
Which segments?
We've made many business plans for projects like this. These are the groups of customers we usually see.
| Customer Segment | Description | Preferences | How to Find Them |
|---|---|---|---|
| Busy Professionals | Working individuals with limited time for household chores. | Quick and convenient service, possibly with pickup and delivery options. | Advertise near office complexes, online platforms, and through partnerships with local businesses. |
| Students | College and university students living away from home. | Affordable pricing, availability of single-load machines, and study-friendly environment. | Advertise on campuses, social media, and offer student discounts. |
| Families | Households with children and larger laundry needs. | Large-capacity machines, kid-friendly waiting areas, and detergent options suitable for families. | Local advertising, community events, and partnerships with family-oriented businesses. |
| Travelers | Tourists and travelers needing clean clothes during their trips. | Quick service, availability of various machine sizes, and possibly folding services. | Advertise near hotels, hostels, and popular tourist destinations. |
| Elderly Population | Senior citizens who may need assistance with laundry tasks. | Assisted services, comfortable seating, and staff sensitivity to their needs. | Collaborate with senior centers, retirement communities, and healthcare institutions. |
How much they spend?
In developing our comprehensive business plan, we've analyzed that customers usually spend between $5 to $25 per visit at a standard laundromat. This expenditure fluctuates based on several factors including the number and type of laundry loads, usage of additional services such as dry cleaning, and purchase of laundry-related consumables.
Research indicates that the average customer utilizes laundromat services from 4 to 15 times a year, with variations often due to seasonal changes, personal habits, or availability of alternative options. Some people may frequent more during certain periods, such as those without in-home laundry solutions or students in nearby dorms.
Calculating the lifetime value of a typical laundromat customer, we would estimate it to be from $20 (4x5) to $375 (15x25), assuming the customer retains their habits for one year.
With these estimates, we can infer that the average revenue per customer, on an annual basis, would be around $200 for a laundromat.
(Disclaimer: the figures mentioned above are generalized averages and may not precisely reflect the financial dynamics of your specific business case.)
Which type(s) of customer(s) to target?
It's something to have in mind when you're writing the business plan for your laundromat business.
The most profitable customers for a laundromat business are typically local residents and apartment dwellers in densely populated urban or suburban areas.
They are profitable because they require regular laundry services due to limited space for in-home machines, and they often lack the time or inclination to do laundry themselves.
To target and attract them, the laundromat can employ marketing strategies like localized advertising, offering competitive pricing, convenient location with ample parking, extended operating hours to accommodate busy schedules, and clean, well-maintained facilities with modern machines and amenities like free Wi-Fi.
To retain these customers, providing excellent customer service, loyalty programs such as punch cards for discounts or free washes after a certain number of visits, and maintaining a clean and safe environment are crucial.
Engaging with the local community through partnerships with nearby businesses and promoting environmentally-friendly practices, such as high-efficiency machines, can also enhance customer loyalty and profitability.
What is the average revenue of a laundromat?
The average monthly revenue for a laundromat typically ranges between $1,500 and $7,000. We will explore different scenarios to understand these figures better.
You can also estimate your own revenue by considering various factors specific to your situation, using a financial plan for a laundromat.
Case 1: a small laundromat in a low-traffic area
Average monthly revenue: $1,500
This type of laundromat is often situated in a location with less foot traffic, possibly in a rural area. It is usually equipped with a minimal number of basic washing machines and dryers.
Such laundromats generally do not offer extra services such as dry cleaning, ironing, or laundry folding. They rely solely on self-service operations.
Assuming an average cost of $2.50 per wash or dry cycle and an estimated customer base of around 600 transactions per month (20 per day), the monthly revenue of this laundromat would be approximately $1,500.
Case 2: a comfortable laundromat in a residential neighborhood
Average monthly revenue: $4,000
This laundromat is located in a suburban residential area, attracting a more consistent customer base. It is not just a place to wash clothes but offers a comfortable atmosphere with amenities such as seating areas, free Wi-Fi, and vending machines.
In addition to self-service laundry, it might provide value-added services, including professional dry cleaning, laundry folding, or even a wash-and-fold service, which have higher charges.
Considering an average price of $3.50 per cycle and additional revenue from enhanced services, this laundromat could handle approximately 1,150 transactions per month (around 38 per day). This level of activity could result in a monthly revenue of $4,000.
Case 3: a full-service laundromat in a high-traffic urban area
Average monthly revenue: $7,000
This type of laundromat is situated in a bustling city area, benefiting from high foot traffic, and is possibly part of a larger chain. It offers a variety of services including self-service laundry, professional dry cleaning, ironing, alterations, and laundry subscription services for businesses or households.
More than just a laundry facility, it stands out with superior customer service, modern machines, cleanliness, and maybe even a small café or a children's play area. This business model attracts a broad customer base from busy professionals to families.
With enhanced service offerings, transactions could be priced higher, averaging around $5.00. Assuming around 1,400 transactions per month (approximately 47 per day), this laundromat could achieve a monthly revenue of $7,000.
It's important to note that these figures can vary widely based on several factors including the laundromat's location, size, services offered, local competition, and overall management efficiency.
The profitability metrics of a laundromat business
What are the expenses of a laundromat business?
A laundromat business's expenses typically include laundry equipment maintenance, rent or lease fees for the premises, staff wages, and utilities.
| Category | Examples of Expenses | Average Monthly Cost (Range in $) | Tips to Reduce Expenses |
|---|---|---|---|
| Rent and Utilities | Lease or rent for the store, water, electricity, gas | $2,000 - $6,000 | Look for cost-effective rental options, optimize energy use |
| Equipment | Washing machines, dryers, coin changers, carts | $2,000 - $10,000+ | Invest in energy-efficient machines, perform regular maintenance |
| Employee Wages | Salaries for attendants, cleaners, and maintenance staff | $1,500 - $3,500 | Optimize staffing during peak hours, cross-train employees |
| Supplies | Detergents, fabric softeners, laundry bags, cleaning supplies | $300 - $700 | Buy supplies in bulk, use eco-friendly options |
| Maintenance and Repairs | Equipment maintenance, facility repairs | $500 - $1,500 | Regular equipment servicing, address maintenance issues promptly |
| Insurance | Liability insurance, property insurance | $200 - $500 | Review insurance policies regularly, consider bundling |
| Marketing and Advertising | Local advertising, website maintenance | $100 - $300 | Focus on local marketing, use social media, word of mouth |
| Taxes and Permits | Business licenses, property taxes, sales tax | $200 - $500 | Stay compliant with tax regulations, explore tax deductions |
| Security | Surveillance systems, alarm systems | $100 - $300 | Invest in security systems for safety and theft prevention |
| Miscellaneous | Office supplies, maintenance tools, coin collection fees | $100 - $400 | Keep office supplies cost-effective, handle coin collection efficiently |
When is a a laundromat business profitable?
The breakevenpoint
A laundromat becomes profitable when its total revenue exceeds its total fixed and variable costs.
In simpler terms, it starts making a profit when the money it earns from providing laundry services surpasses the expenses it incurs for rent, equipment maintenance, utilities, salaries, and other operating costs.
This means that the laundromat has reached a point where it covers all its expenses and starts generating income; we call this the breakeven point.
Consider an example of a laundromat where the monthly fixed costs typically amount to approximately $10,000.
A rough estimate for the breakeven point of a laundromat would then be around $10,000 (since it's the total fixed cost to cover), or servicing approximately 1000 to 2000 customers per month, with services ranging from $5 to $10. This calculation assumes that each customer spends, on average, this amount per visit on various services (washing, drying, detergent, etc.).
It is important to note that this indicator can vary widely depending on factors such as location, size, service fees, operational costs, and competition. A large, full-service laundromat would obviously have a higher breakeven point than a smaller one that does not require much revenue to cover their expenses.
Curious about the profitability of your laundromat? Try out our user-friendly financial plan crafted for laundromat businesses. Simply input your own assumptions, and it will help you calculate the amount you need to earn in order to run a profitable business.
Biggest threats to profitability
The biggest threats to profitability for a laundromat business can include rising utility costs, such as water and electricity, as these are essential for running washing machines and dryers.
Additionally, competition from other laundromats or at-home laundry machines can reduce customer traffic, impacting revenue.
Maintenance and repair costs for the machines are another concern, as breakdowns can disrupt operations and lead to expenses.
Seasonal fluctuations in demand may affect income, with slower business during certain times of the year.
Lastly, factors like location, pricing strategy, and customer service quality can also influence profitability, as a poorly chosen location or pricing that doesn't align with local market conditions can hinder revenue growth.
These threats are often included in the SWOT analysis for a laundromat business.
What are the margins of a laundromat?
Gross margins and net margins are financial metrics used to assess the profitability of a laundromat business.
The gross margin represents the difference between the revenue earned from laundry services and the direct costs associated with providing those services.
Essentially, it's the profit remaining after deducting the costs directly related to the laundry operations, such as detergents, machine maintenance, water, electricity, and employee wages.
Net margin, conversely, accounts for all the expenses the laundromat incurs, including indirect costs like administrative expenses, advertising, rent, and taxes.
Net margin delivers a comprehensive view of the laundromat's profitability by encompassing both direct and indirect costs.
Gross margins
Laundromats typically have an average gross margin ranging from 55% to 70%.
For instance, if your laundromat earns $8,000 per month, your gross profit would be approximately 62.5% x $8,000 = $5,000.
Let's illustrate this with an example.
Suppose a laundromat services 100 customers per day, with each customer spending $4. The total daily revenue would be $400.
However, the laundromat experiences costs such as machine maintenance, utilities, and detergents.
Assuming these direct costs add up to $150 per day, the laundromat's gross profit would be $400 - $150 = $250.
Consequently, the gross margin for the laundromat would be $250 / $400 = 62.5%.
Net margins
Laundromats generally have an average net margin ranging from 20% to 30%.
In simpler terms, if your laundromat generates $8,000 per month, your net profit might be around $2,400, representing 30% of the total revenue.
We'll use the same example for consistency.
If our laundromat services 100 customers daily at $4 each, the total daily revenue is $400.
The direct costs, as previously discussed, total $150.
On top of this, the laundromat bears various indirect costs like marketing, insurance, administrative expenses, taxes, and rent. Assuming these indirect costs amount to $100 per day.
After deducting both direct and indirect costs, the laundromat's net profit is $400 - $150 - $100 = $150.
In this scenario, the net margin for the laundromat would be $150 divided by $400, equating to 37.5%.
As an entrepreneur, it's crucial to recognize that the net margin (vs. gross margin) offers a more accurate insight into how much money your laundromat is genuinely earning, as it takes into consideration all operating costs and expenses.
At the end, how much can you make as a laundromat owner?
Understanding that the net margin is crucial in determining the profitability of your laundromat is essential. It reflects what's left after covering all operating costs.
Your ultimate earnings hinge significantly on your management skills and business strategies.
Subpar laundromat owner
Makes $500 per month
Starting a small laundromat, perhaps with outdated machines, limited services, no extra amenities like Wi-Fi or air conditioning, and irregular maintenance can restrict your total revenue, possibly to just $3,000 a month.
If costs aren't kept in check, your net margin may not exceed 15%. This is due to machine breakdowns, inefficient utilities, and lost customers.
With such constraints, your take-home would merely be around $500 (15% of $3,000). This isn't an ideal scenario if you're aiming for a thriving laundromat business.
Average laundromat owner
Makes $3,750 per month
If you're operating a standard laundromat, complete with functional machines, clean premises, basic amenities, and occasional promotional activities, you could see revenues of about $15,000 a month.
Assuming you manage overhead costs like rent, utilities, and maintenance well, your net margin might be around 25%.
Under these circumstances, you'd be looking at earnings of about $3,750 per month (25% of $15,000). This level of income is a decent expectation for a laundromat performing at average standards.
Exceptional laundromat owner
Makes $20,000 per month
An owner who prioritizes customer experience above all else might run a top-tier laundromat. This means modern, high-capacity machines, various services (like dry cleaning, ironing, and folding), refreshment areas, and maybe even a small kids' corner or entertainment section. Excellent customer service and a well-maintained, comfortable environment could boost your monthly revenue to $50,000 or more.
Efficient management of expenses and innovative services could lead to a net margin of about 40%. Such performance comes from cost-effective operations, additional revenue streams, and a high customer retention rate.
In this optimal scenario, a laundromat owner could be bringing in around $20,000 each month (40% of $50,000). Striving for this kind of success starts with a detailed, customer-oriented business plan for your laundromat.
May you reach this level of success and set the bar for laundromats in your area!