This article was written by our expert who is surveying the industry and constantly updating the business plan for a laundromat.
The laundromat industry continues to show strong profitability potential for entrepreneurs willing to understand the key financial metrics.
With annual revenues ranging from $60,000 for small operations to over $1 million for large urban facilities, laundromats offer predictable income streams and solid profit margins when managed effectively.
If you want to dig deeper and learn more, you can download our business plan for a laundromat. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our laundromat financial forecast.
Laundromats generate consistent revenue with clear profit margins, making them attractive businesses for new entrepreneurs.
Understanding the financial benchmarks is crucial for evaluating investment opportunities and operational success in this industry.
| Financial Metric | Small Laundromat | Medium Laundromat | Large Laundromat |
|---|---|---|---|
| Annual Revenue | $60,000 - $240,000 | $240,000 - $360,000 | $360,000 - $1,000,000+ |
| Monthly Revenue | $5,000 - $20,000 | $20,000 - $30,000 | $30,000 - $50,000+ |
| Net Profit Margin | 20-35% | 20-35% | 20-35% |
| EBITDA Margin | 15-20% | 15-20% | 15-20% |
| Initial Investment | $80,000 - $222,000 | $200,000 - $500,000 | $500,000 - $1,200,000+ |
| Payback Period | 3-6 years | 3-6 years | 3-6 years |
| Utility Costs (% of Revenue) | 15-40% | 15-40% | 15-40% |
What is the current average annual revenue for a standard laundromat, broken down by small, medium, and large operations?
Laundromat revenues vary significantly based on size and location, with clear distinctions between small, medium, and large operations.
Small laundromats typically generate annual revenues between $60,000 and $240,000, featuring 15-25 machines with basic self-service offerings. These operations focus primarily on coin-operated washers and dryers without additional services.
Medium laundromats achieve annual revenues from $240,000 to $360,000, operating 30-50 machines and often including services like wash-and-fold. These facilities benefit from increased capacity and diversified revenue streams that boost overall performance.
Large laundromats can generate $360,000 to over $1,000,000 annually, especially in premium urban locations with 50+ machines and commercial services. These operations maximize revenue through high-capacity equipment, extended hours, and comprehensive service offerings.
What is the typical monthly revenue range for laundromats in urban versus suburban or rural areas?
Location significantly impacts laundromat revenue, with urban facilities consistently outperforming suburban and rural counterparts.
Urban laundromats typically generate 30-50% more revenue than suburban or rural locations due to higher population density and greater concentrations of renters. Monthly revenues in urban areas range from $8,000 to $50,000+ depending on facility size and local demographics.
Suburban and rural laundromats often see monthly revenues at the lower end of each size category due to reduced foot traffic and lower population density. However, these locations may benefit from reduced competition and lower operating costs, particularly for rent and labor.
Small urban laundromats average $8,000-$20,000 monthly, while similar rural facilities may generate $5,000-$12,000. Medium urban operations reach $20,000-$30,000 monthly compared to $15,000-$22,000 in suburban areas.
What are the average operating expenses for a laundromat, and how are they distributed across rent, utilities, labor, supplies, and maintenance?
Laundromat operating expenses range from $8,000 monthly for small operations to $29,000 for large facilities, with annual totals between $96,000 and $348,000.
| Expense Category | Monthly Range | % of Total Costs | Key Factors |
|---|---|---|---|
| Rent/Mortgage | $2,000 - $10,000 | 20-35% | Location premium, square footage, lease terms |
| Utilities | $2,000 - $9,000 | 15-40% | Water usage, gas for dryers, electricity for machines |
| Payroll | $2,000 - $10,000 | 10-30% | Staffing model, hours of operation, local wages |
| Supplies | $200 - $1,500 | 3-6% | Detergents, cleaning products, change fund |
| Maintenance | $300 - $2,000 | 4-10% | Equipment age, preventive maintenance, emergency repairs |
| Insurance/Reserve | $600 - $2,300 | 4-7% | Liability coverage, equipment replacement fund |
| Other Costs | $500 - $2,000 | 5-8% | Licensing, marketing, professional services |
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What percentage of gross revenue do utilities such as water, gas, and electricity usually consume?
Utilities represent one of the largest operating expenses for laundromats, typically consuming 15-40% of gross revenue depending on equipment efficiency and local utility rates.
Water costs dominate utility expenses since washing machines require substantial water usage throughout the day. Gas expenses primarily support dryer operations, while electricity powers all equipment, lighting, and climate control systems.
Efficient laundromat operations with modern, high-efficiency machines can maintain utility costs closer to 15% of revenue. Facilities with older equipment or poor maintenance practices may see utility costs reach 40% of gross revenue, significantly impacting profitability.
Geographic location plays a crucial role, as utility rates vary significantly across regions. Urban areas often have higher electricity and water rates, while rural locations may face higher costs for gas delivery or septic services.
What is the average profit margin that laundromats achieve today?
Well-managed laundromats consistently achieve net profit margins between 20-35%, making them attractive investments for entrepreneurs seeking stable returns.
These profit margins reflect the industry's relatively low labor requirements and predictable revenue streams. Self-service models typically achieve higher margins than full-service operations due to reduced staffing costs and operational complexity.
Factors affecting profit margins include location efficiency, equipment maintenance costs, utility management, and additional service offerings. Urban locations with high foot traffic often achieve margins at the higher end of the range despite increased operating costs.
Seasonal variations can impact margins, with spring and fall typically showing stronger performance. Economic downturns tend to have minimal impact on basic laundry services, though premium services may see reduced demand during difficult periods.
How much initial capital investment is typically required to set up a laundromat, and what is the usual payback period?
Initial capital requirements for laundromats range from $80,000 for basic setups to over $1.2 million for premium turnkey operations in prime locations.
Small laundromat investments typically require $80,000-$222,000, covering basic equipment, initial lease payments, and working capital. Medium facilities need $200,000-$500,000 for expanded capacity and improved amenities.
Large premium laundromats can require $500,000-$1.2 million, including high-efficiency commercial equipment, extensive renovations, and substantial working capital reserves. These investments often include advanced payment systems, customer amenities, and comprehensive security systems.
Most laundromat operators achieve full investment payback within 3-6 years, depending on initial investment size and operational efficiency. This payback period reflects the industry's stable cash flows and relatively low ongoing capital requirements once established.
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What is the expected EBITDA margin for laundromats?
Laundromat EBITDA margins typically range from 15-20%, reflecting strong operational cash flow generation before accounting for financing, taxes, and equipment depreciation.
These EBITDA margins demonstrate the industry's ability to generate consistent cash flows from operations. The relatively high margins result from minimal inventory requirements, predictable customer demand, and scalable operational models.
After accounting for interest, taxes, depreciation, and amortization, net profit margins typically reach 20-35% for well-managed operations. This gap between EBITDA and net margins reflects the capital-intensive nature of laundromat equipment and financing costs.
Operators focusing on operational efficiency, equipment maintenance, and customer service typically achieve EBITDA margins at the higher end of the range. Additional services like wash-and-fold can boost both EBITDA and net margins through increased revenue per customer.
What is the average revenue per machine per month, and how does this vary between washers and dryers?
Revenue per machine varies significantly between washers and dryers, with washers generating $1,000-$2,000 monthly compared to dryers at $600-$1,200 monthly.
Washers typically generate higher revenue because they're used for every load processed in the facility. Customers must wash before drying, creating guaranteed usage for washing machines regardless of customer preferences for air-drying or using facility dryers.
Dryers see somewhat lower utilization as some customers prefer air-drying clothes at home, especially for delicate items. However, cold weather and urban living situations often drive higher dryer usage, particularly in apartment-dense areas.
Machine capacity and pricing strategies significantly impact per-machine revenue. Large-capacity washers command premium pricing and often achieve higher monthly revenue despite lower usage frequency than standard machines.
How do additional services such as wash-and-fold, dry cleaning drop-off, or vending impact revenue and profit margins?
Additional services can boost laundromat revenue by 20-30%, with often higher profit margins than basic self-service operations.
- Wash-and-fold services: Generate premium pricing at $1.50-$3.00 per pound, creating recurring revenue from busy customers willing to pay for convenience
- Dry cleaning drop-off: Provides commission-based revenue with minimal additional investment, typically earning 20-40% commission on orders processed
- Vending machines: Add $200-$800 monthly revenue per machine for snacks, beverages, and laundry supplies with 30-50% profit margins
- Commercial contracts: Offer steady, high-volume revenue from local businesses, restaurants, and hospitality providers
- Alterations and repairs: Create additional revenue streams with skilled labor, often achieving 60-70% margins on services provided
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What is the average occupancy rate for a well-performing laundromat?
Well-performing laundromats achieve occupancy rates of 70-90% during peak hours and 20-40% during off-peak periods.
Peak hours typically occur during evenings and weekends when working customers have time for laundry tasks. Urban locations often see consistent high occupancy due to apartment dwellers without in-unit laundry facilities.
Off-peak occupancy varies significantly based on local demographics and competition. Facilities serving shift workers, students, or seniors often maintain higher off-peak usage than those primarily serving traditional work schedules.
Successful operators implement strategies to boost off-peak usage through discounted pricing, loyalty programs, and targeted marketing to different customer segments. These efforts can increase overall daily occupancy rates and improve revenue consistency throughout operating hours.
How do seasonal variations or economic downturns typically affect laundromat revenues and margins?
Laundromat revenues show minimal seasonal variation compared to many retail businesses, with slight peaks in spring and fall and minor decreases during summer vacation periods and major holidays.
Spring cleaning and back-to-school periods often drive increased usage as customers refresh wardrobes and bedding. Fall months see similar patterns as customers prepare for winter clothing needs and holiday entertaining.
Economic downturns typically have limited impact on basic laundry services since clothing care remains essential regardless of economic conditions. However, premium services like wash-and-fold may see reduced demand as customers become more price-conscious.
The recession-resistant nature of laundromat businesses stems from the necessity of clean clothes for work and daily life. Some operators even report increased usage during economic downturns as customers delay appliance purchases and rely more heavily on commercial facilities.
What benchmarks or industry averages are most relevant today for evaluating whether a laundromat is financially healthy and competitive?
Several key financial benchmarks help evaluate laundromat performance and competitive position in today's market.
| Benchmark Category | Target Range | Competitive Indicators |
|---|---|---|
| Annual Revenue per Location | $150,000 - $300,000+ | Higher revenues indicate strong market position and operational efficiency |
| Net Profit Margin | 20-35% | Margins above 30% suggest excellent cost control and pricing strategy |
| EBITDA Margin | 15-20% | Strong cash flow generation before financing and depreciation costs |
| Utilities as % of Revenue | 15-25% | Lower percentages indicate efficient equipment and utility management |
| Revenue per Washer | $1,000 - $2,000/month | Higher revenues suggest optimal pricing and strong customer demand |
| Peak Occupancy Rate | 70-90% | High occupancy indicates strong customer base and market penetration |
| Payback Period | 3-6 years | Shorter payback periods suggest strong investment returns and cash flow |
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Understanding laundromat finances requires careful analysis of multiple revenue streams and cost factors that impact overall profitability.
Successful laundromat operators focus on operational efficiency, customer service, and strategic location selection to maximize returns on investment.
