If you’re asking yourself if you should purchase a laundromat, this 6 point checklist will help you determine whether or not it’s the right investment for you.
The first laundromat, then called a “Wash-a-teria”, opened its doors in Ft. Worth, Texas in the Depression-era 1930s. Soon, the popularity of laundromats exploded and storefronts spread across the country. The first laundromats were geared toward self-service—which was a change from the earlier commercial companies that laundered, folded, and pressed clothing as a complete service—which means customers paid by the hour to wash their clothing using early electric coin-operated washing machines.
These coin-operated laundry machines enabled those who were affected by the Depression and couldn’t afford personal washing machines another option: deposit a few coins and rent a washing machine for a period of time. Even after the rise of affordable household or in-unit washing and drying machines, laundromats have since never lost their enduring appeal for the convenience, economy, and ubiquity they offer.
Of course, laundry equipment has radically changed since the early 20th century. Tub washers made of porcelain or copper were replaced by sleek stainless steel top-load and front-load electric machines in the 1950s and 1960s. Large, power-consuming machines were ousted by energy-efficient, low water washers. Coin-slot mechanisms gave way to digital card-operated payment systems, which give laundromat owners abilities to remotely manage their stores in capacities never imagined.
Today, there are some 35,000 laundromats operating in the United States, generating over $5 billion in total revenue annually.
Modern laundromats have had to constantly update and keep abreast of the current developments in laundry technology to stay competitive, including the addition of amenities such as free Wi-Fi, flatscreen televisions, vending machines, and children’s areas with family-friendly entertainment.
Some laundromat owners choose to stay open 24/7—upping their convenience factor—and some are completely automated, meaning an owner, manager or employee doesn’t need to be in the store at all, while some storefronts have several employees to help patrons with services like changing cash or coin into proprietary store credit for vends.
Even considering these new trends in the laundry industry, the basic model of the self-service laundry industry has remained the same as it was over 80 years ago. Many things relating to the business model of laundromats has changed, however, including a higher return on investment with these more customer-oriented ancillary services and the ability for many owners to self-manage their stores remotely as absentee owners. Laundromats are so ingrained in the American landscape that it is considered to be a mature market.
Laundromats have become a canny choice for investors and entrepreneurs looking to play a minor role in the day-to-day operations of a business, who want to tailor a business to their exact wants and specifications—since most laundromats aren’t franchises—and who want the feeling of security that a laundromat’s steady income can bring.
If you’re thinking of buying a laundromat, it’s best to research what to expect in the buying process, management duties, and to add up the potential expenses, costs and bills along the way.
We’ve created this checklist of 6 items to cover in detail when buying a laundromat. With all of these tips come the caution of due diligence: A potential buyer will want to check everything thoroughly; talk to multiple owners, consult relevant professionals, like real estate agents, laundry machine maintenance and repair companies and experts and others.
Want to know the secret to running a profitable laundromat? Download our ebook — From Novice to Veteran: The Savvy Owner’s Guide To A Profitable Laundromat.
Use this checklist as a guide for what to expect when buying a laundromat.
If there were ever a time to repeat old real estate platitude, “location, location, location,” it’s when you’re doing research on buying a laundromat. Locations in urban areas near
are the best bets for your laundromat. Multi-Housing facilities and apartment complexes usually have community area laundry rooms, but many residents are loyal to local laundromats. These types of residents that are spread across a sprawling multi-family property are the perfect demographic. Locations near colleges and universities are also attractive, with the vast majority of students using the services of a laundromat.
It is also a wise move to make sure that the laundromat business you’re interested in buying is listed on search engines, as many first-time customers choose which laundry service to patronize based on a Google search for “laundromats near me”.
If the laundromat you’re looking at has a good marketing strategy, they may even have an agency create web-based ads for the store. The more prominent a store’s presence in Google, Bing and Yahoo search engines and the higher its reviews on forums like Yelp!, the more likely the store to be profitable.
Laundromats have few costly recurring expenses, but potential buyers—whether they are searching to buy an existing laundromat or even to build a new store— should be aware of each of these expenses. The lease for a laundromat’s actual storefront will be the highest monthly expense, and buyers in the market today should look for a lease term that is suited to industry standards. If possible, try to find a longer lease term that is amenable to your budget.
In many cases, however—if the current proprietor of the laundromat doesn’t own the location—they have a contract with a leasing company. This would mean that the lease would transfer over to you after you sign the contract.
Naturally, when buying any business, a solid budgetary plan is the first necessary step to factor the initial investment costs of a laundromat and recurring expenses. Whether you’re buying an existing space or building a new store from the ground up. If you are buying an existing space, the costs can range anywhere from $200,000 to $500,000.
Not to be overlooked when calculating overall expenses is possible renovation, which could mean the difference between a rapidly successful store and a business that sees only passersby. If you get a great deal on a store, there may be a reason the owner is selling so low. If the store is just barely hanging on, rundown with equipment in disrepair, completely revitalizing and renovating the laundromat could turn the former derelict store into a profitable business, buzzing with constant activity and foot traffic.
How much time an owner spends in their store is entirely dependent on the owner’s prerogative. An owner can spend as little or as much time in their store as they want. Laundromats are particularly amenable to absentee owners, due to the automated, self-service nature of the business and new technology like digital card payment systems.
If an owner invests in digital card payment systems, loyalty cards which can be used to pay for vends at that store can be dispensed automatically via a payment kiosk without the need for an in-store attendant. Customers also add value, and redeem loyalty program benefits, discounts, and promotions right from the X-Changer kiosk.
Check the existing equipment thoroughly. If you aren’t experienced in testing commercial laundry equipment, do some research on the washing or drying machine operation, read relevant model manuals, or call the specific manufacturer to get some information. You can also contact a laundry repair service and see if you can have a professional assist you in helping to inspect the machines.
Take a fine tooth comb to the machines, are they large industrial washers and dryers? Do they look clean? How old are they? Current maintenance or problems? Do they have digital payment systems, like FasCard and LaundryCard, or is it a coin-only laundry?
Some of the most common problems with washing and drying machines to add to your assessment checklist are:
Also, if the potential store is outfitted with digital laundry payment systems, either cashless card-only and coin-and-card systems, the possibility of a large amount of “float” could add to the appeal of the store.
Is the store you’re looking at buying near another laundromat, you may want to consider doing some commercial recon on your potential competition.
If your competition looks to be fairly successful and nearby, then it may be a good idea to check elsewhere for a store.
Does your store have a good reputation for convenience and comfort? Does it need many renovations?
Does it have extra amenities and new technology, like
A laundromat can be one of the wisest business investments, with due diligence on the part of the investor and a few upgrades, a laundromat storefront can become and continue to be a profitable investment for years to come.
Learn more about investing in and running a profitable laundromat by downloading our guide to a profitable laundromat.
If you would like to learn more about buying a laundromat or digital card payment systems, Card Concepts Inc. is here to help. Contact CCI for more information.
There are more than 35,000 laundromats in the US alone, making up an industry that nears $5 billion in revenue annually. For each laundry store, sales range from $35,000 to $1 million a year depending on a number of factors, like location, rent and the cost of equipment. But as any business owner knows, it’s always wise to look for ways to increase your bottom line and make more money at your laundromat.
The easiest way to increase your laundromat earnings is by adding additional revenue sources. Additional revenue sources will provide more value to your customers and give them more reasons to choose your store. By adding other ways of bringing in profit, not only will you make more money from your current customers, but you will also draw in new customers who come to you because of the additional services you offer.
Food and Drink Vending
This is the quickest way of bringing additional revenue to your laundromat. Profit from vending machines vary based on volume and whether or not you stock and manage your own machines, but can add valuable revenue to your store.
Sell Upgrades on Your Machines
Traditional laundromats are coin operated, and customers receive a standard wash in exchange for a standard fee. However, cycle upgrades (extra rinse/wash) and variable priced cycle options (more for hot, less for cold) are unique capabilities that make a positive impact on a store’s bottom line. You can use a laundry payment system like FasCard or LaundryCard to facilitate this and charge more than your standard price for these upgrades, boosting profits.
Vending That Offers Detergent, Dryer Sheets, Fabric Softener and Other Laundry Items
In addition to offering food and drink vending machines, provide machines that sell small sizes of laundry necessities, like laundry detergent, boxes of dryer sheets and bottles of fabric softener. While a laundry vending machine is another way to make money, it also makes doing laundry at your store easier and more convenient for the customer, which increases profit as well.
Laundry Drop-off Service
Commonly called wash and fold, adding a laundry drop-off service to your laundromat expands your customer base. Clients that are too busy to spend time at your laundry store will love the idea of being able to drop off their clothes and pick them up clean and dry at their convenience, and your profit will grow.
Pickup and Delivery Service
Though it might not make sense for every store, high volume stores and busy locations might find it valuable to give their customers the option of scheduling laundry pickup and home delivery. Like with offering a drop-off service, pickup and delivery will allow your store to reach more people who might not typically use a laundromat.
Another popular way to diversify revenue at your laundry store is by adding arcade games. An upfront investment is required, but over time these machines will pay for themselves and encourage your customers to stay at your store for longer periods of time.
You can also make more money at your laundromat by adding one or two car vacuums outside your store. Many customers will see this as a convenient tool and vacuum their car while their laundry is going inside, netting you extra dollars per month.
While not technically an additional revenue source, giving your customers access to free wifi will encourage people to hang around your store while they wait for their laundry to finish, increasing the likelihood that they’ll spend their cash at your vending machines or vacuums.
When you diversify the revenue sources in your laundry room, you provide new ways for your clients to receive value from your store, which differentiates you from your competitors and increases your profitability. With only small tweaks to your current operation, you can increase your margins and serve more customers. Services like FasCard and LaundryCard simplify this process and make it easy for you to sell upgrades and adjust your vend price based on demand.
See how much more money you could make with a system like LaundryCard by using our profit calculator.
Laundry card systems do much more than simply provide an alternative payment method. Laundry cards build customer loyalty. Customers can obtain a loyalty card by inserting cash or a credit card and then use the value added to the loyalty card to start a machine. By having customers pay first and use the system, it establishes customers with a sense of loyalty and encourages customers to return. In addition to the payment cards themselves boosting loyalty, FasCard and LaundryCard have many advanced loyalty programs built into their systems for you to use.
Loyalty card programs serve as your base of operations for both customer retention and the forward-thinking marketing promotions that drive new business. Today we are going to cover a few of the loyalty programs that FasCard and LaundryCard offer.
Bonus Packages lets you give your customers bonus dollars for adding value to their loyalty card. For example, you could give your customers a $2 bonus for adding $20. Your customers will be encouraged to pay you in advance and you now have them committed for $22 in service! As your customers add more value to their cards, your business will build a ‘Float’. Float is the amount of money added to cards but has not been spent yet. By encouraging customers to add more money to their cards, you will increase customer loyalty through the float.
Free Dry time is enticing advertising to laundromat customers. The Free Dry program allows the system to reward customers with Free Dry time based on their wash usage. Free Dry can be scheduled for certain days of the week or you can choose to only award customers Free Dry credits on specific machines. For example, you can offer customers Free Dry only on your largest machines. You can control how much ‘free’ time your customer earns and our Free Dry program will keep track of all the details for you.
The system enables you to configure any discount amount to any card. You can establish discounts for groups and market to specific customers. For example, you could offer 10% off for all military personnel. You can create as many groups as you wish and assign a unique discount to each group. As each group member uses the machines, not only will they receive their discount but you will get valuable sales information regarding each group. This program gives you the ability to create an endless number of marketing programs to promote your store. This helps you target your primary audience and focus on building loyalty within those markets.
The loyalty points program is a great way to reward your most loyal customers. This program allows customers to earn Wash Points when they use laundry equipment and the system will automatically reward these customers when they reach a certain point goal. The program allows you to set how many points customers earn for every dollar spent and how many points they need to earn to be awarded the bonus. Not only is a points program a great way to promote loyalty but it’s also a great way to encourage card retention.
The coupon program lets you create custom coupon codes that can be distributed to prospective and existing customers. You can configure a coupon code and distribute via direct mail, coupon circulars, email and even social media. With LaundryCard your customer simply enters the coupon code on the X-Changer Kiosk and with FasCard your customer can redeem it through the FasCard mobile app. The systems will redeem the reward automatically. Coupons can be configured to provide a temporary discount which expires on a specific date or designed to issue a bonus to a customer’s loyalty card.
With the LaundryCard system, the birthday bonus allows you to give a gift to your customers on or near their birthday. You can set up a birthday bonus that will automatically be applied to their card with a set number of days before or after their birthday. When customers visit the store on or near their birthday, they will be greeted with a special birthday message and a bonus at the X-Changer kiosk. The birthday bonus program is a personalized way to reward customers and creates a memorable customer experience that will influence loyalty.
The LaundryCard system has a registration bonus program that will reward users bonus money for registering their contact information at the X-Changer kiosk. For example, if a customer enters their registration information, the system will apply a $2.00 bonus to their card. The program and bonus amount are configurable by the operator.
By implementing LaundryCard and FasCard’s advanced marketing and loyalty programs, you can take your laundromat business to the next level. Competition is everywhere and giving your customers reasons to do business with you versus your competition begins by encouraging loyalty. If you’re a laundromat owner or investor looking to set your business apart from the competition, contact us today to learn more about our payment solutions and how investing in the technology can give you more ways to increase your laundromat business!
The unused value or funds left on a self-service laundry “loyalty card” is what those in the laundry industry refer to as “float.” Float is a widespread topic in the laundry industry, which comprises laundromat owners, absentee proprietors, and multi-housing managers.
It is a prevalent topic in laundromats and multi-housing facilities across the country—and on many popular online forums such as PlanetLaundry and CoinWash—because it is one of the chief monetary draws of utilizing a digital card payment system over traditional coin-slot machines.
Although float is a widely discussed topic among laundromat owners and industry insiders, owners are not always able to reap the benefits of float. With some digital laundry payment systems, there is no ability to add value onto an additional proprietary card that is only usable at their locations. In fact, most laundry payment systems only allow a customer to simply pay for vends using a credit or debit card.
It is only with more sophisticated digital laundry payment systems that float is even a possibility. With these advanced systems, laundromat owners are able to issue what are called “loyalty cards,” which entitle their customers to incentive programs such as big bill bonuses (prepay $20, receive $22 in vend credit; prepay $100, receive $110 in credit), points, and group discounts, with more options and customizations depending on whether the owner chooses to permit clients the option to accept cash and card or credit/debit cards alone. Laundromat owners can even issue “digital” loyalty cards with the help of tools like the FasCard app, which expands the loyalty card’s ability to increase float.
Digital laundry payment system providers also offer premier options for customers with secure touchscreen automated payment kiosks, which dispense loyalty cards, redeem discounts and earned point rewards, and add value to cards—all without an in-store attendant necessary. Plus, owners gain features like live bill count and email notifications.
The process of how float accrues with digital laundry payment cards is comparable that of reloadable gift cards. For instance, in both cases, an amount is prepaid and that amount must be spent using that particular card at locations provided in the terms of its use.
Many major banks and credit card companies, such as VISA, American Express, and MasterCard, and retailers like Amazon, Target, Apple, and Best Buy have incubated this proprietary pre-pay concept, encouraged its rise, and slowly solidified the popularity surrounding personal rechargeable gift cards, in no small part due to the unclaimed money left on these cards.
According to a 2011 report by Brian Riley, analyst for the financial consulting firm, TowerGroup estimated that a reeling $41 billion of gift card funds have gone unredeemed from 2005 to 2011. This figure was so astonishing, The Wall Street Journal picked it as its “Number of the Week” for the end of 2011.
Let’s say a laundromat has a group of customers that each buy a single loyalty card and pre-pay for the laundromat’s services with a large bill. In this scenario—after six months or so—most of those customers eventually leave various amounts of value—for some it’s .75¢ and others it’s $1.50—on each card.
If they never use the remainder of the value on their cards, this means quite a bit of “extra” on-going profit for the laundromat. Even if the float on a single card is equal to a nickel or a dime, every cent is rolled up into a continuous whole. In fact, many digital card laundromat owners report accruing upwards of $1,500 in float each month.
This is especially the case when vend prices are increased incrementally in amounts lower than 25¢. As with many other contentious issues, however, float brings with it differing opinions and on its value, use, and its capacity to be transferred from one store owner to another.
There are plenty of reasons for customers not redeeming the value present on their cards, either through card loss, misuse, or by neglecting to bring their old card in with them when they come in to add value to it—and the actual rate of this happening is high.
If you would like to learn more about Card Concepts Inc.’s (CCI’s) premier digital card payment system, LaundryCard, and how easily the investment costs can be recouped by the float accrued by the system, download our free case study, Bowen Laundromats. In this case study, Bill Bowen explains what it’s like to have a LaundryCard system after utilizing another card system and the major differences between the two.
Card Concepts Inc. is the leading provider of digital laundry payment systems, with completely cashless, card-only systems, including LaundryCard, and the card-and-cash hybrid laundry payment system, FasCard. To learn more about both systems, contact CCI at +1(866) 860-1660.
Opening a Laundromat can be a rewarding investment that is both profitable and gives you the freedom to run a successful business without being tied to the office all day. This is a great fit for professionals and investors looking for a more hands-off investment opportunity or for those who simply want the freedom that comes running a business that doesn’t require being onsite or managing a large number of employees.
When deciding to go into the Laundromat business there are number of decisions to be made—location, type of equipment, technology, financing, etc. We address many of these topics in our free Laundromat Investment 101 Download. One of the first decisions to make, which we’ll address in this post, is whether to purchase an existing Laundromat or build one from scratch.
Is it better to buy an established business or build a new one from the ground up? What are the risks of each? What are the costs of each, both in the short and long term?
If you’re thinking about getting into the Laundromat business, there are several key factors you need to take into consideration when weighing your options. In this post we’ll point out key things to look for that will help you determine the best fit for you.
Purchasing an existing Laundromat comes with a proven history of sales. For better or worse, you know how well the location has been performing and have a built-in customer base.
This is certainly a pro for purchasing an existing location as the risk is lower because you know exactly what you are getting into.
That said, people rarely sell profitable Laundromats that are continuing to grow. There are cases of owners selling well-performing businesses in order to retire, but those instances aren’t as common. Aside from these few instances, it’s more likely that as the new owner, you will be looking for a diamond in the rough.
If by chance you do happen to find one of what seems like a great deal, beware of seemingly successful laundromats selling at bargain prices. Ask thorough questions as to why the seller is looking to get rid of their Laundromat.
What may look like a successful Laundromat may be plagued by debt, improper management—or in some cases—questionable accounting.
It’s more likely that as the new owner, you will be looking for a diamond in the rough. Most owners who purchase an existing Laundromat do so because they believe that the current Laundromat is underperforming and that with some changes and under their ownership they could improve the performance of that location. Sometimes this means simply cleaning up the store, adding new signage and a fresh coat of paint, or perhaps some new amenities like free WiFI and flatscreen televisions.
These two high-tech laundry card systems are a great way to attract new customers and build loyalty. So while you have that proven sales history with an existing location, you’re going to want to make sure you see the opportunity to make changes that will improve upon those sales and make the Laundromat even more successful.
While building a Laundromat from scratch doesn’t come with the proven track record of sales, you have the freedom to start fresh and make it exactly how you want it. This includes the public perception, or brand image, of your Laundromat as well. When a new owner takes over an existing Laundromat and it was poorly run, dirty or had older equipment, even if you make improvements in these areas there may be an existing negative perception about the Laundromat that can be difficult to change.
For many, a major benefit of building your own business is the satisfaction that comes with setting it up and branding it exactly how you want. In the case of building from scratch, implementing a card operated system is a given. Customers will be expecting everything to be new and modern, including the payment options and loyalty incentives.
When you build your own Laundromat generally the equipment is financed—meaning less cash up front. A lower start-up cost will give you more resources to start building your customer base and generate income. You’ll also have new equipment, which comes with warranties, so your operating and maintenance costs will be lower for several years. (Compare this to the costs of running a Laundromat bought from a previous owner, which may be a lot higher initially because of costly renovations.)
Choosing a distributor will be an important part of starting your new Laundromat regardless if you buy an existing Laundromat or build one from scratch.
Demographic reports detailing things like how many renters are in a particular area are easy to come by, but a good distributor can give you much more than that.
For example, if there was a Laundromat in the area three years ago that failed, a good distributor might be able to tell you what happened and advise you on ways to avoid the same fate.
Finding a distributor that provides that type of consultative information and isn’t just selling you equipment is crucial.
Most established businesses are sold through brokers. Should you decide that purchasing an existing Laundromat is the best fit it’s important to thoroughly vet a broker before doing business with them. Most importantly—speak with the broker’s past clients. Any reputable broker should be more than happy to provide you with a list of references.
Whether you decided to buy an existing Laundromat or start your own, a laundry card system like LaundryCard or FasCard can help attract new customers and retain existing ones. The convenience and benefits of an easy-to-use card system encourages customer loyalty and can play a major role in the success of your new or revamped Laundromat.
Welcome to the Laundromat business!
Card Concepts Inc. (CCI) offers high quality card-operated laundry payment solutions through the Laundromat smart card, LaundyCard™, the hybrid card-op/coin-op payment technology, FasCard™, and more options like loyalty cards for the Laundromat, multi-housing, and self-service laundry industries.
So you are looking to get into the laundry business. You’ve done your due diligence researching to the very best of your abilities the realities and logistics of opening a laundromat. You’ve spent hours on planetlaundry.com, on the ground finding out the going rate on local laundry franchises, maybe even visiting some successful laundromats in your area.
But once you have your basic business plan down for opening your very own laundromat, there’s just one question left: Do you stock your laundromat with coin operated laundry equipment, card operated laundry machine equipment, or both?
BenBiz.com has a great article on the pros and cons of owning a coin laundromat, an all digital card operated laundromat, and a laundromat with hybrid card-and-coin operated machines.
We at Card Concepts Inc. wanted to highlight a few excerpts from the article, Buying A Laundry: Coin Operated Laundromat Or Card Operated Laundromat? which are included below, but if you would like to read the article in full please click on the link.
“More and more we see “Coinless Laundromats“. Anyone in the business or entering the business will face the age old question; Coin or Card? Well, perhaps it’s not an age old question, as card systems haven’t been around very long, but it is a question worth considering.”
“Your management style or how you want to spend your time will also be important. A card store would be good for the person who doesn’t want to collect coins (and that can get old), wants to track all transactions, wants accurate and automatic accounting and wants to evaluate productivity of each machine.”
If you are looking for a ‘Card Only’ solution for your coinless laundromat, look no further than our LaundryCard system, focused on automating your laundromat by eliminating coins, employee management, store marketing. Learn more why coinless laundromats make good investments and if you’re a current owner who values precious free time but feel like you have less and less these days, read this article of tips on managing your laundromat remotely.
“The hybrid systems seem to be taking over and make a lot of sense to me. Again, with this system you can do it all. Most importantly you can take payment in any form. If receiving payment via cash, loyalty card and credit card is good enough for Macy’s, Starbucks, Wal-Mart and the like it should be good enough for a Laundromat.”
“The hybrid store does not require that you have a reader on every machine. This allows you to experiment with a system without paying the high price of doing an entire store.”
If you are looking for the perfect ‘hybrid’ coin-and-card operated laundry payment system then learn about our FasCard solution. With FasCard, you are able to easily modify your existing laundry machines to accept debit or credit cards and loyalty cards, while still being able to accept coins as regular coin operated laundry equipment.
What can Card Concepts Inc. do for you? Learn more about how the revolution in smart laundry products is changing the question of laundromat owners from “Should I use card or coin-operated machines in my laundromat?“ to “Would my customers prefer hybrid card-and-coin operated machines or solely card-op laundry machines?”
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