Planning is invaluable when starting a laundromat business. Outlining the details of your facility, equipment, services, and personnel will give you a better sense of what you will need to start your business, while analyzing yourself, your competition and your target customers will help you understand your market and how your business fits into it. Writing a laundromat business plan doesn’t have to be overwhelming. Here are 10 things to consider in order to develop a winning business plan for your laundromat.
Look for locations that are on a main road, have high visibility for people passing by and provide easy access and adequate parking for your customers. To prevent theft and provide a safe environment, the area around your potential store should be well-lit. Make sure the building infrastructure and utilities are able to accommodate the resources (electricity, natural gas, water) that will be needed for your business to operate at peak times.
Will you offer coin operated machines, a hybrid of coin and card or card only machines? Card acceptance is convenient for your customers and they’re more likely to spend more when paying via card is an option. Hybrid and card only payment systems allow you to remotely monitor your laundromat and provide hassle free collection. With a card payment system, there is the potential to increase your profits by taking advantage of features such as incremental vend pricing and time of day pricing.
Providing additional services and amenities can offer convenience for customers, increase revenue or set yourself apart from the competition. Consider adding vending machines (food/drink, laundry supplies) or giving your customers access to free wi-fi. Offer cycle upgrades (extra rinse/wash) and variable priced cycle options (more for hot, less for cold). Provide a wash and fold service where customers that are too busy to spend time at your store can drop off their laundry and pick it up clean and dry at their convenience.
What hours will you be open for business? Will you be open 24/7 or have set hours? Will you always have staff onsite or provide a card system to get in during certain hours? Do you plan to be in the store most days or would you prefer your role to be more hands-off? What staff positions would you like to fill – attendant, manager, accountant, marketing, security? For each employee position, lay out hiring strategies, tasks/responsibilities, needed training, compensation plan, and how you plan to manage employee performance.
Even though you may be just starting out in the laundry business, you can still do a SWOT analysis (a list of your strengths, weaknesses, opportunities and threats). Think of this as more of a brainstorming session about your potential laundromat. Strengths may show areas that will give you an advantage over competitors and benefits you will want to advertise to potential customers. Weaknesses may show areas you will want to work on to be competitive. Opportunities may show possible areas of future growth for your laundry business.
Survey the competition in the area of your potential location. Is it a highly saturated market or are your services desperately needed? If there is a lot of competition in the area, are you able to stay competitive through offering different services and amenities? What does your competition look like? When studying your competitors, take note of things such as location and facility, business hours and peak service times, type of equipment, amenities and services provided, pricing and payment options, marketing strategies and promotions offered, and number of employees.
Decide what your ideal customer looks like and consider what that ideal customer will be looking for in a laundromat. Define the demographics, lifestyle and motivations for the market you are trying to reach. Ask yourself if your target market makes sense with your potential location, payment options, and services offered. Your goal is to align your laundromat offerings with the needs of your target market.
Determine what your startup costs will be for opening your laundromat. List estimates for any potential costs of registering your business, down payment for a loan, buying equipment (machines, payment system) and furniture (folding tables, laundry carts), remodeling a building, installing equipment and sewer lines, and municipal fees and permits. After you’ve come up with what your initial start-up costs will be, list estimates for any potential ongoing costs of utilities, loan payments, rent, insurance, payroll, repairs/maintenance, and supplies. Forecast what you expect to make in year 1, year 2, and year 3 based on revenue sources and services you’ll offer. Once you list out all of your costs and forecasted sales, you’ll have a better picture of what you need to make in order for your laundromat to be profitable.
There are many factors to take into consideration when deciding what your vend prices will be, such as the prices of competitors and your expenses. Now that you have an understanding of what your expenses will be, you can figure out what you need to charge at minimum in order to cover those expenses and make a profit. In developing a pricing strategy, decide where on the spectrum you want to be – i.e. the cheapest, the most expensive but with the best options, or middle of the road. Keep in mind that you if you have newer equipment or modern technology compared to your competitors because you are a brand new laundromat, you should factor that into your pricing and charge more for that value.
Outline the key steps you need to complete in starting your laundromat business and an estimated timeline for each. Milestones could include things such as location built / bought / rented, location outfitted with equipment, employee interviews, employee training, and marketing materials. A goal of starting a laundromat is easier to achieve when it is broken down into a checklist of small steps.
Having a solid laundromat business plan will help boost your confidence and improve your chances of success. If you would like to learn more about starting a laundromat or digital card payment systems, Card Concepts Inc. is here to help. Our FasCard and LaundryCard payment systems have helped laundromat owners all over the country offer modern payment options, increase profits, manage employees, implement marketing programs and successfully run their stores.
Contact CCI for more information today!