How To Start A Laundromat Business With No Money

How Profitable Are Laundromats? 

Laundromats can be extremely profitable in the right hands, due in part to the very minimal requirements in terms of work and effort once the business is established.

It is estimated that laundromats can actually have annual turnovers of around $300,000, making the ventures very profitable - especially if the individual opens multiple locations at once.

Starting A Laundromat Business With No Money

Many unemployed or self employed business people might think that you need capital to start a business, and in a lot of cases this is certainly true.

However, there are certain ways and means to start your own laundromat business with ‘no money’ at all - or at least with a much smaller amount than most people think they need.

Do Your Research

With any business, research is the name of the game, and this means knuckling down and learning everything you can about potential locations, the costs involved, washing machine rental/purchase, and the upkeep required for such a business model.

While the article talks about ‘no money’, what we actually mean is ‘very little money’, and to achieve this business with as low a cost as possible, it is important to know the market, and make useful connections within the industry who might be able to advise and help.

The Right Location

Of course, finding the right location is half of the battle when it comes to owning a small business. This relies on various factors, including:

• Amount of foot traffic - there needs to be people nearby to be profitable. This could be in residential areas, or near colleges and universities where people will need laundry services.
• Availability for parking - this needs to be accessible, both for you and your staff, as well as customers coming from slightly further afield.
• Security and safety - this needs to not only be safe from crime, but also safe and secure for both your staff and potential customers. If it is not safe, people will not use the service.
• Size - there needs to be enough machines and space for multiple customers to be able to use them, otherwise they might go elsewhere for convenience.
• Zoning - you need to make sure that you have a legal right to open your business in the area you have chosen. If not, you could face fines, legal troubles, or be closed down by local authorities.
• Utility costs & availability - if the area is expensive in terms of electricity, water, and heating, then you might need to look elsewhere. 

The Right Equipment

You also need to choose the right equipment. This can either be rented or purchased outright, but the former is the more favorable of the two options.

While you do not need to have the top of the line washing machines, they need to be functional, clean, and user friendly. As well as this, they need to work correctly, so as they do not damage customer’s clothing - something that could cost you money in compensation.

Promote Your Business

Self promotion is incredibly important with any small business venture, and failure to do so could result in you failing as a business, or facing bankruptcy as a result.

Social media is a great way to reach new people - especially in your local area. You can also use flyers, posters, and business cards to insight people into your new business.

Promotional Campaigns

As well as promotional marketing, you could also run promotional campaigns, offering people coupons for free washes on their first visit.

This would be especially useful for students on low incomes, or for people in poorer neighborhoods who might benefit from an affordable, community minded business.

You could also run loyalty schemes and programs, for example where loyal customers get a card stamped each time they come, and when they fill the card they get a free wash.

They Are A Necessity

They are also not only useful, but a necessity for people who might not have a washing machine of their own - or who might not be able to afford the respective energy costs.

People need their clothes washing, and as such this business model isn’t going anywhere soon.

Are There Any Cons? 

Of course, there are a couple of cons.

Competitive

The main downside is that the business is competitive, and there are numerous laundromat businesses in most cities. This can make breaking into the market difficult at first.

Capital Intensive

Laundromats work by utlising assets - like loads (ha!) of washing machines.  This makes them capital intensive.  So it can be expensive to get to a point that you have enough machines to make decent money.  This is where you can look at leasing the machines instead of buying - but that may be a more expensive option in the long run, so you need to do the math.

Repairs & Maintenance

As the machines get a lot of use, they will need more maintenance to keep them going.  You can't just pop a standard washer in a laundromat, it needs to be built for purpose and you need to keep them maintained, so make friends with the maintenance team as you might be seeing them quite a bit.

Utilization

In the hotel business you can only sell a nights stay once.  You can never sell that night in that room again.  The same goes for laundromats, if the machine is busy, you can't sell that specific time to someone else.  They need to wait until the first person finishes.  That's why you need enough machines so that people can use them.  The trick is that you can't have too many machines otherwise you have unused capacity and expensive machines sitting idle.  So you need to work out what percentage of the time the machines will be used and optimize the number of machines you need.

Final Thoughts

And there we have it, everything you need to know about running your own laundromat business with comparatively little startup money.

It’s true that laundromats can be a very successful and lucrative business model, especially when you have a distinct knowhow of the options open to you as you get started.

So if you are looking to start your own laundromat business with limited to no funds, then why not give some of these techniques a try?