How to Enter the Laundry Business by Steve Erlinger

I get calls all the time from people who want to enter the Laundry Business by opening a laundromat. As I’ve said before, it’s a popular business with many compelling owner benefits:

• A flexible schedule,
• A casual dress code,
• Typically nice customers engaged in a simple task and who make few demands,
• Its un-stressful nature,
• A good return on investment, and
• Being your own boss.

You’re thinking, sign me up! Right?

Laundry Business Myths

Before you do, allow me to dispel some myths about the laundry business:

1. Laundromat businesses, or more accurately, laundry owners do fail.
2. It’s a simple business, but not easy.
3. If you want to enjoy success you can’t just go there two days a week and collect money.
4. Emergencies happen – sometimes you will end up there when you don’t wish to be.
5. It is not absentee-run unless you are willing to pay a good and trustworthy manager a good salary.
6. There is plenty of competition.
7. It’s not inexpensive to enter or maintain a laundry business. Equipment, walls, folding tables, floors, fans, changers and everything else people use and abuse do not last forever, thus you will have ongoing capital expenses.

Laundry Business Challenges

All that being said, many people still want to start their own laundry business. I joke with friends that if I had a laundromat for everyone who called me who had an interest in entering into the business, I would be a very, very busy individual and doing quite well. Unfortunately for the buyers out there, and me, there are few available stores that make good investment sense, for a variety of reasons:

• Many stores are expensive.
• The location may not be right for where the buyer lives.
• Financing for buying a store may be unavailable if the current owner kept poor records.
• The store may need new equipment that requires an even bigger investment.
• The owner is asking too much even when they can actually prove the income they claim.

So what to do?

Strategies for Finding the Right Laundromat Business

1. First and foremost you have to be patient. I speak to people who have been looking for years and still haven’t found the right store.
2. Secondly you must understand there is no perfect store out there. If the store you were seeking was perfect it wouldn’t be for sale. The owner would keep it or someone else would likely have beaten you to it. Ultimately you must pull the trigger if you want to be in the business, so I advise figuring out up front what deficiencies you can manage.
3. Third, there is no perfect deal. If one party is walking away very, very happy I would guess in most cases it wasn’t a win-win. Each party needs to give a little something.
4. Lastly, at some point you need to simply go for it. If you want to be a laundry business owner then you are going to encounter challenges and be willing to take on some risk.

As cliché as it may sound after you have investigated the best you can, make a good decision from a position of strength and just do it!

Buy, Lease or Build?

Those who call me generally either want to buy a laundry store or start one anew. We’ve covered some of the difficulties in buying a store. Is building one from the ground up a viable option? In most cases I would say no, unless you have very deep pockets and are willing to deal with city planners, building departments, inspections, contractors, off sites (such as bringing in additional power and proper sewer line) and most onerous of all: impact fees typically associated with the sewer usage. All of this is very expensive and time consuming and by now you probably know that equipment isn’t cheap and the tenant improvements necessary for opening a laundromat are extensive and costly.

Finding a location for a new store can be a challenge as well. What neighborhood do you know of in need of a laundromat that does not already have one (or two or three)? Right off the bat you will have plenty of competition. If you are dead set on opening a new store pick an area with poor competition. A lot of owners of derelict laundries figure people will come no matter what. If it’s the only game in town this may be true but if you as the builder of a new laundromat do it right people will flee an outdated, dirty, neglected laundry in droves! What are the three key words to a successful laundromat? Clean, bright and safe! Add to this good equipment and good service and in the right neighborhood you should do just fine whether building new or refurbishing existing.

Another way to enter the laundry business is to assume a lease, or pay some ‘walking away money’ on a failed ownership and try to add value. In cases I’ve observed where a new owner turned around a failed laundromat, they made a series of good decisions:

• Executing high-quality tenant improvements,
• Installing new and large-capacity equipment,
• Upgrading customer service, and
• Undertaking effective promotion and marketing strategies.

Remember, laundromats don’t fail: owners do.

If I had my druthers I would be looking for the ‘value add’ store as just described. They are hard to find, and you have to be in the right place at the right time. They are also more work to get going (though less than building a new store), but you have a say about design and equipment mix and you can leverage a good deal of your purchase since laundry equipment is easily financeable. And though there may not be a great deal of business there is likely some. The only way this recipe may not work is if the neighborhood has outgrown the need for a laundromat. Check the demographics and make sure there is a market for the business.

So you want to be in the laundry business? How will you do it?

Don’t be put through the ringer: have loads of fun with your laundry business!

Steve Erlinger, (Laundry Equipment Specialist, Western State Design) specializes in the many facets of finding, evaluating, equipping and operating, or expanding a coin laundry business in the San Diego, Orange County and Inland Empire areas.

With more than 40 years of experience as a premier, full-service distributor to the coin-op laundry industry, Western State Design has grown to become one of the largest coin laundry equipment distributors in the world. Western State Design is proud to be a Dexter Authorized Distributor, and has been recognized as the No. 1 Dexter Distributor Worldwide from 2009 to 2015. Dexter Laundry located in Fairfield, Iowa, is an employee owned leading manufacturer of commercial vended laundry equipment. All equipment is manufactured in Iowa. Visit WSD online at www.westernstatedesign.com or call 1-800-633-7153.