Why I Got Into The Coin Laundry Business
Back In 1983 I remember being pretty miserable selling insurance for a large company. I was a district manager with a small crew that I was responsible for and, sure, I was doing well and making money. But something was missing. As with many other would-be entrepreneurs, I knew I needed to wake up every morning with something more to look forward to than just selling insurance.
A friend of mine who owned a coin laundromat in New Jersey, told me he was in the “water business”...customers put money in his machines, press a button and water would start running. It was that simple. I was hooked!
During the months leading up to building and opening my first store on December 1st, 1984 I took that opportunity to learn as much about the coin laundry business as possible. I discovered there was more to owning and operating a laundromat than just “putting coins in a machine and the water starts running”. Obviously, it’s not that simple.
After spending the better part of a year searching in several New Jersey cities and towns for a good location close to home and also going to business seminars and visiting local equipment distributors, I finally found what seemed to be the “perfect spot” for a brand new coin laundry...directly across from the station where commuters got on the train to New York City in the morning and came home every evening after work.
Fast forward to today and the questions I was asking years ago are exactly the same ones many entrepreneurs are asking me now...and, not surprisingly, the answers are still pretty much the same, starting with “why should I invest in a laundromat rather than any other retail business?”
Top of the list and for as long as I can remember, is the fact that clean laundry has always been known in our industry to be a “necessity of life”. During good times and bad times, everyone needs clean clothes.
Recently, because of COVID-19 our federal and state governments have officially recognized that fact and classified laundromat businesses to be “essential”, making them exempt from total closure.
One major appeal to laundromat ownership has always been you don’t need a formal business or professional background to be a successful owner/operator. From the very beginning of the history of laundromats, going back more than seventy years, people from all walks of life and socio-economic stripes have owned successful coin laundry businesses and prospered.
Now, I’m confident that if you’ve done some comparison research with other brick and mortar retail businesses you are ready to delve deeper into all the reasons why owning and operating a vended laundry business is the perfect fit for you.
I believe, first and foremost, a healthy cash flow and return on your investment (ROI) is critically important. In our industry it’s not unusual for the owner of a well-managed store in a good location to recoup his/her entire capital investment and become “whole” in less than three years.
Although you are setting yourself up for initial success and, at the same time, planning for the future which may ultimately include the sale of your business, I see job one as hitting your “break-even” point and going into profitability as quickly as possible so you no longer have to dip into your reserves. I, and others I’ve spoken to, have accomplished this in three or four months after grand opening.
If you will not be putting up all the cash needed for your washers, dryers and ancillary equipment up front and there is financing involved, the finance company may allow you to make monthly interest-only payments for a period of time to help you get on your feet. Your first mission will be to build enough revenue to make the full principal and interest payment when it becomes due...then you are “home free” to focus entirely on growing your business, going forward.
Unlike most other retail businesses, getting into a vended laundry can be accomplished in several different ways...you can purchase an established laundromat already producing cash flow or you can buy a “turnkey” store built for you by a distributor or other third party. You can design and build a brand new laundromat on your own when you lease or buy a free standing building or rent space in a large shopping center, a small strip mall or a storefront on the street level of an apartment building on the corner or in the middle of a city block.
Be mindful of the fact that it’s always best to have ample parking and easy access to your store for people carrying bags of laundry and have several compatible businesses such as a Dollar Store, grocery store, sandwich or coffee shop close by for your customers to visit while their clothes are washing and drying.
Your laundromat can be operated unattended, partially attended or fully staffed everyday from open to close. An attended store will afford you the opportunity to offer other garment-care services like wash-dry-fold, dry cleaning drop off, alterations and pick up and delivery. The additional revenue produced from these services will go a long way toward offsetting attendant wages and other related expenses.
Your days and hours can be whatever you wish and, depending on your particular neighborhood, you may choose to stay open 24 hours a day and, unlike other retail operations, self service customers visiting your laundromat will be doing all the work themselves and you get paid immediately.
However, due in most part to the introduction in recent years of state of the art machine technology, payment choices and sophisticated Point of Sale (POS) systems, more so now than I have ever seen before, the laundromat franchise and licensed branded laundry concepts have come into their own and are gaining in popularity in many regions throughout the country. Investors are willing to pay an up-front fee and a monthly percent of revenue for the comfort and security of a successful business model and ongoing access to store management experts.
If you already have a full-time job or other commitments elsewhere you can operate your laundromat on a semi-absentee basis. Some entrepreneurs take advantage of this feature to become multi-store owners by tapping spouses and other family members to operate more stores. However, always keep in mind that if you completely leave your business, your business may have a tendency to leave you.
People who have worked all their lives and finally retired from jobs or careers in other industries, yet are not ready to completely hang up their cleats, find owning a relatively simple laundromat business to be exactly what they need to create their own days and hours and continue to stay busy.
I’ve also worked with folks whose life plan was to own one or more unattended coin laundries making enough money to allow them to leave their current jobs and become independent business owners.
The resources you will be using to provide your services will be shipped directly to your store, rain or shine, everyday by the utility companies through pipes and wires and payment will not be due for thirty days. Some water bills are paid quarterly.
There is virtually no inventory or food to store and keep track of as with sandwich shops or restaurants. However, if you do decide to sell laundry soap products, snacks and drinks through vending machines you pretty much have a captive audience.
If you do it right, a clean, well-run vended laundry can become an important part of the community which can afford you many opportunities to do good for your customers such as offering a “free wash day”, becoming a clothing donation depot, free gifts and prizes for loyal customers and carving out a Family Read, Play and Learn space for customers’ kids to spend time in while mom is doing the laundry.
Finally, the growing renter population, the back-bone of the self-service part of our business, coupled with more people increasingly using wash-dry-fold drop-off and app based home laundry pick up and delivery services, (which makes anyone with a phone a potential customer) I see the future of the vended laundry industry, as a whole, brighter than I’ve ever seen it before and a great reason why you should invest in a vended laundry business.