How Much Does it Cost to Open a Laundromat?

Last Updated on January 18, 2024
Written by CPA Alec Pow | Content Reviewed by CFA Alexander Popinker

Are you thinking about starting a laundromat business but wondering how much it will cost? Opening and running a laundromat can be a profitable small business venture, but it does require significant upfront investment.

In this article, we’ll break down the typical costs associated with launching a new coin laundry so you can determine if it’s the right business for you.

First off, why might you want to open a laundromat? For many entrepreneurs, a laundromat offers an appealing business model. People will always need to wash their clothes – it’s an essential service.

Laundromats can provide stable, recurring revenue if you run them efficiently. The laundromat industry also has relatively low startup costs compared to other retail businesses.

But how much exactly will it cost you to start a laundromat? Let’s take a look at the key expenses involved.

How Much Does it Cost to Open a Laundromat?

The total cost to start a new laundromat can range anywhere from $100,000 to $1 million. But most small to mid-sized laundromats can be launched for $150,000 to $300,000.

The cost depends on factors like:

• Location – Buying or renting space in a high-traffic area costs more
• Size – More washing machines means higher startup costs
• New vs Used Equipment – New equipment is pricier than buying used washers/dryers
• Additional Amenities – Offering services like drop-off laundry, WiFi, etc. adds costs

ZenBusiness Inc. reports that the cost of equipment required to start a laundromat varies from around $20,000 to as much as $500,000 or more. They also mention that a typical security system with multiple cameras and sensors will cost between $2,500 and $7,500, depending on its complexity.

NorthOne states that on average, it costs between $200,000 and $500,000 to open a laundromat. They also mention that the property for a laundromat could cost between $200,000 and $500,000, and could be as much as $1 million or more, depending on the location.

Turnsapp.com mentions that on a typical scale, launching a laundromat will set you back anywhere from $200,000 to $500,000. They also emphasize the importance of conducting a thorough market analysis and business plan to understand specific costs.

A Reddit post suggests that the cost to buy a laundromat business typically ranges from $100,000 to $500,000, depending on factors such as location, size, equipment, and the condition of the facility.

According to Nav.com, there are about 30,000 coin laundries in the US, generating about $5 billion in annual revenue. They mention that smaller laundromats can make $500-$1,000 per week gross at 20% profit, while larger facilities can make up to $50,000 per week gross at 40% profit.

They also provide examples of laundromats listed for sale, with prices varying depending on cash flow, equipment, location, and whether real estate is included in the sale.

Let’s break down the typical startup costs for opening a laundromat.

Equipment

The bulk of your startup budget will go towards buying and installing washers and dryers. New commercial washers and dryers cost $3,000-$7,000 each on average.

For a small laundromat with 20 machines, equipment costs can total $100,000 or more. Larger laundromats with 40+ washers and dryers can require $200,000+ just for equipment.

Besides the washing machines themselves, you’ll need:

• Commercial dryers ($3,000-$5,000 each)
• A hot water heater ($2,000-$5,000)
• Vending machines for soap etc. ($2,000-$4,000 each)

Pro tip: You can save substantially by purchasing good quality used laundry machines instead of brand-new equipment.

Laundromat Build Out

If starting a laundromat in a new retail space, you’ll have to budget for the initial build out of the facility. This includes:

• Architectural plans ($5,000-$10,000)
• Plumbing, electrical, and ventilation work
• Flooring, lighting, decor
• Permitting and inspections

Allow approximately $20,000-$50,000 to build a laundromat space from scratch.

TIP: Save on build-out costs by leasing a space already set up as a laundromat. Look for existing laundromats going out of business.

Additional Laundromat Startup Costs

• Signage – Professionally made signs/banners help attract customers
• POS System – A point-of-sale system to process credit/debit payments
• Initial Inventory – Soap, laundry bags, cleaning products
• Marketing – Print/online ads, direct mailers, promotions
• Business Licenses & Permits – Varies by state and municipality
• Business Insurance – Essential coverage like property insurance
• Professional Services – Lawyer fees, accountant fees, consulting

Altogether, these other startup costs can add $20,000-$50,000+ to your initial investment.

You might also like our articles on the cost of building a car wash, starting a veterinary practice, or opening a coworking space.

As you scout locations, also factor in that you may need 3-6 months of rent upfront as a new business.

Financing Your New Laundromat

Coming up with $150,000-$300,000 in capital to start a laundromat is no easy feat for most entrepreneurs.

You generally have several options to fund your coin laundry business:

Personal Savings & Loans

Tapping into your own savings is the easiest way to access startup capital. Many small business owners also take out personal loans or borrow against assets like their home to self-fund new ventures.

Pros: Quick, easy, low costs Cons: Limited to your own resources

Business Loans & Credit

Banks or alternative lenders can provide small business loans and lines of credit to help launch a laundromat. SBA loans are a popular financing option.

Pros: Gain capital beyond your own means Cons: stringent approval requirements, high costs

Business Partners & Investors

Bringing on business partners or outside investors allows you to pool capital resources. You’ll share ownership but gain startup funding.

Pros: Raises substantial capital Cons: You must share profits/control

Buying an Existing Laundromat

Rather than start from scratch, you can buy an existing laundromat business through a broker. The purchase price is typically based on monthly gross revenue.

Pros: Begin operating quickly, no startup costs Cons: Costly, risk buying someone else’s problems

Assess your specific situation to determine the best path for funding your laundromat. A combo of personal equity, loans, and investors is often optimal.

Ongoing Operational Costs

Once your laundromat is up and running, you’ll have monthly expenses to cover:

• Commercial lease or mortgage
• Utilities – water, electricity, gas
• Employee wages and benefits
• Loan payments
• Insurance
• Supplies – laundry detergent, bags, hangers, etc.
• Repairs and maintenance
• Marketing and advertising
• Credit card processing fees

Budget approximately 50% of your expected gross revenue to cover the ongoing costs of operating a laundromat. Profit margins are modest in the laundromat business, so efficiency is key.

With strong marketing and cost control measures, you can achieve 5-10% net profit margins on average.

Is a Laundromat Profitable?

The short answer – yes, laundromats can be quite profitable if run well.

Top-performing laundromats bring in annual revenues of $200,000+ with net profits in the 10-20% range. A laundromat with 30 washers might generate $300,000 in gross revenue and $60,000 in profit for example.

New laundromat owners should break even within 1-2 years and can reasonably expect to earn $50,000-$150,000 in profits annually after that initial ramp up period.

Of course, profits depend heavily on your business acumen. Buying used equipment, controlling costs, retaining customers, avoiding downtime, and expanding services over time lead to higher earnings.

Laundromat Business Tips

Here are a few tips to maximize your chances of success opening and operating a profitable laundromat:

• Offer wash-dry-fold pickup/delivery – great added revenue stream
• Install ATMs, vending machines, free WIFI – attract customers
• Use social media marketing and loyalty programs
• Invest in top commercial laundry equipment
• Provide excellent customer service
• Keep your laundromat clean and well maintained
• Track key metrics like machine usage, revenue per machine
• Stay open long hours – many laundromats operate 24/7

The laundromat business requires hands-on management and smart financial oversight. But in return, it can deliver stable returns for entrepreneurs.

Final Words

Opening a laundromat requires substantial upfront capital, hard work, and business savvy. But it can also be a smart, profitable small business if done right.

Plan on investing $150,000-$300,000 to start a mid-sized coin laundry operation. Ongoing costs will be around 50% of revenue. Focus on efficiency and customer loyalty to maximize profits over time.

With proper funding, an ideal location, great equipment, and sound business practices, a laundromat can provide solid returns for owners. It’s a tried and true small business model.