Laundromats make a ton of money

Start your own business with a laundromat

Who doesn’t know it as an annoying amount of work in everyday life: towering mountains of laundry that simply don’t want to get any smaller. Dirty laundry occurs every day. In this respect, the potential target group is enormous, especially in large cities. So why not derive a business idea from this “everyday problem” and lay the foundation for setting up a business?

Even if almost every household now has a washing machine, there is still a lot to be said for setting up a self-employed laundromat. The basis will have to be a good location with high demand. And then, of course, the planning and the strategic direction are particularly important, the main features of which are to be outlined in this practice-oriented guide.

Starting a business with a laundromat: start your own business with a timeless business idea

  • Analysis of the initial situation

  • What kind of laundromat to open?

  • What is important in the business plan

  • Gaining customers through added value

  • Opening a laundromat: requirements

  • Merit with Laundromat: Factor Analysis

Analysis of the initial situation

The first laundromat opened in the United States in 1938. A few decades ago it was still customary in this country to wash laundry in a salon rather than at home. This was simply due to the fact that washing machines were still a luxury item back then. Not every household could afford a washing machine. Today there are good and quite energy-saving models from or even less than 200 euros. And thanks to free installment financing, anyone can actually afford a washing machine.

Why this business idea still remains in fashion

If you want to start your own laundromat, you will find fundamentally changed framework conditions today: According to statistical data, a washing machine can currently be found in more than 96% of all households. Even so, it is estimated that there are still between 300 and 700 laundromats. They still hold up, especially in large cities.

It is important for business start-ups to recognize that it is no longer a sure-fire success. However, those who adjust themselves intelligently to the relevant target group, find a good location and score with added value, will be able to successfully set up a laundromat on their own. And finally, it should be noted that laundromats also offer tumble dryers. Of these, there are only just over 1 million copies in Germany! In this respect, it becomes clear that not only washing itself can become a reason to go to a laundrette nearby.

Location analysis and target group as success factors

If you want to run a laundromat for profit, you have to have a location with oneFind the largest possible catchment area or through traffic. Laundromats are typically found in large cities with more than 100,000 inhabitants. This can be an attractive business model, especially at locations with universities nearby, because students are traditionally part of the target group. Single households, single men and travelers also belong to the target group.

In view of this, when searching for a location, it must be analyzed to what extent there is business potential for the groups mentioned. It can be assumed that there will be competition in good locations. It should therefore be ensured that the new laundromat is not too close to the competition. Numerous hotels and youth hostels in the vicinity can also speak for an excellent location.

The shop itself does not have to be excessively large, especially since large washing machines can also be arranged one above the other. Ultimately, the dimensioning of the performance in the business plan must take on specific features: How many visitors / washes per day are expected? How many machines and dryers do you have to buy in view of this? Potential customers want to wash their laundry as quickly as possible. Long waiting times are therefore certainly not an effective means of increasing customer loyalty and satisfaction. If several locations are to be examined in an analysis, the choice may well fall on one with higher rental costs. In the long term, these additional expenses can pay off through higher sales. A cheap shop is useless if it does not generate any noteworthy sales in the long term.

Before starting the planning: weigh up the options!

Before starting the concrete planning, there should be clarity about the basic options for opening a laundromat: There is a chance to become self-employed with a franchise system. Once a suitable location has been found, you can start your own business. In this segment, it cannot be assumed that brand names are particularly attractive to customers. In this respect, a 'no name laundromat' with a convincing concept should also have good chances on the market. Then you have to consider whether it should be a self-service laundromat or one with staff. The first option is the usual one and involves much less effort for founders: You don't have to spend many hours in the laundromat and don't have to pay high personnel costs. And if you want personal service as a customer, you can go to textile cleaning as an alternative.

Trend online laundry service: an opportunity or a threat?

In the last few months there has also been a trend in this traditional business area digital animation from. More and more online washing services are entering the market. Customers can place orders online. The laundry is then picked up and washed and brought back dry. It remains to be seen how this new offering will be accepted and whether it poses a serious threat to stationary laundromats. In any case, options for your own business model should already be created in the business plan: If the resources are available, this model can be integrated. In the laundromat itself, customers could be made aware that they can also use the laundromat from home. In this respect, such a service can contribute to customer loyalty and put sales on a broader basis in the long term.

Shaping business success holistically with a business plan

Many central aspects that should be made clear in the business plan have already been addressed. More follow below with regard to customer acquisition, added value and requirements as well as a profit-oriented pricing policy. After all, the business plan should above all reveal profitability. This is the only way to convince external donors. And in this very respect, the financial part will play a key critical role.

The cost of purchasing machines and vending machines can quickly reach five or six-digit dimensions, depending on the size. In this respect, it must be recognizable in the business plan how investment costs and ongoing fixed costs are to be managed and which sales / profits can be expected on the credit side in the first financial years.

In order to put the financing of this business idea on a broad basis, all options must be examined with a view to the personal starting situation. For example, the start-up grant from the Federal Employment Agency can be used to start a business out of unemployment. The Reconstruction Loan Corporation offers the 'StartGeld' and by means of crowdlending (e.g. via auxmoney) self-employed people can use unbureaucratic options beyond bank financing.

Advantages of this business idea

If you want to set up a self-service laundromat, you will usually not have to hire any staff. The workload can be done very well on your own, whereby a constant presence in the wax salon is not necessary at all. Therefore, this business idea is definitely an option, with a laundromat a so-called one generate passive income. It is enough to stop by every day, make sure it is clean, check the functions and refill everything. Due to the self-service character, the salon can always be open, provided this can be agreed with the legislation in the respective federal state. In theory, the machines can be used to capacity.

Another important advantage that speaks for this business idea is the general economic independence. Even in times of economic crisis, laundry has to be cleaned so that slump sales are not to be expected as in many other areas. Given these advantages, opening a laundromat on a part-time basis may well be an option. The employer should not be persuaded for long, as the additional work input in the case of a tight organization can be calculated within very predictable limits.

Marketing: Win customers for laundromat

A good and centrally located location as well as advertising that is clearly recognizable from the outside will make a major contribution to increasing awareness. Since students are the most important target group for a laundromat, Online marketing must play a key role above all to maximize reach. A search engine optimized homepage and local SEO measures must ensure that searching customers come across the laundromat as an option nearby. In this way, prices and processes on site can also be integrated into advertising, so that a visit to the laundromat becomes more likely. Business models such as a laundromat, which rely on a large number of walk-in customers, can no longer do without local SEO or regional aspects in search engine marketing.

Added value to win and retain customers

Customers naturally have to wait in the laundromat: How can this time be designed in an appealing way? Even more: How can additional sources of sales be developed in this way? Even if state-of-the-art machines enable fast programs, it will often take more than an hour to wait including the use of the dryer. This time wants / can be used for business purposes. Since the laundromat will be crowded with students, it's over free WiFi ponder. Tables and seats with USB connections can ensure that students or business people can work in the meantime. A vending machine for coffee or snacks can sweeten the stay a little. A small lounge corner with a TV and books can provide an entertaining break. The interior design or music can also create a feel-good atmosphere.

It is important to set yourself apart from the competition with an individual concept. And if you sell snacks and drinks, you can also increase your income base. One thing is certain: it will no longer be possible to turn down the price screw for laundry cycles in your own economic interest. If the concept is right and customers feel comfortable, they will also be more willing to accept slightly more expensive prices.

In the marketing, of course, trending environmental aspects can also be specifically focused. It is conceivable that particularly energy-efficient technology will be the focus. Customers have the good feeling that they are protecting the environment with every wash cycle. And since more than 5 kilos of laundry can usually be cleaned in large machines, even a very large mountain of laundry can be handled with just one visit.

Opening a laundromat: requirements

No special expert knowledge is required to set up a self-employed laundromat. In order to be able to officially start business operations, a Business registration required. As a rule, a permit requirement is not to be expected. Whether special evidence is required depends on the specific range of services or additional offer. If you want to sell snacks, for example, you may have to deal with knowledge of the hygiene regulations.

In general, a high level of technical understanding appears to be an important basic requirement in order to ensure smooth processes on site. It would be ideal if minor repairs could be carried out by yourself.

From a purely structural point of view, the shop must meet the requirements for a laundromat: There must be enough water connections and functioning drains. The power supply must also be reliably possible for a large number of washing machines. The processes for customers must be clearly visible and structured in a meaningful way. Since paying with coins is common, appropriate machines must be purchased and connected to the machines. In the start-up phase, a specialist company will have to install functional solutions in this area. This also applies to devices to be able to obtain detergent or fabric softener.

As far as the choice of machines is concerned, preference should be given to models that have already proven themselves in the commercial sector. Think of large filling quantities, the shortest possible program times, very good washing results and the lowest possible energy consumption. Because this will have a direct impact on the company's profit situation.

As far as the legal framework is concerned, the possibilities in the state for opening times around the clock should be checked. In the case of a self-service laundromat, this should be easy to implement in most federal states.

Earning money with your own laundromat?

If you believe reports on the Internet, a laundromat can be considered a passive (secondary) income Achieve a profit of well over 10,000 euros per year. Nobody will get rich with this business idea, as the costs for a wash cycle are simply limited and energy costs have to be paid as well. In order to increase sales, further sales possibilities (snacks and drinks) or the integration of the online laundry service mentioned above should be checked.

Factors for optimizing profits in a laundromat

For a high profit with a laundromat, it is important to create optimal business conditions. This affects the price structure with profit margins per wash, energy-saving washing machines, cheap commercial electricity tariffs and an overall lean cost structure. And especially with regard to the last aspect, a self-service laundromat can score points, since personnel costs are generally not to be expected in the self-service area.

The business plan should make it clear, based on numbers, which sales and profits can be expected. Assuming X washes and an average price of X euros, a forecast can be made for daily and monthly sales.

Secure your own business

Especially in busy locations vandalism can become a real threat to one's own business operations. It is therefore important to check all possible precautionary measures from video surveillance within the framework of the legal possibilities to insurance solutions. Inventory insurance, for example, is typically considered. As for the machines themselves, so are long-term guarantees to strive for. Hence it may be an option on fee-based warranty extensions to fall back on. This means that entrepreneurs can plan longer with the existing technology in the laundromat and there are no immense repair costs in the event of damage. Above all, anyone who wants to make good money with a laundromat has to have one ensure high utilization of the machines. In this context, it should be pointed out that longer downtimes are very expensive and also not advantageous in terms of customer waiting times.

Summary for the business idea 'start your own business with a laundromat'

  1. Even if a washing machine can be found in more than 96% of all German households, this business idea still has a right to exist for the outlined target group in attractive locations in large cities

  2. Independent of the economic cycle, there is demand, suitable as a self-service variant for a passive income: the advantages of this business idea are obvious

  3. Basically, it has to be decided whether a self-service laundromat or a business model with staff should be launched

  4. The location must make a significant contribution to customer acquisition. On the digital side, SEO measures must ensure that reach is maximized

  5. In order to protect business operations in the long term, high-performance insurance solutions must be checked (e.g. against vandalism or the failure of devices).