How to Start a Laundry Business

Starting a laundry business is relatively easy—even if you don’t have previous experience in the industry.

That’s why it’s also one of the more competitive businesses out there, where you’ll find yourself facing plenty of competitors.

To succeed, you’ll need a prime location, to determine what makes your laundry services better than your competition, and offer great value.

This guide will help you start your laundry business and put you on the fast track to success.

The Easy Parts of Starting a Laundry Business

If you’re looking for a safe business, you are at the right place.

The laundry industry has a five-year survival rate and a 20-35% return on investment, which is considerably higher than the average new businesses startups. Also, you don’t have to worry about any inventory management and can easily operate a laundromat on a small scale.

Working life flexibility and ease of management are other significant advantages.

As the owner, you can set your own hours of operation, which allows you to enjoy your preferred work-life balance. Plus, many technological advancements in the field, such as laundromat management systems, make it easier than ever to manage your new laundry business.

In addition, having a laundry business is an excellent source of extra income.

You can introduce your future generations to the concept of small business ownership and build a stable business to pass down to your children when you’re ready to retire. Let’s not forget the unlimited growth potential. You can open your laundromats in multiple locations once you get the money rolling in.

LaundryPulse is a digital laundromat management system that provides you with powerful real-time data to facilitate sound decision-making, along with one-click strategy implementation—anytime, anywhere. This flexibility and speed make it easier to stay ahead of your competitors.

With LaundryPulse, you can connect to your machines and adjust pricing, give free washes, analyze the machine usage, and get instant notifications when a machine needs attention. This tool is ideal for self-service laundromat business owners and has an intuitive mobile app. 

LaundryPulse does not publish their pricing online, but you can get a guided tour, watch a demo on their site, or reach out to their team for more information.

The Difficult Parts of Starting a Laundry Business

Laundry businesses do present their challenges. The initial start-up costs of starting a laundry business can be significant.

First and foremost, you have to scout for prime locations you can either rent or purchase. You’ll also need to buy machines, water heaters, supplies, and other accessories that will add up to your total startup costs. For context, one study estimated the startup cost for a laundry business to be $200,000 and up, depending on size and location.

The next disadvantage is the relatively high competition.

There might already be several laundry businesses in your neighborhood. You should research your local competition and figure out a unique selling point to make your business stand out. This can be the quality of equipment, the ambiance and atmosphere you offer in the store, or other additional amenities.

Be prepared to handle unpredictable demands as well.

You have to be flexible and respond to emergencies whenever your customers contact you, day or night. Customers will also occasionally have complaints that may be stressful and challenging to manage. But considering the low barriers to entry, high success and survival rate, and the flexibility to be a part-time or remote owner, it’s an effort worth taking.

We’ve discussed what starting a laundry business entails. Now, let’s take a look at how to establish your business.

Step 1: Determine the Kind of Laundry Business You Want 

You need to have an exact idea of what kind of laundry business you want to open. The good news is there are tons of options that you can explore.

Explore Different Laundry Business Ideas

Laundry businesses are extremely popular in areas with lots of apartment buildings or where people either can’t or don’t want to buy their own washing machines. For example, some apartment buildings do not allow in-unit washing machines.

You can open a laundry business that allows customers to come in and do their laundry using your machines. Alternatively, you can offer wash and fold services, where customers drop off their laundry and pick it once it’s done.

You can also offer a comprehensive experience, where you offer all of these services to your customers.

Regardless of the format you choose, you need washing and drying machines and a good location for the business. These are just a few factors to keep in mind before you get the ball rolling.

You can also consider buying into a laundromat franchise if the idea of building a business from the ground up doesn’t appeal to you. Of course, there are pros and cons to this, but if it’s your first rendezvous with entrepreneurship, working within an already existing (and successful) framework and recognizable brand can make things easier.

Take your time and do your research before moving forward with an idea. See what other types of laundry businesses are already operating in your neighborhood and city. You can also survey local residents to determine what they need.

Use all the information and insights to finalize your laundry business format.

Step 2: Plan Your Laundry Business

Now that you have a laundry business idea, the next step is to plan your business—choosing a name and structure and developing a business plan. Think of it as giving your laundry business an outline.

Name Your Laundry Business

Choosing a name for your business is one of the most fun parts of the process.

Try to brainstorm something clever and catchy. At the same time, you want to ensure the name is relevant to your business, memorable, and easy to pronounce.

Once you’ve shortlisted a few options, look up whether your business name is available. The Secretary of State’s website is usually the best resource for checking availability and ensuring no other business operates under that name. Otherwise, you might end up getting into trouble with the law.

If the name is available, you can take things a step further and reserve it for a set amount of time. Now, this isn’t mandatory, but considering the importance of a good business name and the effort you’ve taken to finalize one, preventing others from taking it is definitely wise.

Select a Business Structure

We highly recommend selecting a business entity to structure your business early on in the process. Your decision affects how you pay taxes, how much risk you’re exposed to, how to organize your business, and so on.

For example, if you decide to form your laundry business as a limited liability company (LLC), your personal assets will be protected from the company’s creditors and other LLC members. Contrarily, if you opt for a sole proprietorship or a general partnership, you’ll be responsible for your business’s dues.

Choosing a business entity has many nuances. One way to make it easier on yourself is to use an online business formation service to walk you through the entire process. You could also choose to consult a business attorney or a tax professional to discuss the process and help you make a decision that’s best for you.

Write Your Business Plan

After finalizing your business idea, business name, and deciding on a business structure, you can write your business plan.

Business plans provide you—and your co-owners, employees, and other relevant people—a comprehensive overview and actionable plan to run your laundry business successfully.

You can use a business plan template or write it from scratch. Both are good options, so you can decide between them based on what‘s more suitable for you. Here is an in-depth guide to writing a business plan for any startup.

Your business plan should also include financial information. You have to detail where you plan to get your startup capital, whether you’ll be seeking any extra funding, and financial projections for when and how you plan to make money with your brand-new endeavor.

Step 3: Setup Your Laundry Business

In this step, you need to do two things: find a suitable location and get the necessary equipment.

As mentioned, the location of your laundry business will impact your business’s success. That’s why you need to be extra careful when finding and finalizing your place of operation. You‘ll also need the proper equipment to finish your setup.

Find a Location for Your Business

Laundry businesses require specific plumbing and waterline hookups, which along with any necessary renovations, will come at a cost. While the total expenditure will vary depending on several factors, understand that getting your physical space will likely be a significant investment.

You want to get the right space in the right location. 

Consider looking for areas where college students live off-campus or where rental units don’t have washers and dryers built into them. Try to choose a space located near your target audience. The closer you are to your customers, the better.

Don’t forget about security! Laundry businesses are susceptible to robberies and other types of crimes, so you want a space located in a safe area.

Get Your Laundry Equipment

Next on your agenda should be to buy the equipment needed to make your laundry business operational. Depending on the size of your business, you may need up to 20 washing machines and 20 dryers. Besides these, you’ll also need the following:

  • Security cameras
  • Soap dispensers
  • Change machines
  • Credit card payment system
  • Laundry carts
  • Vending machines
  • Seating 
  • Restrooms

Aside from your physical space, laundry equipment is your next biggest expense. On average, laundry machines can cost between $100,000 and $400,000 total. You should have a fair idea about your equipment expenses after preparing your business plan. Next, it’s time to figure out a way to finance it.

Seek Funding

As the owner of a laundry business, you can seek funding through equipment financing plans. Take your quote for the machines directly to a lender, and hopefully, you’ll have the necessary funds to purchase the equipment.

You can also take your business plan to a bank to secure a small business loan. Or you may choose to look for external investors.

While you’re at it, make sure you also get the necessary software that can simplify your life. Include the software costs as part of your overall financial plan.

LaundryPulse, for instance, helps you keep your finger on the pulse of your business. You can use the software to get real-time feedback, hourly, daily, and weekly statistics and reports, and reduce unnecessary service costs. All efforts together will help you increase profits with real-time control and flexibility over your pricing strategy.

Step 4: Make Your Laundry Business Official

This is the step where you make things official.

You’ll file the necessary papers to register your business and get an EIN, as well as procure the required permits and licenses to run a laundry business legally.

Register Your Laundry Business

If you decide to be a sole proprietorship or general partnership, you generally don’t have to register your business with the state. But make sure to check with your local city, county, and state to see what you need to do to operate legally.

Most states allow businesses to register online, where you can file papers through the Secretary of State or Chamber of Commerce website. But some states require you to register in person with paper documents.

To avoid missteps and errors, you can use a business formation service. You’ll also need an employer identification number or EIN once you receive your registration certificate.

Get Applicable Licenses and Permits

The licenses and permits you need to run your laundry business legally will vary depending on your state. You may need specific ones, such as a water pollution control permit or health department license, in addition to a general business license.

Moreover, some states and cities have specific laws around the laundry societies and businesses that provide laundry services. For instance, if you plan to offer pick-up and delivery services, you need additional licenses pertaining to your business vehicle.

You can consult a local business attorney to keep up with licensing rules, which vary largely depending on the state, city, and county.

Next Steps

So there you have it—that’s all you need to know to start a laundry business.

If you find the process intimidating or simply too much of a hassle, you can always work with a business formation service to take over the formation process. Many amazing business formation services offer legal assistance, document filing, an EIN, and other steps to get your startup on track.

After launching your new laundry service, shift your attention to marketing your business effectively.

Marketing your business around the areas frequented by your target customers is an excellent tactic to get people to come through your doors. Start by creating a strong digital reputation for your laundry business by responding to customer reviews on Yelp and Google Business and building an SEO-optimized website. Here is our guide to the best website builders available today to help you get started.

You’ll soon see your latest venture turning profitable once you get the word out.

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