Do you think the coin laundry business is for you? Easy money that you collect once a week? Does the place run alone? Consider these factors when analyzing the coin laundry business.
1. Change machine
Good coin-operated laundries work with change machines. If a customer cannot get change, they will go elsewhere. How many change machines does the store have? A standard shift brand change machine can hold around $ 3000. You can easily check the specs on their website. Instead of machine it means that the owner is driving a narrow boat. Two change machines mean the place is lively. No change machine means people have to ask the grumpy guy behind the counter or the place isn’t really a laundromat.
2. Store sign
Look at the store sign. It turns on? Is half missing? Do you clearly tell people it’s a coin-operated laundry or do you just say “Bob”? The store sign will tell you everything you need to know about how well the store has performed. A large store has a large sign.
3. Top loading machines
With today’s utility costs, it is very difficult to make money from top-loading machines. If the store you are looking at has them and the venue is busy, this is the type of store you MUST buy cheap and replace top loading machines with front loaders 3-5 times. You will have to invest in new machines but you will increase your prices and profits. If the store has top loaders and is empty, drive around to see which competitor just showed up and that they have new front loaders. Stay away from this store
4. Equipment brand
The Maytag man you see asleep in TV commercials should visit some Maytag-equipped coin laundries. While Maytag is a good household name, they don’t make all of their own commercial laundry equipment and the quality has suffered. The leading brand in the industry is Wascomat. Who is Wascomat? Have you heard of Electrolux? A fully Wascomat store is a very good sign. Go see a Wascomat alongside any other brand and you will likely want to use Wascomat. Try it!
5. Utility bills
There is a commonly understood method whereby your utility bills are 14% of your sales. Be careful with this as old equipment will be more like 20% of your sales. I don’t recommend looking at utility bills unless you are calculating usage. This means that you are doing a calculation based on the total amount of water used divided by the load of laundry divided by the sale price to try to get approximate laundry income. If you can do this calculation, that’s fine.
6. Conversion
There can be a big difference in how you would run a store versus how the current owner runs it. Are you friendly and consistent? Do you care about your customers? Will you fix the store sign and make sure you always have change and washing machines available? The store owner affects conversion more than any other factor, but it is not the only factor. Bigger new teams help too, but at the end of the day, your personality will drive the business forward. I must say you have a “consistent” personality. Once you lose interest, sell the business before you go out of business.
7. Neighborhood
Get the demographics of the city’s population. You want a good mix of ethnic backgrounds and the more kids (more dirty laundry) the better. A neighborhood full of retirees is bad news. A neighborhood with too high a median household income is not good. Low-rise 8-24 plex buildings are better than giant high-rise buildings because they generally have poor laundry rooms. Additionally, rental properties in the neighborhood trump coin-operated laundry condos.
8. Parking
Make sure there is enough parking or lots of people within walking distance. Imagine how far your dirty laundry would take if you had to walk to a laundry room. You really want to have plenty of parking if possible. If you don’t have parking in front of the store, you probably don’t have a laundry business.
Also, as a side note, if the road directly in front of the store has an island that separates traffic, you will have to stand outside and watch the flow of traffic into the store. Trafficking islands are generally small business killers.
9. Wash and fold
I would suggest to anyone looking into the laundry business wondering what the benefit of having a laundry counter is.
I have seen many real estate agents claim that you can increase your business by adding a wash and fold counter. You can increase your business, but not in the way you think. Getting a new source of income from the delivery laundry means committing to the effort of building that business and paying someone to be there for extended hours. It is rare (but they do exist) for a laundromat to exceed its staff cost in washing and folding sales. If you are buying as an investment, consider this. If you have a full-time person already doing laundry and folding and you plan to eliminate it, expect a 10% to 40% drop in your self-service traffic. The real prize of having an assistant comes from the convenience it gives to the self-service laundry person.
10. Consistency
Well-run laundries are consistent throughout. I mean EVERYTHING! This includes (but is limited to) store hours, staff, cleaning method, cleaning schedule, washing and folding method, machine brands, available change, soap, supplies, etc. .
The less consistent you are, the less consistent your customers will be.
I have run 3 laundries for 5 years and unfortunately for me it is time to go out of business. I have learned a lot and have met many wonderful new people. I sold 2 of the three stores I owned and the two new owners took my advice seriously and have made good use of the new investments. I have one store left for sale and I am heartbroken to see it go.