Do you want to know how much money laundromats make yearly? If YES, here are 7 factors that determine the income & profit margin of laundromat owners.
In order to have an idea of the amount a laundromat business owner is expected to make daily, weekly, monthly or yearly, you should clearly define the services that laundromats offer. A laundromat business is a modern, well-equipped laundry with state-of-the-art machines that allow customers to drop off clothing to be washed, dried, and folded.
This is often referred to as fluff & fold, wash-n-fold, drop off, bachelor bundles, a service wash or full-service wash. According to the Coin Laundry Association, the cash flow of laundromats is typically in the range of $15,000 and $300,000 per year.
To maximize your business’s profitability, carefully consider some key factors and create a smart business model. It is important to point that there is no one-mold-fits-all when it comes to how much a laundromat business owner is expected to make.
There are some factors that we are going to look into before giving an estimate of how much an average laundromat business owner can make yearly and these factors are;
7 Factors That Determine How Much Money Do Laundromats Make Yearly
1. The Size of the Laundromat Business
You will agree that no one can conveniently state the amount a laundromat business owner is expected to make yearly if you do not know the size of the laundromat facility and the number of customers facility can accommodate per time.
A laundromat business that operates from a small indoor facility is expected to make far less than a laundromat business that operates from a standard indoor or outdoor facility. If your laundromat business facility is a large enough, it can accommodate more customers and that will mean increased revenue.
Normally, the start-up cost for a laundromat can run from about $200,000 to over $1,000,000. After assessing your start-up costs, your budget should include allowances for regular future expenses, such as loan financing payments, rent and maintenance.
2. The Location of the Laundromat Business Facility
A key factor that can greatly influence the money a laundromat business owner is expected to make is the location of the facility.
If a laundromat is located in a highbrow area, an area with the right demography and lifestyle especially busy corporate executives, business owners, households, students and travelers/visitors and of course people who have the financial means (purchasing power), then the facility is expected to make more money.
The truth is that you will struggle to make good money from your laundromat business if you locate the business in an area filled with low income earners or a place where residents do their washing at home.
3. The Type of Services Available in the Laundromat Facility
Another important factor that will determine how much a laundromat business owner is expected to make yearly is the type of services offered by the laundromat.
You will agree that the money a laundromat that has state of the art laundry machines that are easy to operate and also offers robust services that covers dry cleaning, pick-up and drop-off et al., will be far larger than what a laundromat that only offers washing and drying services with low end laundry machines is expected to make monthly.
4. The Management Style of the Laundromat Business
Another key factor that will determine the amount a laundromat business owner is expected to make yearly is the management style of the owner.
Trust me, the results you will get when you are a good manager with top-notch customer service will be far different from that of a facility owner with poor management style and customer service will get. The idea is that a good laundromat business facility owner will not just retain their old customers, they will also keep getting new customers.
5. The Business Approach of the Laundromat Business
There are different business approaches that a laundromat facility owner can choose from and it will greatly influence the amount they are expected to make monthly and yearly.
Of course, we know that a laundromat business may decide that they want to operate only one location and do their marketing alone, and they may also decide to go into franchising and also partner with other businesses that will recommend clients to them.
It is easier to find laundromat businesses that operate franchise and also partner with hostels and camp ground operators making more money. In essence, a well-organized laundromat that works with others will surely make more money than a laundromat business facility that only operates from one location.
6. The Advertising and marketing strategies Adopted by the Laundromat Business
Another key factor that will determine the amount a laundromat business facility owner can make monthly and yearly is the advertising and marketing strategies adopted by the facility. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more.
But the results you will make will far outweigh the amount you spent on advertising. Of course, you don’t expect a laundromat business facility owner that is engaging in aggressive advertising and marketing to make same amount yearly with a laundromat that is passive with its advertising and marketing.
7. The Number of Years the Laundromat Business is in Existence
In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is well-managed.
For example, in your first fiscal year (FY1) you might make a hundred thousand dollars (100,000), in your second year (FY2) you might make one hundred and fifty thousand dollars ($150,000) and in your third year (FY3) you might make two hundred and fifty thousand dollars ($250,000).
Please note that if you are operating a traditional laundromat business facility and you invested massively in purchasing easy to operate washing machines, dryers, industrial irons, ironing board et al. In other to maximize profits, you should try as much as possible to keep the capital investment at a minimum.
Estimated Profit Margin for a Laundromat Business
In order to calculate the profit margin from a standard laundromat business, then you should be able to place a figure on the recurring and ongoing costs of running the business. With all these factors in mind, the profit a laundromat is expected to make monthly and yearly can vary tremendously.
According to the Coin Laundry Association’s Brian Wallace, the annual gross income from one store can range from $30,000 to $1 million. The expenses incurred while running a store range between 65 and 115 percent of the gross income.