Is Buying a Laundromat a Good Investment? (2024)

There are many reasons that investing in a small business is appealing. The idea of being your own boss, making decisions that directly affect the success of the business, and achieving financial independence while providing a valuable service to your community, all contribute to the appeal of becoming a small business owner.

Another significant factor that plays into starting a small business, especially when it comes to opening a laundromat, is the ability to generate family wealth and create an asset that the owner can pass down to the next generation.

If owning a business is your dream, you have probably given some thought to different types of businesses that you can invest in. What you may not have considered, though, is the opportunity presented by owning and operating a laundromat.

Buying a laundromat may be one of the best small-business investments a new business owner can make, for many reasons.

Benefits of Buying A Laundromat

1. High Success Rates

A recent Gallup poll found that 66% of potential entrepreneurs are held back by the fear of business failure. However, one study found that laundromats have an extremely high rate of success – approximately 95% of laundromats succeed over a five-year period.

Learn More: Pros and Cons of Owning a Laundromat for New Business Owners

2. Excellent ROI

Laundromats also have a surprisingly high return on investment, averaging 20-35% in the first year.² Moreover, once the location and commercial laundry equipment are set, laundromats are relatively easy to get up and running without the extended lead time required by retail, restaurant, or other service businesses before turning a profit.

3. Recession Resistant

Laundromats tend to be profitable even in an economic downturn. During a recession, more people will turn to self-service laundry rather than outsourced laundry or dry cleaning. At the same time, people may not be willing to invest in purchasing or repairing home laundry machines when money is tight, relying instead on local laundromats.

4. No Lead Time

With washers and dryers that can accept cash, cards and mobile payment through a laundry payment app, laundromats have a quick payment cycle; significantly shorter than the 30-60 day cycle found within many other industries.

The payment cycle can make or break a small business startup – according to Business Insider, 82% of small businesses fail due to cash flow problems.³ A pay-as-you-go operation like a laundromat eliminates the uncertainty of an extended payment cycle, as well as the need to invest resources in invoicing, billing, and accounts receivable.

5. Flexible Work-Life Balance

In the same Gallup poll, 47% of potential entrepreneurs hesitated to take the next step because they were worried that running their own business would negatively affect their work-life balance. A laundromat, though, requires minimal in-person supervision, particularly if the owner invests in remote monitoring tools.¹

Laundry management software like LaundryPlus gives owners real-time information on machine usage, revenue, and text alerts for any issues at the facility.

For the 84% of potential entrepreneurs that prefer the security of a steady paycheck, the right tools make it possible to supervise a laundromat on a part-time basis, while maintaining a regular full-time job.¹

Related: The Advantages of Opening a Laundromat Business

Beside all of the benefits for an owner, small businesses are a vital part of the economic health of the country. A recent study found that there are 30.2 million small businesses in the U.S., accounting for 99.9% of the total number of businesses. And in 2015, small businesses accounted for 70% of all new jobs that were created in the U.S. and employed 47.5% of the total workforce.⁴

The possibility of attaining financial security, a manageable work-life balance, and contributing to the economy of your community and the country at large are all compelling reasons for investing in laundromats. The high rate of success, excellent ROI, flexibility, scalability, and easy-to-manage cash flow make laundromats a smart choice for new and experienced small business investors.

To learn more, explore our blog post “Is the Coin Laundry Business Right For You?” or contact an expert at Laundrylux today.

Sources:

1. https://www.gallup.com/workplace/236522/potential-entrepreneurs-aren-taking-plunge.aspx
2. https://laundrylux.com/wordpress/wp-content/uploads/2018/03/ELX-New-Investor-Brochure-lr.pdf
3. https://www.businessinsider.com/why-small-businesses-fail-infographic-2017-8
4. https://www.thebalancesmb.com/small-business-impact-on-the-economy-4175064