Basic Facts

Basic facts and figures you should know.

Laundry equipment in Raleigh, NCThe self serve or vended laundromat is capable of a high cash for cash return on investment and fantastic profit margins beyond break even because of low variable costs.

The basic formula for starting a new vended laundry is an investment or down payment of roughly 30% of the total project cost. Total project costs vary greatly from $100,000 mobile laundromats to $750,000 mega stores. The other 70% is financed over 5-9 years with the average loan being paid off in 3 to 4 years. This 70% is usually the cost of the new equipment with the 30% down payment being the costs associated with the building (space the laundromat occupies) and will be somewhere between $100,000 and $175,000 depending on the size of the store you are building and a number of other factors.

This money is needed for design and construction or "build-out" and is not typically able to be financed. Each project however is different and has different goals.
 

The Basics - Facts and Figures

 
laundrywood3Laundromats range in size in terms of square footage and pieces of equipment. The recent trend being toward larger spaces than in the past because of increased demand for larger machines on site and larger stores that are able to service more customers when times are busy.

Generally we see that half of our business comes into the store on the weekends. So, on Wednesday, a few machines are fine but on Saturday, or when it is raining, more is needed to service the increased numbers of customers. Otherwise, that business will leave and go elsewhere. Therefore, unless the laundromat is connected to another business as a supplemental convenience, the average laundromat needs around 20 washers or more and a matching capacity of dryers to generate appealing incomes. A store like this may be 2000 square feet and a big store with say 50 washers might be 4000 to 5000 square feet. Again, every situation is different and this is why operators and new investors do well to seek the help of someone in the equipment side of the business early.

Stability and a steady return cause Laundromats to have long life cycles and to be anchor businesses in shopping centers and other locations. The location will either be owned by the investor or more typically leased for 10 to 20 years. A professional in the business or "Laundry Expert" is also a good resource for helping you to determine if a site has a feasible lease rate and other lease terms conducive to a laundry operation.

Depending on the manufacturer, installation and usage rate, commercial laundry equipment will typically last 10 to 20 years in a laundromat. This is somewhat important because the equipment you buy and the layout of that equipment is going to be yours for a long time. In the last 10 to 15 years, many laundromat operators have realized significant changes in the business. Utility costs have become a major portion of a laundromat's expenses determining if a laundromat is profitable or not. Gone are the days of using lots of water and gas because of sloppy equipment design and limited customization of function. Stores with old equipment contribute as much as 40-45% of their gross income to utility costs. In the last several years, with modern designs, our customers realize utility costs of 20% or even less.

 

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