The money for startup business is a hefty sum. The cost of a laundromat is high. You need a suitable location and commercial-strength coin laundry machines such as washers and dryers. Other costs include having equipment professionally, installed, business formation and incorporation expenses, utilities, and supplies like detergent vending machines.
Startup costs range from approximately $200,000 to more than $1,000,000. The budget needs to allow for regular future expensed like maintenance, rent, and loan financing payments. Here is a business startup checklist.
Business Formation
The type of business entity created determines the cost of setup. Laundromats have a relatively low liability factor and can safely organize as a sole proprietorship which is the most straightforward organization to form. The benefit of an LLC protects you against personal financial and legal risks
Those who incorporate have to file incorporation articles with their state Corporation Commissioner or Secretary of State. Sole proprietorships submit a simple registration form and administrative filing fee. Typical startup costs for C-corporations or limited liability companies are between $200 and $1000.
Equipment
Buying an existing coin operated laundry, you pay the asking or negotiated price. The necessary equipment and hook-up are part of the deal. Consider buying coin op washers from a reliable brand such as Maytag. A storefront with a large open layout reduces the cost of renovation. Building your laundromat has a price tag between $200,000 and $500,000.
A top-loading coin operated washing machine for sale ranges in price from $500 to $700. Front-loaders cost between $3500 and $20,000 per unit. The cost of stacked dryers typically ranges in price from $5000 to $6000. Decide on purchasing new or used machines or some of each.
Customers are more comfortable with new machines. They accept cash and credit cards in addition to coins. They automatically lock while washing and drying. Older machines reduce the initial financing requirements. To stock, the average laundromat with machines costs between $150,000 to $400,000.
If you plan to offer a hot water option, you need to add the cost of a system to heat the water. Anywhere from $15,000 to $40,000 is the likely cost of a water heating system. Other supplies include:
- Laundry carts
- Clocks
- Trash cans
- Signs
- Soap
- Cleaning equipment
Laundry carts range in cost from $50 to $75 apiece. The combination of the other items on the list adds another $750 to $1000. Optional items include a soda vending machine, a security system, and wi-fi connection. Vending machines cost between $3000 and $4000; security systems between $6000 and $10,000; and wi-fi start around $40.
Business Fees
There are local fees. Cities charge laundromats to hook up to sewage and water lines. The costs for each washer range from $200 to $8000. The local water authority has the information needed to determine the fee that applies to your startup laundromat.
Financing
Unless your startup ideas include paying cash for your startup costs, you will need to estimate your down payment. Finance companies and banks require a sizable down payment before extending a loan. The most common down payment required is 20 to 30 percent of the amount borrowed. That figure is the total of estimated costs mentioned above.
A mix of personal savings, private investment, and loans are typical means of financing. Creating a comprehensive business plan increases the likelihood of attracting local investors and lenders. While startup costs are high, coin-operated laundromats are potentially lucrative. Owners have no inventory or staffing costs. There are many apartment residents and home owners who have no access to washers and dryers of their own.
