How to Start a Laundromat

start a laundromat business

Starting a laundromat can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful laundromat.

Importantly, a critical step in starting a laundromat is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.

14 Steps To Start a Laundromat:

  1. Choose the Name for Your Laundromat
  2. Develop Your Laundromat Business Plan
  3. Choose the Legal Structure for Your Laundromat
  4. Secure Startup Funding for Your Laundromat (If Needed)
  5. Secure a Location for Your Business
  6. Register Your Laundromat with the IRS
  7. Open a Business Bank Account
  8. Get a Business Credit Card
  9. Get the Required Business Licenses and Permits
  10. Get Business Insurance for Your Laundromat
  11. Buy or Lease the Right Laundromat Equipment
  12. Develop Your Laundromat Marketing Materials
  13. Purchase and Setup the Software Needed to Run Your Laundromat
  14. Open for Business


1. Choose the Name for Your Laundromat

The first step to starting a laundry business is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own laundromat:

  1. Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
  2. Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
  3. Think about marketing. Come up with a name that reflects the desired brand and/or focus of your laundromat.


2. Develop Your Laundromat Business Plan

One of the most important steps in starting a laundromat is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

  1. Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your laundromat.
  2. Company Overview – this section tells the reader about the history of your laundromat and what type of laundromat you operate. For example, are you a self-service, drop-off, or a card/coin-operated laundromat?
  3. Industry Analysis – here you will document key information about the laundry industry. Conduct market research and document how big the industry is and what trends are affecting it.
  4. Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
  5. Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
  6. Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
    • Product: Determine and document what products/services you will offer 
    • Prices: Document the prices of your products/services
    • Place: Where will your business be located and how will that location help you increase sales?
    • Promotions: What promotional methods will you use to attract customers to your laundromat? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
  1. Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
  2. Management Team – this section details the background of your company’s management team.
  3. Financial Plan – finally, the financial plan answers questions including the following:
    • What startup costs will you incur?
    • How will your laundromat make money?
    • What are your projected sales and expenses for the next five years?
    • Do you need to raise funding to launch your business?


3. Choose the Legal Structure for Your Laundromat

Next you need to choose a legal structure for your laundromat and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the laundromat and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to partner and open a laundromat together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a laundromat include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a laundromat is that it offers limited liability to its owners. This means that the laundry owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your new laundromat, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.


4. Secure Startup Funding for Your Laundromat (If Needed)

In developing your laundromat business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a laundromat to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a laundromat that they believe has high potential for growth.


5. Secure a Location for Your Business

When starting a laundromat business, one of the first things you need to do is find a location for your business. There are a few things to consider when looking for a location:

– How much space do you need?

– What are the zoning regulations in the area?

– What are the competitive businesses in the area?

– What is the rent price in the area?

Once you’ve considered these factors, you can start looking for potential locations. You can use websites like Craigslist or Google Maps to find potential locations.

Make sure you visit the location and speak with the owner or landlord before signing on any dotted lines. You don’t want to sign a lease without looking at the commercial space in person, because if it doesn’t meet your minimum requirements, you need to know before you put down money for a security deposit.


6. Register Your Laundromat with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.


7. Open a Business Bank Account

It is important to establish a bank account in your laundromat’ name. This process is fairly simple and involves the following steps:

  1. Identify and contact the bank you want to use
  2. Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
  3. Complete the bank’s application form and provide all relevant information
  4. Meet with a banker to discuss your business needs and establish a relationship with them
If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your business plan and financial model in hours.

8. Get a Business Credit Card

You should get a business credit card for your laundromat to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.


9. Get the Required Business Licenses and Permits

A laundromat is a business that offers washing and drying services for clothes and other items. Before starting a laundromat, you will need to obtain the following licenses and permits:

  1. Business License – You will need to obtain a business license from your local government. This license will allow you to operate your business legally.
  2. Building Permit – If you plan to build the facility from the ground up, you will need to obtain a building permit from your local government before starting construction on your laundromat.
  3. Fire Prevention Permit – You may also need to obtain a fire prevention permit from your local government.
  4. Drainage and Flood Plain Permit – If you are building your laundromat on land that is located in a flood zone, you will need to get permission from the city’s drainage authority before constructing the building.
  5. Sign Permit – If you plan on putting up any outdoor signs, you will need to apply for a sign permit.
  6. Certificate of Occupancy Permit – To make sure your laundromat is safe and ready for business, you will need to obtain this permit from your local government’s building department.


10. Get Business Insurance for Your Laundromat

There are various types of insurance that are necessary to operate a laundromat.

Some business insurance policies you should consider for your laundromat include:

  • General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
  • Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
  • Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
  • Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
  • Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
  • Professional liability insurance: This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 


11. Buy or Lease the Right Laundromat Equipment

To run a laundromat, you need some commercial laundry equipment like washing machines and dryers. You will also need laundry carts, a sink, and space for a folding table. It is also a good idea to have either a cash register or a credit card machine.

In addition, it might be helpful to have vending machines or other things to add value to your business.


12. Develop Your Laundromat Marketing Materials

Marketing materials will be required to attract and retain many customers to your laundromat.

The key marketing materials you will need are as follows:

  1. Logo: Spend some time developing a good logo for your laundromat. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
  2. Website: Likewise, a professional laundromat website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
  3. Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your laundromat.


13. Purchase and Setup the Software Needed to Run Your Laundromat

Most laundromats need accounting software and customer relationship management (CRM) software. These will help you keep track of income and expenses, as well as your customers.

You may also need an online booking software if you provide drop-off services. This will allow your customers to schedule their pick-ups or drop-offs on your website.


14. Open for Business

You are now ready to open your laundromat. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.


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How to Start a Laundromat FAQs

No, it's not hard to start a laundromat. There are a few things you need to do in order to get your business up and running. You'll need to find a location for your laundromat, secure funding, purchase supplies, and hire employees. If you're not sure where to start, consult with a business consultant or franchise expert. They can help you navigate the process and give you tips on how to be successful.

There are a few things you will need to do in order to start a laundromat with no experience. You will need to research the industry and learn about the different types of laundry businesses that exist. Research how much it costs to start and run a laundromat, what machines are needed, and which locations are best.

You can also consult with experts about starting your laundromat. Be sure to obtain advice from other laundromat owners, experienced real estate agents, or business advisers. It is important to have someone knowledgeable guide you through the process of opening a laundromat. An experienced person can assist you in making significant decisions about how to run your business successfully.

The most profitable laundromat is the one that offers the most laundry services for the lowest price. This can include things like dry cleaning, wash and fold, and detergent. If you are opening a laundromat, make sure to find the perfect balance of services and pricing.

It typically costs between $10,000 and $50,000 to start a laundromat. These start up costs include acquiring the property, equipment, and supplies needed to get the laundromat up and running.

The cost of water, electricity, and gas are the main ongoing expenses for an existing laundromat. Other expenses may include repairs and maintenance costs of equipment, miscellaneous supplies, and rental fees.

One way an existing laundry business can make money is by charging laundromat customers a fee to use the machines. Laundromats may also sell detergents, fabric softeners, and other laundry supplies. They also make money by selling food, drinks, and other services.

There is no one-size-fits-all answer to this question, as the profitability of owning a laundromat will vary depending on a number of factors, including the size and location of the laundromat, the price of utilities and other operating expenses, and the amount of competition in the area. That said, in general, laundromats can be profitable businesses if they are well-managed and cater to customer needs.

Laundromats fail when they are not well-maintained, when the location is not convenient, or when the prices are too high. It is important to make sure that the laundromat's business plan makes sense for this type of site, and it needs to be planned down to the smallest detail and projected costs. Failure to do so could result in the loss of hundreds of thousands of dollars, and will put a tremendous strain on the laundromat owner.


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