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A laundromat is a prime example of a semi-active business model that can establish an ongoing revenue stream with minimal operational maintenance. It makes it a popular business type for many entrepreneurs. However, knowing the initial expenses and costs to start a laundromat, including equipment, is a bright beginning.
We’ll take a look at how much it costs to start a laundromat. We’ll also include an essential equipment list to help look at various costs to examine the overall startup price. Let’s jump right into the laundromat business, shall we?
The cost of equipment required to start a laundromat varies from $21,300 to $477,500. Initial startup costs can be quite significant for a seemingly ‘set-and-forget’ kind of operation. However, the lack of required labor once a startup is complete can outweigh any potential startup equipment list costs to start a laundromat.
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Laundromats are a great business because they don’t typically require staff. When you eliminate staff, you eliminate a considerable expense in labor—but not having on-site staff trades off security.
Due to a lack of staff on-site, one should spend the extra to ensure that a sound security system is in place. Think of the security system as your digital employee who keeps an eye on things.
Many laundromat owners choose to self-manage their security or even pay a security company for a monitoring service.
Depending on the hours of the establishment, one may have a desire for extended security options. It may be the case in neighborhoods with higher levels of criminal activity.
Due to the nature of laundromats, the best locations are often in neighborhoods with an abundance of rental units and lower-income housing.
Unfortunately, with lower income often comes an escalation of criminal activity. It is essential to ensure the safety of your clientele as well as your business and its property.
A typical security system with multiple cameras and sensors will cost between $2,500 and $7,500 depending on the system’s complexity.
Monitored systems usually cost between $30 and $200 per month, depending on the level of monitoring required.
Extra security is also essential due to the equipment requirements. Most laundromats have an ATM and coin machine on site. These should always have additional protection as they are automatic targets for criminals.
Don’t let all of this security talk frighten you. It’s just good business to prepare, that’s all.
What would a laundromat be without clothes washers? These machines will need to be commercial grade due to the extensive use one is hoping they will take, day in and day out.
Commercial washers in laundromats are usually of two sizes—regular and large load size. In most scenarios, the conventional machines outnumber the large load washers 10:1, respectively.
Some types of commercial washers have integrated payment solutions. New commercial appliances can even allow for debit and credit transactions right on the machine itself to avoid the use of coins.
However, these high-tech washers come at a hefty price tag compared to the more abundant coin-operated models.
Used coin-operated machines will cost anywhere from $1,500 to $6,000 depending on the age, make, and model of the washer.
A new budget front load washer can run anywhere from $2,200 to $6,500 for a new appliance, including installation and warranty.
As this equipment is your business lifeblood, a healthy maintenance and warranty program should include implementation.
Commercial dryers can be purchased new or used. Coin-operated industrial dryers are the most abundant.
Prices for used dryers range from $600 to $5,000 for a double upright high-end unit.
New commercial coin-operated dryers can be purchased as low as $1,000 and up to $5,000 or more, depending on the capabilities.
For most dryers for a new establishment, budgeting $2,500 per machine would be an average estimate for new equipment, including installation.
This would get a decent machine, not top of the line but with a solid warranty.
If you’re doing the math, then you know that if you had 15 of each washer and dryer, now you’re looking at quite an initials startup cost for equipment. It is a laundromat and not a restaurant after all.
There are many companies which offer a solution. The solution is leasing the equipment or renting it.
Some companies offer a rental and profit-sharing agreement. Not all will do this for laundromats; often, offered to rental property companies exclusively. However, there are companies out there that offer this sort of rental service.
The leasing is the best option if you want to own the units eventually or have them traded for upgraded models.
Leasing works very well if you can bring enough business to offset the cost and ensure a return on investment.
Leasing also works well if you have only a minimal deposit available for equipment. It can sometimes allow you to get better quality equipment than you otherwise would have been able to purchase outright. In essence, you defer the cost of buying at the expense of paying a premium to do so.
When one has a laundromat, it is preferential to allow your customers to pay for services quickly. However, if you want to save money on the equipment by utilizing coin-operated equipment in a day and age of plastic, you will need a convenient way for customers to pay for the equipment used.
Having an ATM on-site is the solution to this issue. An ATM will allow your clientele to use their bank or credit cards to withdraw money. Money which they can then convert to coins using your bill and coin changer.
Most ATM providers offer included services and provide the machines on a rental basis. It is the preferred method as it transfers a multitude of liability to the company providing the service. When it comes to holding large amounts of money and doing transactions, why not let an ATM company handle it while you take a cut for having their machine on your premises. It is an easy way to earn a few cents off each transaction. Or whatever the deal winds up being with the individual company.
ATMs cost between $2,000 to $7,000 if you want to buy one and own it outright. It is a great way to rack up extra income because each transaction makes you a few dollars, and you only need to refill the machine with cash when it gets low. Although you’ll need a few thousand to get things started, you’ll soon see the transactions rolling in earning you money and also providing a valuable service for your clients.
To change the bills your clients just got from your bank machine, you’ll need a bill changer machine. These units don’t make you money as the ATM does, but your clients will need to convert those bills into coins to operate coin-operated washers and dryers.
Newer technology and payment solutions for washers and dryers are now available to bypass the need for an ATM and change machine. However, then the business owner loses the income of the ATM.
On the other hand, an entirely ‘plastic’ payment solution does negate many theft concerns. Having a laundromat, unattended, with an ATM and coin machine on the wall may be more attractive for criminals. It is a subjective debate every laundromat owner will need to make.
Coin changers price ranges from $500 for a used machine and $3,000 for a new device.
A soap vending machine is another excellent way to add another trickle of income into the business. The device itself costs between $300 for a used machine up to $3,000 for a new soap vending machine.
Keeping the machine stocked and presentable will keep clients doing the easy thing and just buying your soap when they need to clean laundry. And that will be convenient for them, and a moneymaker for you.
When you have a laundromat, clients need a space to fold their freshly dried laundry. Most laundromats offer several tables where clients can fold their laundry. Sometimes they are in the form of counters, but it is most common to see tables.
The standard for these tables is a non-expensive, simple design, yet sturdy to handle heavy loads of laundry piled on top.
It would not be uncommon for a child to climb up on the table as well when their parent isn’t looking due to doing laundry. Consider the table should be able to hold some reasonably hefty weight and is secure.
It means the cost of the table will run between $150 and $500 per table. If you have three tables, then between $450 and $1500 in expenses. However, you will also need some chairs.
Not that you want to encourage patrons to spend their time hanging out at the laundromat, but you need to supply a few chairs for your clientele. Some people prefer to stay with their laundry rather than risk a stranger being able to take it, a common occurrence in many unattended laundromats.
Chairs don’t need to be extravagant but should reflect the professionalism of your decor. Typical ‘public use’ commercial grade chairs will cost between $60 and $300 each.
Every store needs a sign. It is the primary marketing for the location. People who pass by the area will see the sign and know your business location. The sign should indicate the business type, and any branding or added advertising one wants to communicate permanently.
The sign could cost as little as $500 and as much as $20,000 or more. For a laundromat, most locations do not go over $30,000, but the location, type, and size of the sign all play into the cost making it slightly subjective in nature.
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Two pieces of permanent equipment are necessary for a successful laundromat. An electrical feed and panel that can handle the load of all the machines running at once are essential. And a water heater that can handle the amount of hot water required at any given time is also a requirement.
The water heater will need to be strong enough to handle the load of all washers running simultaneously. However, the more appliances a laundromat has, the less likely they will all be busy at the same time. There are some reasonably sophisticated equations to figure out the exact size of the water heater one might need.
The other consideration here is the different types of water heaters. Some models are tankless, while others require a large holding tank. Space and building specifications may limit one’s choices, and one may need to discuss building modifications with the landlord if one does not own the building. And in some situations, significant renovations might be required if multiple tanks are needed.
The last consideration for the water heater is the choice of method of heating. For example, there is an electrically powered heater or gas-powered. These two types are the most common, but other systems also exist.
To summarize, the more extensive and more sophisticated the system, the more expensive. Thus, it is good to find a location with an existing water heater system that can handle the load, no pun intended.
One of the most embarrassing things for a new laundromat owner is forgetting about the electrical draw that all the machines have when running at once.
This sort of electrical draw can cause breakers to ‘pop’ and even cause electrical fires if wiring is inadequate. It is ideal to consider appliance requirements before move machines into the facility. It will allow for renovations to occur as required to install appropriate power for the equipment.
The cost to upgrade a panel might be minimal, depending on the building one is setting up a laundromat in. Each situation will be different and dependent on the equipment used as well.
Pricing for electrical panel upgrades could be minimal from about $2,000. However, it is not uncommon to hear about commercial updates in the tens of thousands of dollars.
Depending on the building situation, if one were leasing from a property manager, it would be rather convenient to work out a deal to have the landlord upgrade electrical for the business as a condition of accepting the lease.
If you own the building, you can do whatever you want within the law. However, if you need to upgrade the electrical, it might cost a considerable amount more, depending on the particular situation.
As one can quickly determine from this article, several variables dramatically affect how much it costs to start a laundromat. With our Startup Equipment List, understanding these variables which affect the initial startup costs is essential to developing a secure business plan and startup strategy.
Let us do an example. Let us assume a modest operation laundromat has ten washers and ten dryers and minimal startup costs. It is not unimaginable to accomplish this feat of entrepreneurial prowess for as little as $21,330. That is, for the equipment discuss here in this article.
Now, if we were to assume a lavish and large establishment for a busy metropolitan clientele, let us assume 30 washers and 30 dryers, all state of the art.
If we crunch some numbers on the higher end of things, this sort of upscale establishment might cost in the neighborhood of $477,500 or more. Again, this is just for the equipment discussed here.
The obvious conclusion is that each situation is unique, just like you, the entrepreneur is yourself. However, one could estimate that the cost range is between $20,000 and $500,000 for equipment to start a laundromat business.
Be sure to read my guide on how to calculate startup costs for your business here