Considering a laundromat as your next investment? Smart move
In many ways, a laundromat is a business unlike any other. Community laundries serve a practical purpose common to all. Week in, week out, everyone needs fresh sheets on beds and clean clothes to wear. Plus, many business analysts consider laundromats to be recession-proof and immune to market volatility.
The lucrative business of laundry
If set up properly and managed with care, your laundromat can thrive as a lucrative, low-maintenance business. Attention to detail and efficient processes will gear your laundromat for long-term success and possible expansion. With a laundromat in your portfolio, it’s easy to branch out into other locations and new neighbourhoods.
Why savvy investors choose laundromats
Return on investment (ROI)
Well-run laundromats in prime locations typically generate an ROI of 20-35%, which is relatively high compared with many retail and hospitality businesses.
Passive cash flow
This is a crucial reason for many investors. You can generate an income without having to be there. Most laundromats are open between 6am and 11pm, which is 18 hours a day to collect revenue.
No franchise fees
Most laundromats are small family businesses – not faceless franchises. This means you don’t pay pricey franchise fees and you’re not governed by strict franchisee rules. You can run your business your way, addressing issues as you see fit and responding quickly to changes in consumer demand.
Minimal employee management
Not everyone has the time or the inclination to lead a large team, and your staffing needs will depend on whether you choose to operate a self-service or fully serviced laundromat. Only a skeleton staff is required at self-service laundromats, where customers pay upfront and do the majority of the work. It’s typical for the owner to handle, cleaning, security and cash collection duties. This makes onboarding, training, rostering, management and payroll a breeze. Your main role in this type of set-up is to provide high-performance equipment and an attractive, welcoming setting – perhaps with snack vending machines, free Wi-Fi and magazines.
No Inventory or stocktake
Unlike a restaurant, newsagent, supermarket or bottle shop, laundromats have few consumables and physical inventory. Not having to order, rotate or discard regularly makes for a lighter management load overall.