As entrepreneurs, most people prefer minimal effort, high-earning businesses. For startup ideas like laundromat can be a great small-scale, bigger-revenue option. But, are laundromats profitable? As an investor or entrepreneur, if you are considering this niche or own one already, this blog will take you through its dynamics. We will also explore average laundromat profits, success-driving factors, and best strategies for maximizing profits.

Are Laundromats Profitable?

Yes. Laundromats are profitable businesses. The annual laundromat revenue is thousands of pounds depending on location, services, and quality of business management.

Key Highlights

• In the UK, the laundry service market revenue estimation is around $1.37 billion in 2022 and is forecasted to spike to $2.15 billion by 2030. This represents a spiking CAGR of 5.8%.

• The UK had $1.98 billion in 2023 (approximately) revenue generated with the online laundry services market alone. Based on this, the growth forecast for the niche is 33.8% CAGR from the year 2024 to 2030.

[Source: Grand View Research]

The ROI for laundromats is higher as compared to other small businesses. For instance, it can range between 20–35%, often outperforming traditional retail businesses and franchises.

Why do Laundromats Have High Cash Flow?

1. Every day-essential Services

Laundry is the basic need for all. Regardless of the economy status, people, hospitality businesses, and hospitals will need clean clothing and linens, always. This marks for a steady demand for laundromat businesses throughout the year.

2. High ROI

Laundromat revenue varies according to business size but have lower variable costs unlike other service-based businesses. The net margins can be noticeably higher with a modest investment and good store location.

3. Non-Complicated Operations

You may think about laundromat if you wish for a non-complicated setup. Laundry business is simple, quick & easy to setup. Machines and point-of-sale system like Clean Touch EPOS are like one-time investments. The rest of daily operations encompass efficient inventory and staff management, maintenance, customer services and cash handling. Automated payments, loyalty programs, and self-service options further reduce overheads.

4. Improvement Potential

You’ve got abundance of opportunities to drive profits. Facilitate value-added services such as wash & fold, ironing, dry cleaning, pickup & delivery, or installing vending machines and coffee corners can significantly boost revenues.

5. Opportunity Exposure

The Laundromat business model offers scalability. Entrepreneurs can expand businesses with more outlets or open franchising. Technology upgrades, marketing, and local partnerships open even more avenues for profitability.

Why Do Some Laundromats Fail to Drive Business Growth?

1. Poor Pre-Investment Research

Failing to perform thorough due diligence before purchasing or opening a laundromat business often imposes significant challenges. For instance, misjudging location potential, underestimating machine upkeep costs, and overlooking competition intensity.

2. Non-Favouring Lease Agreements

If you end up with a bad lease, your profits shall drain and the risk for an expansion plan remains high. Leasing terms with inflexible rent hikes, short durations, or lack of renewal options can diminish long-term business value.

3. Ill-Managed Operations

Lack of efficiency in operations leads to higher expenses and lower customer retention. With ill-maintained machinery, dirty premises, inattentive customer services, or outdated payment systems, you can never attract customers but lose them.

Major Factors Determining the Value of a Laundromat Business

• Choice of location
• Condition of equipment
• Regular cash flow/consistent revenue
• Favourable lease agreements
• Loyal customer base

One of the crucial factors determining the laundromat business value is the system’s automation. For instance, installing advanced EPOS like Clean Touch EPOS enhances operational efficiency and customer experience. Not only it simplifies checkout but shares valuable insights for boosting revenue with convenient re-marketing approaches. It is possible to outperform your competitors with proven techniques without requiring specific marketing tools.

Reasons that Confirm Laundromats are Profitable

We have explored the average laundromat business profit. Here are some former reasons confirming laundromats among profitable businesses:

• High cash flow with minimal inventory
• Predictable and recurring customer demand
• Opportunities for service diversification
• Scalability with multi-location potential
• Recession-resistant essential service
• Automation reduces labour dependency
• Strong resale value for established businesses

How to Open a Laundromat? Step-by-Step Guide

The Laundromat business seems an exciting business opportunity with higher profit margins. However, success only relies on how carefully planned and strategically executed it is. This stepwise guide is for all those laundromat business enthusiasts out there:

1. Conduct Market Research

Market research helps you find loopholes to secure an effective position in the market and enhances your ability to forecast realistic demand. Any business starts with comprehensive market analysis and research. Study the demographics of your target location and the area where you are planning to open your first, second, or “nth” outlet.

Try to identify your potential customers, such as – students, renters, or busy professionals who will be relying on your laundry services. Don’t miss out on your local competitors and list out the number of laundromats operating nearby, their services offered, and pricing strategies.

2. Develop a Solid Business Plan

Create a detailed business plan, and your roadmap to success by outlining the overall cost of the business. Make a list of funds that’ll go for the startup and operational costs, revenue projections, service menu (self-service, wash & fold, dry cleaning), and funding options such as personal savings, bank loans, or investors. Add funds needed for marketing strategies and be clear with your financial goals to strengthen your proposal while sourcing finances.

3. Secure Financing

Initial-phase Laundromat investment is essential if you don’t have a whopping fortune on hand. Explore different financing routes including personal capital, traditional bank loans, etc. Having a strong business plan will improve your chances of securing funding from banks or investors interested in the laundromat sector.

4. Be smart with your choice of location

Remember, the laundromat business is only successful if started at the perfect location. It will even work when the location is not carefully chosen but success is unsure. Look for a site with high foot traffic, good road visibility, ample parking, and proximity to apartment complexes or densely populated neighbourhoods. Accessibility and convenience can significantly increase your laundromat’s customer base.

5. Invest in Quality Equipment

Prefer investing in high-performance, durable & energy-efficient washers and dryers. It’ll seem heavy investment initially but cut down long-term cost. The upfront costs may be high but newer machines reduce water, gas, and electricity expenses while providing a better customer experience, directly boosting your average laundromat profits over time.

6. Install an Advanced EPOS System

It’s crucial to consider facilities from the customer’s perspective. Modern laundromats must cater to cashless customers. Installing a smart EPOS system like Clean Touch EPOS helps you accept digital payments, manage loyalty programs, and monitor operational performance in real-time.

7. Hire Efficient Staff

Hire experienced staff and don’t hesitate in hiring hire trainees or interns who are bold enough to add value to your business. Well-trained staff can handle machine maintenance, deliver excellent customer service, and upsell value-added services like wash & fold, contributing positively to your laundromat revenue. You can also train freshers at low pay (a cost-effective approach for startups).

8. Prepare a Launch Marketing Plan

Create awareness early with an effective marketing plan. Use Local SEO, social media advertising, Google My Business listings, and distribute flyers locally. You may host a launch event with exciting introductory offers for first 50 customers for encouraging community engagement.

9. Focus on Ongoing Growth

Once open, continually track KPIs like revenue per machine, customer retention, and utility costs. Regular maintenance of equipment and customer feedback monitoring are essential. As your business grows, consider expanding services such as pick-up and delivery or adding eco-friendly options to remain competitive and enhance long-term ROI for laundromats.

Due Diligence Checklist for Maximum Laundromat Profit Margin

• Audit existing laundromat financials (if buying)
• Evaluate the machine’s age and condition
• Inspect location traffic and access
• Review local competitor analysis
• Assess lease terms thoroughly
• Estimate utility costs accurately
• Implement a modern EPOS and cashless payment solution
• Plan marketing strategies for opening and scaling

How to Make Your Laundromat Business Thrive?

These are some key metrics for making your laundromat business thrive, as expected or beyond.

• Upgrade to modern washers and dryers
• Offer loyalty programs via EPOS systems
• Add complementary services (e.g., dry-cleaning, ironing)
• Focus on cleanliness and ambience
• Maintain proactive customer communication
• Leverage digital marketing for local awareness
• Analyse performance reports to make data-driven decisions

In Conclusion

The laundromat business is a highly attractive investment opportunity with strong profit potential, resilient demand, and room for innovation. With the right planning, management, and technology solutions like Clean Touch EPOS, you can maximise your laundromat business profit and build a sustainable venture.

| At Axcess IT, our Clean Touch EPOS not only simplifies your operations but also gives you actionable insights to continually optimise profits and customer satisfaction. If you’re ready to modernise your laundromat operations or are planning your first venture, contact Axcess IT today and discover how our Clean Touch EPOS solution can help you succeed.

FAQs

Is laundry business profitable?

Yes, it is. Laundromats provide essential services that are in constant demand, ensuring steady revenue and healthy profit margins.

How much do laundromats make?

The average laundromat profits can range from a few thousand £ to five-figure £ per year, depending on size, location, and service diversity.

How profitable are laundromats?

Laundromats are very profitable. With relatively low operational costs and consistent demand, laundromats often achieve higher ROI compared to many retail businesses.