Laundromat Business Plan: Step-by-Step Guide

Are you planning to open your laundromat business? Then you need to create a business plan to guide you as you start your business and to present to lending institutions. A well-written business plan is a good starting point in determining if your laundromat business will be profitable. Laundromats have been known to have 95% success rates which is high compared to other types of business.

It is estimated from Anything Research that the laundromat business revenue amounts to US$15.35bn in 2023 and the market is expected to grow annually by 2.55%. Laundromats are a great business to run on the side because you do not have to be there constantly for the business to run.

The advantages of laundromats are:

• Low Inventory
• Low labor costs and easy to maintain.
• Easy to operate.
• Low barriers to entry, therefore, no need for special training
• Flexibility
• Able to create a hybrid business and company with another business i.e coffee shop
• Recession resistant

Disadvantages of laundromat businesses

• Competition
• High start-up costs
• Equipment failure
• Increasing utilities cost

Below is a comprehensive outline for your laundromat business plan:

Executive Summary:

This section is complete after you are done writing your business plan, you will summarize your plan by describing your business and including key highlights like the financial projections, products and services, business goals and mission, target market, and key industry insights.

Location and target market

This is key in laundromat business because the location will determine the amount of profit you will make. Do your research and justify why you have selected the location of your laundromat. Renters are laundromats’ key target market. A location that has more renters like students and young professionals would be best for laundromat, also choosing a location that is populated. By identifying your target market, you will be able to determine which places they are most likely to live hence where you can set up your laundromat.

If you are targeting commercial companies, then most like an industrial area will make more sense.

Products and services

Describe the services your laundromat will offer like self-service washing and drying, laundry pick and delivery, and dry cleaning. Indicate as well if you plan to provide additional services or sell products to complement your laundromat i.e., café, vending machines.

Give details of the equipment you will purchase, the suppliers, order timeline of getting the equipment and your equipment maintenance plan.

Determine your pricing strategy for your services and any products you plan to sell at your laundromat. Show the business plan reader how you came about the price and your profit margin.

Permits and licenses.

You will need to get approval from your city officials to operate laundromat, find out which permits and licenses you need to apply for as well talk to your utility providers for your water, sewer, and gas connections.

Insurance

You will need to obtain insurance before you open your laundromat including workers compensation, liability, and property insurance.

Market research

Market research will help you understand your industry trends, determine the competitors in your location, and what your target clients are looking for in laundry services.

Describe how you plan to advertise your business and list down your marketing channels i.e. social media, print, local directories, word of mouth etc.

Team

Mention how your laundromat business is structured and who are the key players. Indicate if your business will be sole proprietorship, LLC, or corporation. Provide a brief bio or resume of your team members and what experience they bring to your business.

Financial projections

Create 3 to 5 years financial statements and include your start-up costs, your revenue, profit and loss statement, break-even analysis, your balance sheet, cash flow projections, and income statements. This is the area of your business plan the reader will focus on and will determine if your business will be profitable.

Appendix

Provide supporting documentation including the lease agreement, your permits, and licences approvals, your tax documents,

Include any additional documents or information that support your business plan, such as market research, resumes of key team members, lease agreements, or pictures of the location.

Get the services of a business plan consultant like Axis business plans or a financial advisor to help you review your business plan and recommend changes before approaching the bank, financial institution, or investor. A well-structured business plan increases the probability of you getting funded.