How to Start a Laundromat Business

From scouting locations to the grand opening, learn how to open a laundromat in 10 steps and what it takes to succeed in this $5 billion industry. 

There’s arguably never been a better time to start a laundromat—or any small business, for that matter. According to the U.S. Department of Treasury, new business applications have surged by 50% compared to 2019, with an average of 430,000 applications per month in 2024. 

As essential services, laundromat businesses are also more likely to withstand economic fluctuations, especially in areas with a high concentration of renters or students. Still, success in the industry requires careful planning and execution, starting with knowing when and where to launch your laundromat business. 

Is now the time to start a laundromat?

Communities across the U.S. have relied on laundromats since the 1930s, and current trends suggest that this need will remain, if not grow. According to the Coin Laundry Association (CLA)—the largest nonprofit trade organization in the industry—laundromat businesses generate about $5 billion in annual revenue, spread across nearly 30,000 coin-operated laundromats nationwide. 

Individual laundromat business owners report annual revenues of up to $300,000, with profit margins ranging from 20% to 30%. While these figures represent the top performers, they still demonstrate the potential for well-managed laundromats to become lucrative businesses. 

Moreover, with a quiet housing market and decreasing rates of homeownership, the need for public laundry services won’t likely disappear anytime soon—particularly in urban and lower-income areas.

How to open a laundromat in 10 steps

The exact process to open a laundromat business depends on whether you build one from scratch or acquire an existing business venture, but you can get started by following these steps.

Step 1: Conduct market research

Market research is arguably the most important part of starting a new business. From a broad perspective, you want to gather information and assess the local demand, your potential customers, and the surrounding competition. Here’s how:

• Analyze local demographics. Use census data and local government resources to understand the population in your target area. Look for areas with high renter populations, lower average incomes, and dense housing, which often indicate stronger demand for a laundry business. 
• Understand customer needs. Learn about your potential customers’ laundry habits and why they prefer certain laundromats over others. This includes understanding their preferred washing times, pain points with existing services, and desired amenities (e.g., good parking or vending machines). 
• Identify competitors. Map out existing laundromats within reasonable walking or driving distance of your potential location. Assess their equipment quality, pricing, operating hours, and types of services. 

Market research helps you make informed decisions and minimize risk, so take your time and learn as much as you can about the local market and laundromat industry before moving forward. 

Step 2: Choose a business model

With your market research complete, you should start to think about which services your laundromat will offer. In addition to the expected coin laundry business, you might consider providing the following services:  

• Wash-and-fold. You can hire staff to wash, dry, and fold customers’ laundry. This may increase revenue but requires additional expenses and labor. 
• Dry cleaning. Expanding into dry cleaning can attract a different customer base but requires specialized equipment, expertise, and infrastructure. 
• Pick-up and delivery. You might offer a mobile laundry service for busy customers or those without transportation, but this also requires additional labor, equipment, insurance, and maintenance costs. 

Keep in mind that operating even a simple coin-operated laundromat involves potential risks, from slip-and-fall accidents to damaging customers’ clothing. Regardless of which services you offer, it’s advisable to choose a business structure that offers liability protection, such as a limited liability company (LLC) or corporation. Otherwise, your personal assets could be at risk in the event of a lawsuit.

Step 3: Write a business plan

Next, you’ll put everything together in an official business plan outlining your laundromat’s goals, strategies, and financial projections. Here’s what you should include in your business plan: 

• Executive summary. A brief overview of your business concept and goals. 
• Company description and mission statement. Details about your laundromat’s services, location, and unique selling points. 
• Market analysis. Insights from your research on local demographics, competition, and industry trends. 
• Organization and management. Your business structure and core team members’ roles. 
• Marketing and sales strategy. Plans for attracting and retaining customers. 
• Financial projections and requirements. Estimated revenue, expenses, and profitability for the next 3-5 years. If you’re applying for loans or funding, you should also outline how much capital you need and how you’ll use it. 

You’ll use the business plan to guide your decisions and convince others (such as potential employees, partners, or lenders) of your business’ potential. As a result, you should be professional and realistic about your goals to avoid false expectations. 

Step 4: Secure financing

The upfront costs to open a laundromat can run anywhere from $50,000 to $500,000 or more, depending on its size, equipment, and location. Generally, you’ll need to account for commercial washers and dryers, plumbing and electrical work, lease or property purchase, renovations, and initial inventory of supplies. Likewise, you should factor in savings to cover operating expenses for the first few months until you start earning a profit. 

When it comes to financing your business, you might consider applying for a traditional bank loan, especially if you have a strong credit history and collateral. You can also look into Small Business Administration (SBA) loans, which often have favorable interest rates and terms. 

Another option is equipment financing, where you secure a loan to purchase laundry machines (usually the most costly expense). Some manufacturers offer their own financing programs, which can be convenient if you’re buying several pieces of equipment. 

Step 5: Find the right location

Your laundromat’s location is crucial to its success. Building on your research from Step 1, here’s how to find the right spot: 

• Target high-demand areas. Focus on neighborhoods with more renters, low-income apartment buildings, or college students. 
• Assess visibility and accessibility. Choose a location that’s easy to find and reach, with plenty of parking. 
• Evaluate foot traffic and nearby businesses. A steady stream of pedestrians and complementary businesses (e.g., grocery stores or pharmacies) can indirectly boost your customer base. 
• Check infrastructure and zoning. Ensure the location has access to utilities and is zoned for laundromat use. 
• Analyze competition. Avoid oversaturated areas, but don’t fear some competition—especially if you’re confident you can offer a better solution. 

You should spend time at different hours and days to learn as much as you can about your potential locations. Once you’ve narrowed down the best candidates, you can reach out to the property owners or lease companies to discuss monthly terms and see how they align with your budget. 

Step 6: Obtain necessary permits and licenses

Before opening your laundromat, you’ll need to secure various permits and licenses. Generally, you’ll need: 

• A general business license
• Water usage and waste management permits
• Building permits for renovations
• Health and safety inspection clearances 
• Signage permits
• Sales tax permit (if selling products)

If offering additional options like dry cleaning, you will likely need specific permits for these services. Still, requirements vary by location, so research your area’s regulations or consult a local business attorney for advice. 

Step 7: Invest in equipment

Washing machines and dryers are the heart of your business, and the types you choose can significantly impact your success. Start by determining the sizes of machines you’ll need, which typically includes a mix of washers (20- to 80-pound capacities) and dryers with matching capacities. You might also consider adding a few extra-large machines for bulky items. 

Moreover, you should purchase enough machines to accommodate your expected peak usage and available space. For example, if you expect 15 customers at your busiest hour, you should ideally have an equal number of machines so no one has to wait. 

You can also invest in energy-efficient machines to keep operating costs manageable. While more expensive upfront, new machines from reputable manufacturers usually come with warranties and service options, which may lead to fewer breakdowns and maintenance costs in the long run. 

Step 8: Focus on the experience

To stand out among the other laundromats, you need to create an environment that customers enjoy visiting. Most importantly, ensure you consistently deliver the essentials, such as spotless floors, ample lighting, sufficient air conditioning or heating, and functioning equipment. 

Next, consider amenities that elevate the customer experience, such as free Wi-Fi, seating or work areas, vending machines, TVs, or a play area for children. That way, your customers have more incentive to return and recommend your business to others. 

Step 9: Market your laundromat

To attract and retain customers, you’ll need to market your laundromat in a way that reaches your target customer base. Here are some marketing strategies to consider. 

Online marketing: 

• Create and optimize a Google Business Profile, which allows local customers to find your business through Google Search and Maps. 
• Build a user-friendly website with online booking capabilities. 
• Maintain active social media profiles on Facebook, Instagram, and X (formerly known as Twitter). 
• Encourage and respond to customer reviews on platforms like Yelp or Google. 

Offline marketing: 

• Distribute flyers, door hangers, or mailers in nearby residential areas. 
• Place ads in local newspapers or community bulletins. 
• Create a referral program for existing customers.  
• Use attractive and eye-catching signs outside your laundromat.  

Remember to track the effectiveness and reach of your marketing strategy and adjust your tactics as you learn more about your customers. 

Step 10: Launch and manage your laundromat

Before opening, you’ll need to register your business with your state’s Secretary of State (SOS) office and obtain an employer identification number (EIN) from the IRS for tax purposes. You can also set up your accounting system and business bank account, as well as establish terms with suppliers for detergent, maintenance supplies, and other necessities. 

Once you’re up and running, your main goals are to focus on managing the operation and developing a routine for regular maintenance. Likewise, monitor your utility usage closely, and budget for ongoing expenses like rent, supplies, payroll, and repairs. 

How much does it cost to open a laundromat?

You can expect to invest anywhere from $50,000 to $500,000 or more to get your laundromat up and running. Here’s a breakdown of the main expenses and how they might vary. 

Location

Costs to secure your laundromat’s location can range from a few thousand dollars to well over $100,000, depending on whether you’re leasing or building the property. If leasing, expect to pay for startup costs, some of which are listed here. 

• Security deposit: 1-3 months’ rent
• First month’s rent: $1,000 to $7,000 or more, depending on the size and location
• Renovations: $5,000 to $50,000 or more, depending on the space’s condition

Utilities

Initial utility setup costs and deposits depend on your area and the rates your utility provider charges, including those listed here. 

• Water and sewer: $200 to $800 (and sometimes more in rural areas or if you have a septic system)
• Electricity: $500 to $2,500
• Internet and phone: $100 to $300

Equipment

Equipment is often the largest expense to open a laundromat since you need to purchase multiple machines. These are some costs to consider. 

• Washers and dryers: $500 to $10,000 each
• Coin machines: $1,000 to $3,000 each
• Security systems: $1,000 to $5,000 

While you can save some money by purchasing used equipment, be sure to factor in the potential for higher maintenance or energy costs, especially if using older models. 

Licensing, permits, and insurance

To register your business and acquire insurance, you should plan to pay for these expenses: 

• Business license and required permits: $50 to $400 or more, depending on the state
• Commercial property and liability insurance: $2,000 to $6,000 or more annually 

Marketing

Your initial marketing costs should mainly go toward building your online presence and announcing your grand opening, including the following: 

• Website development: $0 to $5,000
• Local advertising: $1,000 to $5,000
• Signage: $500 to $5,000

However, the total cost of opening a laundromat depends on where you live, so be sure to research each of these expenses in your area to create an accurate budget. 

How to decide which business structure is right for you

The business structure you choose will affect your tax obligations, personal liability, and day-to-day operations. Here are the basics of the most common options. 

Sole proprietorship: 

• Simplest and least expensive 
• No personal liability protection
• Business income reported on personal taxes 

Limited liability company (LLC):

• Personal asset protection
• Flexible tax options
• Moderate setup costs and paperwork

Partnership: 

• Shared ownership and control
• Each partner reports their share of business income on personal tax returns
• Requires an official partnership agreement 

Corporation: 

• Strong liability protection
• More complex and expensive to set up 
• Multiple tax options, depending on whether you create a C corp or S corp

While changing your business structure later is possible, it’s often a complicated and costly process. To ensure you’re making the best choice from the start, consider partnering with one of our business attorneys before you launch your laundromat. 

Whether you have specific questions, need a document review, or want to register a copyright, LegalZoom is here to help set your business up for long-term success—all for a flat and affordable price.

FAQs

How profitable is a laundromat business?

A successful laundromat may generate annual revenues of $300,000 or more, with profit margins ranging from 20%-30%. However, laundromat profitability ultimately depends on the location, competition, and operational efficiency. 

What are the risks of starting a laundromat?

One of the biggest risks of starting a laundromat is choosing a location with low customer traffic. Other notable risks include high upfront costs, equipment breakdowns, and utility price fluctuations, though careful planning and good business practices can often mitigate them. 

How much investment is required to open a laundromat?

Initial startup costs to open a laundromat range from $50,000 to $500,000 or more—it all depends on the location, building size, and equipment. Major expenses include purchasing or leasing the space, buying commercial washers and dryers, renovations, and initial operating expenses. 

What are the best locations for a laundromat?

Generally, ideal locations for any successful laundromat business have higher populations, more renters than homeowners, and limited competition. This often includes areas near apartment complexes (particularly those that don’t have in-unit laundry appliances), college campuses, and urban centers.