GLENDALE, Ariz. — During my long career in laundromat ownership, I fielded many questions about the self-service laundry business and what’s involved. For this month’s column, I thought I’d answer some of the questions most frequently asked of me while in my mats or when “cornered” at parties.
But before I do, let me say first that if you’re truly interested in owning and running a mat, read as much as you can. Go into the online archives of American Coin-Op where you will find a treasure trove of mat information. The Coin Laundry Association has many helpful tools for researching laundromats, and there are laundry-related forums on Facebook.
Now, onto the questions:
Q: If I buy a laundromat, do I have to know how to fix the machines?
This was one of the most common questions I received. Sometimes I’d be asked while I was working on a machine! My most common response: “Would you open a restaurant if you don’t know how to cook?”
Laundromats are loaded with computerized, electromechanical equipment. If you are handy at fixing things in general, you can probably learn how to diagnose and repair them from your distributor, as well as searching online for laundromat “how to videos” for your brand of equipment.
Don’t forget, you’ll be competing with mat owners who do know how to fix their equipment.
Q: How do I find a store location?
Many laundromat markets are already saturated. A simple way to find locations is to drive around your target market and visit all the mats in the area. If you find one that’s busy most of the time but run-down, you may want to buy it and renovate it. Make sure the financial numbers work, and that the store is run-down due to owner neglect and not because a big, new mat nearby is “crushing” it.
Opening a new mat across the street from the run-down target mat can be risky because the run-down mat can be renovated to compete with you.
Recommended reading: “Eight Ways to Find the Best Laundromat for Sale,” February 2021
Q: Can I keep my job and run a laundromat?
It depends. Contrary to popular belief, laundromats do not run themselves.
They must be well-managed like any other business. You must be able to compete with other mats whose owners and/or family members may be onsite full-time. Some competitors may have been in the business for years.
If you’ve never operated a business before, are “all thumbs” when it comes to technical issues, are undercapitalized, are not skillful at managing employees, and become overwhelmed with problem-solving, I think you’re asking for trouble.
If you love fixing things (after hours), are available by phone/text, completed your “due diligence” to minimize painful financial surprises, and refuse to give up when things get hard, you have a shot.
These points apply mostly to newbies. Once you have some experience under your belt, you can gradually manage them remotely, provided you have great employees who are happy working for you.
I started operating mats in 1976, yet years later, I would still show up for a few hours per mat at least five times a week. But that’s me.
You can spend a million bucks building a gorgeous, brand-new mat, yet it can go downhill in a matter of months if you don’t give it the attention it needs.
That said, laundromats can be easier to operate in absentia than many other businesses. The three main needs are having great employees, keeping the mat immaculate, and keeping the equipment running smoothly.
If you can do these things while working your other job, then you could have years of success, provided the mat was built correctly and is in a great location.
Recommended reading: “Laundromats are a Business, Not a Hobby,” September 2019
Q: How much money do I need?
Depends on how big your mat is. These days, bigger mats that are open 24/7 with plenty of parking seem to do better, at least in the big cities.
Too big can also be a problem. Bigger mats mean bigger expenses, so a 5,000-square-foot mat in the wrong market can indeed fail.
If your mat is less than 1,500 square feet (I’ve seen them as small as 800), you will not have enough equipment to pay for a full crew, even with the help of drop-off service. You will be forced to either go unattended, or you will be buying yourself a job. Unattended mats do work, but mostly in low-crime locations, and locations where vagrants are low in numbers.
For me, a sweet spot could be 3,000 square feet. Big enough to attract customers, yet not so big expense-wise. Of course, it all depends on your market. A 5,000-square-foot mat could cost over $1 million for equipment and construction, not including the building (I recommend buying the latter, if possible). Figure that a 2,500-square-foot mat will cost about half that.
Q: How do I find good employees?
This is a tough one nowadays. The easiest way is to put out “Now Hiring” signs or banners. For online searches, I’ve heard some good things about using Indeed.com. There are plusses and minuses for both approaches.
If you already have a mat, you can offer a finder’s fee bonus to your employees for any new employee who works out well after a 90-day trial period. You can also try offering a sign-on bonus after 90 days for any new employee.
For me, the best strategy was to pay them well, and treat them well.
Recommended reading: “How to Hire Great Employees for Your Laundry,” August 2019
Check back Thursday for more answers to investor questions!
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].