RIPON, Wis. — After choosing to invest in a coin Laundromat, a buyer has to make several decisions, with store location being perhaps the most important. The age-old real-estate saying of “location, location, location” rings true in almost any business venture, but holds particular worth when deciding where to open a Laundromat.
Store location can significantly impact an operation’s success or failure rate, which is why choosing a manufacturer with the right expertise and resources to provide appropriate guidance is so important. Dealing with a partner that has invested in resources such as a commercial real estate service, an in-house finance department with a longstanding history of success, and a stable, experienced distribution network will make finding and analyzing the right location much easier.
The location is one of the most important decisions a store owner will make concerning the overall success of the business. Investors should expect their manufacturer and distributor to have the history, knowledge and experience to properly guide them through this step.
Generally speaking, there are a few key demographics—defined by Merriam-Webster as “relating to the dynamic balance of a population, especially with regard to density and capacity for expansion or decline”—that an investor should consider. First, the share of population that includes renters should be at least 35%.
Rental populations in the United States continue to increase at a staggering pace, and census data has this trend continuing through 2020. Increased immigration, the recent housing collapse, and overall change in attitude regarding home ownership have created a nation of renters. These renters are no different than homeowners when it comes to dealing with the time pressures of our fast-paced world. The ability to complete the weekly chore of laundry in less than 90 minutes is more desirable now than ever.
These paradigm shifts are important when performing site analytics and reviewing demographic trends.
When deciding on a location, considering household size and income level is important; investors should place their stores in areas where demand potential is high. The average household size in a considered location should be at least 2.3 people with a low-to-medium income level—approximately 40% of all households earning less than $35,000 per year use Laundromats. Lower-income households are less likely to pay extra for amenities such as an in-unit washer and dryer.
For example, coin laundry locations in close proximity to trailer parks have a built-in customer base. As most trailers do not have the power capability to run washer and dryer units, park residents require a Laundromat to wash and dry their clothes. This same philosophy holds true for other types of communal living, where an apartment complex may not have the washer and dryer capacity to meet the needs of all residents.
No matter the pre-existing customer base, a hidden Laundromat is not going to attract patrons. When considering property locations, look for retail openings on a main roadway with high visibility and ample parking. Traditionally, Laundromat customers are not making the trip to do a quick load of laundry. Rather, they save up to make one trip with multiple loads. Forcing customers to street-park and walk long distances with large baskets of laundry will deter them from frequenting a specific Laundromat. Convenience is key.
Finally, choosing a Laundromat location based on commercial co-tenants can help provide incentive for customers to visit. On average, customers spend 90 minutes in a Laundromat. Give them an opportunity to multitask; by locating next to grocery stores, “dollar” stores, convenience stores, auto parts stores or check-cashing stores, Laundromats allow customers to get their laundry done and run errands at the same time.
Check back Thursday for the conclusion!