Laundromat Investment FAQ’s (Frequently Asked Questions)

We know that potential investors in the laundromat industry have lots of questions. Below are some of the most commonly asked questions and answers that we encounter from new and potential laundry owners. For more details on any of these topics, or to get answers to additional questions, please ask your Dexter Authorized Distributor. They are a valuable resource, and can assist you with the planning, purchase, installation and long term support of your laundry project and will be able to assist with all of your laundry needs. Click here to find the Dexter Authorized Distributor nearest you.

Is a Coin Laundry a Good Investment?

A coin-operated laundry is a smart investment, particularly in today’s economy. It’s an all-cash, low labor, and recession-resistant business. Many owners see their initial investment paid back in a short period of time, and this is a business with little inventory, or accounts receivable problems to worry about. Compared to many businesses, with the help of your Dexter Authorized Distributor, a laundromat is actually a very easy business to start. The requirements for start-up capital are very reasonable, there are no franchise fees, smaller stores have only minimal labor requirements (since customers do most of the work), and there are no spoilage factors. And with manufactured sponsored financing programs (like Dexter Financial Services), once you have your start-up capital, it is very easy to finance the equipment you need. Beyond the obvious revenue from your coin-op washers and dryers; additional services such as wash & fold, dry cleaning service and alterations & repairs and on site vending can also generate additional revenue.

People from all walks of life and ethnic origins are investing in the commercial laundry industry. It is a common sense business, requiring minimal supervision. It can be run on an absentee basis, which helps you avoid giving up your current profession or other source of income.

Do I Require Any Special Skills To Own and Operate a Self-Service Coin Laundry?

A coin laundry is a relatively simple business to operate. No special skills are required. The most important factors in your success are desire, perseverance and a well-equipped coin laundry with the right mix of equipment in the right location.

How Much Can I Expect to Earn Investing in a Commercial Laundry? Are There Tax Benefits?

The success rate of any business (coin laundry or otherwise) depends on how well you manage it. Some important factors in the success of a modern laundromat are its location, the size of the store, the mix of equipment, the hours of operation, advertising and promotion. Your Dexter Authorized Distributor can help you put together a plan for your business that covers not only investment costs, but the return on your investment. Click here to find the Dexter Authorized Distributor nearest you.

The tax benefits of investing in a laundry can depend on your yearly income. For more details contact your tax provider.

How Much Does It Cost To Build a Professional Coin Laundry?

There are several factors that can impact your potential cost. Location, demographics of the area, layout of the site, size of the laundry, sizes of the equipment, water heaters, water storage tanks, plumbing, exhaust venting, etc., will all contribute to the total cost of the store. A properly designed and equipped coin laundry can cost between $135,000 to $600,000 or more. More important than the actual cost of a store is what a store will generate in revenues and profits for the owner relative to the cost – that is what determines the owner’s return on investment. For more details on building a successful laundromat in your area, please contact your Dexter Authorized Distributor.

Where Do I Get Financing to Open a Laundromat?

Dexter Laundry offers competitive financing and your Dexter Authorized Distributor can assist you with how to apply for financing for your laundromat investment. They can make recommendations on how and where to finance your businesses and will work with you to select the option that best suits your needs and budget. Click here to learn more about financing your laundry equipment through Dexter Financial Services.

In Addition to Financing, What Will I Need for Start Up Costs?

The cash down payment for an existing store depends on the cost of the store and the availability of outside financing, or the willingness of the existing owner to hold financing as a provision of your purchase. The up-front capital required to build a new store will depend on your equipment mix, the size of the laundry, and the condition of the location. As a general guideline, recommend that you have approximately thirty percent of the purchase price available to invest into a new Laundromat, assuming you have a financial statement able to finance the balance. In addition to the down payment, you will have to pay insurance, escrow charges, and deposits on utilities. You also should set aside a cash reserve equal to 2-3 months of operating costs of the business, while your new business is developing a customer base. Your Dexter Authorized Distributor can help walk you through the expected costs and investment needed to open up your new laundry.

How Does Location Impact the Success of a Laundromat?

Location is one of the most important factors in determining the future success of any coin laundry. Your coin laundry should be located in a high-traffic, densely populated, low-to-medium income area, with good access and the availability of convenient parking. Coin laundries can also do well in middle-to-high income areas with single family homes because many two income families find it more convenient, time saving and cost efficient to use the local coin laundry or its wash and fold service.

Whether you are considering purchasing an existing laundry or building a new laundry from scratch, your Dexter Authorized Distributor can assist you in the selection of a good location. Among the many services Dexter Authorized Distributors provide is a free evaluation of your location, store design, and equipment recommendations. Their factory trained laundry industry experts will look at the demographics and traffic patterns of an area to assist you in finding the best possible location for your laundromat. Dexter Distributors can also provide you with assistance in negotiating a lease, obtaining financing and more.

Should I Buy an Existing Coin Laundry and Upgrade It, Or Build a New One?

There are many different factors that can impact whether you should buy an existing laundromat or build one from scratch. Your Dexter Authorized Distributor will be more than happy to meet with you on site to discuss your potential investment, be it an existing business, or a new location.

What’s the Process of Building a New Laundromat?

Your Dexter Authorized Distributor will be able to help you find a location, recommend a mix of equipment, and design your laundromat’s layout. After you approve the basic design, an architect will deliver a complete set of plans for submission to the appropriate building department. Construction will then start with the delivery appropriate gas, water, sewer and electrical service to the site followed by installation of the equipment and other tenant improvements.

What are Impact Fees and How Do They Impact my Laundromat?

While not all cities impose them, impact fees are charges imposed by cities on new construction projects that require connecting to the city’s water, sewer or irrigation system. Costs can range from a few dollars per machine up to several thousand depending on the city. If you purchase an existing laundry, it would not be necessary for you to pay these fees. However there may be other charges required to bring an aging laundromat up to code. For details on what you might expect for impact fees in your area, please consult with your Dexter Authorized Distributor.

Are There Other Taxes or Permits I Need to Know About?

There are an assortment of licenses and registrations that do need to be obtained in order to open a laundromat. These can vary for new or existing locations and by municipality. For more details on what you can expect for your area and laundry location, please consult with your Dexter Authorized Distributor.

How Much Should I Expect to Pay for Utilities?

If your laundromat washers and dryers are water and energy efficient, and designed for heavy-duty commercial use, the utilities costs can average 15-25% of your monthly gross income depending in which part of the country your laundry is located. Older, less efficient laundry equipment can push utility bills beyond 30% of the monthly gross. Consult with your Dexter Authorized Distributor on how to minimize your utility expenses and to make your laundromat as energy efficient as possible.

How Much Time Will I Need to Spend Managing My Laundry?

At first, you will spend many hours learning the business and getting familiar with the various pieces of equipment installed. In time you will be able to manage your laundromat with fewer numbers of hours.

Do Many People Own More Than One Laundromat?

Yes. There are many successful multi-store owners in the coin laundry industry. In fact, it is very common for individuals to choose the coin laundry industry because of the ability to own and operate multiple stores. With managements systems such as Dexter’s Easy Card system, it continues to get easier for store owners to control the operation of multiple locations.