Laundromat Resource › Forums › New Member Introductions! › Does opening a laundromat make sense for me?
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December 10, 2021 at 8:51 pm #13555
Anonymous
My father is looking to open a laundromat business in place of a breakfast shop that he currently operates. He owns the building outright but the property needs to be retrofitted to accommodate the newly purchased equipment. All said and done, this will be a $450K investment with the majority of the expenditures being the new Huesbch washers/dryers. The laundry equipment company offers their own financing and has made us an offer to repay $320K in equipment over 9 years. The first 90 days will be free, then the next 16 months will be interest only. After that, the principal payments of $5,000 a month will start to kick in. This will be a small location of 1,400 sq. feet with 20 washers and 24 dryers. There will be no wash and fold business as we do not want to have employees.
With all of the other added expenses, mainly utilities, I don’t believe this business can turn a profit. We would have to earn $20,000/month just to break even over the next 9 years and that includes revenue to recoup the retrofitting expenses. Even if we do make a small profit over the life of the loan, it won’t be much. It appears that we will be managing this business just to pay bills and pay off the machines.
Can anyone please offer me some insight? Thank you.
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December 23, 2021 at 2:37 pm #13754
20k a month from a new build with is a bit of a reach. Without additional information such as general location, competition, population etc there is not enough information established to give you a more thorough response but your concern is both realistic and valid. That number is steep.
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December 23, 2021 at 2:54 pm #13757Anonymous
Juan,
Thank you for your response.
The proposed laundromat has a population of 28,595 within 1 square mile. Within two square miles, that figure goes up to 76,262. However, there are 10 different laundromats within 1.5 miles of our location. This area is lower-income with a lot of apartment renters that have no laundry hookups. Situated along a busy street, we do have adequate parking with high visibility.
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January 16, 2022 at 5:59 pm #14390
Hello Mike,
The population numbers in the 2 square mile range is more than double the 1 square mile radii which is favorable as is the location and traffic count. But 10 different laundromats within a 1.5 mile radius will be one of your biggest challenges. Especially when you consider a need to grow the business from nothing to 20k a month in some semblance of a short order. Are both your Father and you willing to work / run the business for free until it manages to grow and be self sustainable?
By the time you pay off the equipment loan (depending on what brand machines you go with), you will be facing a situation where you will be looking to replace some equipment all over again.
Good luck.
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Laundromat Resource › Forums › New Member Introductions! › Does opening a laundromat make sense for me?
