Laundromats are a profitable business
Earning residual income with a laundromat
Have you ever noticed that, despite cheap washing machines that you can buy for little money, a laundromat is always full of people washing and drying their clothes without anyone in the shop to work there?
This is exactly how you can generate passive income with a laundromat. I remember a friend telling me that he wouldn't mind owning a laundromat because it was a very easy way to generate pasisves income, he assumed that you would easily make € 10,000 profit before tax per Year. At the time I couldn't even imagine that, since electricity, soap and rent significantly reduce taxable profit, but for the research for this article, I dealt a little closer with this possibility of building passive income.
So how is it possible to earn a passive income with a laundromat and make a profit?
The necessary cost of your own laundromat
The size of a laundromat is at least around 25 square meters and a maximum of around 110 square meters, sometimes more, but on average around 75 square meters.
A laundromat company with several branches in Cologne has between 12 and 26 washing machines for 5 kg of laundry, sometimes a washing machine for 16 kg of laundry and about half of the washing machines in tumble dryers, e.g. 8 tumble dryers on 19 washing machines.
Plan about 60,000 - 100,000 € acquisition costs for the coin machines + running costs for rent, electricity, water and other ancillary costs if you want to open a larger laundromat. If you only open a very small laundromat with less than 10 machines, your acquisition costs and your taxable profits will of course also be reduced.
The Potential Income of Your Own Laundromat
To determine the usual market prices, I visited some laundromat websites, here the result:
- For the washing process in a 5 kg washing machine, 3 € are usually charged, if happy hour times are offered, the price for this period is reduced to approx. 2.50 €.
- A washing process in a 16 kg washing machine costs about 7.50 - 11 €.
- Drying for 15 minutes is charged at 1 - 2 € per process.
- Fabric softener € 0.50
- Laundry detergent € 0.50
With 12 washing machines with 4 cycles of 3 € each this is 144 € per day, the 5 dryers an additional 80 € per day, detergent / fabric softener approx 40 € per day.
Are we making a profit?
I can only estimate the acquisition costs, I am assuming a loan that will be repaid monthly in installments of 1700 €.
- Washing and drying = € 6720 per month
- Detergent and fabric softener = € 1200 per month
= 7920 € turnover per month before taxes
- Renting a building = € 1000 per month
- Loan repayment for coin operated washing machines and dryers = € 1,700
- Employing someone to collect the money = € 300 (1 hour a day x 30 days)
- Additional costs: (electricity, water, etc.) = € 2,800
- Refill the soap and other machines = 600 €
- Total cost = € 6,400
Potential profit: € 1,520 per month or € 18,240 per year.
Remember, this is an optimistic example, it may be that the ancillary costs are significantly higher and the income noticeably lower and you end up making only € 5000 a year in profit or even € 3000 a year loss. A business plan and careful planning are essential.
Inquire at the machine manufacturers about the exact electricity prices, inquire about the exact water consumption and prices of your water supplier.
You can save labor costs if you install a certain technology, i.e. a coin-operated machine with a large volume for all washing machines.
As is so often the case in life, the location of the laundromat is decisive for success and sales.
It is advisable to open the laundromat in a large city with at least one hundred thousand inhabitants.
Find a rental property that is near a university district or near inexpensive small apartments, youth hostels and hostels. A launderette may also make sense in the vicinity of cheap hotels for business travelers and Monteuere.
Ideally, there is a tailoring shop in your street and you can enter into a cooperation that you recommend to each other.
6 months until word of your laundromat gets around and marketing
Don't expect people to run into you after you've opened your laundromat, on the contrary, word of your new laundromat will only get around if you do good marketing online & offline.
Work, for example, with the delivery of flyers directly to your target group (mailbox), create a website or have a website created and let SEO experts bring it to number 1 or at least to the TOP10 so that people can find you in modern times.
Wear or have your page entered in local yellow pages like Yep and other pages, it is extremely important that you do local online marketing, because in the long run this is the cheaper way than offline advertising.
Tips for your own laundromat
- Other possible sources of income: Set up a and candy vending machine. Some manufacturers are happy to support you on the basis of a franchise concept or as a service so that you can buy their machines.
- Stand out from the crowd: Offer free WiFi in your laundromat so that people feel good.
- The location of your laundromat should either provide free parking or there should be parking near the salon. The proximity to bus and train stops is also highly recommended.
- You are doing a commercial activity, so you need a trade license.
- Create a business plan so that you & your lender can calculate whether the laundromat will be profitable.
- Get advice from the local business development agency in order to receive support with the necessary administrative procedures that are necessary to open a self-service laundromat.
- If you have the necessary capital, you can also combine the service with a laundry, iron the customer's laundry and thus generate another source of income.
If you need a loan, register with Auxmoney, banks usually have a hard time lending for businesses.
Have you ever considered opening your own laundromat?
Do you own a laundromat? Tell us about your income-spending experience.
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