How To Start A Laundromat: A Step-By-Step Guide

Opening a laundromat is one of the more dependable small business moves out there. The demand doesn't dry up in a recession. Customers come back every week. And with the right setup, you don't need to be on-site 60 hours a week to make it work.

But "dependable" doesn't mean easy. The owners who succeed treat a laundromat business as a semi-active investment: it requires hands-on involvement early on. They choose great locations, invest in solid equipment, and build systems that keep things running smoothly. The ones who struggle underestimate the planning it takes to get there.

This guide walks you through all of it: costs, financing, location, permits, hiring, and opening day.

What you need to know before you start: a quick summary

A laundromat is a strong business model if you're willing to be hands-on in year one and build toward a lower-maintenance operation over time. Here's the short version:

• Startup costs range from $200K–$1M+ depending on whether you're buying or building.
• Profit margins typically run 20–35% at well-run locations.
• Three models to choose from: self-service (lowest cost), attended (highest revenue potential), or hybrid.
• Location is the single biggest factor in success (more on that in Step 1).
• If you hire staff, you'll need a system for scheduling, time tracking, and payroll (covered in Step 8).

Is starting a laundromat right for you?

Who it's for:

• Entrepreneurs looking for semi-passive income with steady, recurring demand.
• Investors who want a business with predictable cash flow.
• People willing to learn basic equipment maintenance and handle some hands-on operations, especially early on.

Who it's not for:

• Anyone expecting a fully passive business from day one.
• People with no access to startup capital or financing.
• Owners who aren't ready to be actively involved during the first 6–12 months.

Laundromats can run with minimal daily oversight, but that's something you build toward. It takes the right location, the right equipment, and good systems.

How much does it cost to start a laundromat?

Costs vary significantly depending on whether you're buying an existing laundromat or building from scratch. Here's what to expect.

Buying an existing laundromat

What you're paying for: the business itself, equipment, a customer base, and the lease or property.

Typical costs:

• Purchase price: $200,000–$1,000,000.
• Down payment: 10–20% of the purchase price.
• Working capital (first 3–6 months): $10,000–$30,000.
• Equipment upgrades: $10,000–$100,000.
• Closing costs, inspections, legal fees: $10,000–$30,000.

The upside: You get immediate cash flow, a proven location, and an easier path to financing. The downside: Older equipment may need replacing soon, and it can be hard to verify the seller's financials.

Building a new laundromat

You control everything, but the upfront investment is higher and it takes longer to open.

Typical costs:

• Lease deposit: $1,500–$6,000.
• Build-out and renovations: $50,000–$200,000.
• New commercial washers and dryers: $1,000–$6,000 per unit.
• Plumbing, electrical, HVAC: $45,000–$150,000.
• Permits, licenses, insurance: $3,000–$11,000.
• Supplies, soap, vending: $2,000–$6,000.
• Working capital: $40,000–$150,000.
• Marketing: $1,000–$10,000.

The upside: Everything's modern and efficient, lower maintenance, higher revenue potential long-term. The downside: Higher upfront costs and 6–12 months before you open.

Ongoing monthly costs

Whatever path you take, plan for these recurring expenses:

• Rent or mortgage: $1,500–$6,000.
• Utilities (water, electric, gas): $3,000–$6,000.
• Maintenance and repairs: $500–$1,500.
• Insurance: $150–$500.
• Supplies: $500–$1,000.
• Employee wages (attended model): $2,000–$8,000.
• Marketing: $1,000–$3,000.

One note on utilities: high-efficiency washers can use up to 50% less water than older models. That's a meaningful difference on a monthly basis, worth factoring in when choosing equipment.

How to start a laundromat with no money (or close to it)

You can't open a laundromat with zero dollars. You'll need funds for deposits, permits, and early expenses at minimum. But there are real ways to reduce how much upfront capital you need.

Seller financing

The seller acts as the lender, and you make payments directly to them.

• Typical loan terms: 5–7 years, with flexible payment structures.
• Down payment: Can be as high as 50%.
• Interest rates: 6–10%, typically higher than bank rates because the seller is taking on more risk.

Why sellers do it: they attract more buyers, can ask a higher price, and benefit from an ongoing income stream.

How to find it: Search for listings that mention "owner financing." Look for older operators who may be ready to retire. Ask brokers. They often know which sellers are open to it even when it's not listed.

To learn more about SBA loan terms and eligibility, visit SBA.gov.

SBA 7(a) loans

The SBA 7(a) program is one of the best paths for first-time laundromat business owners:

• Down payment: 0–10% in many cases.
• Interest rates: Lower than seller financing or conventional loans.
• Requirements: Good personal credit and a solid business plan.
• Timeline: 30–90 days for approval.

Apply through SBA-approved lenders. For current rates and program details, check sba.gov before finalizing your financing plan.

Partnerships

Find a capital partner willing to invest while you operate the business. Typical splits are 50/50 or 60/40 depending on what each person brings. Formalize everything in a written operating agreement. Money disputes can derail even strong relationships.

Ways to stretch your budget

• Buy a distressed laundromat at a discount and renovate over time.
• Buy used equipment instead of new (can save 30–50%).
• Lease equipment instead of buying (higher long-term cost, but lower upfront).
• Start with a hybrid model to reduce payroll.

Whatever route you take, keep at least 3–6 months of operating expenses in reserve. Unexpected repairs happen. Slow months happen. You want a cushion.

How to start a laundromat business: 10 steps

Step 1: Research your market

Location is the number one predictor of laundromat success. Get this right before anything else.

What to look for:

• High renter density: areas with more renters than homeowners.
• Middle-to-low income neighborhoods (these customers are most likely to use laundromats).
• High foot traffic: strip malls, near grocery stores, near bus lines.
• Limited nearby competition, especially from modern, well-run shops.

How to research:

• Use Census data to understand population, income levels, and renter percentages.
• Search "laundromats near me" and map the competition.
• Drive target neighborhoods at different times of day.
• Talk to apartment managers and college students about their laundry needs.
• Visit competing laundromats and observe machine usage during peak hours.

Red flags to avoid:

• High-income neighborhoods where most residents have in-home machines.
• Areas where new, modern laundromats are already operating.
• Locations with declining population or high commercial vacancy.

Step 2: Write your business plan

Your business plan does two things: it forces you to think through your assumptions, and it's required if you're applying for financing, especially SBA loans.

What to include:

• Executive summary: concept, model, goals.
• Market analysis: competition, demographics, location rationale.
• Financial projections: 3–5 year revenue, expenses, breakeven.
• Operations plan: staffing, hours, vendors, maintenance.
• Marketing plan: promotions, loyalty programs, local partnerships.
• Funding request: if seeking loans or investors.

Step 3: Secure financing

Apply to at least 2–3 lenders and compare rates and terms. Expect 30–90 days for approval and closing.

What lenders want to see:

• Good personal credit.
• Funds for a down payment.
• A solid business plan with realistic projections.
• Relevant management experience.

Lease negotiation tips (if leasing space):

• Ask for tenant improvement (TI) allowances.
• Request free rent during the build-out period.
• Negotiate caps on annual rent increases.
• Make sure the lease allows commercial laundry equipment and drainage.
• Get dedicated parking for customers.

Step 4: Find the right location

Look for:

• High visibility: Street-facing locations outperform tucked-away spots.
• Parking: Customers often bring heavy loads, so ample parking matters.
• Utility access: Gas, 3-phase electrical, strong water supply.
• Zoning: Must allow commercial laundry use.
• Size: 1,000–5,000 sq. ft.
• Rent: Target no more than 20% of projected monthly revenue.

Step 5: Choose your business structure

Most laundromats operate as an LLC. It protects personal assets and keeps taxes relatively simple. An S-Corp can make sense once you're profitable and want to reduce self-employment taxes. A sole proprietor setup is the easiest to get started but offers no liability protection.

Registration steps:

• Register your business with your state.
• Get an Employer Identification Number (EIN) at irs.gov.
• Open a business bank account.
• Register for local taxes.

Step 6: Get your licenses and permits

Requirements vary by city and state. Common requirements include:

• General business license.
• Sales tax or seller's permit.
• Fire department permit.
• Environmental permits (water/wastewater discharge).
• Sign permit.
• Building permits (if renovating).
• Health department approval (if offering wash-and-fold services).

Getting your business license and insurance sorted before signing a lease will save you headaches. Here's what you'll need on the insurance side:

• General liability (covers customer injuries, property damage).
• Property insurance (covers building and equipment).
• Workers' compensation (required if you have employees).
• Business interruption insurance (optional but strongly recommended).

For a full overview of licensing requirements, see the SBA's licenses and permits guide and USA.gov's business resources. Water and wastewater requirements vary by location. Confirm everything with your city's licensing office before signing a lease.

Step 7: Purchase and install equipment

Your core equipment: commercial washers, commercial dryers, and a payment system (coin, card, or app-based). Many experienced operators recommend a ratio of 1 washer per 1.5 dryers.

New vs. used:

• New: Higher upfront cost, but energy-efficient, longer lifespan, and manufacturer warranties.
• Used: Lower upfront cost, but higher maintenance risk and shorter remaining lifespan.

Other essentials:

• Folding tables and laundry carts.
• Seating.
• Security cameras.
• Soap and snack vending machines (these generate extra revenue).
• Change machine.
• Wi-Fi (customers appreciate it while they wait).

Step 8: Hire and train your team

Your staffing needs depend on your business model:

• Unattended: No on-site team members needed. You handle daily opens, closes, cleaning, collections, and machine checks yourself.
• Hybrid: One attendant during peak hours to maintain cleanliness and assist customers with add-on services.
• Attended: 1–3 employees per shift, depending on store size and demand.

Staff responsibilities typically include:

• Assisting customers.
• Keeping the facility clean.
• Handling wash-and-fold.
• Monitoring machines and reporting maintenance issues.
• Restocking soap vending machines.

Managing a new team, even a small one, is one of the trickiest parts of opening an attended or hybrid laundromat. Scheduling, time tracking, and payroll don't need to be complicated. Homebase handles all three in one place so you're not chasing down timesheets or building schedules from scratch each week.

"I love the simplicity and the time tracking and the payroll system itself. It is so much easier than anything I've used in the past. I've run payroll from sitting on a horse moving cattle."

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Step 9: Market your laundromat

Before opening:

• Claim your Google Business Profile. This is free and essential for "laundromats near me" searches.
• Put up "Coming Soon" signs with an opening date.
• Distribute flyers to nearby apartment complexes and college campuses.
• Plan a grand opening promotion (free wash day, discounted first visit).

Ongoing:

• Loyalty programs (buy 10 washes, get one free).
• Partner with apartment managers who can refer tenants.
• Ask happy customers to leave Google reviews.
• Post updates on Facebook (hours, promotions, cleanliness).

Your storefront is your marketing. Keep it clean, well-lit, and welcoming.

Step 10: Open and optimize

Start with a soft opening to test equipment and train your team before going public. Follow with a grand opening promotion to drive initial traffic.

Your first 90-day checklist:

• Track washer and dryer usage.
• Monitor utility costs.
• Adjust pricing if needed.
• Collect customer feedback.
• Use local marketing to build awareness.

Once you're established: upgrade equipment over time, add wash-and-fold if demand is there, and keep looking for ways to reduce utility costs through more efficient machines.

How profitable is a laundromat?

According to the Coin Laundry Association, roughly 29,500 coin laundries in the U.S. generate nearly $5 billion in annual gross revenue, with a business success rate around 95% for well-run operations.

Typical net profit margins run 20–35%. Annual earnings vary widely based on location, size, and efficiency—ranging from $30,000 at a small unattended shop to over $1 million at a large, high-traffic attended location.

The biggest cost drivers are utilities and equipment maintenance. High-efficiency washers can use significantly less water than older machines, a meaningful lever for improving margins over time.

Common mistakes to avoid

1. Underestimating startup costs. The numbers above are ranges. Get specific quotes before committing.
2. Skipping due diligence when buying an existing laundromat. Ask for financials, inspect equipment age, and review the lease carefully.
3. Choosing location based on rent alone. Cheap rent in a low-traffic area will hurt you long-term.
4. Buying old equipment to save money. Older machines break down more often and cost more in utilities.
5. Expecting it to be fully passive from day one. It can become semi-passive, but you have to build it there.
6. Not keeping cash reserves. Aim for 3–6 months of operating expenses at all times.
7. Weak team management in attended models. Staffing problems compound fast without good systems. If you're running a team, don't try to manage it with spreadsheets and group texts. Homebase keeps scheduling, time tracking, and payroll in one place so coverage gaps don't become crises.
8. Ignoring your online presence. Your Google Business Profile is how people find you. Set it up before you open and keep it current.

Frequently asked questions about starting a laundromat

How much does it cost to start a laundromat?

Starting a laundromat typically costs $200,000–$1M to buy an existing location, or $250,000–$750,000+ to build new. Ongoing monthly expenses include rent, utilities ($3,000–$6,000), maintenance, insurance, and payroll if you hire staff. Budget for at least 3–6 months of operating reserves on top of startup costs.

Can you start a laundromat with no money?

You can't start completely from scratch with zero dollars. You'll need funds for deposits and permits at minimum. But you can significantly reduce upfront costs through seller financing, SBA 7(a) loans, or equity partnerships. Most first-time owners combine two or more of these routes and keep 3–6 months of reserves in place.

How long does it take to open a laundromat?

Buying an existing laundromat takes roughly 30–90 days from offer to open. Building new takes 6–12 months due to permitting, construction, and equipment installation. Financing approval, inspections, and build-out are the main timeline drivers.

Is a laundromat a good business to own?

Laundromats have roughly a 95% success rate and typical profit margins of 20–35%, making them one of the more dependable small business models. They work best for owners who treat the business as semi-passive: not fully hands-off. They reinvest in equipment, cleanliness, and customer experience.

Do I need employees to run a laundromat?

It depends on your model. Unattended laundromats need no on-site team members, just regular visits for cleaning and maintenance. Attended models need 1–3 team members per shift. A hybrid model uses part-time attendants during peak hours. Most new owners start with minimal staffing and add team members as revenue grows.

Should I buy an existing laundromat or build new?

Buying is faster and gives you immediate cash flow, but you may inherit old equipment or lease problems. Building new is more expensive and takes longer, but you control everything from the start. First-time owners often do better buying an existing laundromat with a strong location, then upgrading equipment over time.

What licenses do I need to open a laundromat?

Requirements vary by city, but typically include a general business license, sales tax permit, fire department clearance, environmental/wastewater approval, and building permits. If you offer wash-and-fold services, you may also need health department approval. Always verify with your local business licensing office before signing a lease.

How many machines do you need for a laundromat?

Small laundromats may start with 5–6 machines and scale later. Larger stores run 40+ machines. A common starting ratio is 1 washer per 1.5 dryers. Your equipment supplier can help you model the right mix for your square footage and expected demand during the planning phase.

Ready to open your laundromat?

Starting a laundromat is one of the more dependable paths to small business ownership, if you plan carefully, pick the right location, and build solid operations from day one.

The most successful laundromat owners treat it as semi-passive: hands-on at first, then building toward a business that runs without them being there every day. That means investing in modern equipment, keeping the space clean, and setting up systems that work.

If you're planning to hire, Homebase makes it easy to schedule shifts, track hours, and run payroll, all in one place, from wherever you are. Less time on the back office means more time building the business. Start free with Homebase 

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