• "Keys to success? Location, equipment, store appearance and cleanliness. HK is a distributor and multi-store owner with over 40 years of laundry expertise to help you maximize return on your investment." — Karl Hinrichs, HK Laundry President

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Managing a Coin Laundry Business

Laundromat 101: Advantages Of Starting A Laundromat Business

Why should anyone consider starting a laundromat business?

Did you know if you put your money into a savings account, you would get 1-1/2% Return on your Investment (ROI)? Terrific Money Market Funds are currently paying around 8%. If you have a good year in the Stock Market or invest in a good Mutual Fund, you might get a 10% ROI.

When you start and maintain a laundromat business, it is extremely possible to realize a 35-90% return on investment in a cash business. There are many advantages to a cash business, including: 'no checks in the mail,' no inventory, and no account receivables because the customer pays in advance and supplies their own labor.

Why should anyone get into the Laundromat business?

A coin-operated laundry is a recession-proof business, as witnessed in our last recession. Economic conditions have little effect on the overall volume of business. In fact, some of the best times for Laundromats has been in times of economic downturn because available monies are limited, and people defer purchasing and repairing household laundry equipment.

There are also several major tax advantages that are available to the Laundromat owner, including equipment depreciation and the deduction of any financing interest. These situations may lead to a very favorable tax position.

The basic formula for buying a Laundromat is to put down at least 30% (approximately $80,000-$120,000) and finance the balance over a 7-year note. This, in conjunction with at least a 15-year lease, will assure you a handsome return on your investment, even if you can't renew your lease. The equipment in an HK-equipped Laundromat will easily last 15 to 20 years, and longer still, if you keep the equipment in good repair and provide proper preventative maintenance.

After the commercial laundry equipment notes are paid off, the store is all yours, and then the money being paid to purchase the equipment now goes into your pocket. Now is the time for Laundromats to show their real profitability. Remember, just a slight increase in sales over the break-even point creates a substantial profit. The more the store grosses above the break-even point, the greater the profitability.

There are many advantages to starting a laundromat business, including the opportunity for a high return on investment, a recession-proof business venture, a cash business model, and tax advantages.

Get started building your laundromat business with HK Laundry today!


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