How Much Does It Cost To Start a Laundromat: Getting Off the Ground
In every human behavioral pattern, there is a corresponding business opportunity. Everyone loves being in fresh and neatly pressed clothes without having to go through the hassle of hand washing. If you have been one of the people who have been asking the question ‘how much does it cost to start a Laundromat?’ you are not alone, there are many others who have been in the same inquisitive state.
To pull figures right from the top of the shelf, it would cost you approximately $100,000 to $500,000 to have a good start in this business. There is the coin operated model and the other one which will give you a full-service and enable you start a fully fledged home laundry business. If you decide to buy the latter, you need to set aside cash to buy both the washing machine and its dryer.
The location and size of the machine operated Laundromat will determine the overall capital outlay that you may be required to inject. The following factors will give you a concise picture of the costs involved in starting this business.
The Cost of Construction
Once you earmark a vantage location to put up your Laundromat, the next consideration needs to be the cost of construction. These costs would include electrical installation and upgrades, carpentry, drainage and sewer lines construction and plumbing. A good estimate of construction costs would be anything between $100,000 and $200,000.
The Equipment Costs
There is some equipment that you need to purchase which will also take a chunk of the startup capital. You can either decide to lease or purchase the equipment. Remember leasing may attract monthly lease rental expenses while the full purchase will require that you take care of depreciation expenses and other maintenance costs. There are different manufacturers of Laundromat equipment and your choice of brand name, size and sophistication will determine the cost that you will pay. For the equipment, you need to set aside $150,000 and $450,000.
Depending on the state regulations and the local authority legal business framework, your license fees may be higher than others. The type of licenses required for this job include a health permit, general business permit, air pollution control license and building permits especially when you start the construction works. These licenses lumped together may cost you anything from $150-$8,000.
When you decide to run a coin operated Laundromat, you may not need to worry so much about staff. However you will need some people to help you in the cleaning and operating of the Laundromat. From time to time, you will also need the services of a technician. If you offer dry-cleaning services, you may need additional staffs that will also be part of the payroll.
The Cost of Financing
Although many people desire to finance the Laundromat from their coffers, it becomes impossible in most cases due to the fact that the capital involved is huge. The other option is borrowing from friends and relatives which may also not be much.
To succeed, you need to get a loan from a bank or any financial institution. Because of the difficult times that we are living in, the rates of defaults have gone above the roof and most banks are charging exorbitant rates just to cover themselves up. Typically you would have to budget for rates of between 12% and 15 % per annum.
This should give you the glimpse of how much you are likely to incur. In getting your business up and running.