How to Start a Laundromat Business With No Money (25 Best Tips)

You can definitely learn how to start a Laundromat business with no money by reading this article.

It explains how to get started and tips to help you not only start but also succeed with a Laundromat business even with no money.

 

Importance

There are many modern conveniences that are available for the home that can help keep the individuals residence clean, help with cooking, save time, energy, etc.

Examples of some of those modern-day conveniences can include vacuum cleaners, microwaves, convection ovens, speed cookers, etc.

In addition, many of these modern-day conveniences have been automated and have robotic capabilities in which you can schedule times for cleaning and not even have to worry about even doing the chore or remembering.

A prime example would be an automated vacuum cleaner

Another modern-day convenience that helps save time and energy as well getting the chore done is a washer and dryer.

Many washers and dryers are extremely efficient and maximize the use of water, power, etc.

However, some of these modern-day appliances can be fairly expensive and a quality dryer and washing machine is no exception.

For this reason and a variety of other reasons, there are some people that choose to utilize a laundromat to get their washing accomplished.

As long as people like to wear clean clothes and sometimes have difficulty in purchasing major appliances, there will be a need for laundromats.

If considering investing in a laundromat business but do not have the financial resources there are a number of ways that you can make this happen.

 

25 Best Tips to Help You Start a Laundromat Business With No Money

 

1. Research

When looking to start and succeed with a laundromat business but having no money, the first thing you need to do is conduct your research.

To research the subject will only cost you your time and as part of your research you should look into the full scope of what it entails to be involved in a laundromat.

In addition to the items listed below, you would need to be comfortable with the time commitment, the operation of a business, being comfortable with the demands that a laundromat will place upon you and your time, etc.

 

2. Competitors

Another important preliminary step that should be accomplished before moving too far ahead in looking at purchasing a laundromat is to research your immediate area and find out what laundromats are in operation.

Part of your research and observation of the existing laundromats should include how appealing they are to a customer, what services they offer, any uniqueness associated with their operation, and of course the number of customers that utilize the facility.

 

3. Location

If you are looking at a laundromat that is for sale it is important to observe what stores are in proximity.

As patrons that utilize a laundromat will also frequent nearby retail operations while their laundry is being washed.

Also, is the location of the laundromat in close proximity to residential facilities or is it out of the way?

 

4. Budget

In preparation of looking at starting a laundromat another good initial step is to create a budget.

The budget should include on the revenue side of the ledger anticipated income from the use of the machines, other items that may be sold through a vending process on the premises, and so forth.

On the expense side of the ledger you would need to investigate the cost of buying or renting machines, any potential employees that you may be utilizing, insurance, occupancy fees (rent, utilities, etc.), any amenities that you may be offering (Wi-Fi), and so forth.

Obviously, the income and the expenses should balance out and should also, on the expense side, include your anticipated profit.

 

5. Business Plan

One of the primary jobs of an architect is to lay out the building details when constructing a new facility.

This plan is known as the blueprint and shows how the building will be laid out, doors, where the HVAC system will be, electrical system, plumbing, and so forth.

For an individual wishing to start a business a blueprint is also required in this known as the business plan.

Within the business plan is the executive summary, how the business will operate, marketing plan, budgeting, use of employees, etc. all of these aspects of the business plan will show that the process has been thought out and all the components are there in one document to ensure the success.

Therefore, as an individual wishing to start and continue to succeed with a laundromat business it is important to have a business plan.

 

6. Business Legal Structure

If everything thus far looks promising and you are ready to proceed you will need to create a legal business model for your business.

There are a number of legal structures that you can utilize.

An example of some of those legal structures would include:

• LLC
• Sole proprietorship
• Escort
• And so forth

You can investigate what the goal structure is best for you and your choice will depend upon what will best match your business vision and financial goals.

Each of the different structures has implications on taxes that are paid, forms that are needed to prepare and continually file, and so forth.

It is best to investigate all of the possibilities and determine what are the pros and cons and that best suit your comfort level.

The paperwork for filing can be done by a lawyer or there are online companies that will help you in the process.

One such online company is www.legalzoom.com.

 

7. Insurance

As a small business owner you certainly want to protect your assets as well as protect those that frequent your place of business.

Therefore, it is critical that you investigate a number of insurance companies, talk with a variety of insurance agents, and find out what are the best options for you to provide this protection through the purchase of insurance policies

Certainly, one of the most critical policies that you would need to purchase is general liability insurance.

 

8. Marketing

To attract customers and letting them know of the quality laundromat experience that they can engage in, you will want to market your laundromat.

When starting up and wishing to be successful you need to have a strong marketing plan that is incorporated in your business plan.

Potential marketing opportunities would include presence on social media sites, development of a website, and so forth.

A possible marketing campaign could be that even know doing the laundry can be considered a necessary chore but it doesn’t have to be dull or boring You can talk about the various amenities that your laundromat provides that can almost make doing the laundry enjoyable.

 

9. Staff

An important consideration to take into account to start to be successful with a laundromat business is the consideration of staff.

Questions that need to be asked are:

• Will you have staff present on-site?
• Accounting staff?
• Cleaning staff?
• And so forth

It is important to remember that staffing is a big expense if you choose to go the traditional way of employing people.

Perhaps, to cut down on the costs you could outsource these employment roles to freelancers.

By using a security company, cleaning service, outsource your bookkeeping needs to a freelance bookkeeper, etc.

 

10. Uniqueness

Business can be very competitive and that is why it is important to distinguish your business from others by providing a unique aspect.

Use of the Laundromat involves an individual bringing their laundry into the facility, have the clothes washed, dried, and then leave.

Possibilities of uniqueness at your laundromat could include having cable TV, videogame machines, Wi-Fi, etc.

 

11. Banking

Financial stewardship and accountability is also critical as it relates to owning a business.

The first order of business would be to open up a separate banking account that handles all of your business transactions.

Also you would need to find a bank that will help service your specific laundromat financial needs which would include a lot of coin counting.

Also, it is important to utilize a bank that has limited or no fees associated with your banking involvement.

You will also need to consider an accounting software package that either you or an employee can manage as it relates to income and expenses and generating reports such as accounts receivable, accounts payable, invoicing, etc.

Another option as it relates to accounting is to outsource your accounting needs to a freelance bookkeeper.

 

12. Franchise

A possibility of starting a laundromat business is by taking advantage of a franchise.

There are a number of advantages to investing in a franchise.

Some of those advantages include:

• Being supported by the franchise itself
• Advantage of their formulated business plan

Also, there are franchises that don’t charge any fees which can keep your startup costs in check.

Some of the franchises, that may or may not charge a fee include

• Maytag Commercial Laundry
• Super Solids
• Speed Queen
• And others

This may prove difficult having no money for investment but there’s always the possibility of friends and family investing in your adventure.

Check out some of the below Franchise articles for more ideas:

• Coffee Shop Franchise
• Car Wash Franchises
• Pizza Franchises
• Burger Franchises

 

13. Buy Existing

Another possibility of entering into the laundromat business with out any money is to buy an existing laundromat facility.

You could work with the owner of the facility and agree to pay a set amount each month that can be captured in a contract with the outlining terms agreed upon in repayment.

If considering the purchase of an existing business determine why the business is being sold.

Also ask for:

• The audited businesses financials
• Make sure there are no liens or tax implications with the property or business
• And other questions that need to be answered

 

14. Build Your Own

An option to start and succeed at a laundromat would be to construct your own business.

This would require the hiring of an architect, getting bids from various construction firms for the project, and so forth

There would be a variety of permits that would be needed to be filed and paid for.

Overall this would be an expensive venture but is certainly a consideration if you can gather together the financial resources

 

15. Licensing & Permits

If a business experienced a devastating circumstance within their store, often they would have what was called a fire sale.

The concept behind a fire sale is that any of the merchandise that was in the building during the time of the fire was deemed as damaged goods and therefore if a customer wanted to purchase the items they would buy the items “as is.”

In that same line of thinking, if a business is not doing well, often the owner of the business wants to get out from underneath the pressures and stress of continuing operations.

Often, a business owner who is struggling with sales will be open to hammering out a deal with a potential new owner.

Some of the details of the agreed-upon contract by both parties could be the transfer of the ownership with the new owner paying the previous owner a set amount each month.

This process could be known as a lease to buy and will be a prime example of owning a business with no money.

Another detail of this type of agreement would be the responsibility of paying property taxes and who would be responsible.

 

16. Owner Financing

If the current owner of the laundromat wishes to sell their business there is a possibility that they could work with you and you could forgo the use of a working with a financial institution in order to make the purchase.

There may be a variety of reasons why the current owner would want to work for you.

• Perhaps they are retiring
• Maybe a relative or a friend
• Appreciate what they hear from you and wish to provide you the opportunity
• And so forth

There may be a variety of reasons why you are not able to get a loan which could include:

• Poor credit rating
• History of bankruptcy
• No collateral
• And so forth.

You could work with the current owner and work out a binding contract that could be entered into by you and the current owner and the terms of the contract would include all of the normal loan variables.

Those variables would include interest rate, purchase price, number of payments, the amount of each payment, and so forth.

Also See: Starting a Stationery Business, Starting Tile Business & Starting a VR Business.

 

17. Let’s Make a Deal

Another purchase option is to come to an agreement as it relates to payments given to the current owner that is tied to the success of the laundromat.

This option could have monetary benefits for both the current owner and for you as the potential new owner.

Specifically, the terms of the binding contract calls for a set amount of money that is paid to the selling laundromat owner when a financial or performance benchmark is attained.

This type of purchase agreed upon by both parties is known as earn-out.

The details are that the seller of the laundromat finances the business and payments toward ownership correlate with the earnings of the business.

This process, of course, would take years.

An added dimension of this purchase plan includes a fair market value placed on the business.

This value would then be the total sum required to be paid.

Upon agreement and signing the agreement, payments in an amount and at a set schedule would then be followed until payment in full is reached.

The added caveat is that the payments would be tied to the profits attained by the company under new management and would be paid proportionately.

Therefore, if profits are good, payouts occur more frequently and the lump sum payoff goes quicker.

Of course, the reverse would be true.

 

18. Strength in Numbers

A way forward in owning and succeeding with a laundromat and not having the financial resources is to utilize your business plan and recruit individuals that would be willing to invest in your business.

Once you have gathered together the needed money for the laundromat, you can make the purchase.

As part of the investment opportunity for the investors they will need to be comfortable with your business plan, have confidence in your ability to follow through, and see the possibilities of investing in the laundromat and earn a return on their investment.

 

19. Research Loan Companies

It is important to remember that not all businesses operate the same.

They may conduct business under different policies and procedures.

When exploring the use of a loan company, it is important to conduct your research.

The possibilities of a loan being obtained without the need of collateral is a possibility.

 

20. Unsecured Loan

Another possibility of obtaining the needed money to start your laundromat business is by obtaining an unsecured loan.

An unsecured loan is money that is provided or loaned to the borrower and there is no collateral that is needed to secure that loan in the event that there is default.

Two obtain a unsecured loan you would need to have a credit score of at least 690 or above have minimal amount of credit inquiries on your credit report as well as credit utilize utilization well below 50%.

In other words an unsecured loan is money that is borrowed to you based on your good credit history and upon you personally as handling money responsibly.

 

21. Partnerships

A possible scenario of buying a laundromat without any money would be to engage a partner.

If you have the business acumen, know your way around the laundromat business, and are confident that the laundromat will be successful you could approach an individual who could be the financial partner.

The business relationship is that the individual will supply the needed money to obtain the additional money to purchase the laundromat and you will utilize your skills and experience in operating the business successfully.

This will be a good opportunity for an individual looking for an investment of their money.

The terms of the agreement could be captured in a binding legal document.

Some of those terms would include:

• Agreed-upon percentage of profits
• Any payments made to the investor
• Percentage of ownership for all involved
• Etc.

As with any binding contract it is important that people “stay within their lanes” and that the financial partner does not stray into the operational aspect of the business and vice versa.

 

22. Will Work to Own

Another possibility that may present itself in purchasing a laundromat business without any money is the option of working to own.

For example, if you work at a laundromat and have been the assistant manager for the owner of the laundromat and for whatever reason the owner has decided to retire in a couple years and approaches you about possible ownership of the business.

In order to move towards the purchase of the laundromat you could agree to the terms of a legal document in which your salary is reduced and that reduction in your salary is then applied towards the purchasing of the company as each payment could represent a purchase percentage of the laundromat business.

This is a win-win situation for all involved as the current owner has appreciated his or her working relationship with you, and sees that you have the capability of being the owner, and knows that the business will continue to thrive under your leadership.

In addition, they will be paid for the business.

For you, your hard work will have paid off and in time you will be the owner of the laundromat.

 

23. Leverage Buyout

Another possibility of purchasing a laundromat without any available money is known as a leverage buyout.

The leveraged buyout is when the potential new business owner can leverage any of the assets of the business that they are wishing to own.

The assets within a laundromat could include washers, dryers, vending machines, the furniture, laundry baskets, etc.

With a leveraged buyout there is one major stipulation that would need to be addressed.

That stipulation is that the selling price for the company must be less than the compilation of the value of the assets that you are willing to leverage.

 

24. Other Assets

You may not have assets that are liquid that can be used as collateral to obtain a loan to purchase a Laundromat, but there are other assets that you may own which can be utilized as collateral.

For example if you have precious metals, a vehicle, artwork, a home, etc. the lending institution may consider utilizing these items as collateral and provide you the money needed to buy the Laundromat.

These items do not necessarily need to be sold or liquidated but if the loan is defaulted on then the terms of the agreement would be that the lending institution can take ownership of that collateral due to breach of the contract.

 

25. Small Business Loans

As a potential small business owner it is important to know that there are many other small business owners and associations that are rooting for you and want to see you involved and be successful.

Consequently, there are many lending programs for small businesses to help an entrepreneur get started in the business that matches their dream and passion.

Such a financial supporting opportunity is known as the microloan program operated by the Small Business Association.

The money through this program is granted to you towards the purchase or down payment of a small business that you wish to be involved with.

To be involved with this program you can take advantage of a variety of different amounts that may be available.

The money is available as a result of a variety of partners that have provided from their financial resources to make sure that small business in any community moves forward and grows.

To learn more about this program you can go to https://www.sba.gov/funding-programs/loans/microloans.

 

Personal Story

While serving in the Navy and for two of the four years of my enlistment one of the chores that I detested was doing my laundry.

I never took notice of how the laundry was done when I lived at home and so my natural inclination when doing my own laundry was to put everything into one load and add some detergent, insert some coins, and let the machine do the work.

I knew nothing about the separation of clothes from the whites from the dark and always wanted to save money.

However, all that changed when I got married and went with my wife to the laundromat.

Come to find out separate loads should be washed rather than washing all the clothes together, that the clothes should be neatly folded, and minimize wrinkles as much as possible, and the use of detergent, fabric softener, etc. were all part of the washing experience.

In fact, on one occasion I had to travel back home alone and when unpacking my suitcase my mother exclaimed her surprise to know that my wife even ironed my undershirts.

 

Starting a Laundromat Business FAQs

 

Are Laundromats Profitable?

According to Speed Queen Commerical the rate of investment on being involved in a laundromat can range anywhere from 20% to 35%.

This rate of investment or your return is typically due to the fact that the investment involves low labor costs, flexibility, as well as other cost-saving benefits.

 

Where Was the First Laundromat Opened in America?

The first laundromat opened in 1934 and was called Washateria in Fort

Worth, Texas by an entrepreneur by the name of John F. Cantrell.

 

You Can Do It

As the saying goes, “where there’s a will there’s a way,” and wishing to start a laundromat business is no exception even if the obstacle of having no investment resources presents itself.

With hard work, planning, and working your strategy, there are ways that you can proceed to start a laundromat business without money.

 

Conclusion

For the most part, everyone enjoys taking clean clothes out of their wardrobe closet or dresser drawers and putting on clean and fresh smelling clothes.

Modern-day conveniences that help to provide the wearing of clean clothes are a washer and dryer.

However, for a variety of reasons, some people do not have the luxury of having a washer and dryer conveniently located within their home.

Therefore, they rely on commercial laundromats.

Your investment in a laundromat service will not only help individuals with obtaining clean and fresh smelling clothes, but can also make the process as enjoyable as possible, and also help you to realize some profit off of your investment.