Starting your laundromat journey begins with one of the most critical decisions you’ll ever make: finding the right location. Your choice of market, building, and setup can make or break your business. In this newsletter, I’ll share the exact framework I’ve used and taught others to use when identifying a laundromat opportunity that sets you up for long-term success.
1️⃣ Get to Know Your Potential Market
The very first step in finding a winning laundromat is understanding the market you’re stepping into and finding an underserved market. Too many new owners skip this, rushing into leases or purchases without fully grasping whether demand truly exists. As I tell all my coaching clients, “the laws of supply and demand are undefeated. Get this part right and your likelihood of success is high, get it wrong and it really doesn’t matter how great of an operator you are; you’re probably toast.”
Here’s how to approach it:
- Assess the Competitive Landscape: Visit existing laundromats in your target area at different times of day and on different days of the week. I prefer to visit with laundry in hand and to become a customer. Notice how busy they are, how clean and well-maintained the store is, and how customers are being served. If you see long lines, broken machines, or frustrated customers, those are signs of an underserved market. Maybe the greatest sign of an underserved market is to observe many nasty, poorly run laundromats in the area that are all very busy. If a zombie mat is doing well in any particular market, that suggests that the laws of supply and demand are tipped in your favor. Serve the community with better facilities and operations and you’ll have a license to print money.
- Define What “Underserved” Means: It’s not just about a lack of laundromats. After all many markets have a plethora of laundromats, but that doesn’t mean they’re serving the community well. An area might have plenty of stores, but if they’re outdated, poorly attended, or failing to meet customer needs, the community is still underserved—and you could fill that gap.
- Study Demographics: Focus on neighborhoods with high renter density, multifamily housing, and limited in-unit laundry access. Middle- to lower-income communities often rely heavily on laundromats. Population density is key—enough people within a 3–5-mile radius will keep your machines running consistently.
When you combine boots-on-the-ground research with demographic data, you’ll start to see where the true opportunities lie. I do want to caution you that demographic data only goes so far and leans towards the stereotypical low-income laundromat customers. More and more every day, modernized laundromats are willing and able to serve all demographics with great facilities and operations. Don’t just rely on the age old “low income” customers. While they still need to be served, the pie is much bigger if you understand on to serve them.
2️⃣ Buy or Build?
Once you’ve identified an underserved area, your next decision is whether to buy an existing laundromat or build from scratch. Each option comes with pros and cons, but truth be told, I always default towards trying to acquire an existing mat. Even if it needs a complete retool, I prefer not to add another store to any market. Building new in a white box always adds to the laws of supply and demand. For the record, many franchises and distributors will tell you that your store will be so “great” that you’ll easily put the others out of business. A 70-year history of the retail laundromat industry suggests that it probably won’t happen. Even poorly run laundromats are VERY difficult to put out of business completely. Please, do not count on any competitors going under for your proforma to make sense. I beg you! Now that being said, there are still some markets where a new build makes sense. Here’s things to consider.
- Buying an Existing Laundromat:
- Typically requires a smaller investment since the infrastructure, machines, and customer base are already in place.
- Don’t assume a store isn’t for sale just because there’s no “For Sale” sign. Reach out to owners, you might be surprised how many are open to offers at the right price.
- Carefully evaluate the equipment condition, lease terms, square footage, store layout and income/expense records to determine if the deal makes sense.
- If you see the possibility of retooling an older store into your vision, then that is usually a better path to profitability both short term and long term.
- Building a New Laundromat:
- If buying isn’t an option or if no good stores exist in your area, look for existing retail spaces or vacant land where you can start fresh.
- A new build gives you control over layout, equipment mix, and design, but also requires a higher upfront investment.
- New construction typically requires a 1–3-year runway to profitability depending on the market.
- Remember this key truth: you can change equipment, signage, and marketing, but you cannot change the location or overcome a poor lease. Pick a spot with strong visibility, a great lease, plentiful parking, safe surroundings, a supportive police and community, and accessibility via main roads or public transportation.
- Lastly, please know that even with the best laid plans, you’ll want to add 20% to your timeline, and 20% to your budget and cash reserves. Don’t be that laundromat that was headed towards success but simply ran out of runway.
This step is about weighing costs against long-term opportunity. Don’t chase cheap deals—chase the right deals.
3️⃣ Create for Your Desired Market
Your vision for the laundromat business should guide your decisions on both location and layout. Ask yourself: Who do I want to serve, and how?
- Self-Service Only: If you’re aiming for a traditional coin/card-operated laundromat, you’ll want high machine capacity, comfortable folding areas, and amenities like Wi-Fi or vending machines to improve customer experience. Serve the community well, and the money will follow.
- Drop-Off Services: Planning to offer wash-dry-fold services? You’ll need extra space for attendants, workstations, and storage for completed orders. A steady stream of customers dropping off laundry also means choosing a location with convenient parking and higher income demographics.
- Pickup and Delivery: If you want to grow into delivery services, factor in space for processing, bagging, delegation, and drivers coming in and out. Your demographic expands here to serving busy professionals or families who value convenience over cost. Smaller retail clients can be great customers, as well as true commercial accounts, but be careful with the industrial accounts. These big boys are typically hard to make a profit on in most cases. If you plan to offer pickup and delivery at scale and in a medium or major market, I highly recommend planning for 1/3 of your total square footage for non-retail usage.
By knowing your desired market upfront, you avoid designing a store that doesn’t match your business model.
4️⃣ Patience is Key
The laundromat industry is hotter than ever, which means opportunities can be harder to come by. You might find that many existing stores are either not for sale or are asking for far more than they’re worth. That’s where patience comes in. Take.Your.Time. We’d rather take 2 years and then hit a home run with our first store, than get anxious and hit a single. Note: Hitting a single won’t pay the bills!
- Don’t Overpay: The excitement of getting your first laundromat can cloud your judgment. Remember, the wrong deal at the wrong price can sink your business before you start. Buy the wrong location, or simply overpay for it, and you’re behind the eight ball for 5-10 years and possibly have a hole that you can never dig out of.
- Wait for the Right Fit: A diamond in the rough is still out there—but it might take time to uncover it. Despite what all the YouTube gurus with Facebook groups and passive income courses say, great off market deals aren’t around every corner. Stay consistent with your research and networking, and don’t be afraid to walk away from a deal that doesn’t check all the boxes.
- Think Long-Term: You’re not just buying machines—you’re building a generational wealth asset. The right deal will reward you for decades to come but the wrong one will haunt you.
💭Final Thoughts
Success in the laundromat business doesn’t happen by accident, it starts with finding the right location, in the right market, at the right price. By understanding your market, deciding whether to buy or build, tailoring your store to your target customers, and exercising patience, you’ll put yourself miles ahead of most new investors.
The laundromat business has completely changed my life, and it can do the same for you—if you take the time to get this first step right.
Please remember that Carla and I are always rooting for you.
You can do it. We can help. 🙏❤️
– Dave
