Learning how to start a laundromat business means working through six decisions: where to put the store, how it will run, which machines to buy, which permits you need, how to pay for it, and how to keep it running once the doors open.
Each decision moves the others. A site with weak electrical service limits which dryers you can install. A wash-and-fold counter changes your payroll and your insurance at once.
You may be opening your first store or buying one that already runs. Either way, the steps below work through those six decisions in the order they actually come up. Gild Insurance can also help you compare coverage that fits what you build.
Understanding How the Laundromat Business Model Works
A laundromat earns money by renting access to commercial washers and dryers, through self-service machines, staffed services, or both.
The U.S. Census Bureau counted 10,890 coin-operated laundry and drycleaning establishments with paid employees in 2023, and those stores employed about 41,351 people1. That works out to fewer than four employees per store, so your competition is usually one owner with one location rather than a chain.
That count covers only stores with employees on payroll. It leaves out the unattended owner-run stores, which make up a large share of the business.
Decide how the store will run before anything else. Your service model sets staffing, machine mix, utility load, and what you can charge.
Step 1: Choose Your Laundromat Business Model
The first real decision in how to start a laundromat business is what kind of store you are opening. Three models cover most stores.
Self-service. Customers wash and dry their own laundry. You need the fewest people, often none on site, and your revenue is tied to how many machine cycles you turn in a day. Your risk sits mostly in the building and the machines.
Wash-and-fold. Staff handle the laundry for customers who pay for the convenience. Revenue per order rises and so does payroll. It also changes your insurance position, because you are holding property that belongs to someone else.
Hybrid. Self-service machines plus a staffed counter, often with pickup and delivery. A staffed counter can bring in revenue at hours when self-service traffic is thin, though it carries both risk profiles at once.
Pickup and delivery can sit on top of any of the three. It adds vehicles, and a coverage question a walk-in store does not have.
Step 2: Research Your Market and Competition
Start with the housing, since that tends to decide whether a laundromat works on a given block. Renter-heavy areas with older multi-unit buildings and few in-unit hookups are the usual profile.
The U.S. Census Bureau’s American Community Survey publishes the numbers that answer this at neighborhood level2. Renter-occupied share, units in multi-unit structures, median household income, and average household size are all worth pulling before you tour a single space.
Then walk the competing stores. Count the washers and dryers, note the capacities, and check the posted prices. Visiting at your intended busy hour is worth the trip. If machines sit idle at peak, weigh that before you commit to the area.
Finding the Right Location and Equipment
The right laundromat site combines renter demand, easy access, utility capacity, and enough room for commercial machines.
Your lease and your machines will be the two largest commitments you make. Both are difficult to undo.
Step 3: Select a Convenient Location
Customers carry heavy baskets, so convenience tends to matter more than visibility in this business. Before you commit, consider:
- Utility capacity. Commercial washers need high-volume hot water, heavy electrical service, gas supply for the dryers, floor drains, and exhaust venting. A retail space built for another use may have none of it.
- Parking and transit. Measure the walk from a parking space to your door with a full basket in mind.
- Entrances and lighting. Much of the traffic in this business comes in the evening, so lighting and a level entrance deserve more weight than in daytime retail.
- Floor space. Folding tables, seating, and carts need as much thought as the machine rows.
- Lease length. Your buildout goes into a building you do not own, so the term should be long enough to earn it back.
A laundromat open to the public is also a place of public accommodation under the Americans with Disabilities Act. The federal rule names laundromats directly3. In practice that points to an accessible route from the parking lot to the machines. It also covers door hardware a customer can operate and turning space between rows.
It helps to sort that out before you sign. Widening a doorway or regrading an entrance after buildout costs considerably more than designing around it.
Having a qualified contractor inspect the plumbing, electrical service, drainage, and venting before you commit is worth the fee. Low rent stops being low the moment a building needs heavy utility work.
Step 4: Purchase Commercial Laundry Equipment
Your machine mix should follow the laundry your neighborhood actually brings in. Large-capacity machines handle comforters and family loads, which a store with only small machines cannot serve. Drying generally takes longer than washing, so it helps to plan dryer capacity alongside washer capacity rather than after it.
ENERGY STAR publishes which commercial clothes washers are certified and how much water and energy each uses4. That is a cleaner way to compare models on running cost than on sticker price. Utilities are a recurring expense in this business, so the difference adds up.
Decide on payment before you order. Coin equipment is simple and carries no processing fees. Card and app systems cost more and let you change prices without touching the machines. They also bring customer payment data into your business, which raises a question a coin-only store does not have.
Compare buying, financing, and leasing, and build in delivery, installation, repairs, and parts.
Licenses, Permits, and Startup Costs
Registering the business, pulling local permits, and funding the build are the three pieces that stand between a signed lease and an open door.
This is the stage of how to start a laundromat business where timelines tend to slip. What you file and what you pay depend on your city and your business structure. They also depend on whether you are building new or buying a store that already runs.
Step 5: Register Your Business and Obtain Permits
Choose a business structure and complete your registration before you spend money on equipment. Common options are sole proprietorships, partnerships, and limited liability companies.
Depending on your location, requirements may include:
- Business registration with the state, plus any tax accounts
- Local business license or tax receipt from the city or county
- Zoning approval. Laundromats are not permitted in every commercial zone. Confirm it before you negotiate a lease.
- Building, plumbing, and electrical permits for the buildout, which on a laundromat are substantial
- Fire safety inspection, which will look closely at dryer venting
- Signage permit
- Wastewater or sewer approval. Some cities treat a laundromat as a high-volume discharger and apply a separate permit or capacity fee based on expected flow. Confirming it with your local utility before you sign is worth the call.
The U.S. Small Business Administration keeps a guide to which licenses and permits apply5. The answer turns on what you do and where you do it.
Contact your local building and zoning office before construction starts. Confirming requirements first can save you the cost of reworking a finished space.
Step 6: Calculate Your Laundromat Startup Costs
What you spend up front turns mostly on one decision: whether you lease your space or buy the building.
Most guides on how to start a laundromat business quote a startup range without a source behind it. Federal lending data offers a firmer reference point.
Among laundromats that opened with SBA 7(a) financing between 2020 and 2026, owners who leased their space borrowed a median of $355,000. Half of those loans fell between roughly $162,000 and $801,000. Owners whose loans included the building borrowed a median of about $1.24 million6.
Those are loan amounts rather than total project cost. The SBA requires owners to contribute equity of their own, so the full project runs higher than the loan. The figures also cover only stores that used SBA financing, so a smaller store opened with cash would sit below this range.
Plan for:
- Machines, often the largest single line
- Utility work, including plumbing, electrical, gas, and venting, which on a raw space can be substantial
- Real estate, either a lease deposit or a purchase
- Delivery and installation
- Licenses, permits, and capacity fees
- Insurance, which a landlord or lender will require before you open
- Marketing and signage
- Operating cash for utilities, repairs, and wages until revenue steadies
Buying an existing laundromat can save you most of the utility work. It can also hand you worn machines and a lease you did not negotiate. Reviewing the utility bills, the lease, the repair records, and the financials before you agree is time well spent.
The SBA recommends estimating your startup expenses and splitting one-time costs from ongoing operating costs as you build your plan7. Setting aside reserves for slow months and unexpected repairs is worth doing at the same time.
How to Market and Maintain a Profitable Laundromat
A laundromat turns a profit through repeat customers, machines that stay running, and tight control of utility costs.
Once you open, the work shifts. The store sells convenience and reliability, and both are things you maintain rather than things you launch.
Step 7: Build a Marketing Strategy
Laundromat customers generally come from nearby, so it helps to keep your marketing local and specific. Start with a Google Business Profile, since people tend to search for a laundromat by proximity and hours rather than by name.
From there:
- Apartment and property manager partnerships. Buildings without laundry on site can send steady traffic, and the property manager is a single contact who reaches every tenant.
- Loyalty value on the card system. If you run cards or an app, a stored balance can hold a customer better than a one-time discount.
- Wash-and-fold promotion. This is the service with margin, and it reaches a different customer than your self-service traffic.
- Reviews. For a neighborhood business, reviews carry weight, and cleanliness is what customers tend to write about.
Lead with whatever makes your store easier than the one down the street. That might be large-capacity machines, longer hours, or a floor that is always clean.
Step 8: Maintain Equipment and Monitor Expenses
A broken machine is lost revenue and a customer who may not come back. A preventive maintenance schedule with regular inspection, cleaning, and service is worth setting up before you need it.
Lint deserves particular attention. The U.S. Fire Administration reports that the leading cause of home clothes dryer fires is failing to clean them8. That data covers homes rather than storefronts, though the mechanism is the same and your machines run many times the loads.
Clean lint traps on a set schedule and have vents and ducts cleaned by a technician at least once a year. Keeping a dated log helps you spot a failing machine early, and it gives you something to show a landlord or a carrier later.
Water, electricity, gas, and sewer are among your largest ongoing costs, so small changes in consumption can show up quickly in what you keep.
Worth tracking:
- Turns per day, the cycles each washer and dryer actually runs
- Revenue per machine, which can tell you whether your mix fits the neighborhood
- Utility cost as a share of revenue
- Repair spending by machine, so you know which ones to retire
- Wash-and-fold share of revenue, if you offer it
- Monthly operating profit
Writing down how you will handle refunds, complaints, machine failures, and unplanned closures is easier before you need the answer on a Saturday night.
How Gild Insurance Helps Laundromat Owners Protect Their Investment
Business insurance helps you handle the cost when a customer is hurt, your property is damaged, or your store has to close.
The SBA treats getting business insurance as one of the steps in launching a business, alongside registering the entity and pulling permits9. For a laundromat it arrives earlier, because a landlord will usually want proof of coverage before handing over the keys.
A laundromat carries a risk mix most retail does not. You run water, gas, and heat continuously in a space full of unsupervised customers, and the machines are both your revenue and your largest asset.
Laundromat Insurance
Laundromat Insurance is a group of coverages matched to the risks of running a self-service laundry.
Depending on how the policy is built, it may combine property coverage for your machines and contents with liability coverage for covered claims. Gild compares options across more than forty carriers and matches them to how your store operates.
One coverage matters here that rarely comes up elsewhere. If you offer wash-and-fold or pickup and delivery, you hold property that belongs to your customers. Standard property coverage insures your things, not theirs.
Bailee coverage is the piece that may respond when customer clothing is lost, damaged, or stolen in your care. If you run anything beyond pure self-service, ask about it before you open.
General Liability Insurance
General Liability Insurance helps protect your business against covered third-party bodily injury and property damage claims.
A laundromat runs on foot traffic, often unattended, and that is where most of this exposure comes from. A customer may be burned on a hot dryer door, or a child may be injured on a laundry cart.
In a covered claim, general liability insurance may help with eligible medical costs, legal defense, and settlements, subject to policy terms. Landlords and lenders commonly ask for proof of this coverage before they sign.
Business Interruption Insurance
Business Interruption Insurance, also called business income insurance, may help replace lost income and cover some continuing expenses when covered property damage closes your store.
Fire is the clearest version of this risk. The U.S. Fire Administration estimated 110,000 nonresidential building fires in 2023, with about $3.2 billion in property loss10.
If a covered fire damages your building and stops operations, this coverage may help carry the business through the repair period. Rent, loan payments, and insurance premiums do not pause while the store is dark.
There is a limit worth understanding. An ordinary machine failure or a utility outage does not by itself trigger business interruption coverage. What caused the loss, and what the policy says about that cause, decide whether coverage applies.
Equipment Breakdown Coverage
Equipment Breakdown Coverage is the piece that addresses machine failure itself.
Business interruption follows covered property damage. Equipment breakdown works differently. It may help pay to repair or replace washers, dryers, water heaters, and electrical systems. The trigger is a mechanical or electrical failure rather than a fire or a storm.
In a business where every idle machine stops earning, it is worth asking about early.
Ready to Protect Your Business?
Get a quote online or schedule a call with a Gild agent today
Insurance is the part of how to start a laundromat business that owners tend to leave until last. It belongs in the plan from the beginning. Gild Insurance helps small business owners compare coverage that fits how their store runs and what they stand to lose.
Email enterprising@yourgild.com. Text or call (302) 268-6769.
Frequently Asked Questions About Starting a Laundromat
How much does it cost to start a laundromat business?
It depends most on whether you lease or buy. Laundromats that opened with SBA 7(a) financing from 2020 to 2026 borrowed a median of $355,000 when the space was leased. The median was about $1.24 million when the loan included the building. Those are loan amounts, so the full project costs more.
Is owning a laundromat profitable?
It can be, but profit comes from utilization rather than price. Three numbers decide it: cycles per machine per day, water and power cost per cycle, and rent per square foot. A store with the wrong machine mix can stay busy and still earn very little.
Can you start a laundromat with no money?
Rarely with nothing, because lenders expect an equity injection from the owner. Most buyers use SBA financing, equipment financing, or a seller note when buying an existing store. Lenders will want a business plan, your credit history, and a realistic cash flow forecast.
Can you start a laundromat with no experience?
Yes. New owners should still research the industry, learn how the machines work, understand what utilities will cost, and write a business plan. Building a relationship with a distributor and a service technician early will carry you through the first year.
Is owning a laundromat a passive income business?
Not entirely. Laundromats need fewer staff than most retail businesses, and many run unattended. You still handle repairs, cleaning, customer problems, security, and the books. Treat it as a business you manage rather than one that runs itself.
When do I need insurance in place to open a laundromat?
Usually before you open, and often before you sign. Landlords commonly require proof of liability coverage at lease signing, lenders require it at closing, and some cities require it to issue a permit. Line up coverage while you are still negotiating.
- U.S. Census Bureau, County Business Patterns: 2023: https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html ↩︎
- U.S. Census Bureau, American Community Survey: https://www.census.gov/programs-surveys/acs ↩︎
- U.S. Department of Justice, Americans with Disabilities Act Title III Regulation, 28 CFR 36.104 Definitions: https://www.ecfr.gov/current/title-28/chapter-I/part-36/subpart-A/section-36.104 ↩︎
- ENERGY STAR, Commercial Clothes Washers: https://www.energystar.gov/products/commercial_clothes_washers ↩︎
- U.S. Small Business Administration, Apply for Licenses and Permits: https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits ↩︎
- U.S. Small Business Administration, 7(a) and 504 FOIA loan data, FY2020 to FY2026. Figures reflect Gild Insurance analysis of 7(a) approvals under NAICS 812310 coded as startup loans, excluding cancelled and undisbursed approvals, with leased and owner-occupied cohorts separated by loan maturity: https://data.sba.gov/dataset/7a-504-foia ↩︎
- U.S. Small Business Administration, Calculate Your Startup Costs: https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs ↩︎
- U.S. Fire Administration, Clothes Dryer Fires: https://www.usfa.fema.gov/prevention/outreach/clothes-dryers.html ↩︎
- U.S. Small Business Administration, Get Business Insurance: https://www.sba.gov/business-guide/launch-your-business/get-business-insurance ↩︎
- U.S. Fire Administration, Nonresidential Fire Estimate Summaries: https://www.usfa.fema.gov/statistics/nonresidential-fires/ ↩︎
