12 Reasons a Laundromat is a Smart Investment

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If you have saved up money to invest in a business, you might want to consider a laundromat. With an average return on investment of up to 35%, running a laundry facility is fairly straightforward to set up and maintain.

Still not convinced? Here are twelve reasons why laundromats are a smart investment for entrepreneurs:


1. Setting Up a Laundromat is Pretty Simple

Because you’re investing in an already existing laundry business, it’s mostly a matter of taking over operations. First, however, you must choose a facility already outfitted with commercial equipment in a good state of repair. This means you just need to focus on renovating the laundry space itself to your liking and brand style. 


It’s still good to remember that if things can go wrong, they will, and to protect your new laundromat against common perils, like machine breakdowns, vandalism, and customer injuries. This will ensure your business won’t drown in damage claims while you focus on continuing to grow and update equipment as needed. 


Business insurance is essential to help you weather the challenging moments as the owner of a washing company. Consider speaking with a knowledgeable insurer about the different policies available and how they could protect your budding investment: 

2. General Liability 

General liability policies are considered the bedrock of any comprehensive business insurance plan. This coverage defends your laundromat against claims by third parties. For example, if a customer had clothing burnt in a dryer or a vendor tripped and fell because of a wet floor.

3. Business Interruption

Depending on where you live, you may want to consider insurance that helps you cover the loss of profits, pays some of your payroll and tax costs, and related operational expenses due to your business being shut down. This is popular coverage for companies in areas with a history of severe weather events and vandalism. 

4. Commercial Property

Whether you rent or own the building where your laundromat resides, losing any of your washers and dryers would be a catastrophic financial blow to your business. Commercial property insurance covers events such as tornadoes or fires, during which your assets suffer damages. This policy also covers the building itself if you own it. 

5. Workers’ Compensation 

Many laundromat owners prefer to hire employees to manage their facilities. This allows you more time to invest further in your business. However, your state more than likely requires employers of one or more workers to carry this insurance. Workers’ comp is essential coverage that pays for many of a staff member’s medical bills and lost wages should they get hurt on the job. This policy also covers many of your legal fees to defend your good name if accused of negligence. 


It’s important that with any laundromat insurance cost to keep in mind, you should compare the policy’s price tag with the potential losses you would face if uninsured. Often, this comparison highlights how worthwhile having business coverage really is. 

6. You Already Have a Customer Base 

Another reason that investing in a laundromat is a smart investment is you already have a large customer base from the moment you buy it. This translates into instant profit and beginning the process of immediately generating a healthy ROI. If you need additional funding for renovations or equipment upgrades, it may be easier to qualify for a loan because you can demonstrate a revenue history sooner than later.

7. Increase Your Business Value with Equity

Equity accrues after recovering your initial investment when investing in an already established laundromat. This is something that can happen fairly quickly.


Getting an idea of what equity you could potentially generate requires assessing your liabilities from your assets. Once you figure out that magic number, you could increase some of the service rates to boost your overall net income. 

8. It’s a Service that Mostly Runs Itself

Because your customers literally do most of the heavy lifting, your laundry facility is primarily a self-serve business model since you only need a few employees to run the place. However, the savings you get from not having to hire frequently, train, or manage workers is worth noticing. Instead, you can invest this money in better machines or put it into another laundromat on a different side of town. 

9. Multiple Income Stream Opportunities

You probably enjoy being able to buy a danish and coffee at your favorite bookseller, and laundromats have quickly hopped on this trend too! Maybe you would like to add on a tanning salon or nail studio. This is a great way for customers to enjoy additional services during the long wait between wash cycles. You can also install some snack and drink machines with a few video game machines to entertain the kids.

10. It’s a Great Second-Income Opportunity

Because your presence won’t be in high demand on-site, owning a laundromat makes it possible to supplement your current full or part-time job. You could even branch out into other careers or investment opportunities. However you decide to use this extra income, it’ll definitely be a huge benefit to your financial dreams. 

11. It’s Recession-Proof

You know the old saying about there being three things in life you can count on? Well, there’s a fourth: laundry! Even when the economy is in turmoil, people still need to wash their clothes. You may even find your business increases because your facility saves families money by not relying on costly pickup laundry services. 

12. Laundromat Businesses Come with Tax Perks

With all this talk about how investing in a laundromat creates more revenue, you may nervous about tax liabilities. The good news is that there are several deductions and other related tax cuts that save a significant amount on one’s overall return at the end of the year. Speak with a knowledgeable tax accountant or attorney about what savings you can expect on the state level, too. 

Your Business Benefits Your Community

When you think about laundromats, being a benefit to your community may not be the first thing you realize about your investment. However, your service is essential to thousands of families in your area. By having a conveniently located laundry facility in an easily accessible area, you can improve families’ lives. Many of us take for granted washing our clothes, but for some, it can be an ordeal. Keeping your machines in good repair, keeping flexible hours, and offering discounted wash times greatly benefit your patrons. 

Bottom Line

While it’s true there is work to be done as a laundromat owner, investing in one of these businesses is not an all-consuming venture. Imagine how much of your time and money would be spent investing in a restaurant chain. Just the hiring and turnover rate alone would probably drive you crazy!


Before you commit your hard-earned investment dollars into a laundry business that has performed all the necessary planning and risk management strategies to protect your interests. Don’t procrastinate on purchasing business insurance, either. One fire incident could turn your gold mine of an opportunity into a years-long quest to rebuild. 


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