Laundromat Startup Costs: What to Budget

The major cost categories

Expect to budget for equipment, build-out, deposits and fees, initial supplies and a working capital reserve. Equipment is usually the largest single item.

Group your budget this way:

• Washers and dryers. The biggest line. Sizes range from standard to large-capacity machines.
• Build-out. Plumbing, floor drains, electrical upgrades, ventilation, gas lines, flooring, lighting.
• Fixtures and payment systems. Folding tables, seating, change machines, card systems, signage, security cameras.
• Deposits and fees. Lease deposit, permits, licenses, utility deposits, legal and accounting setup.
• Insurance and initial supplies. Vending items, cleaning supplies, soap if you sell it.
• Working capital. Rent, utilities and payroll while customers build.

Use the broader worksheet in business startup costs alongside this list.

Why utilities and build-out surprise owners

Laundromats need high water, sewer and gas capacity. A space not set up for it can require expensive upgrades.

Many first-time owners price the machines and underestimate the building. Heavy water use calls for adequate supply lines, floor drains and sewer capacity. Dryers need gas or high-power electrical service and proper venting. If a former retail space lacks these, upgrades can run high.

Before signing a lease, have a contractor inspect the space and quote the work. Ask the utility about connection fees and capacity charges. Check zoning and permits locally. Our guide to small business zoning laws explains why this step matters.

Buying an existing laundromat versus starting new

Buying brings existing customers and cash flow, but you pay for it and inherit aging equipment. Starting new costs more upfront with slower ramp-up.

An existing store already has revenue you can verify. You also inherit its lease, its reputation and its machines, which may be near the end of their life. Replacement is a cost worth quantifying before you make an offer.

A new store lets you pick modern, efficient equipment and the right location, but it takes time to build traffic. Whichever route you choose, study the numbers closely. See where to look for a business to buy and valuation methods.

How to estimate your own number

Get at least three equipment quotes, a contractor bid for the build-out, a lease draft and insurance quotes, then add a contingency of at least 10 to 20 percent.

1. Visit two or three comparable laundromats and note machine counts and prices per load.
2. Request written equipment quotes, including delivery, installation and warranty.
3. Get a contractor bid for plumbing, electrical, venting and finishes.
4. Obtain the draft lease and calculate deposits and first months of rent.
5. Price insurance, permits and licensing.
6. Add a reserve for several months of operating costs.
7. Add a contingency for overruns.

Then build a simple projection: loads per day, price per load, utilities as a percentage of revenue, and rent. Our break-even point formula shows when the store covers its costs.

Ways to finance the equipment and opening costs

Common sources are owner savings, equipment financing, SBA loans and landlord build-out contributions. The equipment often serves as collateral.

Many owners combine their own cash with equipment financing, since the machines secure the loan. SBA loans can finance a purchase or build-out at lower cost but take time. Landlords sometimes provide a tenant improvement allowance. Read equipment leasing and SBA loans for startups.

Industry background and typical funding needs are covered on our laundromat funding page. Expect lenders to ask for a business plan, a lease and your own investment.

Where ROI Funder fits

ROI Funder places equipment financing and working capital for laundromats with 6+ months in business and $20,000+ monthly revenue. It does not fund brand-new startups.

If you already own an operating laundromat, equipment financing can fund replacement machines in about 2 to 7 days, and working capital can cover utilities or a remodel. Eligibility is 500+ FICO, 6+ months in business and $20,000+ monthly revenue, from $5,000 to $5,000,000.

ROI Funder does not place startup loans for businesses under 6 months. Before replacing machines, run the payback: in this illustrative example, a $30,000 set of efficient dryers that cuts gas costs by $600 a month and adds $500 in monthly vend revenue pays back in about 27 months before financing costs. A soft credit pull applies when you apply.