Starting a Laundromat: Build New, Retool, or Zombiemat?

You’ve decided laundromat investing is for you, but you’re at a difficult crossroads… should you build new, retool an existing business, or resurrect a struggling zombiemat? While this is a tough decision, it’s also one of the most important ones you’ll make as you start your journey. Each route has its pros and cons, and a smart choice will depend on several factors such as your budget, experience, location, demographic, and more! In this blog post, we’ll take a detailed look at each of these three venture options, complete with helpful insights and scenarios that will guide you in choosing the right path for your situation and future success!

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Building a new laundromat

When launching a brand-new laundromat, the possibilities are endless, and so is your revenue potential. Building from the ground up means you get total control over the design and layout of your laundry business. You’ll have the opportunity to create a modern and comfortable space that precisely reflects your vision and stands out from competitors. Sounds pretty great, doesn’t it? With a world of freedom comes significant investment and effort. Here’s everything you need to know to decide if a brand-new build is right for you:

Pros of building a new laundromat

Customization of layout and equipment

Starting a laundromat from scratch allows you to tailor every last detail to your goals and operational needs. You can optimize the layout based on modern specs and efficiency standards for ultimate customer satisfaction. Everything can be customized, from machine placement to business management technology.

New, energy-efficient machines

When you start fresh, you can install the latest and greatest in energy efficient equipment. These washers and dryers reduce utility costs and win points with environmentally conscious customers. You may also be able to cash-in on tax benefits and rebates.

Attractive to customers due to new facilities

A brand-new laundromat with state-of-the-art facilities is inherently attractive to customers. Amidst your dated counterparts, people will be drawn to clean, modern, luxury laundry experiences. This will position you to grow a loyal customer base quickly.

Cons of building a new laundromat

Higher startup costs

Naturally, a brand new laundromat is a significant financial undertaking. Costs like purchasing or leasing land, construction, acquiring permits, and buying new equipment add up very quickly, with the total bill ranging from $500,000 to $1 million, depending on how high-tech you go.

Longer time to open

The process to build a new laundromat can be lengthy. With the red tape involved in securing permits and complying with local regulations on top of construction and installation timelines, it can take months or even years before you can open your doors.

Finding a great location

Securing a suitable location for your new laundromat can be challenging. You need to find an area with sufficient demand, minimal competition, and accessible for your target customers. Don’t forget—the site must be zoned for commercial use!

Key considerations

When starting a new laundromat, initial investment and financing options are big considerations, as the financial groundwork is substantial. If you’re considering this pathway, you should explore small business loans, investor funding, and equipment leasing to alleviate the volume of upfront costs. Market research and location analysis are also important to think about. Take a good look at demographic data, local competition, and potential customer bases to strategically select a location that aligns with target market profiles. Also, learning about the regulatory requirements and permits of your area is essential. These include zoning approvals, environmental assessments, building codes, and safety inspections.

When to choose this strategy

If you have substantial capital: Building a new laundromat is the most capital-intensive route for your endeavor. It's the right choice if you have access to significant financial resources, either through savings, investments, or potential financing options.
If you want full control of design and equipment: If you have a specific vision for layout, design, and service offerings, you may choose to start from scratch. This is the only way you’ll be able to tailor every aspect of your business to your preferences and operational goals.
In a growing or underserved market: Consider building a new laundromat if you're targeting a growing area where demand for laundry services is increasing. New developments in residential areas or communities without adequate laundry facilities present a glowing opportunity.

Retooling an existing laundromat

Retooling an existing laundromat gives you an opportunity to breathe new life into an established business. This involves updating equipment, improving the facility, and bringing in modern operational tools. For entrepreneurs who want to hit the ground running with a built-in customer base and lower initial costs, retooling can be a smart move.

Pros of retooling an existing laundromat

Lower startup costs compared to building new

Starting from the bottom demands astronomical financial capital. One of the primary advantages of retooling is a much more palatable initial investment. Since the infrastructure is already in place, the main expenses come from needs for upgrading equipment and refurbishing the facility.

Quicker to open

Retooling an existing laundromat allows you to bypass many of the time-consuming steps involved in new construction. Since the location is already established, you can focus on making improvements and getting the business operational in a shorter time. A quicker turnaround gets you a faster return on investment!

Existing customer base

A loyal customer base is the lifeblood of a thriving laundry business, and that’s exactly what you get by retooling. The existing customers are familiar with the location and will likely continue to use the service under new management, especially if you make some useful upgrades. This immediate customer flow provides a steady income from the moment you open your doors, which you can continue to build on marketing and new service offerings.

Cons of retooling an existing laundromat

Potential hidden issues with the property

When retooling your laundromat, it’s possible to run into unforeseen issues that weren't visible during your pre-purchase inspection, like structural problems, outdated plumbing and electrical systems, or other costly repairs that need immediate attention. Hidden issues like these can break the budget and derail the retooling process.

Limitations on layout and design changes

Retooling a laundromat requires an entrepreneur with an open mind. Depending on the laundromat, you may be limited on implementing modern designs or optimizing the space. These restrictions might affect your ability to cater to modern customers and bring your true vision to fruition.

Possible outdated infrastructure

Existing laundromats may have old infrastructure that can be expensive to replace. This includes old plumbing, wiring, ventilation systems, and other essential components. If you’re leaning towards retooling, make sure to take an audit of these systems, as you’ll need to factor repairs into your startup budget.

Key considerations

Retooling requires a budget of new equipment and laundromat renovations, with a focus on state-of-the-art washers, dryers, and aesthetic upgrades to boost customer appeal. Also, a thorough inspection of the current infrastructure is important to protect your investment, examining plumbing, electrical systems, ventilation, and structural integrity to prevent future costly repairs and assess the feasibility of the investment. Lastly, evaluating the existing customer base and market potential is critical. Think about demographics, usage patterns, and satisfaction levels to help determine what parts of the laundromat need TLC.

When to choose his strategy

If you find a location with good potential but outdated equipment: Retooling is the way to go if you find a laundromat in a great location with outdated machinery. This scenario empowers you to transform an underperforming asset into a profitable business by purchasing new equipment. The key is finding value of the location—ask yourself: does it have high foot traffic? Does it lack nearby competition? If yes, efficient machines can take it to the next level!
If you want to save on laundromat startup costs: Retooling a laundromat can be substantially less expensive than building one from scratch. This approach can include everything from the building itself to the existing utility setups. By focusing your investment on essential upgrades and marketing, you can give a facelift to the business without the hefty initial expense of a new build.
If you want to open sooner: As an entrepreneur, you know time is money! If you’re eager to open the doors, retooling allows you to skip the lengthy timelines of building a new establishment. Since the foundational elements of the laundromat are already in place, the turnaround time from acquisition to operation is considerably shorter.

Taking over a zombiemat

Taking over a "zombiemat"—a laundromat that's barely surviving or has been abandoned—can feel like a daring rescue mission. This strategy involves resurrecting a failing business, which, while challenging, offers the potential for significant rewards. For the savvy entrepreneur, this strategy promises a lower initial purchase price and a greater ROI (return on investment) if done right. It also gives you the opportunity to revitalize a community hub!

Pros of taking over a zombiemat

Very low acquisition costs

One of the most attractive advantages of taking over a zombiemat is the potential for very low acquisition costs. These laundromats are usually sold at a fraction of the price of more successful establishments due to their underperformance. The lower financial barrier to entry makes it a goldmine for entrepreneurs who see the potential and are willing to put in extra work.

Opportunity to turn around a failing business

Revitalizing a zombiemat presents a unique opportunity: the chance to turn a failing business into a profitable venture. This can yield a sense of accomplishment and community impact. By bringing in modern business practices, upgrading equipment, and enhancing customer service, you can transform a neglected laundromat into a popular local service.

Potential for significant profit

If the turnaround is successful, the potential for profit is great. Since the initial investment is typically lower with zombiemat ventures, the return on investment can be substantial if the revitalized laundromat attracts a strong customer base.

Cons of taking over a zombiemat

High risk of hidden issues and repair costs

One of the significant challenges with zombiemats is the likelihood of encountering hidden issues that can lead to substantial repair costs. You may run into things like malfunctioning equipment, structural problems in the building, or neglected maintenance needs. Addressing these issues can quickly increase the estimate and complicate the turnaround process.

Possible negative reptation in the community

A zombiemat may carry a negative reputation within the community due to its previous state of disrepair or poor service. Overcoming this stigma can be a major challenge despite improvements and changes under new management. Rebranding and re-establishing trust in the community will require strategic marketing efforts and patience.

More effort required to attract new customers

Taking over a zombiemat often requires more effort in marketing and customer outreach to attract new patrons and reassure former customers of the improved quality and reliability. This includes extensive promotional campaigns, special offers, and community engagement initiatives to increase visibility, which adds an additional layer of challenge and investment to the project.

Key considerations

Taking over a zombiemat requires a thorough inspection and assessment of the property to be sure there are no structural damages or outdated systems that go outside of your budget. Understanding why the business failed is important for planning effective solutions and avoiding past mistakes. Lastly, developing a solid turnaround plan is essential, outlining strategies for refurbishment, equipment upgrades, improved customer service, and marketing initiatives for a profitable turnaround.

When to choose this strategy

If you have experience in the industry: Taking over a zombiemat is best for those who already have experience in the laundromat industry. Knowledge of industry, common challenges, and customer expectations can significantly increase the chances of successfully revitalizing a failing laundromat.
If you’re looking for a low-cost entry point: For entrepreneurs looking for an investment opportunity that doesn’t require high initial capital, taking over a zombiemat gives a lower-cost alternative. This strategy allows for entry into the industry at a fraction of the cost, providing a unique opportunity to invest more as the business begins to generate revenue.
If you have a strong plan to revitalize the business: Choosing to take over a zombiemat should be accompanied by a robust and detailed plan for its revitalization. Think of clear strategies for remodeling, re-equipping, and rebranding the business, alongside solid financial planning and marketing strategies. A strong, actionable plan increases confidence in the project's viability and guides the transformation process.

Leveraging technology in your laundromat

No matter which route you choose, adding modern technology to your business is essential for your longterm success. Tools like digital payment systems and real-time machine monitoring help you keep your laundromat running smoothly. This also includes automated scheduling systems, loyalty programs integrated directly into point-of-sale systems, and apps that allow customers to check machine availability, reserve machines, or even remotely start their laundry.

Cents: A comprehensive solution for laundromat management

Cents is a holistic solution for easy and effective laundromat managed, offering a full suite of powerful tools to manage day-to-day operations seamlessly and maximize profitable revenue. This platform covers everything from payment processing and customer management to laundry logistics and employee scheduling. Cents simplifies the complexities of laundromat management so you can save time and, make money, and keep customers happy.

Benefits of using an all-in-one laundromat management solution

Using a all-in-one system like Cents for managing your laundromat has several advantages you can’t get elsewhere:

Centralized management: One integrated system means all aspects of your business, from finance to customer service, are managed in one place. This reduces the time spent on administrative tasks and lowers the likelihood of errors.
Cost efficiency: By consolidating various functionalities into one platform, you can reduce software subscription costs and streamline training procedures for staff, as they only need to learn one system.
Improved data analysis: A unified system provides a holistic view of business performance, allowing for more accurate data analysis and decision-making. Tracking trends, customer behavior, and operational efficiency is simpler when all data is consolidated.
Enhanced customer experience: When all components of the business are integrated, customers enjoy a smoother interaction, from booking machines online to receiving promotions tailored to their usage patterns. This seamless experience can increase customer satisfaction and loyalty.
Scalability: As your business grows, a unified system like Cents can easily scale to accommodate new locations and increased demand without the need to patch together different solutions.

Payment solutions for laundromats

Having a modern payment system that customers find convenient will set you apart in the competitive laundry market. It should enhance user experience and streamline revenue and data collection, so you can make informed decisions on how to improve your business. A modern payment solution should adapt to customer preferences, offer flexibility and security, and come with data insights.

Cents' Penny and Laundroworks stored value cards

These are two examples of modern payment solutions that will drive success and create customer satisfaction in your laundromat venture.

Penny: This on-machine payment system allows customers to pay directly at the machines using their mobile phones or cards. Integrated directly into the laundry machines, Penny supports various payment methods, including credit cards, debit cards, and mobile payments, providing a seamless and secure transaction process.
Laundroworks stored value cards: These are prepaid cards that customers can load with credit and use for all their laundry needs. The cards offer a convenient alternative for customers who prefer not to carry cash or use their credit cards for every transaction. They also facilitate loyalty programs and special promotions, enhancing customer engagement.

How these solutions improve customer experience and operational efficiency

Convenience: Both Penny and Laundroworks stored value cards eliminate the need for customers to have cash on hand, offering a more convenient and quick transaction process. This convenience can lead to higher customer satisfaction and repeat business.
Increased security: Digital payments reduce the risks associated with cash handling, like theft and loss. They also provide a clear audit trail, which helps in maintaining accurate financial records.
Operational efficiency: With digital payment systems, laundromat owners can save time on cash management tasks such as counting cash, refilling change machines, and depositing revenue at the bank. These systems automate many aspects of financial management, allowing owners to focus more on other areas of their business.
Data collection and management: Advanced payment systems like Penny and Laundroworks allow for the collection of detailed transaction data. This information can be used to track customer habits, peak usage times, and revenue patterns, which are invaluable for strategic planning and promotional targeting.
Scalability and flexibility: As the business grows, these payment systems can easily scale to include more machines or services without significant additional costs. They also adapt to various customer needs, supporting a range of payment methods.

Conclusion

We've explored three primary strategies: building a new laundromat, retooling an existing one, and reviving a zombiemat. Each approach offers unique advantages and comes with specific challenges:

Building New provides the freedom to design your ideal laundromat but requires significant capital and time investment.
Retooling an Existing Laundromat offers a quicker start with potentially lower initial costs and the benefit of an existing customer base, albeit with some limitations on customization and possible hidden infrastructure issues.
Taking Over a Zombiemat presents the lowest initial cost and a high potential return if successfully revitalized, yet it carries substantial risks including hidden problems and the effort needed to overcome a possibly tarnished reputation.

As you consider buying a laundromat, carefully evaluate these options against your financial capabilities, risk tolerance, and long-term business goals. Reflect on the local market demand, your personal experience in business management, and your vision for the laundromat to ensure that your choice aligns with your entrepreneurial aspirations.

Starting a Laundromat: Should You Build New, Retool, or Take Over a Zombiemat?