Is the coin laundry business right for you?
Do you like to be your own boss? Are you willing to work hard at developing a new business? Most of all, are you looking for a healthy return-on-investment (ROI)? If you’ve answered “yes” to these questions, the coin laundry industry may be an exciting industry for you to get into! Laundries can be solid investments generating a ROI of 20% to 35%.
What are some of the advantages of owning a Coin Laundry?
- Absentee ownership.
- It is not labor intensive.
- There is no personal selling involved and no perishable inventory to stock.
- A coin laundry provides a service that is recession resistant because clean clothes are a daily necessity.
- Customers pay in advance with cash (no accounts receivable or bills to collect).
- Coin laundry is an established industry – it has been around for many years and is not a fad.
- Consistent income. There are only slight fluctuations in business of about 10% depending on the weather.
- Few or no employees are needed to run the business.
- No special skills, training, higher education degrees, or experience necessary.
What does it cost to buy a Coin Laundry?
Typically, a coin laundry is valued at 3-5 times the net profit depending on many factors. Some factors include the length of the lease, condition of the equipment, and location. Financing is available to buyers. Many financing opportunities are available to buyers:
- Seller Financing — it is common for the seller to carry back a note. Often you can negotiate attractive terms with the seller when you buy the coin laundry. Sellers usually require a down payment of 30-50% of the purchase price. An interest rate of 5-8% and a loan term of 5-8 year fully amortized are typical.
- HELOC — your Home Equity Line of Credit.
- SBA Loans — Small Business Administration loans can fund a coin laundry business purchase.
- Private Investors — often friends and family will lend money to finance your business because they can receive a higher interest rate vs. bank CDs. It is also possible to find “equity partners” to invest in your business in return for a percentage of the business cash flow.
How to recognize a good coin laundry location?
- Demographics- large families, high amount of rental households, and high amount of poverty households
- Lease- long term lease
- Good parking- easy to access parking lot with plenty of parking.
- Well lit- the store needs to be bright inside and out.