Economic Analysis of a Laundromat

Starting a Laundromat Business

Planning on buying a laundromat? 

It doesn’t matter if it’s based in Los Angeles, or in the Midwest, you must conduct an economic analysis of that laundromat because, this will help you to really know the profitability of the business that you’re investing in. 

In this article we will offer you a breakdown that you can use to do an economic analysis of a laundromat. 

What Does an Average Laundromat Cost? 

As of 2023, the average laundromat is valued between $195,000 and $500,000 because the price range for a laundromat depends on a variety of factors including: equipment, age of equipment, décor of the facility and necessary leasehold improvements. 

Determine The Fixed Costs Vs. Variable Costs 

Even though the current owner of the laundromat may be telling you that it’s currently earning $10,000 per month, the reality is that profitability always depends on fixed costs and variable costs. 

Fixed costs are easy to determine because they are paid every month. These costs typically include rent, payroll, cleaning costs, insurance, advertising, trash, repairs to the location and note payments. 

Variable costs are different because they can be classified as a direct function of the volume of business that the laundromat is currently doing. 

Some of the variable costs typically include utilities, but the reality is that these costs can often be controlled when a laundromat owner invests in energy-saving washers and dryers because, these appliances can lower variable costs significantly each month. 

Laundromats Are Still Profitable Even during Trying Economic Times 

Let’s face it, we know that it’s difficult to escape severe recessions and inflation but the good news about laundromats is that it’s possible for a well-managed facility to have a solid break-even point each month and dependable cash flow. 

By keeping your fixed costs low and investing in energy efficient appliances, you maximize profitability and build a thriving business.  

By Jeremy Raglin, Content Writer

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