Opening a Laundry Shop Costs $151,000 to $490,000

Are you looking to start your own laundry shop? As part of your business plan, make sure to consider all startup and operating costs to open and run a laundry shop.

We’ve identified that it costs anywhere from $151,000 – $490,000 to open a 2,000 sq. ft. $25,000 monthly revenues laundry shop (laundromat) with 2 full time employees, plus $16,900 – $22,400 in operating costs per month to run the business.

Want to know more? In this article we’ll go through all the different costs you will need to incur to open your own laundry shop. Read on!

Laundry Shop Startup Costs

Starting a small laundry shop can cost between $250,000 and $1,000,000, depending on the location, equipment, financing options, and how much of the operation you want to own rather than rent or lease. Your startup costs will also be determined by whether you acquire an existing laundromat or build one from scratch, as well as the average property costs in your city.

Here are the key startup costs you can expect before you open your business. There are 2 types of costs: startup costs and operating costs.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you. 

Startup cost	Amount
Lease security deposit (or loan down payment)	$11,000 (rent) – $40,000 (buy)
Equipment (washers, dryers, POS, etc.)	$150,000 to $450,000
Total	$151,000 – $490,000

Lease security deposit (or loan downpayment)

You can either choose to purchase the property, or you may get it on lease. 

You must commit to occupying a property for a few years and pay a security deposit if you opt to lease it (refundable). This will vary depending on the property’s location and size. For example, the average rent for a commercial space in downtown Los Angeles is $2.95 per square foot.

The average laundromat in the U.S. takes up 2,170 square feet, but some use up as much as 5,000 square feet, while smaller facilities can occupy a mere 1,000. For example, approximately 2,170 square foot space would cost you around $6,400 monthly rent.

If you must offer a security deposit equal to three months’ rent, you must set aside $11,250. (in line with the average space requirement as per this source).

The cost of a laundromat facility ranges from $200,000 to $500,000, with modifications costing an additional $100,000. Therefore, you will need to provide a down payment of at least 10% for the loan. So, if the commercial space costs $500,000, you’d have to pay $50,000 upfront plus a 10% deposit.

Laundry shop equipment startup costs

For a laundry business, you have the option of acquiring or leasing equipment (the washing machines and dryers mostly).

Depending on the sophistication of the technology and the size of your laundromat, commercial washing and drying equipment can cost anywhere from $150,000 to $450,000. This may sounds like a lot: laundromat indeed are businesses that require important upfront investment before you can generate revenue.

By far the most important is the cost to source the washers and dryers.

Let’s see in detail the different equipment expenses you can expect before you can open a laundry shop:

Security

Depending on the system’s intricacy, a conventional security system with many cameras and sensors will cost between $1,000 and $10,000. 

• Security hardware: $1,000 to $2,500 on average
• Installation and activation costs: $300 to $500 on average 
• Alarm monitoring: $40 to $120 on average

Washers

Depending on the washer’s age, brand, and model, used coin-operated machines can cost anywhere from $1,500 to $6,000. 

The cost of a new budget front-load washer, including installation and warranty, can range from $2,200 to $6,500.

So assuming you open a laundromat with 15 front-loaders, this would cost you anywhere from $33,000 to $97,500.

Dryers

Used dryers can cost anywhere from $600 to $5,000 for a twin upright high-end model. 

Depending on the features, new commercial coin-operated dryers can cost anywhere from $1,000 to $5,000. 

Leasing is a good option if you only have a little deposit for equipment. It can occasionally enable you to obtain higher-quality equipment than you would have been able to afford otherwise. In other words, you defer the cost of purchasing by paying a premium to do so.

So assuming you open a laundromat with 10 coin-operated dryers, this would cost you anywhere from $10,000 to $50,000, in addition to the cost of the washers as explained above.

Banking ATM Machine

It is preferable to allow your consumers to pay for services promptly using an ATM if you decide to open a laundromat. If you want to buy and own an ATM outright, it would cost you between $2,000 and $7,000.

Coin Changer Machines

If you want to open a laundromat, coin changer machines are the way to go. The cost of a coin changer ranges from $500 for a used machine to $3,000 for a brand new one.

Soap Vending Machine

A soap vending machine is another wonderful option to supplement your business’s profits. The machine ranges in price from $300 for a second-hand unit to $3,000 for a brand new soap vending machine.

Folding Tables and Chairs

Customers need a place to fold their freshly dried laundry when they visit a laundromat. 

The price of a table will range from $150 to $500 per table. So if you have three tables, your expenses will range from $450 to $1,500.

Chairs don’t have to be expensive, but they should match your decor’s professionalism. The average cost of a ‘public use’ commercial grade chair is between $60 and $300.

Signage

A sign is required at every store. The cost of the sign could range from $150 to $20,000. Most laundromats do not cost more than $30,000, but the sign’s location, type, and size all factor into the price, making it rather subjective.

Water Heater

Gas and electric water heaters have approximately comparable total costs. Gas water heaters cost between $1,300 and $2,600 upfront. As a result, gas heaters have a greater initial cost. However, because the total cost of natural gas is low, your monthly utility payment will be lower overall. On the other hand, electric water heaters have a lower upfront cost (on average $950 – $1,500) but a generally higher monthly cost.

Electrical Panel Upgrade 

Electrical panel modifications could cost as little as $2,000 to upgrade. Commercial updates in the tens of thousands of dollars, on the other hand, are not uncommon.

Point-of-sale (POS)

It’s easy to be paid, maintain track of inventory, and track orders with a point-of-sale system. You’re going to need one! According to this source, the total cost of setting up a POS terminal might range from $1500 to $5000, depending on the brand and quality of the hardware.

According to Cost Owl, the following additional expenses are required for a POS system:

• $1,500 to $5,000 for the hardware
• $60 to $400 per month for software licensing
• $200 to $500 for installation

These costs will undoubtedly vary depending on the POS system you use and the size of your business. 

For example, the hardware cost for one terminal bundle, one kitchen display, two server handhelds, and one ticket printer is between $4,400 and $5,000. 

If you choose a cloud-based POS system with discounted hardware, the hardware for a single-register business will set you back $1,500.

Laundry Shop Operating Costs

In addition to the one-off startup costs before opening your laundry shop, you must also consider the total recurring cost of running the business. 

Operating cost	Amount (per month)
Rent	$6,400
Staff	$5,000
Utility bills	$4,000 – $8,000
Marketing	$500 – $1,000
Supplies, insurance, software & other	$1,000 – $2,000
Total	$16,900 – $22,400

Laundry shop rental costs

In the United States, the typical laundromat occupies 2,170 square feet. However, some might be as large as 5,000 square feet, while smaller facilities can be as tiny as 1,000 square feet. For example, monthly rent for a 2,170 square foot space would be roughly $6,400.

Laundry shop staff costs

In the US, 70% of laundromats have 2 employees or less. Also, a laundry worker’s annual salary is $26,200 on average.

So assuming you have 2 full-time employees, you should expect to spend around $5,000 per month (including taxes & benefits).

Utility Bills

Utility expenditures are one of the most significant operational costs associated with owning a laundry shop. Water, electricity, and gas are frequently expensive for laundromats. 

When you think about it, in this type of business, washing machines and dryers operate nearly nonstop. As a rule of thumb, you should set aside 16% to 25% of your monthly revenue in utility bills. 

According to the Coin Laundry Association, the average laundromat has annual revenues of around $300,000 per year, so $25,000 per month.

So assuming your laundromat earns $25,000 a month, you should incur anywhere from $4,000 to $8,000 in utility bills.

Laundry shop marketing costs

The cost of marketing a laundry shop varies depending on whether you employ an agency or manage it yourself. There are numerous ways to promote your laundry business, ranging from more classic methods such as television, newspapers, magazines, and radio to more contemporary methods such as social media. 

Additionally, public relations organizations may assist you in expanding your advertising channels and managing your social media accounts, but they are the most costly option.

The Small Business Administration (SBA) recommends spending between 2% and 3% of your revenue on marketing when you’re just starting.

If you’re pursuing larger brand awareness initiatives or working with an advertising agency, you can spend up to 10% -12% of total sales. Indeed, when you aim to win new consumers, you’ll logically have to spend more in the first few months. With time, you should see organic growth (word-of-mouth) and be able to lower your marketing spend.

Assuming $25,000 monthly revenues, you can expect to spend around $500 to $1,000 in marketing expenses each month.

Supplies

As per H.K. Laundry, the average cost of supplies with a laundry shop with 20 washers would be around $450.

Insurance

To keep your premises and equipment protected and to keep you protected against any accidentals and liabilities, you will have to opt for insurance. The average laundromat in America spends between $350-$750 per year for $1 million in general liability coverage (as per this source).

Repairs

Since your business depends on the function of your equipment, you need to do timely repairs. Such expenses are a part of operating costs, and on average, a laundry shop with 20 washers can expect to spend $200 per month on such repairs, as per H.K. Laundry.