Whether you are considering investing in the coin laundry industry or you have already made the investment there are many factors that will determine the outcome. My goal will be to provide you with sound advice, guidance, industry knowledge, and to help you achieve your goals.
We will start with the basics, the following are some of the key factors to consider when you are opening or operating a coin laundromat:
- Location – parking, traffic flow, visibility, complimentary businesses, square footage, store front, entrances, signage, condition of the building, and ease of access to the location are just some of what must be considered when choosing a location.
- Demographics – in general the demographic profile you should look for has changed in the last 15 years. Many so called industry experts have not kept current with what makes a coin Laundromat successful, they still cling to the old sales pitch used in the 80’s and 90’s. The demographic and economic forces that make a Coin Laundromat successful in 2014 are NOT the same as the formula used in say 1995. Understanding these changes are crucial to the decision making process.
- Equipment – Everyone in the industry has their own bias toward one manufacturer or the other when it comes to choosing the right equipment. If you are building a new Coin Laundromat the factors you should consider are reliability, ease of operation, capacity, energy use, parts availability, serviceability, warranty, and price. These factors are not any different when considering equipment for an existing Laundromat but some additional factors have to be considered with an existing Laundromat, such as space available (are you adding units or replacing existing units), continuity to existing equipment package, and capacity offered are all important.
- Services offered – full service or self-service? Maybe a combination of these services makes sense. Will you offer dry cleaning? Card store or coin store, what about a credit card system? The answers to these questions are critical decision points and the answers are found in the demographic analysis. This is another area where unfortunately most distributors & sales representatives come up short. Having a reliable distributor who has current knowledge and understating of the demographic / economic factors will make the difference.
- Competition – Competition is not in and of itself a reason to avoid opening in a particular location but understanding the strengths and weaknesses of your competition is vital to the decision making process.
- Lease / Purchase – Many people have varying opinions on whether you should lease or own the property. Let me simplify the argument, what is the COST associated with each option, that is the true question. For example if you could get a 15 year lease for $1,500 per month that might make more sense than having a 15 year mortgage for $3,800 per month. Of course the reverse may be the reality, so understanding the terms of the lease, monthly cost, and benefits of purchasing the property all have to be looked at. Owning your own property will be a benefit long term to be sure but the numbers must work in the short term as well.
- Operation – How you operate the Laundromat is as important as anything else. So many operators having varying opinions on the best practices. In reality there is no silver bullet, the demographics and location should dictate how you operate (hours, coin or card, self-service or full service, locked or unlocked rest room, sliding door or push to open, etc.)
- Financing – Each individuals financing needs are different based on credit, scope of project, business experience, etc.
As you can see there are a variety of factors to consider and weigh out, each factor needs to be discussed and analysis must be done. What you need to take away is that all of these factors are determined by the location and the demographics. What may be perfect in say South Boston may be wrong for a Laundromat on Cape Cod. The best thing you can do to start is consult with a real expert, someone who has experience, knowledge, and most importantly is UP-TO-DATE on what works in 2014.
Please look forward to my next blog which will be devoted to equipment and products