Laundromat Financial Overview
Laundromats generate about $5 billion in combined nationwide gross annual revenue. An average gross income of a laundromat in the USA varies greatly, from $30,000 to over $1 million a year, according to the Coin Laundry Association. Once expenses are factored in, at the higher end the net profits could be as high as $350,000 a year.
Laundromat Valuation and Selling
Ordinarily, the industry standard is to use 3-5 times the annual profits as a selling price for your laundromat operation. When performing a laundromat valuation, there are various factors to consider. It’s important to consider the length left on the lease, condition of laundry equipment, and future store expenses as well when you are choosing a selling price. Although almost every laundromat can be sold, if you wait until the lease is almost gone or you’ve let the equipment fall into disrepair, it will make a sale more difficult and the selling price will suffer.
A real estate comparable provides information about recent sales in a local market. This information helps you understand what it costs to buy or lease a laundromat business in a specific area. The Coin Laundry Association offers a program that covers how to value a coin laundry store. Additionally, tools are available for finding comparable commercial properties.
When selling your laundromat, your asking price should be 3.5-5 times the net operating income of your business. You can determine that multiple by considering the age of the equipment, the length of the lease, and the terms of the lease.
Starting Costs and Revenue Estimation
Typically, start-up costs for a laundromat can run from about $200,000 to over $1,000,000. After assessing your start-up costs, your budget should include allowances for regular expenses, such as loan payments, rent, and maintenance.
On average, it costs between $200,000 and $500,000 to open a laundromat. It depends on whether you’re buying an existing laundromat or starting from scratch, as well as the average property prices in your city.
To get an idea of monthly gross income without contacting the owner/broker, count how many washers are in the store of each type and note the corresponding vend prices. This will help estimate the usage and income generation based on industry benchmarks.