Make sure to watch Part 2: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-dBJPgEhEfU4.html What would you do if you opened a business and were in Justin and Mike’s shoes? How would you deal with the situation? Leave a comment below!
Finally, someone who understands that better service can equal more business and happy customers, and that sometimes it's not about squeezing out every penny of profit!
@@frankmontez6853 well he did put down 200k (with his partner) and never really gave his revenue, also not sure if he included his salary into it. If he did then yea its a very good margin if he didnt than we dont know. Also have to consider how much of his loan he is pay off each year. If he is able to pay off his business loan within 10 years than yup 100% agree (given his profits included his salary or at least dividends).
For certain areas and people, I say….”SQUEEZE”🤑🤫. They will steal from you, rob you, and take advantage due to their poverty mentality. You gotta let the mice play. Then use the lessons to mentally shift & be just as streetwise or even more so than they are! 😅
Better service yes but look at the area in which they are running the business they aren’t in areas where people need the services the most like apartments complex and places that don’t have room for a washer and driver
This isn’t the norm. I used to own 4 Lmats for 6 years and none of them were this clean. Realistically it’s the LM in poorer areas that makes money. The cleaner ones in nice areas don’t because everyone has a washer/dryer. When looking to buy one, I check to see how many apartment complex is around in a 4 mile radius, if they do section 8 housing. If they have onsite laundry facilities. My LMs would get vandalized on occasions and tagged, nothing too damaging. In recent years, due to the increasing electric and water prices, it wasn’t worth it when compared to the hours put in. Avg about 20$ an hour with 12-14 hours of work a day, expenses factored in, if you have employees their pay, it’s not like these guys make out to be. These videos are so BS.
See you're the kind of person that really tells it like it is. I hope and appreciate comments from no nonsense people like you. Most people just say stuff with no knowledge and shouldn't be commenting.
No mention of cost of the real estate. Obviously, that's a huge variable dependent upon where you want it and what level of client you are hoping for. But that would seem to me to be the most critical piece of the investment decision here. How much are your $/ft for the lease, and what's your corresponding pricing strategy, and WHERE does THAT leave your "50-60% Margin"? LOL😂
The 'hidden' cost is the owners' time. They need to record every single hour they spend attending to machines, handling vendors, accounting, etc. If their net profit (should they have any) allows them achieve $20 or $25 per hour pay scale, then they can compare that against other opportunities they might find elsewhere...including a salaried job that comes with benefits and vacations (which this business opportunity fails to do). This kind of business is usually 7 days a week from 6a to 10 or 11p at night. Being anchored to an operation comes with a substantial intangible cost. It's rare that that ever gets justified economically. But it does get justified by owners via lots of storytelling.
@@jaybingham3711 This is not true. This specific laundromat isn't set up l For the owner to own a business. When buying a business you need to buy a bussiness not a job, you can get that for free. If you don't do it right then you can be like this guy who barely gets time off. There are much better ways and that is why it may or may not work for other people.
I’ve traveled the USA, Mexico and Canada for six years in an RV. I’ve literally been in hundreds of laundromats. None were even close to being as nice.
God, that's a fact. My local one is rented. The owner will not do maintenance and the renter is fed up and will be happy to gripe about his woes to customers. So disheartening. Poor customer service. I've complained about the lack of lights in the parking lot, told him I would not come in in the evening, frankly, he gets what he deserves.
I owned a small laundromat for 7 years. It was profitable. But due to space limitations I was not able to scale the business up to make it larger. I invested in new equipment on a regular basis, but a newer and much larger laundromat opened just blocks away. It still remained somewhat profitable, but the writing was on the wall. I sold it for a profit and the buyer operated it for the next ten years. It was time for me to move on to something else.
The standout here: this owner was smart about it. Rather than the "no more cash" rush of everyone else, he figured out a way to allow people to benefit AND still use cash if they want. That's how it should be done.
Love the detailed breakdown of overhead and startup costs. I was always curious about laundromats. I feel the location is what can make and break your business.
@@danielwhoI Market varies heavily from the Coast of Pacific Beach in San Diego, to say, somewhere in Wisconsin. However, like a restaurant, there is a ratio of income vs rent you want to stay at. Every industry has that metric.
This laundromat is in my home town. The other one was run down and closed down. There was a demand for one locally and this one filled the niche. I love the app, new well maintained facility and service
@@gustavosalvini1827 I'm low income, but I still have a roof over my head and a washing machine under that roof, so I can do it at home. It's cheaper to do it yourself, there must be more to it that just low income.
@@UpFlip Come on, man. Stop being so agreeable to these comments! Tell this guy that you use it to read the questions, and then keep doing that if you want to. Don't be so quick to say "okay, yes sir, I'll do what you tell me to do". Tell him to kick rocks and do what you want.
I own 2 laundromats and I can tell you this one is 🔥 on the inside. It’s beautiful and well maintained. I need to update some of my machines this year because it’s a great business to have no matter how bad the economy gets.
Worked with a guy that bought laundromats as a side business. He said most of his profit didn't come from laundry but the crane games he put in. He made enough off those to quit our job and let the laundromats run themselves.
*The App service is a big edge. Enabling clients to see how busy is the laundromat and even knowing the status of each machine before you set out to the place itself is very awesome and convinient!*
I wish our laundromat had app. Cuts down on needing to get $10 to use on the change machine. It doesn’t take $20s. Also don’t have to worry about coins getting stuck and I lose all that money.
I suspect he either grossly under stated it accidently or he just doesn't know since he has only been in business for months. My one bedroom apartment energy bill is averaging $53 a month and that's to keep the refrigerator running and my A/C unit that I only turn on when im in the apartment.
For anyone interested in this, if you live in a bigger city or even just a college town, try and look ok apt sites for places that don't include washer/dryers in the units or don't have washer dryer hookups. You can make a lot off college kids who don't want to deal with their dorms crappy laundry rooms
Great video. Only question i have is why move the camera so much during the interview? Is the laundromat on a boat? Is the camera man drunk or on a swing? ....does he need a potty break? Other than that, very informative video.
The biggest deal breaker for me is cleanliness. I live in an apartment that has a dryer and top load washer now but when it comes to washing comforters I go to the laundromat. BUT, if the machines look and smell disgusting or have a ton of dog hair in and around it, I refuse to use it.
We bought an existing laundry 7 years ago. We grew that business by 70%. Doubled the wash and fold service. Your prices must stay with what your local market will sustain. Friendly staff is very important!
Decades ago I worked part time doing maintenance/ repair on coin machines for a local family. The "old man" and two sons both had going laundries along with "side" stuff. They made money but a LOT of work. Not 8-5!!! I would be working late, 7-9PM doing machine repairs and one of them would pop in to do up change in the til and whatever else. And people can REALLY screw you, putting crap in dryers that melts and makes a mess of the drums, same deal with washers. Some dumb woman washed a giant stuffed bear in one of the big Milners, the thing burst and clogged up the machine. Took me hours to get things "undone."
This was one topic I don't think he touched on, maintenance. I'm a bad person to talk about this because I don't trust people with anything they don't own. They will abuse it and ruin it and not care one bit. When those machines go down I bet it's a pricey repair and probably down for a few days.
@@kendallevans4079 Some repairs was customer ignorance. Various stuff left in pockets, candy, lipsticks, even ammunition. None ever went off. Nylons in water pumps!!! One woman washed a stuffed teddy in one of the big Milners and the drain plugged. That was a lot of fun and time, but no damage, really. Kids trying to "rid" in the big Cissels WAS a problem. The drum bearings were a POS
Thank you for sharing ! Very interesting. This is an almost non-existing business here in Sweden since you either have your own washing machine in your apartment or house or almost every apartment complex have washing machines available free of charge (paid via your rent) that you may use if you live there.
I own 2 Launderettes in the UK. Location is everything, free parking and close to other shops so customers can go and run other errands. We also do commercial laundry and dry cleaning. Both shops are fully-manned as lots of customers need advice and we need to take laundry in. I work 1 day a week sometimes 2 and it is allowing me to grow my property portfolio. I can do lots of the repairs myself so that saves lots of money. Getting good staff is also key. Good video and Justin explained his business very eloquently.
I don't know how laundermats do, but I remember being a kid going there with my dad and coming out with at least a few bucks for candy bars after scouring the underside of machines, looking under chairs, and other crevasses. I loved every trip to the laundermat. It was like free money for me as a kid.
My uncle is a dentist, and a little known secret is that dentists are notorious for leaving loose change where there are candy and soda machines for people to find.
So $7k a month not counting rent, labor , repair, or debt service. Seems like for two people to see a return you would need a huge volume of people. Awesome looking laundromat I hope those guys make some money.
Depreciation and marketing costs too. There is more to it than what you see here. I don’t think it’s that passive either. Bills have to be paid, it has to cleaned, marketed, employees managed, equipment dealt with.
I was just adding this up too. There's also insurance. That water bill though. If only there was a way to reclaim that water without the huge cost. Is there such a thing as a laundrymat on well water?
Nice to see a laundromat owner that's maintaining his business to attract customers. Most of the independent laundromats near me have closed down as the apartment owners in the area have added laundry rooms even when the buildings didn't originally have them; that's an indication there must be money in it. I now live in my own home but occasionally use a laundromat to do large items, and they're getting harder and harder to find in my area.
I don’t know if that an indication that there’s money in laundromat businesses. I doubt the landlords are doing it for the laundry income. I’d think it’s an indication that having in-house laundry is becoming more valuable to renters such that they’d pay more rent to live in places that have it.
why don't they lease space in the laundromat? Like maybe you could have a small alcove with a seamstress offering repairs while you wash. Maybe have a barista operating a small coffee bar.
@@TheNicoliyah the issue I often have with laundromats are that they are so dull and boring. The one I used to go to had a Little Caesars in the same plaza, then the Little Caesars closed, and the laundromat soon followed. Now the one I go to I'll only wash then get out of there ASAP since it is so boring.
good idea. having an "office" in the middle of the place was the stupidest part xD overall good tho and can increase profit/sqft to use it more efficiently
It's probably all fun and games for 10 to 15 years tops. Most front-loaders expire in 15 years, especially with heavy use. They then start to necessitate a lot of repair or replacement. I think those interested in this line of business should do proper consideration of the time it will take to get the investment back, the expected profit while the business is profitable, and the maximum time the business will work without necessitating machine replacement. The location should be around a densely populated area where people are too stupid, or are legally not allowed, to have washing machines at home. I reckon a place full of tourists would be the best.
Every laundromat I have been in where an owner is standing in it is in good shape. MONITORED. Every one I have been in where no owner is present is broken down and trashed. People do not appreciate having one in their neighborhood enough to tell the brats (no matter their age) who break things STOP, or call police over the vandalism.
Used a laundromat in St.Louis that was owned by an airline pilot. The girl there ran a tight ship. It was clean, well lit and the machines were dealt with as soon as they broke. Washateria in St.Louis/Shenandoah Ave for anyone reading this.
@@richelletvforyou8324 Indiana. They're so bad here that I kinda want to figure out how to own one so people have a nice one to go to but not sure if it's profitable enough to keep up on one.
@@IvanGoldBit holy crap!! You people talk about Trump all the time I see. I mean...even on these business videos!! I came on here to get ideas on the laundry business and decided to read comments and here we go again. This just proves my theory. You guys love him more than his supporters do. Lmfao!!
Walk in there like you own the place & every once in a while talk to yourself. No body will mess with a crazy if it looks like a bad choice. Also wear a Lorena Bobbitt shirt!...lol!
@@dc2280 I have a washer and dryer. I mean I wouldn't want to own a laundry mat because it would be where I don't want to go and they destry and trash everything.
Yup! Just act like you’re crazy and talk to yourself and also scratch your arm once and awhile. Put some flour on your dark shirt and rub your head to make it flake... they will stay away from you
@@marlonestrella8105 I too think it is ridiculous that anyone should have to worry about their safety while washing clothes. However, I had to play crazy plenty of times to get my kids stuff ready for the week. It is a sad truth of our world. PS. Powder donut lips & shoulder twitches. Stay safe Brother Marlon!
Agreed! 100% percent truth! DON'T PARTNER WITH ANYONE FOR YOUR BUSINESS!!!!😬😬. It's a horrible ideal. You can be successful on your own. Don't feel like you have to have a business partner!!!
This guy hasn't experienced his business long enough to know how passive or not it really is. He has all brand new machines which haven't started to really wear and break down a lot. Once the wear and tear sets in, it will take a lot more hustle and bustle keeping on top of the machines running and making money. Including the change machines - they're notoriously unreliable and customers always have a gripe from stolen dollars and quarters. Plus, if he's trying to avoid employees, he could end up with a hazardous situation where a person keeping track of what's going on to deal with spills and other hazardous situations exposes him to lawsuits. He hasn't been sued yet due to some form of claimed negligence. And so hasn't experienced lawfare and the expenses associated with it and how it can deeply cut into your profits (or even destroy your business). If he thinks his average profit margin will 50-60% over the long run? Good luck! Most mature, ordinary businesses with no special product or service (i.e. with little to no competition) are lucky to clear 10-20% a year.
Wow, that is a nice laundry mat. I had no idea it was so expensive. I am thinking about starting some kind of business to start that has some passive elements to it. But I only have $10,000 So I guess this idea is out of the question. But you said $423k and also $700k So I am still a bit confused. If I had that much money to start a business I would buy a residential apartment building for $2M-$3.5M with a $423k/$700k down payment, Which would gross $35k per month the first year and within a couple of years I would get the rents up to $50k per month. expenses on apartment buildings are about half, But you also get equity build up as you pay down the mortgage and appreciation as the value on the property goes up. I am curious how that would compare to owning and operating a laundry mat?
Eh not so much really, I just bought 12 and had service guy come out 4x for random 3 units, coins where getting stuck after like 10 uses......returned them they sent me 3 new ones... ~I don’t own a public laundromat, this was for my buildings~
If you cant fix your own machines make sure store is Very Profitable to cover repairs. I recommend every laundromat owner learn how to repair your own machines & most do.
I was immediately confused when he answered with multiple different numbers for profit percentage. He should have asked specifically about net profit and net margin.
We own 3 laundromats and only the one that is debt free makes 50% profit. Depending on the number of machines you can easily have $600-$800K in equipment not considering construction costs.
Abot 35% is the industry average. This guy hasn't even gone past the 1st year and claims to have 50-6o% profit. I will come back 5 years later and see where this number stands. oh yes, I will also ask about the partner, if he is still there. :) Good luck.
As a laundromat owner myself I cant agree how he could suggest to customers that they can put a 40lb load in a 20lb machine to wash... that totally insane.
@@sierraingram4487 He would make minimum 250K net a year so you can get money back in 3 years. If he is making less than it will take much longer and the investment will not gonna work. Those machines lasts forever but 5 years later they will begin to break etc and he will spend money for these machines. Hope can get this investment in 3-4 years.
Years ago, many of my single friends and I would meet at our local laundry on Sunday afternoons...and while we did our laundry we would have a dish-to-pass lunch and chat it up. Fun times!
I didn't hear anything about the cost of servicing them. It was a nice glossy presentation about all the good things but what about repairs, cleanouts and vandelism? I have been doing service for years and most property owners are clueless and most laundry mats are only profitable in low income areas. Most people can buy a good used washer and dryer for less than what they spend in a couple of months at the laundry mat.
This was a very well done video. The questions were on point and the guest was given lots of time to provide a detailed response. It is also nice to hear about the back story to their entry into this under appreciated line of work.
This place looks awesome. I live in the ghetto. I normally see the homeless keeping warm in there or out of control kids having races with the wheeled laundry baskets! 🤣
The wear and tear on those machines. I recalled taking many of my my big laundry such as bedding and dirty shoes and washing it at the local laundry mat because I didn't want to damage my laundry machine. 😉
With a laundromat, you could be looking at ways to diversify your service and see if you can gain some commercial customers. There are lots of businesses that could benefit from high volume washing if you lower the prices. I'm in hospitality (short term rentals) and I had to set up my own laundry company because all the laundromats were inflexible when it came to pricing. 2 years on and now we offer commercial washing to the hospitality sector. As it's high volume, all 6 23kg machines run constantly. If any of them break down, we just phone the rental company who fix for free. It's a great business if you can get your head round lower prices and higher volume. If you have machines sitting idle for most of the day, you should definitely look into this.
The laundromats where i go all are doing laundry for walk ins and have professional housekeepers who are doing their own customers laundry at the laundromat. And some also do commercial and dry cleaning(not always in house). This keeps the attendants plenty busy.
Why wouldn't your hospitality building have their own machines if they had such high volume of clothes needing to be cleaned? Or any business for that matter?
This Owner prefers cashless payments.. and yes you can see how back in the day before machines could count coins and issue rewards would be a way to wash some dirty cash through it.
@@nikluv21I can't believe in the year of our Lord 2021, so many people missed what is clearly a joke. Yes, this is a cultural movie/tv reference about laundromats and carwashes being fronts for money laundering. Sigh....
I thought maybe you were joking, but it is hard to tell tone via text. Some people are truly clueless, you could have been one of them. Thought you could tell in this day and age it was a joke with the lol. Sigh...
Empty laundry mats are always vandalized you need to have matrons to sell soap give change and keep clean!Only use when waiting for repairs!Also dislike dog blankets and camp blankets ruined machines observing
I manage laundromats. The key is location then cleanliness. The profit margin can be as much as 60%, but it is generally 30-35%. A lot goes into it, but if your laundromat is a hog pen and not nicely kept, you will lose your tail. It takes work. Lots of work. You can’t just open the doors and expect to make $.
Card is the way to go. It’s more convenient and much faster. Gotta teach those who are stuck to their old ways. I was the same way. But it honestly beats a pocket full of coins, dropping a coin every now and then, loading those coins, and changing cash for coins. It gets people in and out so the next customer doesn’t go elsewhere. Great info here nevertheless.
There are multiple things wrong with this. Frist mistake was to "buy" a laundromat. People don't just sell laundromats if they are making them money, its one of the easiest passive income streams. The second he retooled the mat all he did was just bought the lease from the previous operator who "sold him" that mat and he still has to pay monthly rent! If it was ran down he could have easily went to the landlord and be like hey yo this run down mat? They obviously not paying you rent, how bout I take over the lease and put in new machines and you can start collecting that rent on time again. Another mistake made is that he was suckered into buying computerized machines by a speed queen sales rep that not only cost 3-4x more than regular machines but they also track every single coin which is tracked by software and that translates to every single cent made being reported on his taxes where's a traditional coin op machine with no tracking mechanism is not. The point he makes about employees is dead wrong! That nice ass wash & fold area would NOT be ran by employees that I have to pay and follow labor laws for and pay unemployment insurance on top of that and all the other hassles. Instead that would be provided to the right person that can run their "Own" wash & dry business and the space is provided on a few conditions. They must be friendly and be customer service oriented, keep the place clean and be sure to alert you of any issues like machines breaking down or the coin machines are empty etc. They can charge what ever they want per a lb to their customers. They are still pumping in money in to the machines your collecting from, they are making money off the difference and your store is still attended and kept clean.
New machines means they're not breaking down. The one big thing that helps in owning a laundry is being able to fix the machines yourself. As the machines age they will start needing more service. Most people get out of the business when repair cost start to go up. They sell and then open in a new location with new machines.
This is a part I NEVER hear revealed. Perhaps it does not exist. My negotiations with an equipment supplier is going to be what my spare part inventory is with my purchase of 50 machines? They did a layout? Ridiculous. What parts on these models you propose failed at the other customers who had ordered 50+ machines? Which critical part has the lowest hour expectancy? My equipment sales guy doesn't know? Pathetic. NOW?, TODAY?! in the Supply Chain fails days, you want to just wing it, and find out later? Idiot. I know I need heater elements and belts. Which bearings fail fastest? How many bearing locations are there in a washer? How hot do pumps get? I see several walk through videos on RU-vid, what dryer situations occur to produce the wall burns I see around old equipment? If I drive into a car dealer, and go to the back, and pull into the Service bays on Friday with a case of cold beer at 4pm, and get the guys around and tell them I want to buy a model, they will tell me straight up in 6 minutes, which is best, which parts fail, and what they drive. The same is true at Dexter. Get the name of the guy who services the local laundromats with Dexter equipment. He knows 9 parts I should have on hand right off the top of his head. I did not see any parts inventory in that backroom.
I just moved to a new neighborhood and the laundromat by me have washers with card readers attached to them. So you can just use your credit or debit card to pay for the washers instead of having to waste time and money by paying to take money out of the ATM, and then trying break that $20 or whatever into quarters. I was so happy to see that and I was surprised that more laundromats don’t have that option. It’s the only time I’ve ever seen washers with card readers on them.
@@cameronbateau6510 I live in Chicago and the laundromat I go to that’s down the street from had card readers. However, since this post, they’ve now updated once again, and instead of traditional card readers, the laundromat basically created their own payment card that you can add funds to and use for the washers and driers. And that laundromat payment card is now what we use in those “card readers”. Still not bad, but I preferred the card readers. Also we now have to pay for drying. The driers used to be free when they had the regular card readers.
The biggest expense would be the depreciation of the equipment. On a straight line basis, and after googling the conservative life span on commercial laundry equipment is 10 yrs, ~500k of equipment is $4,200 a month. He also mentions another 200k in capital employed in the store which presumably also have D&A costs. Additionally after 10yrs of inflation, the cost to replace the equipment will be higher which understates the true depreciation figure. So that 500k in equipment becomes 600k to replace and therefore profits will be overstated somewhat, due to depreciation not reflecting the true cash cost to the business of using up a year of the equipment's life span. Not sure how the 50% margin was arrived at, is that the EBITDA/Operating margin and not the net margin?
@@od4407 I guess I'm just pointing out a large cost not mentioned by the video. A laundromat would seem amazingly profitable for the first few years with new equipment from a cash flow point of view, but in reality just this one store has to 'put aside' over $50k a year to account for equipment usage.
@@alexgamble4718 That’s true, an issue that comes with purchasing new high tech machines...which is why I would never go this route, I’d go for the lower end laundromat purchased from an investor looking to retire...older machines, you can replace them with other not so high end machines
my mom owns one of these down in Florida and her speed queens are now nearly 24 years old. she has owned it since 1992 and runs the place 24 hours a day. its a cash cow and the numbers are closer to 65% net. now it also has a section out area with a small cafe selling food that nets nearly $1500 a day.
If you weren't making a ton, then you just weren't laundering your money correctly ;- ) For those who don't know where the expression "laundering money" came from, it was born from Al Capone's owning of a number of laundromats and using them to do just that, laundering his millions
18 years in the military? Thank you for your service sir. You should get a job as a Mailman for two years to finish off your 20 years of federal service.
Laundromat near our place in northern mi looks almost exactly like this one except smaller. Top rated machines, very clean and well kept. They probably do very well.
Traveling, I ended up need some clothes washed. I found a place much like this. It was great, friendly, and the staff kept it spotless with many of the same services. I still remember the facility two years later that is how good it was.
Most laundromats here are stand alone building. The water bills and piping are too much maintenance to deal with a landlord, business owner owns the building too.
I have a relative who opened one near a number of apartment buildings. He started off real strong but a store a little closer to the apartments added machines and it cut too deep into his customer base.
"Having a partner, you reduce your risk" Woah! One guy had a business partner whose dependant daughter got sued for something she did that was completely unrelated to the business. The plaintifs in the lawsuit came after the business and the guy lost everything.
If that's true, then the owners failed to properly incorporate their business and left themselves vulnerable. They should have utilized an experienced small business accountant/attorney when filing their business.
Not automatically. Depends on water bill and rent. I know the laundromat near me went under because immigrant labor that was their main market vanished.
What are your thoughts regarding competition and how close a competitive laundromat can safely be? I am looking at a laundromat to purchase but realized a brand new laundromat opened up two years ago only 2.5miles away
I went to laundromats to wash blankets and bed sheets. However since my wife and I bought a front-load washer, we have not been to any laundromat because we could wash our blankets and sheets using our washer. As front-load washers became less expensive, more people would be using laundromats less often. I felt laundromats might not be a good business in the long run because they would be fighting for smaller customer base in the future.
Here where I live in NY in my town I have two huge laundromats that are open until midnight they get busy many people have washers dryers or laundry rooms where they live however going to the laundromat is more of a social thing I see parents with kids they play the arcade games hang out during the COVID BS it was a great way to get out of the house and mingle I saw it everyday 😂 many of the essential stores knew this so they took advantage one of the laundromats put in a coffee bar for us also know many of the laundromats around my county are open 24/7 so yes I'd say opening a laundromat is wise..And my local laundromat has the same Pepsi vending machine 😊
I agree with all the praise about this video and the laundromat and owner! One other thing: the design of this space is so on point. It shows how much they care about the customers. Not those plastic chairs, but stylish leather-looking couches? The wood trim. Every detail thought out. Well done.
