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Are laundromats good investments?

May 06, 2021

Smart investors typically look at certain specific factors before investing in a business. Of course, the most important thing everyone wants to see is return on their investment or (ROI), and its steady financial performance.

Secondarily depending on the investor and their investment goals, other concerns might include the initial investment and financing, available support and expertise, time commitments or flexibility, and perhaps even an exit strategy among other issues.

Based on these criteria, are laundromats good investments?

You could certainly put your money into a conventional savings account, IRA, 401k, money market or mutual fund and receive their typically very limited returns. However, because small business owners may have more risks, many business experts advise investors to search for an ROI from 15-30%. Yet the low labor costs, minimum inventory, and payment upfront before service contribute to low risks for laundromat owners and the laundry industry has an overall high success rate with a significantly higher ROI of 25-35%.

There are certain indicators of steady financial performance and laundromats have always been considered recession-resistant and unimpacted by seasonality. Washing laundry is a repetitive necessity of life. Today with the current pandemic, it has become even stronger with the "essential business" designation. Additionally, there is no competition from e-commerce that other brick-and-mortar businesses may face.

While it's important to know what to expect to budget, investing in a laundromat can vary greatly depending on location, equipment, and other important considerations. However, interest rates have never been lower, and equipment manufacturers are offering highly attractive terms. In addition, higher vend prices and smart, energy efficient equipment can significantly reduce operational costs. Working with a knowledgeable and highly-experienced team of industry experts can alleviate the unknowns and help your laundry business start strong.

You don't have to be an expert in vended laundries to get into this business.

Laundromats can be run successfully with offsite management or on a part-time basis and labor is minimal. You can determine your own level of involvement. They are scalable and therefore future expansion or multiple-store ownership can be achieved optionally. Their flexibility, scalability, and easy-to-manage cash flow make laundromats a smart choice for both new and experienced small business investors. In addition, new technology makes the business of laundry more efficient, accessible and advantageous. These advanced solutions and industry-leading technologies make running a laundry business easy.

Laundromat valuations have risen and those with proven track records are sold with relative ease and at top dollar. Just like other types of real estate, laundries appreciate in value. A profitably run laundry may expect to find a buyer quickly and in most cases will command a much higher price than was paid, leaving you with a nice retirement nest-egg.

A laundromat from Aaxon can be a very rewarding experience with all of the benefits of a profitable investment - without all the risks! We have worked with many entrepreneurs like you. With Aaxon's experience, superior market knowledge, wide variety of services and reliable commercial laundry equipment, we have all the tools available to assist entrepreneurs in opening a coin laundry, whether as an added source of income, retirement investment or a full-time business venture.

To learn more about opening a laundromat, please visit www.aaxon.com.