How Much Money Does a Laundromat Make?

by Laura Dobbins   |    Blog

Many years ago, when Randy and I first looked into supplementing our income, we started with real estate. And one thing we learned from the pros was how to analyze a “deal” in under a minute.

A few quick calculations and you’d know whether a particular property was a contender.

But this isn’t real estate.  This is laundromats.

So as we went through our own research process and acquired our two laundromat locations, we learned of several “back of the napkin” easy methods that helped us narrow down the field to only those that were worth our time. (These calculations can also work for those planning to build new.)

And now that we have been in the ownership trenches for several years, we can see that those high-level benchmark calculations were actually pretty spot on.

Now you too can use them to make quick income estimates when you have limited information (or almost no information at all!)

The primary question being examined here is:

“How Much Money Can a Laundromat Make?”

Let’s get to it.

Quick Calculation #1 – Estimate the Washer Income

Let’s say that you find out about a local laundromat for sale, and you want to know roughly how much gross income the washers generate in a month. But you don’t want to contact the owner/broker just yet. You just want some general figures.

Here’s what you do.

Head over to the target laundromat, count how many washers are in the store of each type (try to be as inconspicuous as possible), and take note of the corresponding vend prices (the cost to use the washer). That’s all you need for now.

We’re going to use that information, as well as some industry benchmark figures, to estimate how much those washers, on average, can/would be used in a month and the amount of income that usage will generate.

The first industry benchmark we’re going to use is:

Washers in an average laundromat are used three (3) times per day.  These are also called “turns per day” in laundromat speak.

(A store with an average of two turns per day is operating below target, and a store with an average of four turns per day makes for one very happy owner.)

And since the industry average is three turns per day, that is a fairly safe figure to use in our calculation.

First…Take the count of each washer type and multiply that by the vend price. Then multiply that by 3 uses per day, and finally multiply that by 30 average days in a month.

EXAMPLE:  Let’s pretend you counted 10 double-load washers in the store, and the owner charges $3.00 per use.  Multiplied together that gives you $30.  We’re going to say they’re used 3 times a day, so multiply $30 times 3 and you get $90.  This means that on an average day, those double-load washers are bringing in $90.  But there are 30 days in a month, so multiply that $90 daily figure times 30 days and you get $2,700.

The double-load washers will, on average, generate about $2,700 per month in income.

You will repeat that calculation for each washer size/price.

Your calculations will eventually look something like below.  The figures in red are just examples I used for illustration purposes.  You will replace the figures in red with the amounts you jotted down on your paper.

Once you’ve performed that calculation for each washer size in the store, add them all together for a final “Total Washer Income Estimate”.   In my example, the washers bring in $14,580 per month.

Not too bad.

But wait…you may be thinking, “Ummm, Laura, that’s only washer income.  What about the dryers?  Don’t those make money too?”

Yes they do.  Here’s where another handy industry benchmark comes in to play.

That brings us to…

 

Quick Calculation #2 – Estimate the Dryer Income

Thankfully, estimating the dryer income is very simple arithmetic once you have the washer income in your back pocket.

On average, dryer income is roughly 50% of washer income.

So…using your estimated monthly washer income from #1, multiply that figure by 0.5. That will give you the estimated monthly dryer income.

Going back to my example, if my total monthly estimated washer income was $14,580, that means the dryer income is $14,580 x 0.5 = $7,290.

This gives me $7,290 in monthly dryer income.

Now add both the estimated monthly washer income to the estimated monthly dryer income to arrive at an estimate of the Total Monthly Income.

Now I’ll go back to my example.  If I add both my washer and dryer income figures together…

$14,580 Monthly Washer Income  ( + ) $7,290 Monthly Dryer Income

= $21,870 Total Monthly Income

As a reminder, these are just benchmark calculations.  A particular location can do better or worse than your estimate.  But for those looking for ballpark figures, these kind of calculations are just what the doctor ordered.

And don’t forget, if you’re building new, you can run similar calculations to determine how many washers you need in order to generate a certain amount of gross income.

Finally, if you’re looking to buy a laundromat of your own, you definitely need to check out our Official Laundromats 101 Complete Guide to Purchasing a Laundromat.  Click HERE!

Until next time!