Laundromat Business Plan Template
Whether you want to start your own laundromat business or expand an existing one, you need a business plan. The following laundromat business plan template lets you know what elements you need to include in a successful laundromat business plan.
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To ensure your laundromat business success in this highly competitive market, you need a properly structured laundry business plan. With over 12 years of experience, we have helped over 5,000 entrepreneurs create business plans to start and grow their laundromat businesses. Using the following laundromat business template, you can put together an effective business plan for laundromat.
Things to Know Before Writing an Laundromat Business Plan
Laundromat industry is a part of basic services. As the IBIS report shows, the industry stands at an annual revenue of $5.5 billion with a -1.3% growth for the last five years (2017-2022) and -0.2% growht projection for 2022-2027. The industry has an average profit margin of 16.5%. These are about 18,2727 businesses that offer laundromat services in the USA, employing a 51,496 employees.
The promising aspects of laundromat industry are:
- Low concentration, almost always place for new laundromats
- Few regulations
- Growing globally
- Low barrier to entry
However, you should consider these factors before making the leap:
- The industry is in life cycle decline
- Capital intensity high and you’ll probably need a sizeable loan to start this business
- Little Industry Assistance from industry associations
- High competition that is ever increasing
Key Success Factors for the Laundromat Business
Laundromat businesses can be made successful if you take care of the following six factors.
Govt. Regulations Compliance: Laundromats create water waste. You will need to be fully compliant with the local municipality’s requirements and regulations.
Develop Cost Efficient System: As the margins are low in this industry. You can make money by keeping the costs low and making your system efficient.
Apply and Win Tenders: For laundromats, a reliable income stream for your business can be the laundry contract from colleges, universities, and property managers. You will need to plan and be able to compete in such tenders.
Clean and Bright Premises: A clean and beautiful shop that is well-lit and functions as it should create a competitive advantage for you. It will also help you attract new customers and maintain cash flow.
Dynamic with Technology: Technology saves costs, improves efficiency, and helps you give a good customer experience. You can incorporate the technologies like using water-saving machines, using a card-based system instead of a coin-based one, etc.
Follow Social Distance Protocols: Social distancing is still a thing in the USA. The CDC has protocols for businesses to keep social distancing. Make sure your business follows these protocols so that people can comfortably come and use laundromats.
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What is an Laundromat Business Plan?
A laundromat business plan/laundry business plan is a road-map for starting and growing your laundromat business. Your business plan outlines your business concept, identifies your target customers, presents your marketing strategy, and details your financial projections.
Any bank or investor you approach will require a laundry business plan, so putting one together will be critical to securing funding.
In short, writing a business plan can help you succeed if you’re thinking of starting a laundromat business or pitching to investors or venture capitalists.
Why You Need a Laundromat Business Plan
Laundromat business plans can be used to gain interest from potential investors or to secure loans from banks. They are also helpful to you as the owner. A laundromat business plan allows you to thoroughly analyze every aspect of your potential business.
A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a laundromat business idea, and may help you better understand your company’s finances and competition.
Laundromat business owners who have a business plan grow 35% faster than those who don’t, and 75% of fast-growing businesses have one.
A laundromat business plan is a living document that should be updated annually as your company grows and changes.
Free: Business Plan Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
Sources of Laundromat Funding
Laundromats are small businesses. The funding options are limited and you will need to present a convincing business plan to help you raise funding for your laundromat business.
We researched and found these funding options that are easy-to-access and come with high success chances.
- Bootstrapping and using your own money
- Friends and Family loans
- Small Business Administration Loans for the industry
- Grant for minority, women-owned, and veteran-owned businesses
- Credit Cards
- Term Loans
- Business Line of Credit
How to Write a Laundromat Business Plan
To write a laundromat business plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a laundromat business plan, or you can just download our proven sample business plans to get a better idea.
Executive Summary
The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.
It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.
Tell them what kind of laundromat business you have and what stage you’re in; for example, are you a startup, do you have a laundromat business that you want to expand, or do you have a lot of laundromat and laundry businesses?
Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.
- Provide a high-level overview of the laundromat industry
- The name, location, and mission of your laundromat business
- A description of your laundromat business, including management, advisors, and a brief history
- Discuss the type of laundromat business you are operating, Give an overview of your target customers., and how your company differs from competitors in the industry
- Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
- And give an overview of your financial plan
Check out these executive summary examples to help you write a perfect one for your laundromat business plan.
Free: Executive Summary Examples
An executive summary is the most important part of your business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.
Company Analysis
- Company summary:
- Company history: When and why did you start your laundry business?
- What milestones have you achieved so far? Among the milestones might be the number of customers, locations, installed machinery and revenue, growth year over year, etc.
- Legal structure and ownership: Do you have S-Corp status? Is it an LLC? A sole proprietorship? Describe your legal structure.
- Mission statement: An overview of your laundromat business’s guiding principles. Learn how to write a perfect mission statement.
Industry Analysis
Provide a brief overview of the laundromat industry in your industry analysis. This may seem unnecessary, but it serves multiple purposes.
First, researching the laundromat industry will educate you. It gives you an understanding of the market in which you are operating. Secondly, market research can improve your strategy, especially if it identifies market trends.
Third, market analysis shows readers you are an expert within your field. Conducting research and presenting it in your business plan for laundromat is the most efficient way to accomplish this.
Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.
- Give a quick overview of the laundromat industry. Define the laundromat business in terms of size (in dollars), historical background, service region, and products.
- Examine previous trends and growth patterns in the laundromat industry.
- Identify the market’s major competitors.
- Age, gender, and general lifestyle of the targeted market
- Determine the factors that have an impact on the laundromat industry. These might include government regulatory rules and other businesses’ competitive activities.
- Using research data, the industry forecast expected growth over the next five to ten years. Predictions should be made for both the long and short term.
- Describe how your laundromat business intends to position itself in the industry. Concentrate on how your laundromat business can benefit from opportunities highlighted in the industry.
Customer Analysis
The customer analysis section is an important part of any laundromat business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how your laundromat services will meet those requirements.
Customers can be categorized into the following segments:
- Collage/University students
- Multi-family residences
- Home and Apartment Renters
- Condominium residents
- Low income families
- Seasonal Employees
Customer analysis may be divided into two parts: Psycho-social profiles (why your laundromat services suits a customer’s lifestyle) and Demographic profiles (descriptions of a customer’s demographic qualities).
With regards to demographics, include information about: the ages, genders, locations, and income levels of your customers. When targeting businesses, describe what kind of business, size, and location your target customers are.
The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better your chances of attracting and retaining customers will be.
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Competitor Analysis
It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:
- Identify the strength and weakness of your laundromat business competitors.
- Search for opportunities to distinguish your laundromat business from competitors.
The first step is to determine who your direct and indirect competitors are.
The direct competitors consists of other laundromat businesses that offer essentially the same services to the same people in the same neighborhood as you do.
Indirect competitors are other laundry businesses, laundormats installed by property managers and self-service dry cleaners. Though it seems that there are not many competitors for this industry, the fact that it is basic need invites many players.
There is fierce competition inside the industry. The laundromats compete on price, quality of service, working hours, technology, and addons like wash and fold or dry clean.
This competition pushes prices down and laundromats operate in a narrow range of prices in an area.
The forecast also shows that the competition will further increase and margins may shrink over time.
Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your laundromat business— but keep an eye on the indirect competition as well as they can determine if and how you should innovate or relocate your business.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they offering cheaper laundromat services? Is low price their only strength?
- Quality – Are they offering many addons on the laundry services, or their machines are quick and efficient? Do they also offer dry cleaning, folding, etc.
- Customer service – How they respond to their customers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. For example, will you offer long work hours so that busy professionals can use your services in the evening or night? Are you open on weekends and holidays? Can you pack the laundry for an additional cost? Do you offer special package for property managers, hostels, university students, etc.? How can you attract more business by improving customer support?
Consider how you will outperform your competitors and include them in this portion of your laundry business plan.
Free: SWOT Analysis Examples
Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.
Marketing Plan
Creating a marketing plan for laundromat business involves identifying the target demographic and finding art that suit their preferences.
As part of your marketing plan for a laundromat business, you should include:
Pricing and Product Strategy
Your laundromat business must offer laundromat services that are more valuable, cheap or around the same cost, and better quality. Research what your competitors offer and how they price their laundromat services.
Placing and Promotions
Place refers to the location of laundromat business. Describe how your location might attract customers. As an example, is your laundromat close to a college or university, or next to a condominium building, or apartment complex, etc.?
Promoting your laundromat business is the final part of your marketing plan. In this step, you document how you will drive customers to buy your services. A few marketing methods you could consider are:
- Pre-opening events
- Local Newspaper ads
- Flayers
- Offering packages for students and renters
- Optimizing Google My Business Listing
- Reaching out to local bloggers and websites
- List your business on industry-specific sites
- Community Outreach
You should also think about your laundromat company’s Unique Selling Proposition (USP), which should explain why clients should choose you over other laundry businesses. Ensure that your USP is reflected in your marketing.
Read Later: How to create a marketing plan in a business plan.
Operations Plan
While the previous sections described your goals, your operational plan in a business plan discusses how you will achieve them.
An operations plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.
Your operations plan should be divided into two individual parts, as seen below.
Your daily short-term processes include all the tasks involved in running a laundromat business, including hiring and training employees and administering the business. etc.
Your long-term goals are the milestones you hope to reach. It may include the date when you hope to lease the facility or remodel the facility: or when you hope to reach $X in revenue.
Management Team
The management team section in a business plan‘ outlines your management team, staff, resources, and how your business ownership is structured.
This part may be easily organized by dividing it into the following points:
- Ownership Structure
- Internal Management Team
- External Management Resources
- Human Resources
Ownership Structure
This section outlines your laundromat business’s legal structure. If your company is a sole proprietorship, it may simply be one phrase. It might be longer if your company is a partnership or a corporation. You should make it a point to clarify who owns what part of the business.
Internal Management Team
This section should not only outline who is on your management team but also how each person’s skill set and experiences will contribute to the growth of your laundromat business. Ideally, you and/or your team members have direct expertise in the laundromat business. If this is the case, highlight your experience and skills.
External Management Resources
Think of these external management resources as your internal management team’s backup. Consider forming an advisory board if your team is lacking expertise and experience with laundromat business.
An advisory board would consist of 3 to 7 people who would serve as mentors to your laundromat company. They would assist in answering queries and providing strategic direction.
If necessary, search for advisory board members with expertise running laundromat business.
Describe all of your company’s external professional advisers, such as accountants, bankers, attorneys, IT experts, business consultants, and/or business coaches.
Human Resources
The final topic to consider in the management area of your laundromat business plan is your human resource needs.
Financial Plan
As part of your financial plan, you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Financial statements include your income statement, balance sheet, and cash flow statement.
Income Statement
A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.
As you develop your income statement, you need to develop assumptions. Will you serve 30 customers per day or 200? Will sales grow by 2% or 10% per year? Your choice of assumptions will greatly impact your business’s financial forecasts. Conduct as much research as possible in order to ground your assumptions in reality.
Free: Income Statement Template
Create a financial statement for your business by downloading our free income statement templates.
Balance Sheet
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.
The balance sheet shows your laundromat business’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:
- Assets: Tangible goods with the monetary worth that the company owns.
- Liabilities: Debt owing to a company’s creditor.
- Equity: The net difference when the total liabilities are subtracted from the total assets.
The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.
Create a pro forma balance sheet for your laundromat business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.
Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.
For example, spending $200,000 to build out your laundromat business will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.
Similarly, if a bank sends you a check for $200,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.
Cash Flow Statement:
Your cash flow statement will help you determine how much money you need to start or grow your laundromat business. In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a laundromat business:
- Design fees, construction, and other costs associated with location development.
- Cost of equipment like display cases, computers, and software
- The cost of maintaining a sufficient art collection
- Staff payroll or salaries
- The total cost of insurance coverage (general liability, workers’ compensation, and property casualty)
- Start-up inventory costs
Pro Tips: Learn how to write a financial plan in a business plan to help you write a winning laundromat business plan.
Free: Balance Sheet Template
Create a financial statement for your business by downloading our free balance sheet templates.
Appendix
List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.
Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix.
Bonus Tip: Learn how to write a business plan appendix for your laundromat business.
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Summary of the Laundromat Business Plan
A laundromat plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the laundromat business, your competition, and your customers. The plan will help you understand the steps necessary to launch and grow your laundromat business.
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