1. Laundromat Business Plan
By Karla M. Kassey
Custom Marketing Consultants
Full Report

2. Industry Overview Definitions and Background
Trends and Characteristics
Operations and Performance Levels
Summary

3. Definitions and Background
“The term coin laundry is defined as commercial-grade, self-service laundry equipment placed into service in a retail space. Coin laundries generally occupy the retail space on long term leases (10-25 years) and generate steady cash flow over the life of the lease.”
Source: Coin Laundry Association, ©2006 g

4. Definitions and Background (continued):
“Coin laundries thrive in periods of both growth and recession. During periods of recession, when home ownership decreases, the self-service laundry market expands as more people are unable to afford to repair, replace or purchase new washers and dryers, or as they move to apartment housing with inadequate or non existent laundry facilities.”
Source: Coin Laundry Association©2006

5. Trends and Characteristics
“The more concentrated the population, the greater the need for coin laundry facilities. National and regional demographics indicate renters, the primary users of coin laundries, are the fastest-growing segment in the nation. As of the 2000 Census, 31 percent of the nation’s 116 million households were renter occupied.”
Source: Coin Laundry Association©2006

6. Operations and Performance Levels
“Coin laundry operations consist of three basic areas: janitorial, maintenance and the handling of money (which consists of collections and loading coin changers). Bookkeeping, administration and banking are typically off-site management areas.”
Source: Coin Laundry Association©2006

7. Sales volume varies based on the following:
Demographics
Overall services offered
Design and general condition
Equipment selection
Condition and vend prices
Hours of operation
Parking
Competition
Prevailing market vend prices
Source: Coin Laundry Association©2006

8. Summary
“Today’s coin laundry industry is a strong and vibrant one. Even more appealing is the fact that this dependable public service industry continues to grow and thrive. The demographic trends toward an even greater apartment dwelling segment of the population and predicts continued prosperity for the Laundromat industry.”
Source: Coin Laundry Association©2006

9. Population segmentation strategy:
In the following slides is data that can be used to get additional information about the target markets that might visit your Laundromat facility. This information can be used to determine which T.V. stations, magazines, etc. that your target market views, what type of entertainment each group likes, etc.

10. Boomtown Singles
“Affordable housing, abundant entry-level jobs, and a thriving single scene—all have given rise to the Boomtown singles segment in fast-growing satellite cities. Younger, single, and working class, these residents pursue active lifestyles amid sprawling apartment complexes, bars, convenience stores, and Laundromats.”
Source:

11. Boomtown Singles (continued):
Lifestyle Traits:
Go snowboarding
Watch Fuse Network
The Source magazine
Futurama TV
Drive a Nissan Sentra

12. City Startups
“In City Startups, young, multi-ethnic singles have settled in neighborhoods filled with cheap apartments and a commercial base of cafes, bars, Laundromats and clubs that cater to twentysomethings. One of the youngest segments in America—with ten times as many colleges students as the national average.”
Source:

13. City Startups (continued):
Lifestyle Traits:
Go snowboarding
Play soccer
Jane Magazine
Late Night with Conan O’Brien
Drive a Suzuki Aerio

14. Home Sweet Home
“Widely scattered across the nation’s suburbs, the residents of Home Sweet Home tend to be upper middle class married couples living in mid- sized homes with few children. The adults in the segment, mostly under 55, have gone to college and hold professional and white collar jobs. With their middle-class incomes and small families, these folks have fashioned comfortable lifestyles, filling their homes with toys, TV sets and pets.”
Source:

15. Home Sweet Home (continued):
Lifestyle Traits:
Go mountain biking
Eat at Quizno’s
Read Inc. Magazine
Smallville TV
Drive a Saturn Vue SUV
Source:

16. Mobility Blues
“Mobility Blues is a segment of young singles in working-class neighborhoods in America’s satellite cities. Ethnically diverse and young, these transient Americans tend to have modest lifestyles due to their lower income jobs. Surveys show they excel in going to movies, playing basketball, and shooting pool. They are also part of a larger segment called Micro City Blues which includes a mix of old and young singles and widowers.”

17. Mobility Blues (continued):
Lifestyle Traits:
Go to college basketball games
Shop at Express
WWE Magazine (wrestling)
George Michael Sports Machine TV
Drive a Kia Rio

18. New Beginnings:
“Filled with young, single adults, New Beginnings is a magnet for adults in transition. Many of its residents are twentysomething singles and couples just starting out on their career paths—or starting over after recent divorces or company transfers. Ethnically diverse—with more than half of its residents Hispanic, Asian or African American—new beginnings households tend to have the modest living standards typical of transient apartment dwellers.”
Source:

19. New Beginnings (continued):
Lifestyle Traits:
Go to the movies 4+ times/month
Read Jet
WWE Magazine (wrestling)
Jerry Springer TV
Drives a Kia Spectra

20. Laundromat Renaissance
“For most of us, meeting the demands of work and our personal lives leads to a time crunch. Laundry owners are capitalizing on this reality by offering their customers time-saving convenience in the form of wash-and-fold (drop-off service). Some are even picking up laundry from customers’ homes and delivering it back to them clean and folded.”

21. Laundries are a Growth Industry
There are over 35,000 coin operated laundries in the United States generating more than $3.5 billion in annual revenue.
Laundries perform especially well in densely populated, lower income areas. The primary customer base is the estimated 89 million people who live in rental housing.

22. Laundries are a Growth Industry (continued):
“Coin laundries also appeal to a broader array of customers because of their convenience, time and cost savings, heavy duty equipment not found in the home, and fluff and fold services for busy workers on the run.”
Source: “Coin laundry folds in entertainment” Tracy Drury; November 24,

23. Additional Background information on Laundromats
Coin laundries can range in market value from $50,000 to more than $1 million, and can generate cash flow between $15,000 and $200,000 per year. Business hours typically run from 6 a.m. to 10 p.m. The stores usually occupy 1,000 to 5,000 square feet of retail space, with the 2002 average being 2,260 square feet.

24. Additional Background information (continued):
The coin-laundry segment is fragmented: the 50 largest firms generate about 40 percent of revenue.
Source: “Excerpt from Dry Cleaning and Laundry Facilities Industry Profile.”

25. Laundromat industry:
Small companies can compete successfully by owning favorable locations or providing special services. The industry is labor-intensive: average annual revenue per employee is about $50,000.

26. Recommendations:
Purchase a brick oven and sell frozen single serving pizzas cooked in the oven
Have free popcorn
Have a video game machine (i.e. play station or X-box for people’s children to play while they do their laundry)
Add a water softener to prevent hard water stains on customers’ clothing
Add a micro filtration system to ensure that water is free of any contaminants that could stain clothing, etc.

27. Recommendations (continued):
Add two workstations that allow patrons of the Laundromat to check and to use the internet
Use one of the TVs to play movies that you can hear
Offer discounts during slower traffic periods
Use a card system that allows the consumer to lock the machine while clothes are washing or drying so clothes can’t be accidentally taken by others

28. Recommendations (continued):
Add a clothes washing service and charge by the pound to launder and fold patrons’ clothes—one source offers 99 cents per pound and a ten pound limit meaning that you must have at least 10 pounds of laundry.
Stay open 24 hours on Friday and Saturday

29. Recommendations (continued):
Advertise in the local paper and in the Kent State paper that you can do all of your laundry at the same time versus only having access to a single machine at apartments and in dorms, at home, etc.

30. Recommendations (continued):
Leave flyers at apartments advertising any new features as Laundromat patrons typically live in apartments
Have a laundry pickup and delivery service that picks up and delivers laundry to apartments and homes of those individuals receiving the wash, dry and fold service.
Have special pricing on beer on Friday and Saturday night and stay open all night.
hat

31. Recommendations (continued):
Have a babysitter on hand on Saturday morning and afternoon while patrons wash their clothes
Rent mailboxes to patrons
Advertise at hotels in the area that business travelers can bring in their laundry to wash or to have the proposed wash, dry and fold service

32. Recommendations (continued):
Have board games available for patrons to play
Sell candy
Sell snacks such as potato chips, etc.
Advertise in the local paper the ability to wash comforters, sleeping bags, etc. in the larger machines

33. Recommendations (continued):
Sell sample sized bottles of stain remover
Sell sample sized bottles of liquid detergent and fabric softener
Get one of the radio stations to have someone appear there and give prizes, etc. for those people that come over to do laundry/have a grand reopening once ideas such as those described above are implemented

34. Recommendations (continued):
Again, promote the fact that at a Laundromat vs. an apartment facility, many loads of clothes can be washed all at once, which saves a great deal of time for busy people that have a lot of laundry to do.

35. More Recommendations:
Advertise your laundry services at your other places of business such as 100 bottles of beer on the wall if you aren’t already doing so.

36. More Recommendations:
Use the recommendation with regard to TV programs that each group watches that is named above and put these programs on your TVs

37. Additional Recommendations:
Advertise on cable TV and advertise more than one of your businesses together and tie in the fact that you have many types of Beer at llaundry 101

38. Again, More Recommendations
Advertise that you can stay as long as you like, especially if people are drinking, such as during a period in which you have a brand of beer on sale, etc. as stated above.