July 6, 2023
When it comes to starting a laundromat, there are various reasons why writing a business plan is crucial. While you may not have woken up this morning with an overwhelming desire to spend the next few days crafting a detailed plan, it's important to understand that potential lenders and investors often require a business plan and they will want your business plan to include realistic and accurate numbers for the laundromat industry.
Although you may have the vision for your laundromat already formed in your mind, the individuals with the financial resources you need have requested your business plan and projections. This is particularly true if you're seeking a business loan, as lenders typically will require a comprehensive business plan as part of the application process. And if you're considering buying an existing laundromat, that's a whole different animal your plan should cater to.
So if you have to do it, this article is going to help you walk through the following:
With that in mind as the path forward, let’s dive in.
What Should be Included in a Laundromat Business Plan?
A laundromat business plan should persuasively articulate to investors and lenders hy customers would choose your laundromat services over others, why you or your team are the ideal individuals to oversee the laundromat, and how the financial forecasts are designed to ensure a profitable financial outcome for their investment. Below is a comprehensive structure of our complimentary laundromat business plan template.
Laundromat Business Plan Outline
I. Executive Summary
II. Market Analysis
III. Business Concept
IV. Marketing Strategy
V. Operations Plan
VI. Financial Plan
- Startup Costs and Use of Funds
- Annual Sales, Gross Profit and Net Profit
- Key Financial Ratios
- Financial Summary
- Income Statement Annual Summary
- Cash Flow Statement Annual Summary
- Balance Sheet Annual Summary
VII. Management Team
How to do Market Research for a Laundromat Business Plan
Essential to any laundromat business plan is conducting thorough market research. It is crucial to understand your position in the market and validate the demand for your specific laundromat concept, location, and pricing structure. More about our Laundromat Market Research approach here. The following instruments and strategies can help you conduct market research for your proposed laundromat.
What Will be the Cost to Advertise my Laundromat?
We recommend utilizing tools like Google Keyword Planner to help you determine which keywords to target when advertising your laundromat's services. This tool also provides an estimate of the cost per click for various keywords, as demonstrated below:
Are there Seasonal Trends for Laundromats?
We like to use Google Trends to identify how seasonal your laundromat concept might be. For example, you might find that search volume for “laundromats near me” in the United States is somewhat seasonal in nature. January and February are consistently the lowest search volume, with the summer tending to be the high point of the season
How Many Customers Do my Competitors Receive Each Month?
Generating foot traffic reports for your competitors can also be useful, providing a ballpark figure of the number of customers they typically serve at their laundromats. An example report below indicates monthly visits for a specific location:
Ultimately, the potential customer base for your laundromat is a critical determinant that will shape your financial projections. Hence, grasping the customer volume of your competitors can assist in estimating potential traffic to your laundromat.
How to Create Financial Projections for a Laundromat Business Plan
With thorough market research at your disposal, it's time to develop financial projections for your laundromat. One easy way to make projections is using our laundromat financial projection template which uses your estimated customer usage and traffic to form the foundation of your revenue projections. Each laundromat has its own capacity constraints, whether it's the number of available machines or the time it takes for customers to complete their laundry. To create accurate financial projections that demonstrate your ability to repay a loan or provide a return on investment to potential investors, you need to focus on the following key steps:
- Estimate startup costs for your restaurant
- Forecast revenue
- Project supplies & labor cost
- Estimate your operating expenses like rent and utilities
- Calculate how much investor or loan capital you will need to open
Our laundromat projection templates will guide you through this process, offering step-by-step assistance to format your projections in a standardized manner that meets the requirements of potential investors or lenders. Typically, startup laundromat projections should include an integrated income statement, balance sheet, and cash flow forecast.
By following these steps and utilizing our laundromat projection templates, you'll have a comprehensive financial outlook for your laundromat business. This will enable you to present a compelling case to potential investors and lenders, demonstrating the financial feasibility and profitability of your laundromat venture.
Example Laundromat Business Plan
Presented below is the structure of our laundromat business plan. To personalize it for your specific laundromat, you can access a Google Doc version of this laundromat business plan template here. We have also created a comprehensive video walkthrough that will guide you through the process of customizing the business plan to align with your unique laundromat concept.
Table of Contents
- Business Description
- Market Analysis
- SWOT Analysis
Marketing and Sales Strategy
- Branding and Identity
- Website, menu, and social media platforms
- Marketing materials and promotional items
- Marketing mix
- Organizational Structure
- Location and Facility
- SOP (Standard Operating Procedures)
- Health and safety protocols
- Startup Costs and Use of Funds
- Annual Sales, Gross Profit and Net Profit
- Key Financial Ratios
- Income Statement at a Glance
- Income Statement Annual Summary
- Cash Flow Statement Annual Summary
- Balance Sheet Annual Summary
1. Executive Summary
1.1. Company Overview
Briefly introduce the company's background, products or services, and target market.
- Example: Laundry Lounge is an upscale laundromat business located in Los Angeles, California, offering modern laundry facilities and premium laundry services. We cater to individuals and businesses seeking a unique and comfortable laundry experience.
Outlines the company's short-term and long-term goals.
- Example: Establish Laundry Lounge as the go-to destination for laundry services in Los Angeles. Within the first year, we aim to achieve high customer satisfaction and build a loyal customer base.
- Example: Long-term: Expand the Laundry Lounge brand to additional locations while maintaining our commitment to quality and customer service.
1.3. Mission Statement
Describes the company's purpose and core values.
- Example: Provide unparalleled convenience, quality, and relaxation to our customers through our state-of-the-art laundry facilities. We strive to create a welcoming environment where customers can enjoy their laundry experience while receiving top-notch laundry services.
1.4. Keys to Success
Highlights the factors that will contribute to the company's growth and success.
- Example: Advanced laundry equipment and technology, competitive pricing structure, personalized assistance, and variety of laundry options and services.
2. Company Description
2.1. Company History
Provides context on the company's background and founding story.
- Example: Laundry Lounge is owned and operated by Dame Smith, who brings a wealth of experience in the laundry industry. With a passion for providing exceptional laundry services,
2.2. Legal Structure
Describes the company's legal structure (e.g., sole proprietorship, partnership, LLC, corporation).
- Example: Laundry Lounge operates as a limited liability corporation (LLC),
2.3. Unique Selling Proposition
Emphasizes the company's competitive advantage or unique offerings.
- Example: Laundry Lounge sets itself apart by offering modern and comfortable facilities, advanced laundry technology, premium laundry services, customizable options, and a welcoming environment that enhances the overall laundry experience
2.4. Target Market
Defines the company's ideal customer base.
- Example: Laundry Lounge's ideal customer base consists of individuals and businesses in the vibrant city of Los Angeles who seek a superior and convenient laundry experience.
3. Market Analysis
3.1. Industry Overview
Presents a general overview of the industry, its trends, and growth potential.
- Example: The laundromat industry in Los Angeles is thriving, driven by the city's diverse population, high demand for laundry services, and the need for convenient and efficient laundry solutions.
3.2. Competitor Analysis
Evaluates the company's direct and indirect competitors, as well as their strengths and weaknesses.
- Example: Direct competitors: Local laundromats in the surrounding area
- Example: Indirect competitors: Laundry pickup and delivery services, On-demand laundry apps, home-based laundry options.
3.3. Target Market Analysis
Explores the company's target customers, their demographics, preferences, and pain points.
- Example: Caters to busy professionals and young urban dwellers in the bustling city of Los Angeles. Our target market includes young professionals, students, and individuals with a fast-paced lifestyle who value convenience, and time efficiency.
3.4. Market Opportunities
Identifies potential opportunities for the company to grow within the market.
- Example: Laundry Lounge can seize market opportunities by offering additional services such as dry cleaning and garment alterations, and developing strategic partnerships with local businesses to enhance customer convenience and satisfaction.
Key Point 1
- Example 1: Surveyed 500 residents in the area to determine their laundry habits and preferences, revealing a high demand for a modern, well-equipped laundromat with extended operating hours.
- Example 2: Analyze the performance of existing laundromats within a 5-mile radius, noting their average occupancy rates and customer satisfaction levels to identify potential gaps in the market.
- Example 3: Review customer reviews of existing laundromats in the area, identifying a lack of positive feedback regarding cleanliness and machine reliability, indicating an opportunity to provide a superior laundry experience.
- Example 4: Perform some keyword research to see volumes and trends in phrases like “laundromat near me” in your target area
4. Marketing and Sales Strategy
4.1. Product or Service Offerings:
Describes the company's products or services in detail.
- Example: Laundry Lounge offers a comprehensive range of laundry services, including self-service machines, drop-off services, premium detergent options, and express wash and fold services.
4.2. Pricing Strategy
Outlines the company's approach to pricing its products or services.
- Example: Laundry Lounge adopts a competitive pricing strategy, offering affordable rates for our various laundry services while maintaining a high standard of quality.
4.3. Sales Strategy
Explains how the company plans to generate sales and build
- Laundry Lounge will employ a multi-channel sales approach, leveraging online platforms for appointment scheduling and reservations, walk-in inquiries, and strategic partnerships with local businesses.
4.4. Distribution Channels
Describes the methods through which the company will deliver its products or services to customers.
- Example: Laundry Lounge primarily operates through our physical location, offering convenient access to our laundry facilities. Additionally, we will provide an efficient online platform for customers to schedule appointments and access information about our services.
4.5. Promotions and Advertising
Details the company's promotional efforts and advertising strategies.
- Example: Laundry Lounge will implement targeted marketing initiatives, including online advertising through social media and search engine platforms with our local community to increase brand visibility and attract new customers.
Key Point 2
- Example 1: Collect a list of individuals interested in a “founders discount” or something that gets them discounted laundry services for the first year if they join the list prior to launch
- Example 2: Collaborate with local hotels and Airbnb hosts to offer special laundry packages, targeting tourists and travelers in need of reliable and convenient laundry facilities.
- Example 3: Launch a referral program where existing customers receive a discount for referring friends and family, resulting in a steady stream of new customers and a sense of community among loyal patrons.
- Example 4: Organize a grand opening event offering free washes and dryer credits, attracting over 200 local residents and generating buzz through word-of-mouth referrals.
5. Operations and Management
5.1. Facility Location and Layout
Specify the company's physical business location and refer to the internal arrangement and organization of the space.
- Example: Laundry Lounge will secure a prime location in Los Angeles, strategically situated in a high-traffic area. Designed for customer convenience and comfort, with efficient machine placement and ample seating.
5.2. Equipment Maintenance and Quality Control:
Cover the company's actions to protect its assets, data, and personnel.
- Example: Laundry Lounge will prioritize equipment maintenance and quality control, conducting regular inspections and cleaning to ensure optimal machine performance and customer satisfaction.
Involves the company's process for hiring and training employees to meet its staffing needs.
- Example: Laundry Lounge will employ a dedicated team of experienced staff members trained in efficient laundry handling and providing exceptional customer service.
Key Point 3
- Example: Showcase the team's experience in implementing cutting-edge technology, such as mobile payment options and laundry tracking apps, to enhance customer convenience and streamline operations.
- Showcase the team's expertise in implementing customer-centric services, such as offering eco-friendly detergent options and providing a comfortable lounge area with complimentary Wi-Fi and refreshments.
- Lenders want to see that you or your team have some experience and know what you are doing/getting yourself into to increase the likelihood of success.
5.4. Inventory Management
Involves systematic control and organization of laundry machines, supplies, and resources to ensure efficient operations
- Example: Laundry Lounge will implement an efficient inventory management system to track machine availability, facilitate reservations, and ensure a smooth and seamless laundry experience for customers.
All of the unique Loundromat projections you see here were generated using ProjectionHub’s Laundromat Financial Projection Template. Use PH20BP to enjoy a 20% discount on the template.
6. Financial Plan
6.1. Startup Costs
Provide a detailed breakdown of the total startup costs requirements, and where you plan for those funds to come from. You will also want to break down how the startup costs will be used including working capital to cover losses before the business breaks even.
- Example: The total startup costs for Laundry Lounge are estimated at $300,000. The owner plans to contribute a personal cash injection of approximately $50,000 to $75,000. They are also securing a business loan of around $150,000 to $200,000 from a financial institution and have a small equity investor willing to contribute $50,000 to $75,000.
Watch how to create financial projections for your Laundromat
6.2. Revenue Projections
Provide an estimate of the company's future revenue based on market research and assumptions.
- Example: Laundry Lounge projects $168,000 in revenue in the first year, with steady growth over the first five years.
6.3. Expense Projections
Estimates the company's future expenses, including fixed and variable costs.
- Example: Laundry Lounge's expenses include direct expenses, marketing, general and administrative costs, salaries, interest and taxes, loan principal, and equipment costs.
6.4. Profit and Loss Statement
Summarizes the company's revenue, expenses, and net income over a specific period.
- Example: Laundry Lounge expects to achieve profitability within the first year of operation, with net income gradually increasing over the five-year period.
6.5. Cash Flow Projections
Outlines the company's projected cash inflows and outflows.
- Example: Cash flow projections for Laundry Lounge take into account seasonal fluctuations in sales and expenses to ensure smooth financial management.
6.6. Break-even Analysis
Determines the point at which the company's revenue equals its expenses.
- Example: Laundry Lounge anticipates reaching its break-even point within three months of operation, demonstrating a strong potential for early profitability.
Key Point 4
- Example 1: Research industry benchmarks and project a gross margin of 55%, which aligns with the profitability of successful laundromats in the area.
- Example 2: Account for seasonal variations by estimating a 20% increase in revenue during the summer months, when customers may require more frequent laundry services.
- Example 3: Analyze the impact of local economic trends, such as an increase in population and residential development, to project a 15% annual growth in revenue for the first three years of operation.
7.1. Supporting Documents
Includes any relevant documentation that supports the information presented in the business plan, such as resumes, financial projections, market research data, and permits or licenses.
7.2. Glossary of Term
Provides definitions for industry-specific terms used throughout the business plan to ensure reader comprehension.
7.3. References and Resources
Lists any sources or resources referenced during the preparation of the business plan, including industry reports, market research data, and relevant publications.
Key Point 5
- Example 1: Offer personal assets, such as a fully-owned commercial property, personal residence, free & clear vehicle as collateral for a loan, showcasing the owner's willingness to share in the risk and secure funding for the business.
Laundromat Business Plan FAQs
How can I choose the ideal location for my laundromat?
When selecting a location for your laundromat, consider factors such as proximity to residential areas or college campuses, ease of access and parking, visibility, competition in the area, and the demographic profile of the target market. A convenient and easily accessible location can attract more customers.
What types of equipment are necessary for a laundromat?
Essential equipment for a laundromat typically includes washers, dryers, folding tables, laundry carts, change machines, seating areas for customers, and vending machines for detergent and other laundry supplies.
Are there any specific permits or regulations I need to comply with to operate a laundromat?
Regulations and permits for operating a laundromat can vary depending on your location. Common requirements may include business licensing, compliance with health and safety regulations, water and waste management permits, and adherence to local zoning regulations. Research the specific requirements in your area.
How can I attract customers to my laundromat?
To attract customers to your laundromat, consider offering competitive pricing, providing a clean and well-maintained facility, offering additional amenities such as free Wi-Fi or comfortable seating areas, promoting convenient operating hours, and implementing loyalty programs or discounts for regular customers.