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There are some businesses that are staples of just about every community. Laundromats are one of those businesses. No matter what city you live in, you’re bound to find one and its bound to be raking in the dough.
Because of its significance in communities, you might be wondering how to open a laundromat. Well in this blog post we’ll explore the ins and out of starting a laundromat business, so you can begin your journey with confidence.
Let’s get started!
Table of contents
1. Develop a business plan
Like starting any business, starting a laundromat begins with coming up with a plan of action. Unfortunately, many business owners make the mistake of thinking that business plans are optional.
Here are few reasons why business plans are not optional:
- Productivity— Business plans are roadmaps that clearly define your marketing and financial goals, keeping you and your team on track to meet them.
- Company value— When you’re ready for a valuation of your business, business experts will look at your business plan to fully determine its value.
- Communication— Everyone involved should understand the business objectives. Business plans create alignment among founding partners.
- Competition— Developing a business plan gives you comprehensive knowledge about your competitors; who they are, what they offer, and most importantly, how you can do it better.
- Funding – A business plan is actually required if you ever need funding for your business. It’s the first thing a traditional lender will want to see in order to determine your eligibility.
Another major perk of writing a business plan before opening a laundromat is that it forces you to ask and answer serious questions like…
Why do I want to start a laundromat business?
Who’s my demographic?
How much do laundromats make on average?
So, if you’re serious about learning how to open a laundromat business, trust us when we say a business plan is absolutely vital!
2. Form an LLC or Corporation
The second part of how to start a laundromat business is to form a Limited Liability Company (LLC) or Corporation.
By forming an LLC or Corporation, you protect your personal assets and safeguard yourself from being personally liable for debts incurred.
What’s the difference between the two?
A corporation is a legal entity created separately from those who own and operate it. A corporation’s debts and taxes are separate from its owners, thereby offering the greatest personal liability protection of all business structures. The two most common types of corporations are S and C corporations.
An LLC blends the aspects of corporations, partnerships and sole proprietorships into a simple and flexible business entity. LLCs protect the owners and operators from personal liability similar to a corporation, and they possess the “pass-through” tax benefits of a partnership.
You don’t get these protections if you operate your laundromat business as a sole proprietor. Basically, if you’re a sole proprietor and you’re targeted by a lawsuit (and lawyers love targeting small business owners), you risk losing EVERYTHING—your savings, home, retirement and other personal property.
In addition to asset and liability protection, forming an LLC or corporation comes with a ton of tax benefits.
This is because LLCs and corporations are entitled by law to many tax deductions not afforded to individuals. Additionally, the self-employment tax savings alone can amount to thousands of dollars saved every year.
Ask any business expert how to open a laundromat and they’ll tell you that the most important step is forming an LLC or Corporation.
3. Get funding and open business bank account
Opening a laundromat business is one thing but if you want to keep your laundromat open, you’re going to need funding for your business.
The same is true for every business but especially for a laundromat business. This is because can cost you anywhere between $100,000 and $200,000 to buy an existing business and even up to $1 million or more.
So, where do you get funding? Traditional banks are an option but it’s best to avoid them. For starters, they don’t like working with new businesses and have very high interest rates. Your best bet is to go with an alternative like with a Small Business Association loan.
In addition to getting business funding, you’re going to want to open a business bank account. Doing this not only makes it easier to separate your personal taxes from your business taxes, it further separates you from your business. This provides an added layer of asset and liability protection.
4. Find a prime location and come up with a marketing strategy
Understanding how to start a laundromat business is pointless if you don’t pick a good location. For this reason, you must know your target demographic. If you’re targeting college students, find a location in or near a college town. Other great locations include densely populated cities.
One you settle on a good location, now it’s time to develop a marketing strategy that will draw in your target demographic. Take time to fine-tune your messaging, brand voice and even brand colors.
Brand identities are as diverse as the people who create them but here are a few tips that every laundromat owner should know and adhere to:
- Maintain a clean environment
- Have your machines well-maintained
- Ensure there’s good lighting and comfortable seating
- Invest in WIFI
Now that you know how to own a laundromat, it’s time to get started in your lucrative career. If you’re nervous about getting started let the experts here at Inc Authority help!
We’ll not only help you form your LLC or corporation, we’ll work with you to develop and write a business plan and help you get you maximum funding for your business. And that’s just the tip of the iceberg!
With our 30+ years of experience and 5-star Trustpilot rating, you can trust us when we say your business is in good hands!
Incorporating is the most powerful thing you can do to legitimize your business. And at IncAuthority.com, our setup LLC services are 100% free. Always. So, don’t wait. Form your free LLC today and enjoy the protection due to you and your business under the law.