Guides
Where a laundromat actually makes money: margins and break-even
A laundromat's margin comes from machine turns per day against fixed rent, water and gas, so break-even is a count of cycles, not a revenue target.
What to take away
- A laundromat's margin is set by turns per machine per day, not by the price of a single wash. A washer that runs six cycles a day carries the same rent as one that runs two.
- Break-even is a cycle count. Divide monthly fixed cost by contribution per cycle, and you get the number of washes you must sell before rent, water, gas and card fees are covered.
- Water, sewer and gas scale with every cycle, so they belong in the contribution figure, not in overhead. A dryer that runs long eats margin a washer just earned.
- Vend price rises stick only where the local market tolerates them. Test one bank of machines, not the whole floor.
- Membership and card-system fees change the arithmetic. A 3 percent card fee on a $4 wash is 12 cents the customer never sees.
This article covers laundromat operations in general. Utility rates, discharge rules, gas and electrical work, licensing and lease terms vary by state and municipality. Confirm specifics with your utility, your local permitting authority and a licensed technician.
The margin is in the turns
A laundromat sells machine time. Rent, insurance and the lease are fixed whether the store is full or empty, so the number that moves margin is how many paid cycles each machine completes.
Take a 40-machine store open 14 hours. At four turns a day the floor runs about 4,800 cycles a month. At six turns it runs 7,200. Rent, insurance and the card system's base fee stay the same at both counts.
Dryers hold up the second half of the price. In most US markets, dry time sells at about 25 cents for five to eight minutes, or roughly $1.00 to $2.50 for a full dry.
Machine choice sets the ceiling on turns. Speed Queen, Dexter Laundry, Continental Girbau, Huebsch and Maytag Commercial build front-load washers from 20 to 60 pounds that cut dry time and water use against a top-load.
A new 40-pound front-load typically lists between about $4,000 and $7,000. A commercial top-load starts near $1,000 to $1,800.
So the operator's real job is raising turns: faster dry times, working machines, and a floor that does not send customers to the store down the street.
Payment hardware reports those turns. Card Concepts Inc. (CCI), KioSoft, WashCard and Setomatic's SpyderWash sell card and app systems. Typical pricing is a monthly base fee of about $25 to $75 per store plus 2.5 to 6 percent per transaction.
Break-even, worked in variables
Break-even is fixed cost divided by contribution per cycle. Contribution is the vend price minus the variable cost of that cycle.
Break-even in four numbers
- $9,000monthly fixed cost F
- $1.80contribution per cycle C
- 5,000break-even cycles per month
- 167break-even cycles per day
- Monthly fixed cost (F): rent, insurance, card-system base fee, laundry attendant wages, license fees.
- Vend price per wash (P)what the customer pays, before card fees.
- Variable cost per cycle (V)water, sewer, gas for the dryer, chemicals, the card processor's percentage.
- Contribution per cycle (C) = P minus V.
- Break-even cycles = F ÷ C.
A store with F of $9,000 and C of $1.80 needs 5,000 cycles a month, about 167 a day. On a $3.00 wash with $1.20 of variable cost, contribution is $1.80.
At 5,000 cycles the store collects $15,000, pays $6,000 in variable cost and $9,000 in fixed cost, and nets nothing.
Everything above break-even drops to profit. At 5,500 cycles the store keeps $900 on $16,500 of revenue, a 5 percent net margin. At 6,500 cycles it keeps $2,700 on $19,500, about 14 percent. At 8,000 cycles it keeps $5,400 on $24,000, or 22 percent.
Turned the other way, 4,200 cycles a month loses $1,440. Net margins for self-service laundries land in a wide band, typically about 10 to 30 percent of revenue. Rent per square foot, utility rates and turns per day set where a store falls inside it.
Where the money actually leaks
Water and sewer are the costs new owners underestimate. A top-load washer uses roughly two gallons per pound of laundry; a commercial front-load uses about one. Sewer is often billed on the same meter reading, so both lines rise together.
In most US markets water runs about $3 to $8 per 1,000 gallons, and sewer is billed at 80 to 120 percent of the water charge. A 5,000-cycle month at 40 gallons a cycle moves 200,000 gallons, and the combined bill typically lands between about $1,000 and $3,500.
Gas for dryers is the second leak. A dryer that runs 45 minutes instead of 30 burns half again as much gas for the same load, about 15 cents more at $1 per therm. The customer pays the same vend price either way.
Card-system fees are the third. A processor taking 3 percent on a $4 wash takes 12 cents. On 5,000 cycles a month that is $600, and it never appears on the vend price sign.
Hard water raises chemical use and machine wear. Water softener salt typically costs $8 to $14 per 40-pound bag at retail, and it is a line item most new owners leave out of the budget.
ENERGY STAR lists commercial clothes washers that meet federal water and energy limits. It is the cheapest way to compare a replacement machine against the one already on your floor.
Pricing rows that fit a laundromat
Where it fits
- Flat rate per machine cycle, typically $3 to $8 for a front-load wash
- Standard wash and dry, where the cycle rarely surprises
- Flat rate per pound, attended, typically $1.50 to $2.50 with a 10- to 15-pound minimum
- Winter bedding loads, comforters, bulky items
- Good, better, best wash tiers, often $1 apart
- Stores with two machine sizes on the floor
- Membership or prepaid card, often 10 to 15 percent below the single-cycle price
- A neighborhood customer with a recurring need through winter bedding season
- Drop-off wash, dry and fold
- Customers who value time over price
- Commercial accounts billed weekly
- Restaurants, salons and small gyms with towels to turn
What it hides
- Flat rate per machine cycle, typically $3 to $8 for a front-load wash
- One overloaded machine cycle costs more than it earns
- Flat rate per pound, attended, typically $1.50 to $2.50 with a 10- to 15-pound minimum
- Weight is estimated, not weighed, and disputes follow
- Good, better, best wash tiers, often $1 apart
- The middle tier carries the customers who would have paid for the top
- Membership or prepaid card, often 10 to 15 percent below the single-cycle price
- Unused balances feel like a bad deal and stall renewals
- Drop-off wash, dry and fold
- Labor per pound, which is the whole cost
- Commercial accounts billed weekly
- Payment terms stretch to 30 days while the water bill does not
Winter bedding loads change the floor
From November through March, bulky items arrive: comforters, mattress pads, sleeping bags. They need the large front-load machines and a longer dry.
An owner who prices a comforter at the standard cycle price loses money on gas and time. Bulky-item pricing commonly runs $18 to $35 per comforter, or a per-pound rate of $1.50 to $2.50 with a minimum.
The Coin Laundry Association publishes benchmark data on turns and utilities that owners use to compare stores, and its PlanetLaundry publication covers regional vend-price surveys.
What to check before you spend
Track three numbers weekly: turns per machine, contribution per cycle, and service-call turnaround on down machines. A washer out of service for a week is a week of lost turns, and parts availability drives that timeline more than labor does.
The U.S. Bureau of Labor Statistics: Drycleaning and Laundry Services: Industry at a Glance publishes establishment, employment, occupation and earnings data for the sector. It gives context for the industry, not for your store's lease or utility bill.
The Internal Revenue Service: What kind of records should I keep? sets out what a recordkeeping system has to show, and what documents support purchases, sales, payroll and assets. Ask a CPA how it applies to your books.
The Federal Trade Commission: Advertising FAQs: A Guide for Small Business covers the rules for claims and endorsements. "Lowest price in town" needs support behind it.
Common questions
How do I calculate a laundromat's break-even point?
Add up monthly fixed cost: rent, insurance, base card fee, attendant wages and license fees. Subtract variable cost per cycle from vend price to get contribution. Divide fixed cost by contribution and you have the cycles you must sell each month.
What is a typical profit margin for a laundromat?
There is no single figure. Published ranges for self-service laundries run from roughly 10 to 30 percent of revenue, and one store can sit well below that. Lease, utility rates, machine age and turns per day move the number, so build your own from your lease and your last three utility bills.
Which costs do new owners underestimate most?
Water and sewer, gas for dryers, and card-processing fees. All three scale with every cycle, so they belong in the contribution figure. A dryer running 45 minutes instead of 30 burns half again as much gas for the same vend price.
Does raising vend prices always improve margin?
No. It improves margin only if turns hold. Test a rise on one bank of machines, watch the cycle count for a month, and expand only if the count holds. A price rise that drops turns can lower total contribution.
What does one wash and dry visit cost the owner?
In most markets, variable cost runs about $0.60 to $1.30 a visit. Water and sewer take $0.20 to $0.60, dryer gas $0.25 to $0.45, chemicals $0.05 to $0.15, and a card processor's cut near $0.12 on a $4 wash.
