The Coin Laundry Insider (2013)

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The CoinLaundry Insider

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1

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. Coin laundries

are unique small businesses in that they have

no inventory or receivables.

The coin laundry industry is approximately

70 years old and is primarily composed of

individual owner/operators. No significant

franchises are in operation at this time. Currently,

there are about 35,000 coin laundries in the

United States, generating nearly $5 billion in

gross revenue annually. Clean clothes, like food

and shelter, are considered a necessity of life

and coin laundries provide a basic health service

for millions of Americans. While laundries are

found in virtually all neighborhoods across the

country, stores seem to perform exceptionally

well in predominately renter-occupied, densely

populated areas. These areas are increasing in

number with each year throughout the country.

The intense population growth, coupled with

the expansion of rental housing, has increased

the customer base for coin laundries.

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 predict

continued prosperity.

Before investing in the industry, successful

laundry owners take the time to adequately

research each phase of ownership. This guide

provides great insight on the first steps of

evaluation. For a more comprehensive view,

we invite you to join the industry’s only not-for-

profit trade association, the Coin Laundry

Association. As a member, you will have full

access to archived articles, best practices and

other members who can share what’s worked for

them – and what hasn’t. Once you’ve reviewed

the full list of benefits on page 20, you can join

online at www.coinlaundry.org or by calling

800-570-5629.

Brian Wallace

The CoinLaundryIndustry

coinlaundry.org • (800) 570-56292

Renters vs. Owners

Clearly, you need to look for a decent

percentage of apartment dwellers and home

renters in your market area. Often, these

folks may not have access to washers and

dryers in their households, and may not have

adequate laundry facilities in their buildings.

Renters will always be prime self-service

laundry customers.

Population Density(Number of Households)

The denser the local population, the better

the market for a coin laundry. Dense, urban

areas tend to feature a lot of the character-

istics consistent with coin laundry success

and profitability.

Persons Per Household(Number of Children Per Family)

This is a no-brainer. More families mean

more laundry. By the same token, families

with two or more children create lots and lots

of dirty clothes, thus making them first-class

coin laundry customers. In addition, this

particular stat can help you determine the

types of machines you have.

Average Income

As a rule, coin laundry customers tend to have

household incomes in the low-to-moderate

range, which is consistent with the fact that

they are also typically renters who don’t own

washers and dryers.

However, don’t completely ignore the

rest of your market. Several laundries in

middle-to upper-middle-class areas can do

a large amount of wash-dry-fold business.

Population Age

Typically, the younger the population, the

more coin laundry customers you’re likely

to attract.

Ethnic Mix

The design of your store, the décor, the

equipment mix and the language used in your

coin laundry (as well as your promotional

literature) will be greatly influenced by the

ethnic background of the local population.

Knowing the ethnicity of the majority of

your customers also can influence seemingly

minor things, such as the kind of soap you

carry or the brand of soda and snacks in your

vending machines. These are little things

than can go a long way toward customer

satisfaction and loyalty.

Employment Profile

What is the ratio of blue-collar workers to

white-collar workers in the market area?

After all, blue-collar workers tend to be good

coin laundry customers. On the other hand,

knowing that your marketplace has a strong

percentage of white-collar workers can help

you plan to possibly offer additional amenities,

such as wash-dry-fold and drycleaning –

services that may not typically appeal to

blue-collar workers, but would no doubt be

of value to many white-collar types.

When studying the demographics for your marketplace, you need to look for some basic characteristicsamong the population there that are common to solid coin laundry customer prospects. Here’s a basiclist of characteristics to look for in your area to determine whether or not it is a good market for a self-service laundry:

Market Demographics: Winning the Numbers Game

DemographicReportsBefore you buy or build, a

demographic report is a must.

Laundry Research Members

receive 5 FREE demographic

reports.

................................................Join at coinlaundry.org/membership

Demographics


Traffic Patterns/Frequency

When evaluating your laundry site, the volume of traffic

that goes past your store (or prospective store) is paramount.

The more traffic the better. Also, consider the posted speed

limits; difficulty of ingress and egress; visibility of the store

from the road and time-of-day traffic patterns.

Gender(Heads of Households)

Although the long-standing pattern has shifted somewhat

dramatically in recent years, there are still more women

patronizing coin laundries than men. Furthermore, families

with female heads of households have proven to be excellent

coin laundry customers.

Clearly, the stronger locations for coin laundries will have

populations that boast many of the characteristics just

mentioned, especially in combination. For example, you may find

a market area with a large percentage of apartment dwellers

with children, whose income is in the low-to-moderate range.

But be careful, as with most things, there are exceptions

to the rule. And there are certainly exceptions to the types

of “good coin laundry neighborhoods” just described. For

example, areas that feature colleges and universities are

typically great coin laundry markets. The same can be said

for “resort” areas, mobile and trailer home parks, and

campground areas.

Any coin laundry veteran will tell you that the final decision

is based on “a feel” for the area and the particular customers

in that neighborhood. But they will also explain the

importance of reviewing all of the information available

to you.

Once you’ve been in the business long enough, you will

get that “feeling,” too. However, never stray too far from

the basics: study demographic data, talk with other coin

laundry owners in your area – and communicate with your

customers as much as possible.

Those customers are the lifeblood of your laundry business.

Demographics

STATS THAT DRIVEYOUR BUSINESSCLA’S INDUSTRY SURVEY

�Average Rent per Square Foot

�Vend Prices

�Drop-off per Pound Charge

�Gross Revenue Spent on Utilities

Answers to these topics are included in the 2012 Industry Survey.The survey is FREE for CLA members.

Not a member? Order a survey for $99 at coinlaundry.org today.

Get Unbiased ResearchWhat is the average monthly rent? Per

square foot? As a percentage of gross

revenue? Laundry Research

Members can find the answers to

these questions and more in the annual

Industry Survey.

..............................................................Join at coinlaundry.org/membership

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Types of Leases

There are a few different types of leases. Gross leases include

all of your costs, such as taxes and common area mainte-

nance. However, the majority of today’s coin laundry leases

are net leases or triple net leases.

That latter simply means that you’re going to pay a base

rent, plus common area maintenance, insurance, real estate

taxes and all of the other associated costs. In many cases,

this can include things such as resurfacing the parking lot.

So be clear where you stand on this issue.

Rent Escalations and Other Costs

The next thing you want to do is develop a clear under

standing of how your rent is going to escalate. There are

several ways this can occur. One way is through a simple

fixed amount formula. For example, this year you would

pay $1,000. Next year, you would pay $1,500. And the year

after that you would pay $2,000. And so it would go, down

the line. In this scenario, the rent is written out, and you

know what the amount will be year after year.

Another way landlords can escalate your rent is on a

percentage basis. They’ll write down an amount to start with

and jump it annually based on an agreed-upon percentage.

However, be wary of the dangers of compounding with

this type of rent escalation.

Other Key Clauses

Exclusivity and ancillary services. One of the things you need

to negotiate is an “exclusive” in that center to do your type

of business, as well as the ability to offer the ancillary services

you’d like to provide. You’ll want to have those OK’ed ahead

of time in writing so that the landlord can’t come back to

you and say, “I just gave you permission to run a laundromat,

not drop-off drycleaning and vending.” That must be clearly

defined in your lease.

Losing a major tenant. Another thing to protect yourself

from in a shopping center is if, for any reason, the major

draw of that center leaves. In such cases, you should have

the right to get out of the lease or at least be entitled to

some sort of a rent abatement or credit.

Visibility. Perhaps you have a nice location in your center.

Then, a few years down the road, the landlord erects a

building right in front of your coin laundry – and now no

one can see you from the street. You should be able to

protect yourself from that, either with rent abatement or

the ability to get out of the lease completely.

First right of refusal. If your laundry becomes successful,

you may want to expand. Therefore, you should try to get

the first right of refusal on the space on either side of you.

This way, if that space ever does become vacant, at least the

landlord has to come to you first and offer you the space.

Roof maintenance. Historically, the business owner has

been responsible for the interior of the building, and the

landlord has been responsible for the exterior of the building,

including the roof. However, in the case of coin laundries,

where there is a lot of roof penetration from dryer and

plumbing vents, there can be an issue as to who is responsible

for the roof. This needs to be clarified in your lease.

When it comes right down to what your actual lease is

going to look like, you may or may not get these concessions

from your landlord. But at least you know ahead of time

what you’re getting yourself into.

The main thing to focus on when negotiating your lease is the time factor. You’ve got to give yourselfenough time on the lease to make it worth your while. If you’re going in with a new store, it’s highly recom-mend that you get 15 to 20 years as an absolute bare minimum – with 25 years being the ideal situation.Of course, this duration can take different forms. For instance, it can be an initial lease term of five years,

with five-year options thereafter, totaling 25 years. That’s all negotiable with the landlord.The next most important thing is the assignability of your lease. If you’ve got a lease and you can’t assign

it to somebody else when you sell, then it’s going to affect the value of the store.

Leasing Your Laundry: Tips, Traps and Strategies

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Proceeding before checking the zoning restrictionsThere have been many would-be laundromat

owners who have found what they thought

were great locations and just plowed ahead,

renting the buildings or buying the parcels of

land without first checking the zoning. Before

you pick up that pen to sign the lease – and

certainly before you dig that first shovel of

dirt – understand the zoning regulations.

Failing to secure the required permitsFor you business to operate, a Certificate of

Occupancy may be required by your city or

town. So be sure to check. The permits that

you and your contractor initially file with your

local authorities are the documents which,

when final inspections are completed, will

facilitate your store’s being granted the

Certificate of Occupancy. Make sure you

receive and maintain copies of these permits.

Failing to create a realistic budgetWe’ve all heard it before: The single biggest

reason that any new business fails in any

industry is due to a lack of capital. You must

not only have the capital to go into the coin

laundry business correctly and not over-

leverage yourself, but you also need some

startup capital. After all, you’re not going to

be at positive cash flow on Day One.

Also, it’s crucial to have a contingency

budget, especially if you are building your

first store. For first-timers, experts suggest

planning for a budget overrun as high as 20

percent or more.

Overlooking demolition expenses. If you’re building your new store in an existing

space, demolition is a key issue to consider.

Just the cost of dumpsters and trash removal

can get expensive rather quickly.

And if it’s an older space, you also may

encounter hazardous waste, such as asbestos

tile or even fluorescent lighting. You have to

be careful to lawfully dispose of such items.

Neglecting to create a written work scheduleOnce construction starts, timing becomes

imperative. Obviously, different contractors

representing several different trades are

expected to complete their phases of the

project at certain times, and if one runs behind

schedule, it can throw off everyone else.

Of course, you will almost assuredly have

some delays. As with your budget, be sure to

build a little “padding” into your construction

schedule. If not, you may run into other costly

issues, such as coming up with overtime pay

for your contractors to get your project back

on schedule to hit your required deadlines.

Underestimating the importance of the distributorChoosing a distributor is possibly the most

important decision you can make – after

picking your location. The distributor’s

expertise and advice will save you a great

deal of time and effort. Most likely, no one

knows the local marketplace, as well as the

contacts you will need, better than a good,

local distributor.

When building your dream laundry business, there are a n mber of ways in which you can sabotageyour aspirations. To keep you from doing so, here are some common miscues of which to steer clear.

Pitfalls to Avoid When Building Your Laundry

Outside PerspectiveWant to talk over an idea with

someone in the business – or get

input on how to fix one that has

gone wrong? Laundry

Research Members are

invited to contact the association’s

on-staff professionals. One-to-one

phone consultation is just one of

the many benefits of membership.

....................................................Learn more atcoinlaundry.org/membership

Avoid Mistakes


The bottom line is that the distributor wants you to be

successful so that you return to buy more equipment for

your present and perhaps future stores.

Underestimating the importance of the architect Laws vary from place to place, but in some areas, only a

licensed architect can design and affix his seal to the plans

for your self-service laundry. Your distributor can probably

recommend an architect who has previously designed coin

laundries and would understand the particular requirements

of laying out your specific store.

Some distributors also have the ability to create suitable plans.

Underestimating the importance of hiring proper contractorsAgain, your distributor can recommend contractors who

specialize in this area and who most likely could take you

to a number of stores they have already completed. Be sure

to talk to these former clients and ask them how the

construction process went for them. You should get a

decent idea as to their proficiency.

In addition, perhaps ask the contractor to bring in the

crew that generally works with him – plumber, electrician,

carpenter and so on – or you might negotiate to do some

of the work yourself or subcontract part of the work to

people you know.

Always negotiate contracts that itemize every detail of

the work to be done – how it will proceed, when it will be

completed, and for how much money. Any deviation from

the contract should be by mutual consent; if not, you – the

employer – have a strong case that should hold up in court,

if necessary. Insist on contracts before the work begins.

Unless you’ve built a laundry before, it’s not advisable to

try to serve as your own general contractor. However, if you

choose to go this route, at least hire someone who specializes

in this area of construction to act as your consultant. Perhaps

he can also do part of the work or at least outline the steps

you need to take.

Failing to secure builders’ risk insuranceEvery contractor you hire should be insured. But be sure

that you have builders’ risk insurance to safeguard you

during this period as well. Once your store is open, you

can convert it over to your regular insurance policy.

Opening a coin laundry with inadequate supplies ofwater, gas or electricityYour store’s utilities are the lifeblood of your business in

many ways. After all, water, gas and electricity are, in essence,

what you are truly providing your laundry customers.

Therefore, whether you are building a store from the ground

up or converting an existing building into a self-service

laundry, you’ll need to know whether you can get enough

of each of these utilities to meet your business’ needs.

Typically, a letter to the utility companies that supply

these essentials will be answered within four to six weeks

and will provide you with information on availability,

procedure and estimated costs.

With gas, the key is having the right pressure – and not

having to spend a fortune going all the way to the street

to pick up that utility.

Skimping on the water heater and water meterNo doubt, the trend in the industry is toward larger washers.

Thus, it logically follows that larger water heaters and water

Avoid Mistakes

10

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Avoid Mistakes

meters are also in order. However, some laundry operators

don’t see it that way.

Undersized water heaters have a tendency to break down

sooner than they should. What’s more, customers expecting

hot water may quickly become former customers.

The situation is the same with water meters. Some laundry

owners who don’t want to pay the price for an appropriately

sized water meter will try to get by with a smaller one and

not have enough pressure to run their machines.

Installing too much equipment for the available interior spaceDon’t give your customers a closed-in feeling. Aisles should

not be so narrow that two customers using machines on

opposing walls bump into each other as they load or unload

their respective machines.

It’s not a contest to see who can fill every square inch of

their store with equipment. You have to have a workflow.

Instead of taking a car through an assembly line, you’re

taking a customer through an assembly line. That means

getting a parking spot, getting a debit card or coins, getting

a washer, getting a dryer, getting folding space and leaving

in an efficient, comfortable manner.

Your goal is to create a flow that feels natural. After all,

your customers are coming to your laundry to work, not

shop. Your business is unlike any other retail enterprise.

Creating bulkheads that are too narrowAlthough you design the store mainly with the customer

in mind, don’t forget about the person who must maintain

your washers.

When designing a store, it’s always in the back of your

mind that you’re making dollars per square foot, so you want

to put as much money-making equipment into the available

square footage as possible without compromising the

workflow. However, in doing so, some laundry owners end

up compromising the size of their bulkheads.

On paper, a three-foot bulkhead looks like it would be

easy to get into to repair a machine. But the plumbing comes

up through there, and pretty soon three feet doesn’t seem

like all that much.

Leaving insufficient space behind the dryers The same line of thinking that leads to narrow bulkheads

often causes insufficient space behind the dryers as well.

Therefore, always be sure that your layout calls for an area of

16 to 36 inches from the rear of the dryers to the wall behind

them. Creating easy access for you and your repairman is

good planning.

Providing insufficient makeup air for your dryers. You

must provide sufficient makeup air for your dryers. Consult

your dryer manufacturer’s installation or operating manual

for proper specifications. Providing too little makeup air will

reduce the efficiency of the dryer and cause other problems.

Overlooking the importance of adequate floor drainageFloor drains are something that a lot of people skimp on,

and it’s something you need to have. You’re in a place that

invariably is going to have water on the floor – sometimes

an inch or two – and you’ve got to have somewhere for it

to go. In addition, your floor drains should be on a separate

line than those that hook into all of the washers.

Clearly, there are many more mistakes, mishaps and miscues

when it comes to opening a self-service laundry. These are

just a few of the most common – and most damaging.

coinlaundry.org • (800) 570-562914 coinlaundry.org • (800) 570-5629

Generally, if the demographics point to larger families or a

large percentage of ethnic groups, it is wise to lean toward

the larger machines as the bulk of the laundromat.

By contrast, if there are a lot of retired people and seniors

in the area, you should generally purchase more smaller

washers. Or if your self-service laundry is located close to

a college campus or to where there are a lot of singles,

again perhaps lean toward smaller frontload machines.

As for dryers, many store owners and distributors alike

suggest figuring out what is needed based on the washer

poundage. Basically, determine the total poundage of your

washers and then back that into the dryers. If you’re using

30-pound dryers, only figure about 25 to 27 pounds per

dryer, because customers always tend to overload the washers

and under load the dryers.

Several experts prefer slightly higher than a one-to-one

ratio on dryers to washers.

As a rule of thumb when determining the mix, include

at least three sizes of machines, which give customers three

options and three price points.

But before purchasing a store full of washers and dryers

based strictly on what the demographic numbers tell you,

take a look around your marketplace. Spend some time

at your competitors’ locations, particularly on Saturdays.

See what machines are getting the heaviest usage – and

which are being ignored by the customers. After spending

a couple of Saturday afternoons this way, you can pretty

accurately determine what equipment people in your

market typically like to use.

Avoid These MistakesSeveral factors go into determining your store’s equipment

mix. Therefore, there are several mistakes that can be made

during this exercise. One of the biggest is letting the

pocketbook rule, rather than taking a long-term view of

the business.

If you have the wrong equipment or the wrong equipment

mix in a store, you’re never going to reach your potential

fast enough. A lot of people see dollar signs at the beginning

and don’t buy the 50-pounders and the 80-pounders,

thinking they can get by with 18-, 25- and 35-pounders.

But if the area really requires the larger machines, these

operators aren’t going to get all of the business they could

be getting.

When figuring out your store’s equipment mix, there are two main sources – demographics and thecompeting laundries in your marketplace.

The Right ResourcesGetting the right mix also means getting the right information. Laundry Research Members have access to archived

articles from the laundry industry’s leading publication, PlanetLaundry. Cover stories, store profiles, business management

and legal topics are just a few of the topics available online – day and night.

....................................................................................................................................................................................................Learn more at coinlaundry.org/membership

Striking a Balance: Formulating an Equipment Mix

Equipment Mix

planetlaundry.com 15

You can only get so many turns per day. So, whether you’re going to

get three or four or five turns on a smaller washer at about $2 per wash,

wouldn’t you rather get that same number of turns on a larger capacity

machine that will take up almost the same amount of floor space yet

bring $5 or more a turn? If your store is underequipped for your

specific market, you are surely leaving money on the table.

The same thinking explains the success of todays stack dryers. They

enable the operator to earn two dryer incomes from the same space

that used to handle only one unit.

Obviously, the key is to get your customers in and out of your store

in a timely fashion. And to do that, you must have enough equipment

to do the job for them – when they want to wash.

Another mistake related to equipment mix can be made when

determining how those large and small washers are to be dispersed

throughout the store.

For example, many experts suggest spreading the machines equally

throughout the store so that not all of the largest washers are in one

area. They could be divided at least into two areas – each with a full

complement of machines. Too many operators put all of the largest in

one row, all of the mid-size in another and all of the smaller frontloaders

in another. That way, people who want to use a large and a smaller

machine have to run back and forth.

Several laundry owners locate the biggest washers upfront. For some

stores, organizing the mix with the bigger washers in front makes sense

for two reasons: (1) it’s a better impulse-purchase location, and (2) it

rewards the customers who spend the most money in the store.

Another mistake is loading a store with larger washers, but continuing

to put in only one size of dryers.

Despite the bigger-is-better mantra being spouted by many industry

experts, self-service laundry owners need to exercise good judgment.

There is a balancing act to laying out a store. It is possible to get carried

away with too many machines and end up putting more money into

the laundry than it demands – or can do. That could be the difference

between failure and success.

CLA’s Laundry Advertising Solution

www.planetlaundry.com

The Coin LaundryAssociation has manygreat resources to helpyou achieve success.

If you have the wrong equipment orthe wrong equipment mix in a store,you’re never going to reach yourpotential fast enough.

Laundry Web Networkwww.findalaundry.org

DIY Directwww.coinlaundry.org/membership/direct-marketing-for-your-laundry/

Planet Laundrywww.planetlaundry.com

Coin Laundry Association Insurance(800) 346-8424www.coinlaundryinsurance.com

Coin Laundry Association(630)-953-7920www.coinlaundry.org

16

What is the distributor’s reputation, personally and

professionally?

What is their record of success? Do they have any

customers who have built more than one store with them?

Or any who have purchased from them more than once?

If you have a distributor who sells once and then never

again, there could be a reason for that.

What is the distributor’s financial reputation?

How long have they represented their main product line?

Do they offer site selection and evaluation?

Do they back sales with parts and service?

Do they offer reasonable, open financing?

How long has the company been in business?

Do they provide a list of references?

Does the distributor have a sufficient stock of equipment?

Do they have a reputation of developing friendships

with customers, not just business relationships?

Are their prices competitive?

Do they invite you to visit their facilities and meet the

personnel? In addition to these specific areas, the distributor

you choose should be able to offer you:

• Experienced installation crews.

• Superior knowledge of the industry and the products they represent.

• Demographic knowledge and interpretation.

• Provide some cash flow analysis.

• Provide store layout and design services.

• Excellent service that is prompt and professional.

• Give service schools in-house to train you on the product.Manufacturers’ reps work alongside distributor sales people and service technicians to teach store owners trouble-shooting and maintenance techniques.

• A well-stocked parts department with quick shipping. This is one area that sets certain distributors apart from their competition.

There are some questions to be sure to ask when looking for an equipment distributor, which can beanswered through research and company references. They are:

Finding One That’s Right for You

Distributors

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Strong PartnershipsSomeone who fully understands your business is a direct asset. An insurance agent

who knows how to best protect your facility, employees and your personal liability

is one of those assets. For more than 25 years, CLA Insurance has had focused on

laundries, providing CLA members with thorough coverage at competitive rates. In

2011 CLA Insurance introduced lines of insurance to cover all your insurance needs

including business, employer and individual coverage.

..............................................................................................................................Learn more at www.coinlaundryinsurance.com coinlaundry.org

(800) 570-5629

planetlaundry.com 17

Online ToolsFor ideas on how to design a business plan for the laundry industry, Laundry Research Members have access to

an online sample – along with a sample pro forma. The Educational Library section of the site also contains sample print

ads, a sample employee manual and Spanish translations of common laundry terms.

............................................................................................................................................................................................Learn more at coinlaundry.org/membership

Examine your specific needs and be professional enough

to recommend the right products to achieve your goals.

Recommend the right manufacturer for your needs.

Check in on new construction regularly, making sure that

all stages of the buildout are going as planned.

Check installation parameters. For example, does the

equipment fit through the door? Do you have the right

flooring to support the equipment? Do you have the right

utilities? Does the equipment fit into the space properly?

Check delivery times from the manufacturer.

Answer all of your questions about the product you are

purchasing – why they recommend them and how they

compare with the competition.

Once you have placed an order with a distributor that

you have chosen, now is when they should really start to

go to work for you. A list of their responsibilities includes:

• Ordering the proper equipment from the manufacturerwith the right voltage and specifications.

• Coordinating your sale with a finance company, if you require financing.

• Tracking the order with the manufacturer.

• Accepting the product either at their warehouse or at your job site; meeting the truck and taking the product off the truck and rigging it into the store and setting it in place.

• If contracted, they will bring the proper utilities to themachine, bolt it down if necessary and perform a startup test.

• Training you on the use of the product and any preventivemaintenance procedures that you might have to perform.In addition, they should provide you with a maintenanceschedule. What’s more, every good distributor is goingto train you in not just the product but help you hire and train your attendants, as well as run service schools.

• Providing service when needed, including warranty service as negotiated when you purchased the product. Thedifference between a good store and a great store is in thedetails. And a good distributor can provide those detailsto take a store from four turns per day to five turns per day.

When it comes to building a new store or replacingolder equipment, the distributor’s role is mainly that ofbusiness advisor, to recommend what kind of equipmentyou need and why.

Great Expectations.Let’s examine what a distributor needs to do for you before a purchase is even made:

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When it comes to building a new store orreplacing older equipment, the distributor’srole is mainly that of business advisor, torecommend what kind of equipment you needand why.

What business are you getting into? Yes, you wantto open a self-service laundry. But you need to educateyour potential investor about today’s stores, as well asthe industry in general. Most banks and other financiallenders likely aren’t as familiar with the coin laundrybusiness as you have become. Photographs of modernself-service laundries and some general industry figuresshould bring everyone up to speed.

Who and where are your prospective customers?Basically, this is the demographic analysis of your market-place. In this part of the plan, it’s important to be extremelyspecific about where you gleaned this information. Anotherkey to this section of the plan is to not overreach how largeof a market area you think you’re going to be able to serve.

Why is your marketplace underserved?Who areyour competitors? Who’s already out there doing thesame kind of business you’re doing? Go into your potentialcompetitors’ stores, check visibility from the street, checkparking, check the age and condition of equipment,check pricing. And take notes.

This exercise, along with your demographic analysis,should give you the tools to take your qualitative informationand transform it into quantitative numbers.

Why will you be successful in filling the void in yourmarketplace? In writing your business plan, you shouldtry to figure out – and convey – why your self-service laundrybusiness will be unique. What makes you different? Whyare people going to come to you – other than the factthat you just happen to be the new kid in town?

How are you going to tell your customers about yourlaundry business?What’s your marketing strategy? Howmuch do you plan to spend on advertising? What types ofpromotions do you have in mind? Your lender will certainlyhave a number of questions regarding how you plan toget the news out about your business to the people youhave targeted as customers. Be prepared for these inquiries.

How are you going to operate your business? Thissection deals with your specific coin laundry facility. Do

you own the property or will you be a tenant? How bigis your store going to be? What equipment do you needto put into this store?

What are you going to do about personnel? If yourstore is going to be fully or semi-attended, what’s yourplan? How much are you going to pay them? How manyhours are they going to work?

What revenues, expenses and net profits are youexpecting during your first few years of operation?This is the financial pro forma, and it’s obviously a crucialsection of your plan.

Revenues can be tough to determine. However, youshould already know what kind of equipment your storewill feature from answering Question No. 6. And from yourcompetitive market analysis (Question No. 3), you alsohave a handle on what your vend pricing needs to be.

Hopefully, because of the demographic analysis (QuestionNo. 2), you have figured out approximately what share of themarket you’re going to be able to capture. From this, youought to be able to project approximately how many poundsof clothing your store will be washing and drying per week.

Therefore, from all of this information, you should bein the ballpark in regard to your revenue.

Operating expenses are a bit easier to figure out, andyour distributor can help you by determining yourapproximate utility costs.

How much capital will you require? How much moneyare you putting up? How much do you expect to borrow?Also, what are you going to do with that capital? How muchmoney is going toward equipment? How much is goingtoward outfitting the interior of the building?

Who are you?What’s your background? What’s yourbusiness experience? What can you say about yourselfthat would indicate you will be successful?

No matter how good the rest of your business plan looks,banks will dwell heavily on your personal and businesscredit history. They want to see whether or not you’ve paidyour bills on time and what kind of personal net worthyou have.


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The properly written business plan answers 10 crucial questions:

A Blueprint for Success

Business Plan

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Coin Laundry Association:(630)-953-7920www.coinlaundry.org

Coin Laundry AssociationInsurance:(800) 346-8424www.coinlaundryinsurance.com

Planet Laundry:www.planetlaundry.com

Laundry Web Network:www.findalaundry.org

Coin Laundry Association Contact Information

Social NetworkingFollow us, download us... take us with you! You will never have to be without your CLA updates, business management news,

marketing trends, expert advice... and industry connections. Here’s how and where to find us:

Twitter: CoinLaundryAssn YouTube: CoinLaundryAssn iTunes: PlanetLaundry Facebook: Coin Laundry Association

Did you know that the best time to be become a member of the Coin

Laundry Association (CLA) is when you are researching the industry?

That’s because CLA will save you countless hours of gathering

data, statistics, and relevant information about getting started in

the coin laundry industry.

Membership with CLA opens the door to resources of information

by providing you with insight into all aspects of the business. The

new Laundry Researcher Membership was created to provide

potential investors like YOU the tools they need to adequately research

each phase of store ownership.

Highlights of the Laundry ResearcherMembership include:

� Demographic Reports: 5 FREE� Consultations: One-on-one with the CEO and the

VP, and a Grand Opening Consultation� Laundry Library of books: Today’s Coin Laundry Road to Financial Independence How to Find, Evaluate and Buy a Laundromat Secrets to Buying & Owning a Laundromat The Gold Book – A CLA exclusive Exclusive CLA Insurance access Plus much more!!

Your Success in the Laundry Industry Begins Here!

Join the Coin Laundry Association as

Laundry Researcher today, visit www.coinlaundry.org/ member-ship/join-now/laundry-researcher/ or call the Member Services Team

at (800) 570-5629 toget started now.

Membershipin Coin Laundry Association

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Documents

The Coin Laundry Insider (2013)