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Industry guide · Consumer & capital

Laundromat Business Plan: Costs, Licensing & How to Open One (2026)

A complete guide to opening a coin or card laundromat, from equipment selection and wastewater permits to turns-per-day economics and SBA 504 financing.

$6.8B
US laundromat industry revenue (2025)
~29,500
laundromats operating in the US (2025)
$200,000-$500,000
typical new laundromat startup cost
20%-35%
average net profit margin
3-5 turns/day
industry machine utilization benchmark
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The short answer: Opening a laundromat costs $200,000 to $500,000 for a mid-size new build with new equipment, and as little as $50,000 to $150,000 to acquire and retool an existing location. Equipment, buildout, and utility hookups (plumbing, electrical, gas) dominate the budget. Before you open, you need a general business license, a certificate of occupancy, building permits, and, in most jurisdictions, a wastewater discharge permit covering your high-volume drain load. Profit margins run 20% to 35% on a well-operated store; utilities consume 20% to 30% of revenue. The SBA 504 and SBA 7(a) programs are the most common financing vehicles, and any lender will require your business plan to show a debt service coverage ratio (DSCR) of at least 1.25 on a stabilized basis.

Is a laundromat profitable?

Yes, when location, machine count, and utility costs are properly managed. Industry data from KMF Business Advisors (2026) and WaveMAX Laundry (2024, 50-store sample) put average monthly gross revenue at approximately $12,000 to $39,000 depending on store size, with net profit margins of 20% to 35%. A small 20-washer store can generate $160,000 or more in annual revenue; a mid-size 40-washer attended store with wash-dry-fold services can reach $400,000 or more. The key drivers are machine turns per day (3 turns is the industry average; dense urban locations often achieve 4 to 6) and utility cost discipline, since water, gas, and electricity together consume 20% to 30% of revenue and increase sharply with older, inefficient equipment.

The honest risk is that laundromats are capital-intensive and illiquid. A well-positioned new-build may take 12 to 24 months to reach stabilized cash flow, and deferred equipment maintenance is the most common margin eroder. Unattended stores keep labor costs near zero, while attended stores with wash-dry-fold services allocate 15% to 25% of revenue to payroll but generate meaningfully higher per-customer revenue. The 5-year survival rate for laundromats is reported at approximately 95%, above the average for small businesses, reflecting the non-discretionary, repeat-use nature of the service. A well-documented business plan with conservative ramp assumptions is essential before approaching SBA or conventional lenders.

How much does it cost to start a laundromat?

Laundromat startup costs vary significantly based on whether you are building new, acquiring an existing store, or buying a distressed location and retooling. The table below reflects full project costs for a mid-size new build, covering lease buildout or construction, equipment, utility hookups, and payment systems. Use these as planning ranges; your actual cost will depend on your market, lease terms, equipment age (new versus reconditioned), and machine count.

Line itemTypical range
Lease deposit and initial rent (first/last/security)$5,000-$30,000
Facility buildout and renovation (walls, flooring, lighting, HVAC, dryer venting)$50,000-$200,000
Commercial washers (20-60 units at $5,000-$15,000 per unit)$100,000-$450,000
Commercial dryers (20-60 units at $6,000-$10,000 per unit)$60,000-$300,000
Plumbing, water supply, and drain hookups$20,000-$100,000
Electrical upgrades and panel (208V/240V circuits)$15,000-$50,000
Gas line installation or extension$10,000-$40,000
Card payment kiosks and management software$20,000-$80,000
Working capital reserve (3-6 months operating costs)$20,000-$75,000
All-in laundromat (new build, mid-size)$200,000-$500,000

The biggest swing factor is whether you are building new or buying an existing store. A new mid-size build with 40 machines in a strip-center lease typically runs $250,000 to $500,000 all-in. A distressed acquisition, buying a rundown store and retooling equipment over time, can be entered for $50,000 to $150,000 but carries deferred-maintenance risk and may require significant capital in years two and three. At the high end, new construction of a freestanding laundromat with owned real estate can reach $1 million to $3 million once land is included. Reconditioned equipment can reduce your machine line items by 30% to 50%, though warranty coverage is limited. Budget a 10% to 15% contingency on any new-build project for permit delays and utility upgrade surprises.

Step by step

How to start a laundromat

1

Choose your entry path and target market

Decide between a new build, an acquisition of an operating store, or a distressed retool. New builds allow full format control but require more capital and a longer ramp. Acquisitions transfer an existing customer base and documented cash flow, making SBA underwriting easier. Identify your target customer density: laundromats draw 87% of customers from within one mile, so population density and renter concentration in your trade area are the primary demand signals.

2

Select and negotiate your location

A strip-center or inline retail space of 1,500 to 3,500 square feet is the most common laundromat footprint. Confirm that the space has adequate water supply capacity, drain capacity for high-volume discharge, natural gas service (if using gas dryers), and sufficient electrical panel capacity for 40 or more 208V/240V circuits. Negotiate a lease with a term of at least 10 years to protect your equipment investment, and verify zoning permits a commercial laundry use.

3

Apply for building and utility permits

Before any buildout or equipment installation begins, pull the required permits from your local building department: a building permit covering the renovation scope, individual electrical, plumbing, and mechanical permits for equipment hookups, and a gas permit for dryer connections. Utility permits and capacity confirmations from your water and sewer utility are a separate step. Budget 2 to 8 weeks for permit issuance plus inspection time.

4

Obtain your wastewater discharge permit

Laundromats discharge high volumes of water containing detergents, lint, and suspended solids. Most local sewer utilities require a wastewater discharge permit or industrial pretreatment permit before you can connect. Applications go to your local water or sewer authority and typically take 4 to 8 weeks. Some jurisdictions also require a lint trap or lint interceptor as a condition of the permit. Apply early, this is frequently the longest regulatory step outside of the building permit itself.

5

Register your business and obtain a general business license

Form your LLC or corporation with your state Secretary of State, obtain a federal EIN, and apply for a general business license from your city or county ($25 to $300 per year). Confirm sales tax treatment: most states exempt coin-operated laundry from sales tax, but a handful, including Ohio, do not. If you plan to offer drop-off or wash-dry-fold services, you may need a separate seller's permit for any taxable ancillary services.

6

Complete buildout, install equipment, and pass ADA inspection

Coordinate your general contractor, plumber, electrician, and equipment distributor so that utility hookup rough-ins and slab work precede equipment delivery. Ensure ADA compliance throughout: at least one washer and one dryer must be front-loading and positioned at ADA-compliant heights, aisle widths must accommodate wheelchairs (36 inches minimum), and entrances and, if provided, restrooms must meet ADA standards. ADA compliance is verified as part of the certificate of occupancy inspection.

7

Pass final inspections and receive your certificate of occupancy

Before opening, your facility must pass fire, building, plumbing, electrical, and mechanical inspections. The certificate of occupancy is your legal authorization to operate the space as a commercial laundry. Any equipment change or major renovation after opening may require a new or amended CO in some jurisdictions.

8

Set pricing, launch payment systems, and open

Configure your card-based payment system or coin mechanism with wash and dry prices that reflect your utility costs and local competition. Card and app-based payment systems improve revenue tracking, reduce theft, and allow remote price adjustments. Consider offering a loyalty program or a regular-customer discount for wash-dry-fold services to drive repeat visits and increase average revenue per customer. Track turns per day by machine from day one as your primary operational KPI.

Regulation

Licences, permits & regulations

General Business License

A general business license is required from your city or county before opening. The application typically requires your business entity registration (LLC or corporation), a description of your business activity, and payment of an annual fee ranging from $25 to $300 depending on the municipality. Many cities also require zoning clearance confirming the address is approved for a commercial laundry use before issuing the license. In some states, you will also register separately with the state revenue department if your services are subject to sales tax. Issued by: city or county business licensing office.

Certificate of Occupancy (CO)

A certificate of occupancy confirms that your facility meets all building, fire, plumbing, electrical, and mechanical codes for its intended use as a commercial laundry. The CO process includes inspections of all finished utility work, fire suppression and egress, and ADA accessibility compliance. A new or amended CO is required when you occupy a previously vacant space, change the use of an existing space, or complete a renovation that alters plumbing or electrical systems. Issued by: local building or inspections department, typically 2 to 6 weeks after all final inspections pass.

Wastewater Discharge Permit

Laundromats generate high volumes of wastewater containing detergents, surfactants, lint, and elevated temperature. Most local sewer authorities require a wastewater discharge permit or industrial pretreatment permit before connection or operation. The permit establishes acceptable discharge limits and may require installation of a lint interceptor or pH adjustment system. Some jurisdictions also require periodic discharge monitoring reports. Application is made to your local water/sewer utility or municipal environmental authority. Timeline: 4 to 8 weeks; fee: $100 to $1,000 per year depending on discharge volume and jurisdiction.

Building, Electrical, Plumbing, and Mechanical Permits

Any structural renovation, electrical panel upgrade, new plumbing connections, gas line work, or mechanical installation (HVAC, dryer venting) requires separate permits from your local building department before work begins. For a typical laundromat buildout, this means at minimum: a building permit for the renovation scope, an electrical permit for new circuits and panel work (commercial washers and dryers run on 208V/240V), a plumbing permit for water supply and drain connections, and a mechanical permit for gas dryer hookups and dryer exhaust venting. Permits are pulled by your licensed contractor and inspections are required at rough-in and final completion stages. Issued by: local building department.

Regulatory requirements vary meaningfully by state and city. California requires compliance with California Air Resources Board (CARB) dryer venting and lint trap standards. Ohio imposes a 5.75% sales tax on coin-operated laundry services where most states do not. Some municipalities require a separate sign permit for any exterior signage, and a handful of jurisdictions have local ordinances specific to laundry businesses covering hours of operation, exterior lighting, and noise from dryer exhaust fans. Always verify requirements with your local building department, sewer utility, and city clerk before signing a lease or committing capital.

What your laundromat business plan must contain

A laundromat business plan prepared for SBA or investor review needs to address five things lenders scrutinize closely. First, a detailed startup cost budget with individual line items sourced to contractor estimates, equipment quotes, and lease terms, not round-number guesses. Second, a location and demand analysis covering population density within a one-mile radius, renter concentration, and proximity to competing laundromats. Third, a 5-year monthly proforma showing revenue built bottom-up from machine count, turns per day, and average vend price, with EBITDA and DSCR calculated month by month. SBA underwriters require a DSCR of at least 1.25 on a stabilized basis; most lenders want to see that reached by year two at the latest. Fourth, an operations section covering attended versus unattended model, staffing plan, and utility cost management strategy (new high-efficiency equipment typically cuts utility cost from 25-30% of revenue down to 18-22%). Fifth, a sources-and-uses table showing exactly how much equity the owner is contributing and how much is being financed, with lender proceeds clearly allocated to eligible uses under SBA guidelines. SBA 504 proceeds must be applied to fixed assets (real estate or equipment); SBA 7(a) proceeds can cover working capital and soft costs as well.

Funding a laundromat

The SBA 504 and SBA 7(a) loan programs are the two primary financing vehicles for laundromat startups and acquisitions. The SBA 504 is the preferred structure when the project includes real estate ownership or a large equipment package: a conventional lender covers 50% of total project cost, a Certified Development Company (CDC) provides up to 35% at a fixed below-market rate (up to $5 million), and the borrower contributes 15% equity (rising to 20% for a new business or special-purpose property). Loan terms run 10, 20, or 25 years with no balloon payment. The SBA 7(a) program (also up to $5 million) is more commonly used for laundromat acquisitions and working capital-intensive startups since proceeds can cover goodwill, lease deposits, and soft costs that the 504 cannot. Both programs require a credit score of 680 or above, a completed business plan, personal financial statements, and 2 to 3 years of personal (and, for existing operators, business) tax returns. Equipment-only financing is available from specialty lenders and laundry equipment distributors for operators leasing rather than owning their space, typically at 5 to 7 year terms on commercial washer and dryer packages.

FAQ

Frequently asked questions

How much does it cost to open a laundromat?

A new mid-size laundromat with 30 to 50 machines in a leased strip-center space typically costs $200,000 to $500,000 all-in, covering buildout, equipment, utility hookups, payment systems, and working capital. A distressed acquisition and retool can start as low as $50,000 to $150,000. A new-construction freestanding laundromat with owned real estate can exceed $1 million to $3 million. Equipment is the largest single line item, commercial washers run $5,000 to $15,000 each and dryers $6,000 to $10,000 each when purchased new.

What permits do you need to open a laundromat?

At minimum you need a general business license from your city or county, a certificate of occupancy confirming the space meets code for commercial laundry use, and building, electrical, plumbing, and mechanical permits for the installation work. Most jurisdictions also require a wastewater discharge permit from your local sewer utility before you can connect high-volume laundry drainage. ADA compliance is verified as part of the certificate of occupancy inspection.

How many turns per day does a profitable laundromat need?

Industry benchmarks put 3 turns per day as the average, with low-density suburban stores running 2 to 3 and dense urban locations achieving 4 to 6. Each turn represents one complete wash cycle per machine per day. Revenue is calculated as machine count multiplied by vend price multiplied by turns per day multiplied by operating days per month. Improving turns from 3 to 4 across 40 machines at a $3.50 vend price adds roughly $4,200 per month in gross revenue.

How profitable is a laundromat compared to other small businesses?

Laundromats generate net profit margins of 20% to 35%, which is strong relative to most retail and food-service businesses. The five-year survival rate is approximately 95%, well above the small business average, reflecting repeat, non-discretionary demand. Utility costs (water, gas, electricity) are the primary margin risk, consuming 20% to 30% of revenue. High-efficiency, newer equipment can push utility costs to 18% to 22% of revenue, substantially improving margins.

Can I get an SBA loan to open a laundromat?

Yes. Both the SBA 504 and SBA 7(a) programs are actively used for laundromat financing. The SBA 504 is preferred for projects involving real estate purchase or large equipment packages, covering up to 35% of project cost at a fixed rate with a 15% to 20% borrower equity requirement. The SBA 7(a) is more flexible for acquisitions and working capital. Both programs require a credit score of 680 or above, a formal business plan, and a project demonstrating a debt service coverage ratio of at least 1.25.

Tayyab Shabbir, Founder of Avvale

Reviewed by Tayyab Shabbir, Founder of AVVALE. Our team has built 200+ business plans and financial models for funded ventures across regulated, capital-intensive and main-street industries, from SBA and bank loans to investor and visa applications.

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Sources: Kentley Insights, "Laundromat Industry Report 2025: $6.8B Market Size" (kentleyinsights.com, 2025); Press Cleaners / The Laundry Bag, "Laundromat Statistics in 2025: A Deep Dive for Investors" (presscleaners.com, 2025); KMF Business Advisors, "Laundromat Business Profitability in 2026: 12 Financial Truths Every Investor Must Know" (kmfbusinessadvisors.com, March 2026); WaveMAX Laundry, "Laundromat Investment Guide 2026" (wavemaxlaundry.com, 2026, 50-store 2024 performance data); Clarify Capital, "How Much Does It Cost to Open a Laundromat in 2026" (clarifycapital.com, 2026); Nav, "How Much Does It Cost to Open a Laundromat in 2026" (nav.com, 2026); NorthOne, "How Much Does it Cost to Open a Laundromat in 2025" (northone.com, 2025); StartPermit, "How to Start a Laundromat Business: Licenses, Permits, and What It Actually Costs (2026 Guide)" (startpermit.com, 2026); ThinkSBA, "SBA Loan Coin Laundry: Financing Your Laundromat" (thinksba.com); Eastern Funding, "SBA 504 Loans/Commercial Real Estate for Laundromats" (easternfunding.com); Cents, "Into the Fold 2025" industry report (cited via presscleaners.com). All cost and market figures are sourced from the above and represent 2024-2026 data; individual project costs will vary by market, equipment selection, and local utility rates.

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