How To Start a Laundry Business in 11 Steps

Laundromats can be an extremely profitable business. In fact, the laundry industry in the United States is worth $6.6 billion, with close to 30,000 businesses in operation, each generating a cash flow between $15,000 and $300,000 per year. Globally, the laundry services market is expected to grow from nearly $104.2 billion in 2021 to around $145.8 billion by 2031.

This makes starting your own laundry business an excellent proposition.

Want more good news? A laundry business is relatively easy to start and manage, even if you don’t have much experience in the industry. But, like most startups, it can come with its fair share of competition and hiccups.

We’ve created this primer to help you understand what it takes to set up a laundry business and differentiate yours from its competition.

1. Decide on the services you want to offer
2. Choose a business name
3. Choose a brand identity
4. Choose a business structure
5. Create a business plan
6. Obtain the necessary permits and file any required paperwork
7. Find a location
8. Open a business bank account
9. Purchase equipment
10. Hire employees, if necessary
11. Market your business
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1. Decide on the services you want to offer

While becoming a business owner can be exhilarating, you’ll need to take the time to research and plan the kinds of services you want to offer.

You could choose to open a laundromat where customers come in and use your coin-operated washing machines to do their laundry, or you could offer full-service washing and ironing where customers drop off their laundry—with fold services included. Once it’s done, you can either partner with a delivery company to send the clean clothes back, or customers can pick them up.

Different laundry services include:

• Self-service and coin laundry. Customers insert coins to start the washers and dryers. This service is popular among students and young professionals who value convenience and affordability. The importance of machine quality and user experience cannot be overstated, as reliable machines and a clean, user-friendly environment attract repeat customers.
• Providing private new laundromat equipment to multi-tenant buildings. This service is ideal for property managers and building owners looking to add value to their rentals. By installing high-quality, efficient machines in apartment complexes, you can provide tenants with the convenience of on-site laundry facilities, often appealing to busy professionals and families.
• Commercial laundry. This service targets businesses that require regular washing of uniforms, linens, and other materials. Hotels, restaurants, and medical facilities are typical clients. Offering efficient and reliable service can set your business apart, ensuring customer satisfaction and long-term contracts.
• Additional service. Services such as dry cleaning and delivery can attract a wider customer base. Offering dry cleaner services appeals to professionals needing garment care, while delivery services offer convenience to busy individuals who prefer not to visit the laundromat.

You could also offer a combination of these services. Whatever business ideas you choose, you’ll need the appropriate equipment and a location for your business—all of which will be part of your overhead startup costs.

You may also want to learn about other types of businesses in the neighborhood, understand the demand and demographics of your target customers for your laundry services, and create a plan and budget accordingly.

2. Choose a business name

This may be one of the most important steps in starting a new business, so take some time to really think about your business name. Your new business’s name can be as clever or catchy as you’d like, but you may also want it to describe your business model and be easy to remember. You also may want to steer clear of complicated spelling, which could confuse consumers.

Upwork’s Project Catalog™ can help you choose a business name and connect you to slogan writers who can develop the perfect name for your service business.

Once you’ve shortlisted a few names that you like, you’ll want to check whether or not they’re available. Most states have directories you can review. They also typically have resources that list state naming requirements.

You’ll also want to do a trademark search, since using a business name that’s already trademarked could lead to legal troubles. The United States Patent and Trademark Office (USPTO) offers a Trademark Electronic Search System for searching these business names.

At the same time, consider whether you’ll be using a name other than your registered business name. If so, you’ll want to check doing business as (DBA) registrations first to see what’s available.

You should also check what web domains are available for your business name so it’s easy to find and access. Use a domain name search engine to check availability and register your business website.

3. Create a brand identity

Creating a strong brand identity helps attract and retain. Key elements to consider include:

Create a logo

Decide on brand colors

Include information on this, as this will inform much of the design and brand identity. (Could go before/after logo.)

Create a tagline

Building a cohesive brand identity with a well-chosen name, professional logo, and compelling tagline can significantly enhance your business’s visibility and appeal.

4. Choose a business structure

Once you have your business name, you’ll want to decide on your business structure. This is often required before you can register your business. It will affect everything from how your business operates to personal liability and taxes, so consider it carefully.

Four of the most common business entities to choose from are:

• Sole proprietorship
• Limited liability company (LLC)
• Partnership
• Corporation

The U.S. Small Business Administration (SBA) has a helpful page that explains the differences between business structures. We offer a breakdown below:

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Let’s dive a bit more into the legal implications of each option:

• Sole proprietorship. The simplest form of business structure, a sole proprietorship does not create a separate legal entity. The owner is personally responsible for all business debts and liabilities, meaning personal assets are at risk.
• Limited liability company (LLC). An LLC provides limited liability protection to its owners, meaning their personal assets are generally protected from business debts and claims. LLCs must comply with state-specific laws, including filing annual reports and paying required fees.
• Partnership. In a partnership, each partner is personally liable for the business’s debts and obligations. This can lead to joint and several liability, where each partner can be held responsible for any business debts. It’s a good idea to have a detailed partnership agreement to mitigate potential disputes and clarify roles.
• Corporation. A corporation is a separate legal entity from its owners, providing limited liability protection to shareholders. However, it comes with more stringent regulatory requirements, like adhering to corporate governance practices, filing annual reports, and maintaining detailed financial records. Corporations face double taxation, where profits are taxed at the corporate level and again when distributed as dividends to shareholders.

Choosing the right business structure is crucial for legal, financial, and operational success. Consider consulting with legal and financial advisors to determine the best structure for your specific needs and goals.

5. Create a business plan

After doing initial research and deciding which services you want to offer—plus coming up with a business name and choosing a business structure—it’s time to assemble a business plan for your laundry business. This is important because investors and lenders often require you to present a business plan if you need to get a bank loan or are looking for other ways to fund your business.

You’ll want to look further into your target market, shortlist your service area, and summarize your:

• Budget. Outline all startup and ongoing costs, including equipment, rent, utilities, and staffing.
• List of operations. Detail daily, weekly, and monthly tasks required to run your business.
• Specific short-term goals. Identify immediate milestones, such as securing a location or purchasing equipment.
• Long-term objectives. Define your vision for growth and expansion over the next 3-5 years.

You can also hire a market research analyst to research and design your business plan. Their market research and experience can help you understand the dos and don’ts of owning a laundry company. Or, if you’ve done that research yourself, you can get expert help drafting your business plan.

Conduct a market analysis

Conducting a market analysis is a big part of creating a business plan.

Start with a competitor analysis by:

• Identifying local competitors. List existing laundromats and laundry services in your area. Visit their locations to understand their strengths and weaknesses.
• Evaluating services and pricing. Compare the services offered and pricing structures of your competitors. Identify gaps in the market that your business could fill.
• Assessing customer reviews. Read online reviews to gauge customer satisfaction and identify common complaints. Use this information to improve your own service offering.

Next, follow up with customer surveys:

• Create a survey. Make a questionnaire to gather insights on customer preferences, needs, and pain points. Include questions about preferred services, pricing, and locations.
• Distribute the survey. Share the survey through social media, email, or in person at local community centers and businesses.
• Analyze the results. Use the feedback to tailor your services to meet customer demands and stand out from competitors.

Create financial projections

Another major part of crafting a business plan is creating a financial plan with accurate projections. Below is a step-by-step process for projecting your potential finances as a laundry business or laundromat owner:

1. Project revenue. Estimate your monthly and annual revenue based on your services, pricing, and expected customer volume. Consider seasonal variations and potential growth over time.
2. Project expenses. Detail your fixed and variable costs, including rent, utilities, supplies, and salaries. Include one-time startup costs and ongoing operational expenses.
3. Create a profit and loss (P&L) statement. Create a monthly and annual profit and loss statement to track income and expenses. This will help you understand your break-even point and profitability.
4. Forecast cash flow. Project your cash inflows and outflows to ensure you have enough liquidity to cover your expenses. This is crucial for managing your finances and planning for future investments.

Financial projections are essential for:

• Securing funding. Investors and lenders want to see realistic financial projections to gauge the potential return on their investment.
• Managing cash flow. Accurate projections help you anticipate cash flow needs and avoid liquidity issues.
• Tracking performance. Regularly comparing actual performance against projections allows you to make informed business decisions and adjust your strategy as needed.
• Planning for growth. Projections help you plan for future investments, such as new equipment or additional locations, by showing you when you can afford to expand.

Creating a detailed business plan with comprehensive market analysis and financial projections can significantly increase your chances of success and help you secure the necessary funding to launch and grow your laundry business.

Laundry business plan example

6. Obtain the necessary permits and file any required paperwork

It’s best practice to speak to a professional (like a legal consultant) to determine which local business licenses and permits you may need to apply for. These will vary depending on where you plan to operate your services.

For example, you may need to get a general business license in addition to specific permits, such as a health permit from the local health department, a water pollution control permit, and a sales tax permit (if you plan on selling products or additional services).

As for business insurance, you may need workers’ compensation if you have employees, general liability insurance, property insurance, and commercial auto insurance if you offer a laundry delivery service.

Also, consider looking into what paperwork you may need to file to run your service business. Check with your state’s secretary of state office to see what registration is needed and whether you can register online or will need to file paper documents.

Steps to obtain permits and licenses

Provide quick section intro.

General business license

Where to apply: Local city or county office

Estimated cost: $15 - $300+

Steps:

1. Fill out the application form available at your local city or county office.
2. Submit the completed form along with the required fee.
3. Await approval and issuance of the license.

Health permit

Where to apply: Local health department

Estimated cost: $100 - $300

Steps:

1. Contact the local health department to obtain the application form.
2. Complete the form with details about your business operations.
3. Schedule an inspection if required.
4. Pay the applicable fee and submit the form.
5. Await inspection and approval.

Water pollution control permit

Where to apply: Local environmental protection agency or water control board

Estimated cost: $0 - $5,000

Steps:

1. Obtain the application form from the local environmental agency.
2. Provide detailed information about your business’s water usage and disposal methods.
3. Submit the form with the required fee.
4. Await review and possible inspection.
5. Receive the permit upon approval.

Sales tax permit

Where to apply: State revenue department

Estimated cost: Typically free, but may vary by state

Steps:

1. Apply online through the state revenue department’s website or in person.
2. Provide necessary business information, including your EIN.
3. Submit the application and await approval.

Employer identification number (EIN)

Where to apply: Internal Revenue Service (IRS)

Estimated cost: Free

Steps:

1. Visit the IRS website to apply online, or complete Form SS-4.
2. Submit the form online for instant issuance, or mail it to the IRS.
3. Receive your EIN.

State business registration (if necessary)

Where to apply: State’s Secretary of State office

Estimated cost: Varies by state

Steps:

1. Check the Secretary of State’s website for registration requirements.
2. Complete the necessary forms (online or paper).
3. Pay the registration fee and submit the forms.
4. Await confirmation of your business registration.

7. Find a location

Although you can run a small business from the comfort of your own home (e.g., if you’re only doing drop-off and pickup services), depending on the volume and type of services you offer, you may need to find a commercial space.

Finding the right location is determined by several factors, including your service area, how big a space you’ll need, and how much equipment you have. Consider the following tips for finding the perfect space for your potential laundry business:

• Use commercial real estate websites. Platforms like LoopNet and Crexi can help you identify available commercial properties. These websites let you filter searches based on size, price, location, and specific needs, such as access to plumbing and water lines.
• Work with a realtor. A commercial real estate agent can provide valuable insights and access to properties that may not be listed online. They can also help negotiate lease terms and ensure you get the best deal possible.
• Consider high-traffic areas. Locations near busy streets, shopping centers, and residential areas can attract more customers. Visibility and accessibility are key factors for success.
• Analyze demographics. Look for areas with a high concentration of potential customers, such as students, young professionals, and families. Understanding the local population’s needs can help you tailor your services accordingly.

Also, research zoning laws and local regulations by doing the following:

• Check zoning requirements. Use resources like the Municode Library to understand the zoning laws in your area. Make sure your chosen location is zoned for commercial use and explicitly allows laundromat operations.
• Consult with local authorities. Reach out to your city or county planning department to confirm the zoning regulations and any restrictions that may apply to your business. This can prevent costly mistakes and ensure compliance with local laws.
• Understand building codes and permits. Familiarize yourself with the necessary building codes and permits required for a laundromat. This includes plumbing, electrical, and safety regulations. You may need to upgrade the infrastructure to meet these requirements, so factor this into your budget.
• Consider environmental regulations. Make sure your business complies with environmental regulations, such as water usage and waste disposal. Non-compliance can lead to fines and legal issues.

Other factors to consider are:

• Infrastructure needs. A laundry business requires specific infrastructural features such as robust plumbing and adequate water lines. Ensure the potential location either has these facilities or the capacity to add them.
• Budget considerations. Track all potential costs, including rent, utilities, laundry equipment, and any additional plumbing or electrical work. Be sure the location fits within your budget and allows for potential expansion.
• Competition analysis. Visit and assess nearby laundromats to understand the competition. Consider their services, pricing, and customer reviews. Choose a location that provides a competitive edge, such as offering unique services or better amenities.
• Accessibility and convenience. Ensure the location is easily accessible for your target customers. Consider factors such as parking availability, public transportation, and proximity to residential areas or businesses that may require regular laundry services.

Your location is one of the largest and most important investments when starting a new business. Before finalizing any contracts, visit a few different spaces and compare costs, utilities, and competition.

8. Open a business bank account

You’ll want to set up your business’s financial accounts to pay your bills, pay your workers, simplify taxes, and receive payments. To operate under a business name, you should also open a business bank account, which typically comes with associated fees.

Having separate accounts can also help you establish a business credit score, which can help you apply for business loans or attract investors if and when you require external funding to grow your laundry business.

Also, consider applying for a business credit card to distinguish your personal and business spending. You should speak with a financial consultant to help plan your expenses and the kind of bank account, credit card, and insurance to opt for.

Tips for managing business finances

Separate personal and business finances. Open a dedicated business bank account and use a business credit card to simplify expense tracking and build business credit. We offer more pro tips below:

• Maintain accurate financial records. Use accounting software like QuickBooks or FreshBooks to track all transactions, reconcile accounts monthly, and keep digital copies of receipts and invoices.
• Create and stick to a budget. Develop a detailed budget covering all expected income and expenses. Monitor your budget regularly and set aside funds for unexpected costs.
• Manage cash flow effectively. Forecast cash inflows and outflows to ensure liquidity. Invoice customers promptly and negotiate favorable payment terms with suppliers.
• Seek professional financial advice. Hire a bookkeeper or accountant for managing records and taxes. Consult a financial advisor for strategic planning and use financial management toolsto streamline operations.
• Establish a business credit score. Pay bills on time and monitor your credit report regularly. Maintain a balanced use of credit to avoid overleveraging.

These strategies will help you manage your laundry business’s finances effectively, positioning your business for stability and future growth.

9. Purchase equipment

The exact equipment and utilities you need will depend on the services you choose to provide. But some basics are likely to include:

• Laundry machines (washers and dryers). High-efficiency commercial washers and dryers are essential. Average prices range from $1,000 to $2,300 per machine. Regular maintenance (cleaning filters, checking hoses, etc.) can extend their lifespan.
• Coin or change machines. These machines allow customers to exchange bills for coins. Prices range from $1,770 to $2,140. Restock and maintain these machines regularly to avoid downtime.
• A credit card payment system. Modern laundromats benefit from accepting credit and debit cards. Systems typically have monthly subscriptions ranging between $0 and $99, plus processing fees. Do regular software updates and security checks.
• Laundry carts or baskets. These help customers transport their laundry. Expect to pay $15 to $80 per cart. Regular cleaning and maintenance can prevent damage and prolong use.
• Detergent vending machines. Vending machines for laundry supplies can cost between $1,000 and $8,300. Regular maintenance and inventory checks are essential to keep these running.  
• Tables for folding clothes. Sturdy folding tables cost about $40 to $130. Keep them clean and in good working condition to keep customers coming back.
• Security cameras. A comprehensive security system can cost between $4,000 and $10,000. Regular software updates are necessary for optimal performance.

Financing options for things like these include:

• Loans. Small business loans from banks or credit unions can help finance equipment purchases. Look for loans with favorable interest rates and repayment terms.
• Leasing. Leasing equipment can reduce initial costs. Many companies offer leasing options with maintenance packages included.
• Equipment financing. Specialized lenders provide financing for purchasing equipment. This can be a good option if you want to own the equipment but need to spread out the payments.

Investing in quality equipment and maintaining it is the best way to ensure smooth operations and customer satisfaction in your laundry business. Exploring financing options can also help manage costs and support your business’s growth.

10. Hire employees, if necessary

Your business plan should cover many financial decisions, including whether or not you need to hire employees. Depending on the kind of laundry services you provide, the hours you expect to operate, whether you offer delivery and pickup, and the size of your business, you may need some employees to help out.

This is a highly regulated area and a good place to get legal advice. Keep all these things in mind:

• Compensation structure. Will you pay your employees minimum wage or a higher salary? Will you pay them weekly, biweekly, or monthly?
• Tax filing and withholding. Laws govern how long employment tax records must be kept, including forms and accounting details for state taxes. You could also be responsible for other employment taxes and should speak with a financial consultant to understand those costs.
• Federal employment and labor law requirements. These include workplace posters, employment eligibility verification, your state’s new hire program, and the Occupational Safety and Health Administration (OSHA).
• Insurance. It’s a good idea (and, in most cases, necessary) to get certain types of insurance, such as unemployment, safety, disability, and workers’ compensation.

Typical roles that a laundry business may need include:

• Laundry attendant. This role operates the machines, sorts, folds, and packages laundry, maintains the laundry area, and assists customers.
• Maintenance technician. This role performs routine maintenance on equipment, troubleshoots and repairs equipment issues, maintains repair supplies, and ensures compliance with safety standards.
• Delivery driver. This role picks up and delivers laundry to customers, maintains the delivery record, handles customer payments, ensures timely and accurate deliveries, and maintains vehicle cleanliness and basic vehicle maintenance.
• Customer service representative. This role greets and assists customers in person and over the phone, handles customer complaints and resolves issues, processes payments, manages the cash register, and promotes services and special offers.

Recruiting involves advertising job openings on job boards, social media, and local community centers, using referrals from employees and customers, and partnering with local employment agencies.

For interviewing, prepare relevant questions, assess soft skills, conduct practical tests for technical roles, and check references.

Onboarding should include a comprehensive orientation on company policies and culture, hands-on training, pairing new hires with experienced staff for mentorship, and regular check-ins to address concerns and provide feedback.

Comply with the Fair Labor Standards Act (FLSA) for minimum wage and overtime pay, the Family and Medical Leave Act (FMLA) for job-protected leave, and the Americans with Disabilities Act (ADA) to prevent discrimination.

Ensure workers’ rights to a safe workplace as per OSHA, provide equal employment opportunities, and offer fair compensation and benefits. Mandatory training includes OSHA training for workplace safety, anti-discrimination and harassment training, job-specific training for equipment use, and customer service training to improve client interactions and service quality.

Check out Upwork’s Project Catalog for HR consulting for expert advice on the recruitment process, worker compensation and benefits, management, organization development, etc.

11. Market your business

Knowing the right ways to market your business is essential for building your brand image and reputation among your target audience. Your ability to sell your services can translate directly into more customers and greater revenue, making it easier to grow and differentiate your laundry business over time.

One of the best ways to market your business is to promote it around places your target audience frequently visits. For example, if most of your customers are college students, you may want to hang posters, distribute business cards, or pass out flyers at popular coffee shops, local libraries, apartment buildings, or college bars.

Having a prominent online presence is also important. You can boost your marketing by creating a user-friendly website, updating it regularly, and leveraging search engine optimization (SEO) tactics by including relevant or relatable keywords in your content to boost your ranking on search pages.

Digital marketing strategies include:

• Social media marketing. Use platforms like Facebook, Instagram, and X (formerly Twitter) to engage with your audience. Post regular updates, share customer testimonials, and run targeted ads to reach potential customers. Use high-quality images and engaging captions to draw attention. Hosting giveaways or contests can also boost engagement and expand your reach.
• Email marketing. Collect email addresses from your customers and send them regular newsletters. Include special promotions, updates about new services, and tips for maintaining laundry. Personalized emails with exclusive offers can encourage repeat business. Tools like Mailchimp or Constant Contact can help you manage and automate your email campaigns.
• Search engine optimization (SEO). Optimize your website content with relevant keywords that potential customers might use to search for laundry services. Regularly update your blog with helpful articles about laundry tips, industry news, or company updates. Use meta tags, alt text for images, and backlinks to improve your search engine rankings.

Local marketing tactics include:

• Sponsoring community events. Sponsor local events like sports games, festivals, or charity runs to increase brand visibility. Set up a booth to offer promotional materials and engage with the community. Sponsorships can also create positive associations with your brand.
• Offering special discounts. Provide special discounts or promotions to attract new customers. Offer discounts for students, senior citizens, or new customers. You could also run seasonal promotions or loyalty programs to encourage repeat business.
• Collaborating with local businesses. Partner with nearby businesses to cross-promote services. For instance, you could collaborate with local cafes to offer joint discounts or create a referral program with apartment complexes to offer their tenants a discount on laundry services.
• Hosting events or workshops. Organize events or workshops that can attract potential customers. For example, you could host a workshop on eco-friendly laundry practices or a community event with free laundry services for a day.

Focusing on customer service and experience can help you build a solid reputation. One way to do this is by responding to all customer reviews on your website, social media pages, and referral websites like Yelp and Google Business Profile, regardless of whether the reviews are positive or negative.

Positive reviews can encourage others to try out your services, while negative reviews can give you something to improve on. Either way, responding to reviews shows your customer base that you value their opinions.

Pro tip: Approach negative reviews carefully. You don’t want to antagonize your customers or sound defensive. Acknowledge the constructive feedback and show the customer that you appreciate their patronage.

You can also offer services like free Wi-Fi, install televisions, and have well-stocked coffee and vending machines to provide entertainment and boost the customer experience as they wait for their laundry.

By employing a mix of digital and local marketing strategies and enhancing customer experience, you can effectively market your laundry business, attract new customers, and build a loyal customer base.

You’re one step closer to starting a business of your own

Following our primer can help you understand the path toward getting your laundry business off to a successful start. But we can’t cover everything specific to each business and region, so do your research.

With the help of expert independent professionals from Upwork, you can further simplify the process of setting up and running your own laundry business. We can connect you with several professionals from a variety of fields to help you with any project at every step of the journey, from market research and building your website to client retention and expansion.

Finding an expert with the right skills for the job is simple, quick, and cost-effective. Sign up for an account with Upwork today!

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Upwork does not provide tax or legal advice. Each reader and company should take the time needed to adequately analyze the laws that apply to their business endeavor.

Each state’s laws are different, so be sure to consult a local attorney so they can explain your state’s rules and regulations to you before making a decision.