Coin Laundry as a Business - Inputs Please?

coolhead on 28/05/2023 - 13:19
Last edited 28/05/2023 - 13:37 by 1 other user

hey peps - anyone here has any experience with coin laundry as a business? I am considering buying one in eastern suburbs of Melbourne. heaps of them up for sale and varying prices.

Interested to know what things I need to consider and how do the numbers stack up. Will talk to a few agents over the next few weeks.

  • Generally, how much is the profit margin?
  • What should be a good price given the weekly sales, have noticed listings about 15-20 times of monthly sales.
  • Can the numbers be trusted given its mostly cash business unless it accepts card payments.

Any other gotchas i should consider?

TIA.

Education & Work

Comments

    • JimmyF on 29/05/2023 - 12:35
      +19

      One the last remaining Drive-in cinemas is closing in Dandenong in July due to "Teflon Dan's" land tax increase said to cost them $1000/day!!!!

      I see you have been reading the Heard Sun again. Here is a different headline that was being run back in late 2022 when it was SOLD.

      Lunar Drive-In Cinema to close mid-year following sale

      Yeah, they sold back in late 2022 for $45m dollars. Way before this so called 'land tax' change. It's amazing how the anti Dan haters like to spin things. Bit like the current owners.

      Admittedly that's for a 5 acre site

      5 acres was the old site they offloaded a while ago for ~$5m. This one is the 15 acre site.

      I'm sure the owners will sleep well at night with the $45m that joined the $5m in their bank account.

      $365k 'land tax' on the 15 acre site is a 'steal' really.

    • JIMB0 on 29/05/2023 - 12:46
      +3

      So now the land will be used for a more productive purpose. The owners sold for a mint and can purchase land further out of town if they wish to carry on the business, while still pocketing a huge sum of money. Isn't that the point of land tax?

    • AustriaBargain on 29/05/2023 - 14:24
      -1

      Why didn't the drive in just think of something to do in the day, like a marketplace or something. Seems kind of wasteful to leave it empty during the day when a normal cinema can play movies from dusk to midnight.

    • smartazz104 on 29/05/2023 - 17:41
      +1

      I bet you never went to that drive-in.

    • burningrage on 30/05/2023 - 12:25

      Ignoring the obvious Dan-lovers (hopefully not that many but doubt it considering the political leaning of this forum in general), the owner did say land tax increase and the increased operating costs were the biggest factor in deciding to close. They were forecasting a breakeven according to the article.

      Land tax increase does not begin from this VIC budget. It has been increasing for many years (it affected me too, rising by 10% each year and under this new budget, 100% next year) so the argument land tax being the contributor of the closure was sound. If anything, they were probably lucky they got out of it BEFORE the land tax changes because chances are maybe they may not be getting $45m if they were having to sell under pressure.

      To reitrerate the point in case, if you know Govt is going to after for your property in the near future, what would you do? Offload it first right? That's what this guy did.

      Having said that, it's sad to see Lunar drive-in goes away. I think it has a significant historical cultural value on it. It is still visited by more than 400k customers every year.

      • placard on 31/05/2023 - 20:37

        If the writing was on the wall so much with land tax, why on earth did they spend so much money renovating the entire toilets and restaurant at Lunar Drive In??

  • JIMB0 on 29/05/2023 - 09:05
    +1

    For extra money rent out the back room to a laundromat lawyer.

  • TightAl on 29/05/2023 - 09:10
    -6

    Have u sat outside for 24 hours to count the walk ins?
    Stop being so useless

  • RolandWaites on 29/05/2023 - 10:35

    In Melbourne during winter I'll head to the local to use the dryer once a week. But that's based only on last year. With El Nino predicted for at least the coming year (and if not El Nino, drier conditions than in recent years at least), expect demand for dryers to dip until the cooler months return to being reliably wet.

  • gromit on 29/05/2023 - 10:44
    +2

    It would be a power intensive business, wonder if those numbers hold up when power prices are about to go up 20%+

    • coolhead on 31/05/2023 - 12:37
      +1

      yeah that would be a deal breaker

  • trapper on 29/05/2023 - 11:26
    +2

    Sit there for a few days, or a week, and count every single load of washing that gets done. Now you know the real numbers.

    • smartazz104 on 29/05/2023 - 17:42

      And make sure the people coming in don’t look like they are related to the owner.

      • trapper on 30/05/2023 - 15:23

        Don't tell the owner when you will be doing this obviously …

  • living4music on 29/05/2023 - 13:04
    +3

    There is a LaundroMat next to my shop. It’s a local shop street in 1 of the worst areas in Brisbane. Out of 20 different shops, the LaundroMat is the busiest with full customers from open to close, everyday, especially in a rainy week, you can even see the queue, and it has been like that for few years, hardly see a quiet time. Go figure.
    The location is most important. Don’t do it in rich suburbs.

    • JimB on 29/05/2023 - 13:51

      Great to know..

      I've always wondered who uses them on a regular basis.

      • living4music on 29/05/2023 - 20:48

        All the lazy people in a poor neighbourhood.

        • stringbean402 on 29/05/2023 - 23:31
          +3

          This !

          People in shit suburbs aren’t actually short of cash, just the common sense and financial literacy to make good decisions.

          Great place for bottle shops, service stations, 7/11’s and fast food / takeaway shops to thrive.

          Not such a good place for a florist or clothing boutique. Need to pick your locations.

          • Kangarookiddd on 31/05/2023 - 11:14
            +1

            @stringbean402: Or don't have the outlay or space for washer dryer / or only have access too shared and never maintained machines in apartment complex

  • JimB on 29/05/2023 - 13:56

    I've always wondered how do Laundromats stay open, given rental expenses and energy costs.

    The post above me answered my questions.

    I'm fortunate to say I've ever used a Laundromat but I've never put something on lay-by either.

    To me there are far too many for all to be profitable.

  • AustriaBargain on 29/05/2023 - 14:21

    How about a vending machine business instead? Put some in universities and you can make a lot of money, college kids eat snacks every day of the week.

    • smartazz104 on 29/05/2023 - 17:42

      Stick a Neo Geo cab in there and the kids will never leave.

    • Typical16-bitEnjoyer on 29/05/2023 - 18:43

      Put some in universities and you can make a lot of money, college kids eat snacks every day of the week.

      Wouldn't it be better to put the machines in colleges then?

    • coolhead on 31/05/2023 - 12:38

      already alot everywhere..

  • jatbinks on 29/05/2023 - 14:52

    They are usually money pits after you have subtracted electricity and rent costs. Which is why they are mostly used for laundering or washing money.

  • Munki on 29/05/2023 - 16:29

    The only type of laundering business I'm willing to do, is money.

    I'm kidding AFP! Please don't arrest me!

  • lostgoat on 29/05/2023 - 16:36

    Pls OP buy one . The poor buggers electricity bills are going up big time and they need out fast .
    Save em !

  • Drakesy on 29/05/2023 - 17:20

    How much do you really think you can make charging $5 for a washing machine.

    Going to be honest, it's not a lot.

  • Spending2Much on 29/05/2023 - 17:23

    Electricity and Gas (hot water) will be your biggest expense. Along with rent on a premises.
    Maintenance. Cleaning

    I don't think it's the passive no hands on business itigit look to be first up.

    Coin machine doesn't work or doesn't give correct change or a wash mach that jams a coin or is faulty and your gonna have issues and complaints and especially if its not surted out in a timely manner.

  • moneyhungry on 29/05/2023 - 17:40
    +1

    Maybe open up a Wendy's franchise instead, heard somewhere it's going to be bigger than mcdonalds.

  • Typical16-bitEnjoyer on 29/05/2023 - 18:42
    +2

    There's a good documentary on coin laundry ownership that was released last year.

    • ProlapsedHeinous on 01/06/2023 - 00:13

      my lawd the flashbacks to him trying to act all cool about it too….hahahha

  • lostgoat on 29/05/2023 - 20:01

    Probably staged as the husband should have taken his head off : https://www.youtube.com/watch?v=Mnb84aDheT4

  • ajdj10 on 29/05/2023 - 22:25
    +2

    In another life, I would have really liked just doing laundry and taxes with you.

  • mshanann on 29/05/2023 - 22:51

    Not related to laundromats- but I reckon you could do a milk/bake-good early morning home delivery thing in one or two affluent suburbs in any of the major cities and make a grand per day easy.

    Things like hot cross buns, croissants, fresh bread, milk, OJ, bacon, eggs.

    • coolhead on 31/05/2023 - 12:41

      won't work for me as i am looking for something passive. Some time investment is fine but for other small things might have to hire someone = additional cost

      • gromit on 05/06/2023 - 12:16

        I suspect you may be under estimating the work and effort involved to run a successful laundromat business. have you researched the effort side of the business well?

  • spoonmugen on 30/05/2023 - 09:04

    its always location location location…
    ive seen some that have next to no business
    and i've seen packed ones

    its all seasonal too

  • JafferMoney on 30/05/2023 - 09:27
    +5

    OzBargain is definitely NOT the place to ask for business advice.

    The vast majority of people on here would have heart palpitations at even the thought of taking such a 'risk' in getting into business…they would rather be an employee for life and travel 10kms to save $1.

    • star-ggg on 30/05/2023 - 10:04
      +1

      it's either that or buy crypto

    • Cluster on 30/05/2023 - 11:35

      Some of us are business owners or work for ourselves. Not everyone here resembles the penny pinching stereotype.

      • JafferMoney on 30/05/2023 - 11:54
        +2

        Yea same…but the vast majority are.

  • ColtNoir on 30/05/2023 - 11:46
    +1

    Due diligence on their books before buying.

    • gromit on 30/05/2023 - 13:34
      +2

      This is the type of business you need to be very careful of and not trust the books. I would be camping outside the store for a week then asking to see the books. The books are too easily cooked in either direction for cash businesses, would want to see original utilities bills too.

  • May4th on 30/05/2023 - 12:34

    I thought you only buy those businesses to do a different type of laundrying

  • Hangryuman on 30/05/2023 - 14:00

    what could possibly go wrong - maybe this - https://www.youtube.com/watch?v=9dxXCEOL3pU

    • coolhead on 31/05/2023 - 15:52

      all insurances should be in place for this

  • Cluster on 30/05/2023 - 14:20

    I'm just amazed coin laundries are still a thing. Apart from international students and tourists, why are people still using them in 2023? After six months of laundromat use the average user would have spent enough to buy a new washing machine.

    • b_sean on 30/05/2023 - 20:00
      +2

      I can think of many scenarios apart from Intl students and tourists -
      1. Short term tenants (I know one my friend works in QLD for 3 days while family in VIC)
      2. Breakdown of home machine
      3. Large items such as quilts etc which are too much for home machine
      4. Shared accommodation
      5. We use dryer in laundromats sometimes especially in winter

      The laundromat in and around Hawthorn are always occupied (not at 100%)

      • spoonmugen on 01/06/2023 - 06:00

        same… we dont have room for a dryer so in winter we cant hang our clothes… and use a laundromat

    • ihbh on 01/06/2023 - 08:30

      Apart from international students and tourists

      And why wouldn't many of them hand wash in the shower?

  • morebunnings on 30/05/2023 - 15:29

    One opened next to my old gym last year. Carpark went from easy to find a park to full most of the time with old beat up cars and people siting in them hanging out and smoking. Never seen so many smokers in my life.

    They must have been making bank.

    • greatlamp on 31/05/2023 - 08:46

      With the cost of cigarettes you could buy your own washing machine in a few months…

  • Ciderfizz44 on 31/05/2023 - 08:27
    +1

    Hmm let me see:
    - water
    - detergent
    - clothes
    - power
    - washing machines
    - dryers

  • Marrk on 31/05/2023 - 15:11
    +1

    I always think of the game Arcade Paradise when thinking about coin laundrys, a hybrid coin laundry/games arcade sounds like a very Melbourne idea.

    In America car detailing/barber places are starting to become a thing. Having a second element to businesses that require you to wait seems smart.

  • Taro Milk Tea on 31/05/2023 - 15:48
    +1

    Have you watched Everything Everywhere All at Once?

    • coolhead on 31/05/2023 - 15:49

      not yet. someone suggested earlier as well, will do it

  • cauilfield on 31/05/2023 - 16:38

    Walter, maybe get a carwash instead?

  • SaberX on 31/05/2023 - 22:13
    +1

    "heaps of them up for sale and varying prices."

    I think that speaks for itself….

  • SpicyStew on 31/05/2023 - 22:41

    did you ask yourself why there are so many up for sale?

  • Oofy Doofy on 01/06/2023 - 05:42

    Get a haircut and get a real job
    Clean your act up and don't be a slob
    Get it together like your big brother Bob
    Why don't you get a haircut and get a real job

  • ihbh on 01/06/2023 - 08:29

    Please go ahead and then do an AMA. Also provide your learnings - e.g. too optimistic, pessimistic, clueless, got tricked, etc.

    Also, keep us updated regularly on your progress, including when you close or sell the business. And provide return or lack of throughout. Just payback, or return or approx IRR.

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