Why Do Laundromats Fail? (14 Mistakes You Must Avoid)

Before we delve into why laundromats fail, let’s first examine why you should care about this business.

There are many reasons why the laundry business has become an eye-catching opportunity for entrepreneurs. For instance, consider the statistics: it has a 20% ROI, a success rate of 94.8%, and a growth rate of 9.4% per annum. All this makes it hard to reject the opportunity.

It’s like having money in your bank, and someone comes to you saying, “This is an opportunity. If you invest X amount in this, you’ll not only get your money back in 3 to 5 years with a 95% success rate but also continue to unfold the same amount in the following 3 to 5 years.”

Can you reject this offer?

This is how the cleaning business is.

This images has laundry Business facts and figures for those who want to understand laundromat profit margins.

But still, many laundromats fail.

It doesn’t happen on its own. There are plenty of reasons that put some entrepreneurs in the 5% (that’s the failure probability in the laundry business).

We have discussed those reasons here. So if you have plans to start your coin laundry business, make sure to avoid the following reasons why laundromats fail.

14 reasons why laundry businesses fail:

Here are the top reasons why laundry businesses fail.

Inappropriate location

Location is the key factor for any business to succeed. Many real estate agents, business strategists and even marketing experts place way too much emphasis on ‘place’.

You might have heard about the 4 P’s of marketing, also known as the marketing mix. The 4 Ps were first introduced by E. Jerome McCarthy in 1960.

We have also witnessed that a large laundromat failed after a large nearby public housing facility closed, forcing its tenants to vacate.

That’s why we can say location is the pillar to succeed in the laundry business.

In my opinion, to succeed in any brick-and-mortar business, especially, coin laundry business, you can’t overlook location at any cost. You have to focus a lot yourself. In fact, it’s a lengthy proses and you can also seek help from laundry distributors.

If you can’t secure an excellent location for your laundry business—for instance, if you find yourself in an inappropriate plaza that doesn’t attract the right customer base, or if it’s not situated in the front of a commercial or residential street—it will ultimately fail. Or we can say that the possibility of failure increases.

So while planning your laundry business, location should be your top priority. Here is how you can find the ideal location: consider where most of your customers live. Look for areas with thousands of potential customers around your location. It should be easily accessible to them, ideally within a 5 to 7-minute travel distance.

Staying in this location offers two benefits: you are covering your residential potential customers, and you can offer commercial clients free drop-off services, as most successful businesses I know do.

No Parking

Parking can make or break any business. If you don’t have parking for your laundry business, it can be a reason of failure.

A survey conducted by Inrix (which is leading transportation analytics solutions provider) discovered that 40% of motorists in the United States avoid a business that doesn’t have a parking area. Especially in self-service laundry businesses, if you don’t have parking, it creates a lot of confusion and inconvenience for your customers who might spend time at your place.

So when deciding on a building for your laundromat, it’s crucial to have prior parking for your business.

Laundromats usually belong to wealthy families, and if you could entertain them in the best possible ways, you might face consequences.


It’s a fact that many businesses fail because of mismanagement. It could be financial management, marketing, or sales management; whatever that is, it’s one of the critical factors for a business.

A study by a U.S. bank shows that 82% of businesses fail because of cash flow mismanagement.

Say it’s not close to your house, and you can’t visit more often to manage your business well. It can get you in trouble.

So while planning your business, it should be your top priority that your business is accessible to you.

Unskilled Staff

Almost all business consultants put too much emphasis on hiring the right people for your business. Right people means employees who are skilled, reliable, and loyal to your business.

Hiring untrained staff results in a considerable loss.

Untrained staff might make many mistakes dealing with customers, or at least while doing other in-house jobs.

So it should be one’s top priority not to hire untrained staff unless you can easily adjust new employees and train them.


Equipment isn’t the game changer, but it plays a vital role in the laundry business.

Energy Efficient machines save up to 25% energy 45% water $180 a month

Here is how it can make a difference in your business, and it can one minor cause to your launderette business failure. According to the research of AI group, new laundromat equipment consume 5% less energy for 3 to 5 years. So, if you are not using advanced technology-based machines, it can be expensive compared to your competitors.

And if we talk about the latest machinery, some energy efficient machines save up to 25% energy and consume up to 45% less water. So, you should never buy 10- to 15-year-old machinery for your laundry business.

In short, new equipment can make a real difference in profits that you can use to set competitive prices and offer discounts.

Besides this, old equipment breakdown is common, costing $180 a month.

In the breakdown period, you are not only losing opportunities to wash more clothes, but you are also paying a lot of money to the technician.

Also, old equipment doesn’t perform as well as new ones. That means you are losing customer trust.

Unstable Water/Power Supply

Many laundry owners found unstable water or power supply as one of the reasons why laundromats fail.

Water and power are both crucial for the laundry business. If you don’t have it, you are nowhere. So while preparing a plan for the laundry business, it should be one’s top priority that you won’t suffer such breakdowns.

High Prices

Suppose you purchased an old laundry business; the machines are too old, consume a lot of energy, and break down more often than you shut it down or increase your prices.

In both cases, it’s a significant loss.

One can run a business at high prices until there is no competitor. Otherwise, people will move and even start hating your laundry once they get the same quality work at lower prices.

However, suppose you offer better quality than your competitors. In that case, you provide better services in washing, drying, and folding clothes and charge comparatively higher rates; people would compromise on a small amount.

In short, if the rates are higher than the services you provide, it can result in a significant loss in the long term. However, you can charge for what you provide.

Not Enough Opening Hours

It’s not for the laundry business but for many other businesses where your sales depend on direct customer dealing. If, in a competitive market, you are not available for as many hours as your competitors, then people start preferring others.

There is a reason behind it.

If people believe they may not find you open, they don’t come to you. Even if you are available now, they might think you might be closed when they need their washed clothes back. They won’t come to you.

Secondly, wherever a customer comes twice, he has a strong emotional attachment to that place. If your customer went to your competitor’s shop, and they treated him well, you will lose him forever.

Competitive Market

Once again, it’s a part of your location research. That’s why location is important for a laundromat business failure or success.

Many believe there are ten laundromats, so there can be 11 out there.

The idea isn’t bad, but it can also spoil your investments. People don’t leave their brands unless they find them becoming ignorant.

So if you jump into such a crowded market, building a reputation will take you a lot of time.

Lack of Funds

Lack of finances is one of the primary reasons why new businesses fail.

Businesses, especially small business owners, often believe that as they start, they will be in profits or at least meet their expenses.

It rarely happens.

That’s why all experienced business consultants insist on keeping at least six months’ expenses in your pocket before you even give it a shot.

But when I plan to start a new business, I keep 13 months’ total expenses in hand. However, it should never take so long for any business.

Thirteen months is the most extensive time one can ever expect for any business to be in profit. If someone isn’t making a profit in 13 months, it’s essential to reanalyze everything: business model, business plan, market research, and marketing strategies.

Poor Customer Dealing

Respect is one of the most powerful tools for building relationships.

Those who don’t focus on building relationships ultimately fail. Or at least they don’t earn as much as they had the capability of.

If your staff is ignorant enough to give value to your customers or can’t entertain them well in your store, it will harm you in the long term.

I used long-term in some cases because many consequences don’t happen instantly. Many things give you a chance to change, but if a business keeps repeating those mistakes, your competitors catch all of your business.

Lease/Mortgage Costs

Many business owners take a loan to start a business.

On loans, they have extra markup costs other than routine expenses. That means they need more business to meet everyday expenses. In such a case, it’s not such a big market, and there is no considerable business in the area, leading to failure.

Extra Expenses

Not all laundromats are successful because not all can run with the same budget.

If a laundromat owner has his land, has no bank loan payments, and uses online marketing instead of traditional marketing, he has lower expenses than many others.

Many laundromats were unsuccessful because they had to pay more than their competitors. As a result, they couldn’t make anything and hence lost interest.


You know, laundry belongs to cleanliness.

It’s not just a matter of clean clothes. If you don’t keep your place clean, people will not only judge your mismanagement but will also believe that as you don’t care about your place, you might not care about their clothes.

As a result, it can get enormous consequences.


There are many reasons why laundromats fail. We have discussed all the reasons why a coin-oriented laundry business can be unsuccessful.

Say we have found that the right place has a massive impact on a laundry business. If you couldn’t choose the right place, it would never be a pleasant experience.

So if you have plans to start a laundry business, it’s far better to learn these reasons before giving your idea a shot.

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