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

The laundromat business is one of the highly profitable businesses in the United States and worldwide. That is the reason that it has been an eye-catching business for entrepreneurs.

But still, many laundromats fail.

There might come a question in your mind: if it’s a highly profitable and rewarding business, why do laundromats fail?

It’s not for no reason.

There are many reasons why the laundry business fails, and that one must consider even before starting it.

Lack of knowledge is one of the biggest reasons that new businesses fail. And if you don’t know everything about a business, there are always chances that you might fall from any point.

So if you have plans to start a coin-laundry business, that’s great, but before you even plan to start a new laundry business or purchase one for you, acquaint yourself with the top reasons for which laundry businesses fail.

14 Reasons For Which Laundromats Fail

Let’s discuss all the reasons for which laundromats fail. The reasons are somehow different from the reason we discussed in our other article: why new businesses fail.

Inappropriate location

Lousy location is one of the most significant reasons for which laundromats fail. A site is the pillar of this business. If you couldn’t get an excellent location for your laundry business, let’s say you got a place in an inappropriate plaza that doesn’t attract the right customer, it will ultimately fail.

So while planning your laundry business, location should be your top priority. The examples of best locations could be like posh area or a college hostel.

No Parking

In survey, it’s discovered that 40% of motorists in the United States avoid a business that doesn’t have a parking area.

So while deciding building for your laundromat, it’s crucial to 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 dire circumstances.

Mismanagement

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

Unskilled Staff

Almost all the business consultants put way too much emphasis on hiring the right people for your business. By right people means hiring qualified employees.

Some small businesses hire untrained staff and believe that they can train them pretty soon. There could be one trained guy in the business to teach them.

But this 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 ones’ top priority not to hire untrained staff unless you have grown so much that you can train a few as replacements.

Equipment

Equipment play a vital role in the laundry business.

It can cause a laundromat failure by any means. If you are not using advanced technology-based machines, that means it will be way too expensive for you as compared to your competitors. So the cost will increase and hence low profits.

Besides this, the old equipment breakdown is not common. 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.

Additionally, old equipment doesn’t perform pretty well as the new ones do. 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 for which 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 ones’ top priority if 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 either you shut it down or increase your prices.

In both cases, it’s a significant loss.

At high prices, one can run a business until there is no other 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 only but many other businesses where your sales depend on direct customer dealing. If, in a competitive market, you are not available as many hours as your competitors do, then people start preferring others.

There is a reason behind it.

If people believe that they may or may not find you open, they don’t come to you. Say even you are available for now, but they might think that you might be closed when they need their washed clothes back. They won’t come to you.

Secondly, wherever a customer comes twice, it 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 the most important thing for a laundromat business failure or success.

Many people believe that as there are ten laundromats, it 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 in, in such a crowded market, it will take you a lot of time to build a reputation.

Lack of Funds

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

Many times, businesses, especially small business owners, believe that as they start it, 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 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.

Lousy Customer Dealing

Respect is one of the most powerful tools to build relationships.
And those who don’t focus on building relationships ultimately fail. Or at least don’t earn that much 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 the everyday expenses. In such a case, it’s not such a big market, and there is no considerable business in the area, it will lead to a failure.

Extra Expenses

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

If a laundromat owner has his own land, has no bank load payments remaining, and works on the business as a manager, that means he has lower expenses than many others.

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

Dirtiness

You know, laundry belongs to cleanliness.

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

In result, it can get huge consequences.

Summary

There are many reasons for which laundromats fail. We have discussed all those reasons which a 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 for you.

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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