1 Way To Make Massive Income Is One You’d Never Expect, According to Codie Sanchez

©Codie Sanchez/Contrarian Thinking

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When it comes to finding profitable industries for starting a business, many may look past their local laundromat in search of a newer trend. However, laundromats have a lot of things going for them.

Codie Sanchez, a successful finance influencer and founder of Contrarian Thinking, took it upon herself to dig deeper into the phenomenon. In a recent YouTube video, Sanchez interviewed successful laundromat owners to find out why the laundromat business is so lucrative. Here are some reasons you can make a fortune from owning a laundromat.

You Don’t Need a Fortune To Start Out

If you walk past a laundromat, starting one of your own might seem intimidating. Apart from renting a location, you’ll see multiple heavy-duty washers and dryers, change machines and vending machines. These machines require regular maintenance and operate with hot water and electricity. All of this may seem like you’d need a large loan to get started. 

However, according to Sanchez’s panel of owners, this isn’t the case. One owner explained the low barrier to entry, saying, “There are tons of examples of some of our customers that start as, like, a consumer business where they just have their car and home washer and dryer. They build up a customer base. They do some pick-up and delivery, and then they’ve built up enough to say, ‘I now want to buy a store.'”

Recessions Don’t Affect Laundromats

When a business is recession-proof, it means that bad economic conditions don’t negatively affect it and it continues to generate revenue. Industries based on consumer needs, such as child care, healthcare, home repair and groceries, can all be recession-proof as people need these no matter what shape the economy is in. Similarly, people need a place to wash their clothes if they don’t have a personal washing machine at home. 

Sanchez’s panel explained that the self-service aspect seemed to be recession-proof, but the pickup and delivery side can experience a drop in revenue under certain circumstances. One owner shared that his business had to adapt during the COVID-19 pandemic to accept Electronic Benefit Transfer (EBT) cards, a type of welfare card, so that those receiving government benefits could still do their laundry.

Laundromats Generate Significant Revenue 

When they’re run efficiently, laundromats can generate substantial profits. Sanchez asked her panel how much their businesses made a year. Two of the owners made between $100,000 and $200,000 annually, one made between $1 million and $1.5 million a year and the final owner made over $50 million a year. 

While making this much may seem like an anomaly, national stats back it up. In the U.S., the monthly gross revenue of a laundromat ranges from $15,000 to over $30,000, which translates to $200,000 to over a half-million dollars per year. These profit margins normally run between 20% and 35% after operating costs. How much you can make depends on a number of factors like how much traffic the laundromat gets, how efficiently you run the business and the location.

Laundromats Are Easy To Scale

When Sanchez started in the laundromat business, she found it so lucrative that she quit her job on Wall Street to pursue it. As is usually the case, she began with a single laundromat and expanded her business into eight income streams. To do this, she followed a series of steps:

• Step 1 – Start or buy a laundromat: Buying an established business or starting your own will mean you’ll start getting a constant stream of revenue. You can use these profits to invest in other areas of your business.
• Step 2 – Add a second revenue stream: Finding a way to cash in on your customers while they’re waiting for their laundry can mean a lot of extra money. Sanchez installed vending machines with snacks and drinks, leading to more profits with less labor.
• Step 3 – Offer a premium service: Creating a more expensive drop-off option for customers will further boost revenue. Many customers don’t want to do their own laundry or wait for it to finish, and this premium service caters to their needs.
• Step 4 – Sell what they need: Make sure your laundromat has products like soap, detergent and dryer sheets for their convenience and your increased revenue.
• Step 5 – Expand the business: Sanchez added pickup and delivery options to reach more customers that may be too busy to come to her laundromat. 
• Step 6 – Find bigger clients: Marketing to commercial clients like hotels and bigger businesses can boost profits quickly. 
• Step 7 – Open more laundromats: Once your business is thriving, duplicate the model and open more laundromats with similar services.

Using this approach as a template can help you get started with a laundromat business and generate income in various ways. 

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