Finding a Winner, Part 1

By Wally Makowsky | Oct 16, 2009

I often get asked what goes into determining whether or not a location is a good one for a self-service laundry business. And, in my opinion, there are four key factors in choosing the right location. They are: (1) population, (2) location, (3) competition and (4) parking.

When examining population, you need to look at the density and the makeup. Population density refers to how many people live in a one-, two- and three-mile area. In a rural setting, you can probably gauge the density up to a 10-mile area. In urban areas, most of your customers will live within a two-mile radius of your laundry; this is where 90 percent of your business will come from. On the other hand, in rural markets, customers will come from up to 10 miles away, depending on the number and quality of laundry facilities in neighboring towns.

When considering density, always remember that the more people in the smallest area the better.

Next, let’s look at population makeup. It would be advantageous to build your new store in an area featuring mainly blue-collar families. Typically, the majority of those in this demographic live in rental areas and have children. Remember that larger households mean more pounds of laundry, which equates to more business for you.

Also, regarding population makeup, perhaps consider areas that have migratory workers. After all, temporary employees do not buy washing machines. They use coin laundries.

For obvious reasons, middle- to upper-income families typically are only interested in wash-dry-fold and drycleaning services. They live in homes that have washers and dryers, and these individuals only patronize coin laundries to wash their larger items, such as rugs and comforters.

Of course, before you make your final decision, it pays to get a demographic study for your market area of interest. This can remove some of the guesswork from your decision

Next, let’s look at location. The word “location” is defined as “a particular place confined to a definite spot or geographic position.” Our definition is slightly different: Where can we build a laundry that makes money?

Let’s start with demographics. Choose an area where the population contains a majority of low- to middle-income families. Also, the number of family members per household is very important; more kids mean more pounds of laundry, which means more dollars.

What’s more, look for older housing, which likely doesn’t have proper accommodations for residential washers and dryers.

Next, look for a high-density location. But remember that there is a definite relationship between how many people are in your marketplace and how large your store needs to be. All stores have peak hours and peak days; if you can’t accommodate your customers during these high-traffic times, they will go elsewhere.

In addition, try to get the best spot in a good location. The best spot is a free-standing building with plenty of parking on a main street that has a good deal of local traffic. Exposure is constant advertising.

Why a free-standing building? It gives you complete control of parking, signage and multiple entrances. People like to park as close as possible to an entrance.

The second-best locations are small strip centers, which also allow your customers to park close to the building. Generally, they have other businesses that draw local customers to the center, which will help your business. The magic word there is “local.”

If you’re building in a small center, try to build on either end if you can. In most cases, the ends contain additional parking.

Street locations and large shopping centers typically are less than optimum laundry sites. Street locations without parking never reach their full potential and are generally the least desirable to build on. By contrast, large shopping centers draw a lot of customers, but unless you get one of the end units, parking can be a problem. Also, large centers charge quite a bit more rent and a lot of the shoppers are not local.

To summarize, a good location is an area that contains a number of people who will use a coin laundry, and a good spot is a particular place in that area that will accommodate those people in the most convenient way.

Next time, we’ll cover the other two factors in finding a profitable laundry location – competition and parking.