When starting a new business, there are many things that need to be taken into account when it comes to costs. There’s the location of the laundromat, the starting capital, the cost of advertising and the costs of running/maintaining the business once it is in business. A laundromat can be an extremely successful business but requires a smart business plan and an effective understanding of what the costs of running the business will be.
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Share Capital:
Share capital is very important when starting a laundromat, as not having sufficient capital will not allow you to start your business. There are various ways to raise capital for your business, the most suitable for a laundromat would be either your own cash or to raise capital through debt. With your own cash, you will be able to start up the business with no hassles and not have to worry about future payments looming over-head if your business doesn’t gain the traction for the first few months after opening.
Alternatively, you could also borrow money to raise share capital. Whether it’s from a bank or investors, it is a great way to gain the funds needed to successfully start your business. However, if you are borrowing from an investor or a bank that expects monthly returns, be sure to accommodate the payments into your business plan and ensure that you are staying up to date with them.
Cost of business location:
The next cost you will incur is the purchase price/ rent of the location you wish to set up your laundromat. Picking the right location for your laundromat is essential to maximise profits for your business. However, the best locations most likely come with the heftiest price tag. Make sure to do your research on the best location store and the store that fits your budget or that you will be able to make loan repayments on each month. Ideally, you would want a place easily accessible and visible. Your business is determined on customers finding and returning to your laundromat, so having a place easy to find will attract new customers.
Advertising:
Another expense is the cost of advertising. Advertising is key for your business and will be a very helpful tool to attract new customers. Advertisements can appear in the window of your shop, if the shop is clearly visible, and can be very effective in attracting new customers. You can also advertise through the internet to boost the reach of your business around the area it is based in. Advertising does come with costs and this is something that you have to take into account when first starting your business to increase the reach of your laundromat.
Laundry Machines:
The most important costs of a laundromat are the laundry machines. This is also one of the most costly parts of starting a laundromat, as the costs of new machines can be very high and the amount to fill a decent sized laundromat is a substantial amount. An alternative to these costs would be to purchase second hand laundry machines, as they often work just as well and are sold at a much cheaper price. With laundry machines also comes the price of water and electricity.
Saving money on purchasing second hand laundry machines is a great way to reduce the price of electricity and water until business starts to pick up. Washers produce the largest proportion of a laundromats income, however, dryers are also a significant part of a laundromats income. Be sure to take the same approach to purchasing the washing machines as the dryers, look for the best deals and second hand machines to reduce the start up costs and edge closer to your laundromats first profits.
Miscellaneous costs:
Costs also arise for all employees who work for the business as well as insurance incase any accidents happen in the laundromat. These costs are essential as employees will help the productivity of your business, which ultimately leads to profits. There are also the costs to maintain the laundry machines and to keep the business tidy to maintain the customers and not discourage them from returning. Although these costs can be minor, repairing or replacing machines can be very pricey and insurance will help keep these costs to a minimum.
Conclusion
If you are looking to start a Laundromat, here is an idea of how much it is going to cost you. LawPath has Business Lawyers to help you start your business provide expert advice on every facet of your business.
Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from Australia’s largest legal marketplace or to get answers to your legal questions.
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