When a laundromat fails, it is typically due one of the same few reasons.
Laundromats run into the same pitfalls as other small businesses, and when owners can’t find a way out, they are subject to losses. It is important to know exactly what to avoid in order to maintain a business that maintains a revenue stream and serves a purpose in the community. There are three reasons why laundromats fail, according to Planet Laundry. The potential causes for a business’ decline include:
Neglecting or mismanaging your business
Bad management is the top reason why many laundromats eventually fail. All too often, a person will purchase a laundromat with the idea that as long as they collect their earnings every week or two, the business will continue running. However, this is not the case. This is the kind of business that can be run part-time, but that doesn’t mean significant work isn’t needed to maintain steady earnings. It is up to the manager to ensure that everything is working properly and the customer base is pleased with the service they receive. Avoiding these responsibilities can place a laundromat on a detrimental path of bad management.
Competition stealing customers
New competition taking away business is never a good thing, and if you’re laundromat can’t compete than you’re in for troublesome times. Many new businesses boast newer, cleaner and larger facilities, since they are set up to compete. There is a preventative measure in the case of new competition, and it is directly tied to avoiding neglectful management. The best way to avoid new competition is maintaining a laundromat that nobody wants to compete against. If you have a grungy business with old equipment and bad service (ZombieMat!), a business could swoop in at any time and steal away your customers. It is important to make sure your laundromat is well-run in order to avoid opening it up to competition. Failure to do do may result in your store becoming a failing laundromat.
Not enough funds
It is a horrible feeling to invest all your funds in a new business, just to realize that you’ve run yourself dry before getting it off the ground. There are a number of ongoing costs that laundromats have to constantly be aware of, such as filling change machines and paying utilities. For new businesses, it could take up to six month before any profit is realized. This is why it is important to make sure you have enough capital to start and maintain a laundromat. If monetary issues are on the horizon, or you’d just like to better manage your cash, than it will be important to look into your access to funding. Speak with a representative at Eastern Funding in order to learn more about your options.