Bankruptcy for Business Owners: A Guide

You’ve come to this page because you want to learn how to start a laundromat business with no money. It won’t be easy, but we’ve got some pointers to help get you going. Starting a laundromat business can be a great way to earn a decent, steady income without having to make a huge initial investment. The growing demand for self-service laundry facilities allows laundromats to generate healthy profits, sometimes even outside standard working hours. To attract customers, laundromat owners may offer extras such as WiFi, TVs, and vending machines. Some even have coffee bars or gaming areas to keep customers entertained while they wait for their laundry. There's a lot to think about before you get to this stage, so continue reading to learn how you can open a laundromat business from scratch.   How Likely Are Laundromats To Generate High Profits? Laundromats can be very profitable, with some owners running successful businesses that generate up to $300,000 per year in cash flow according to the Coin Laundry Association. Of course, making that much is far from certain; the location of your business, the size of your laundromat, and the services you offer will all affect this. There are also several unavoidable business costs, such as utility bills and salaries for full- or part-time employees, although it’s worth noting that some laundromats are unstaffed.  So, let's see what you need to take into account and do before starting earning. Key Things To Consider Before Starting a Laundromat Business You must take into account quite a few things to build a laundromat startup that succeeds, since seven out of 10 startups don’t make it to their 10th birthday. Below are some of the most important factors. Location of Your Laundry Business The location of your laundromat is one of the most critical factors in determining your success. It’s best to look for a high-traffic area, preferably with a mix of residential and commercial businesses and perhaps near a major intersection. Before you start a laundromat business, consider the competition in the area. If there are already several laundromats around, you'll have difficulty making yours stand out from the crowd.  Another vital factor to consider is the demographics of the area. The median income and age group of residents can give you a good estimate of whether this is the right target market for your services.  As a general rule, you should aim for residential areas inhabited by young people living in rental properties as opposed to upscale neighborhoods. After all, lower-income people living in smaller apartments are less likely to have their own machines, and the closer you are to your target market, the better.  Laundromat Services Laundry washing and drying are the core of laundromat businesses. While most laundromats only offer these services, some may also provide laundry folding and ironing. Some also provide pick-up and delivery services for an additional fee to maximize their laundromat business profit. Such a strategy can be a great way to attract customers who are short on time and are willing to pay more for convenience.  Of course, to do this, you'd need to hire part-time or even full-time workers, whereas you might be able to run a standard laundromat without any day-to-day staff. If you’re considering this, perform a cost-benefit analysis to estimate whether the earning potential of this service is worthwhile. Marketing Strategy A marketing strategy that works is another essential step in owning a laundromat. You can use various channels to build awareness, including social media, billboards, or TV commercials. The most important part is to ensure that your marketing strategy is in line with the overall branding of your business so that potential customers can easily recognize and remember you. Of course, word of mouth will also play a significant role in promoting your laundromat. The best way to get people talking about your business is to provide a top-notch service, which we’re sure you’ll do anyway! Choose Channels for Advertising Purposes Carefully You'll need a steady income stream to pay off your loan and ensure overall profitability if you start or buy a laundromat with no money. That’s why it’s especially important to pay attention to the media channels your target audience uses.  For example, you'll likely find younger and middle-aged people on social media, while older people are more likely to get information from watching TV. Building a professional-looking website for your business can be a worthwhile investment; it makes you look more legitimate and may help you rank better on search engines. Cost Structure (Bills, Rental Space, and Employees’ Wages) To estimate an approximate cost to start a laundromat, you must consider various expenses. First of all, electricity and water bills will be among your most significant monthly expenses. You'll need to secure highly efficient, energy-saving washers and dryers to lower these. However, buying these machines requires a hefty initial investment, so it might be better to lease them. You must also factor in the costs of detergent, fabric softener, and other laundry essentials. The price of these can quickly add up, so it's essential to find a wholesale supplier who can give you a discount for buying in bulk. Of course, don't forget the costs of renting or purchasing a commercial space. Last but not least, you'll have to consider workers' salaries if you're planning to offer additional services like laundry folding or pick-up and delivery. If you start a coin laundry business, you’ll need to decide which extra services are worth it.   Competitors You should also research nearby competitors and learn what services they offer, how much they charge, and what marketing strategies they use. Understanding your competition helps you set your business apart and find the appropriate target market for your laundromat.  Of course, finding a location with few or no nearby competitors would be great, although that can be difficult in high-potential areas. Opening a Laundromat With No Money: Estimated Costs Various factors affect the cost of setting up a laundromat, including the location, required permits, and investments like sewerage connections.  Note that you can potentially save money if you buy an existing laundromat rather than starting from scratch. That way, you can spare up to $8,000 per sewer connection per washer and up to $300,000 for laundry equipment in total.  Of course, you might still want to know how to start a laundromat business with no money from scratch. If so, you should evaluate different loans offered by banks financing small businesses to find the one that best caters to your needs. Once you make a choice, you’ll have to open a business bank account. Refer to the following table for a quick breakdown of the relevant starting expenses: Expense type Estimated cost Sewer connection per washer $200–$8,000 Top-load washer $500–$700 Front-load washer $3,500–$20,000 Dryer $5,000–$6,000 Soap machine $500 and over Water-heating system $15,000–$40,000 Optional card system $40,000–$80,000 Laundry cart for clothes $50–$75 Cleaning supplies $750–$1,000 As you can see, there can be a lot of variability in the cost of opening a laundromat, so evaluate every option thoroughly before making a decision.  Rough estimates suggest that you'll need to spend between $200,000 and $500,000 to get your business up and running – and that’s just for the basics! You'll also need to factor in the cost of hiring some help to run or maintain the place, which will undoubtedly push the price up even higher. Still, as long as you're aware of all the potential expenses beforehand, you should be able to plan and budget effectively. Devising a Laundromat Business Plan As the owner of a laundromat, you’ll need a detailed action plan. By having a clear vision for your business and developing a roadmap to bring that vision to life, you’ll increase the chances of success for your startup. A good business plan is made up of many parts. We’ve explained the process below. Executive Summary An executive summary is a short, clear overview of the business plan. It should highlight the plan's key points in an easy-to-read manner and get investors and executives interested in your offer. Ideally, the executive summary should be no longer than two pages. Company Summary You specify the owner, your goals, and how you start the business here. A company summary presents your business to potential investors. It should contain: Missions and goals Products and services Facts that make your business stand out from competitors How should the company's presence will benefit the target market Budget If you’re comfortable that you know how to start a laundromat business with no money, it's time to start budgeting. This process should include researching the cost of buying or leasing equipment, licenses required, your commercial space, workers' salaries, and insurance. There’s much more to running a successful business than simply budgeting, but without a solid idea of your costs and expected profits, you won’t know where to start. To minimize risk and reduce your initial outlay, opening a laundromat franchise might be a better idea. We’ll discuss the pros and cons of franchises later on in the article, but for now, here’s what you’ll need if you want to go it alone. Marketing Plan A marketing plan will help you raise awareness about your laundromat and promote it to the target audience. The approach you should take depends on who your customers will be. For instance, if you're targeting young people, social media platforms like Twitter and Instagram can be helpful.  If you're unsure how to proceed with this, you might want to consult a marketing expert, although that could be expensive. Power Structure You only need to create a power structure to define the business’s hierarchy if you have employees working in your laundromat. Include job descriptions and specific tasks for every employee to avoid miscommunication and boost efficiency in the workplace.  If you work independently, skip this part of the business plan. Business Objective Before starting or buying a laundromat, you need to have a vision of where you want to take it. Do you want to build a laundromat empire, or are you happy with one location, at least at first? What services would you like to offer?  Once you answer these and other questions, explaining your business objectives over several paragraphs will be easier. Target Market Identification You can’t truly begin to prepare your business until you know who your market is. Owners need to analyze their services and predict how the market will respond once they open laundromats. You'll also need to set prices for your services once you’ve researched the market to avoid charging too much or too little. With this in mind, you can identify your target market demographic, including age, gender, career type, and location.  Competitor Analysis Analyzing your competition will help you differentiate your laundry business from others that are out there. You can proceed to this step once you’ve defined your target market. Financial Goals and Objectives Next, you need to decide on your short- and long-term plans. This will include any expansions you might want to make to the business.  To do this, you'll need to research the untapped population in your target market and decide what percentage of that you think you can reach. Note that you'll need some statistical knowledge or help from an expert to complete this.  Types of Services To estimate laundromat startup costs, you need to decide what services you'll offer. In this section, you should outline whether or not you’ll provide folding, delivery, entertainment, and other relevant services. Marketing Analysis Consider factors like market segments, target households, inbound visitors, and product pricing to develop a clear marketing strategy for customer satisfaction and increase your chances of success. Strategy You have to specify how you plan your business to succeed, especially if the competition is fierce. Outlining your strategies for breaking into the market, building your reputation, and maintaining a stable business for years to come is crucial. Financial Plan You should use this section to project your business’s gains and losses, monthly and annual earnings, and break-even margins. As you can imagine, crunching the numbers is one of the most important   Common Ways To Raise Funds for a Laundromat Business You came to this page wondering: "how much does it cost to buy a laundromat?" We hope that by this stage, we’ve given you a fairly comprehensive answer to that question. But knowing how much you need and actually getting that money are two very different propositions. In this section, we’ll give you some ideas for raising the funds you need. Attract Investors Reaching out to investors is one of the best ways to secure funds for your new laundromat business. But it’s not just about money; experienced investors can give you advice that could be critical to growing and maintaining a successful business. That's why you should do your homework and present a detailed business plan to convince the right people to invest in your startup. Of course, nothing in life comes for free; you’ll have to give up some percentage of your profits and/or control of your business to get investors on board. But if it helps you get started and avoids the risk that comes with taking out a business loan, then it might be worth it. Take Out a Loan If you prefer to start independently, there are several types of loans to open a laundromat. These include: Term loans, which come with fixed monthly payments and pre-defined terms.  Equipment loans, which are suitable for financing substantial equipment purchases, with the equipment you buy serving as collateral. SBA (Small Business Administration) loans; government-backed loans with low-interest rates and long terms. The downside is that approval for these loans usually takes months.  There’s always an element of risk to taking out a loan. Make sure you crunch the numbers beforehand, otherwise you might end up biting off more than you can chew.  Open a Franchise Laundromat Opening a franchise may be the best solution if you don’t know how to start a laundromat business with no money. That way, you get help, resources, equipment, and training. Moreover, the franchisor will provide you with a proven business model and help you open quickly. Before you join, however, you should reach out to several franchisors and compare their offers to ensure you're making the best choice. It’s also worth speaking to other franchisees to see if they’re happy with how the business is run. The main advantage of this option is that you'll get brand recognition and support from the franchisor. Also, many customers trust franchises more than independent businesses. The biggest downsides are that you’ll have to pay upfront royalties and fees, you’ll have to give a percentage of your revenue to the franchisor, and you’ll never have full control over the business. Final Tips To Open a Laundromat Once you get your laundry business going, you might do better overall and increase your revenue if you take the following steps: Start a loyalty program to retain customers. Offer free products, like detergents, with every wash. Sell detergents, fabric softeners, or other related products. Open a small cafe so customers can enjoy a coffee while they wait. Install TV screens and gaming consoles to make the wait more pleasant for customers. Offer extra services, such as laundry pick-up, delivery, dry cleaning, ironing, stain removal, and folding. Conclusion You have plenty of laundromat business ideas and you now know your options, so there’s never been a better time to start planning your business. Remember that a laundromat is a significant investment, so do your homework and develop a detailed business plan before taking the plunge. 

Starting and running a business is a real juggling act. In the midst of all the chaos, the process of getting a business loan can seem daunting. You may not even know where to start, but that’s where a business loan broker can help.  Successful brokers can assist you in finding the right lender, getting the best interest rate and term, and submitting your application. But is the service worth the cost? And are there other options available to you? You should find this article helpful in finding answers to these questions. What Is a Business Loan Broker? Once you’re beyond the intricacies of how to become a business owner and are in a growth stage or are running a mature firm, you’re likely to find yourself in need of a business loan. This is where a business loan broker can help. Business loan brokers work with both banks and alternative lenders to find the best financing options for their clients. They also help with the application process and, in some cases, may be able to negotiate the terms on behalf of their clients. Types of Business Loan Brokers Brokers generally specialize in one market segment. Depending on your business size or the type of financing solutions you require, you can opt for one of the following: Startup loan brokers: You should go for this type of business loan broker if you are running a startup that’s finding it difficult to acquire a loan due to a short or no credit history. SBA loan brokers: These business loan brokers specialize in government-backed loans disbursed by the Small Business Administration (SBA). Factoring brokers: They help companies boost their cash flow while waiting for their invoices to be paid by customers. These professionals assist their clients in obtaining invoice financing and factoring products, which involve selling invoices to a third party, or factor. Equipment financing brokers: These business loan brokers help companies finance the purchase of new equipment by offering them loans or leases. Merchant cash advance brokers: The job of these brokers is to ensure their clients get cash upfront in exchange for a percentage of their business’s future sales. When Do You Need a Business Loan Broker? When deciding whether to hire a loan broker, you should consider if that would be the most cost-effective course of action for your business.  For example, startups that have never applied for a loan before could benefit from hiring a professional with industry experience and connections, while businesses eligible for an SBA loan would do best to consult an SBA loan broker. Or, if you’re struggling to get approved for a loan from a bank or credit union, working with a broker could help you secure financing from an alternative lender. Brokers may also be able to help you get a better interest rate or other terms for your loan. On the other hand, if you’re comfortable with the lending process and confident in your ability to secure financing, you may not need a broker. Just consider if working with a broker would end up costing you more in fees than what you would save on interest. How to Choose a Business Loan Broker Should you decide that hiring a small business loan broker would benefit you, there are a few things you should know before settling on one. First off, you should know where to look for brokers. A simple Google search is one way to find a business lending broker. Another is to go to specialized websites, including those of the American Association of Commercial Finance Brokers, Small Business Finance Association Broker Council, or the local secretary of state, which will list brokers licensed in your state. And if you’re not keen on finding a broker online, you can always visit the office of a local small business organization. When it comes to choosing a particular loan broker for your business, you should first look into how many and which lenders they collaborate with. This will give you an insight into the kind of offers they can get you. You should also inquire about the broker’s experience and success rate. This will help you gauge whether they’re likely to be able to get you the financing you need. It would be a good idea to check whether the business loan brokers you are vetting have a Better Business Bureau accreditation and rating. Finally, it’s important to find out about broker fees and how they’re paid. That way, you can compare the offers of different brokers and find the one that suits you based on the cost and the quality of service. Once you have a list of business lending brokers who might be a good fit, it's a good idea to look for customer reviews. The experiences of other people can tell you if a broker is worth working with. Business Loan Broker Fees Brokers typically charge a commission expressed as a percentage of the total loan amount. A majority of brokers charge between 1% and 6%, though some may ask for as much as 17%. Some brokers ask for the money upfront, while others take a percentage of the overall interest you end up paying, which, of course, translates into a higher interest rate. Alternatives to Hiring a Business Loan Broker If you decide that working with a small business lending broker isn’t for you, there are other options available. You can work directly with some of the best banks or credit unions, or use an online lending platform like Lendio to compare multiple loan offers at once. If you have a poor credit score, you may want to check out some loans for business owners with bad credit. No matter what route you choose, be sure to compare interest rates, fees, and terms before selecting a loan. And remember, always read the fine print. Bottom Line All in all, a business loan consultant can serve as a link with the right lender and get you the best possible terms on your loan. However, they typically charge a commission for their services, which can add to the cost of your loan. Therefore, you should do the math to find out whether hiring a broker would pay off before you make the final decision.

As a small business owner, you know that every penny counts. That’s why effective budgeting is essential to the success of your business. A well-crafted budget can help you control expenses, allocate resources effectively, and make informed financial decisions.  But what exactly is a spending plan? And how do you create a budget for your startup? Stay with us and learn the ropes of efficient budgeting for small business needs. What Is Budgeting? Budgeting is the process of planning and allocating resources to achieve financial objectives. In other words, it’s a road map for your business finances and a comprehensive process of creating a plan for how to spend your money. This includes setting financial goals, estimating expenses, and tracking actual spending.  A budget gives you a clear overview of your finances so you can make informed decisions about how to best use your resources. The Benefits of Budgeting for Small Business Operations Even though it doesn’t seem like something that would have an immediate impact, budgeting can be beneficial for your small business in several ways. It can help you control expenses and save money. When you know where every penny is going, it’s easier to find areas where you can cut back. This can free up resources to be used elsewhere, such as investing in company growth. With budget planning, you can improve your decision-making. A budget forces you to think carefully about every purchase and consider whether it’s really necessary. This can help you avoid impulsive decisions that might harm your business in the long run. Once you start budgeting for your small business startup, you can better allocate resources, save for a rainy day, or invest in emergency funds or retirement accounts. Avoiding debt and building up reserves can help you weather tough times and take advantage of opportunities when they arise. How To Make a Budget Plan Whether you use a top-notch app, a good old notebook, or sophisticated business budgeting software, the process of creating a budget for your small business is more or less the same. Here are the steps you need to take: 1. Know Your Numbers The first step in any budgeting process is to get an accurate picture of your current finances. Budgeting for starting a small business means knowing how much money you have coming in and going out each month. Look at your bank statements, invoices, and receipts to better understand your typical expenses. Then, list your sales records, inventory, and other sources of revenue to get an idea of your income. If you don’t have good records, you should start tracking your spending. Don’t forget to factor in fixed costs like rent and salaries and variable ones like materials and shipping. A good budget should include one-time expenses like equipment purchases or repairs and make room for unexpected costs that can pop up from time to time. With all the figures in place, you can tally up your total monthly income and expenses. This will give you a good starting point for planning and budgeting for your small business. 2. Project the Cash Flow Accurately Your budget needs to project your company’s cash flow for the coming months. This means estimating your income and expenses for each month and ensuring that your projected income is higher than your projected expenses. If not, you must find ways to increase revenue or reduce spending. Customer and vendor payments are often irregular, so you need to account for this when estimating your monthly cash flow. While on it, you can also think of a strategy to encourage customers to pay sooner rather than later.  You can do it by offering a discount for early payment or using simple tools for budgeting for a small business, such as reliable invoice financing software. The latter will not only help you get paid immediately but also help you track your expenses and manage customer information. 3. Consider Cost Cutting If your projected expenses are higher than your income, you need to find ways to reduce your spending. One way to do this is to consider cost-cutting methods. There are several ways you can save money without sacrificing quality or service: Negotiate with vendors: You may be able to get a better deal on supplies or services by negotiating with your vendors. This is especially true if you’re a loyal customer and have leverage due to the volume of business you do with them. Reduce inventory: Do you have too much inventory on hand? One of the best budgeting tips for small business owners is to reduce inventory levels and free up cash that can be used elsewhere in your business. Cut overhead costs: Take a close look at your overhead costs, such as rent, utilities, and insurance. Are there any areas where you can cut costs? Reduce staff costs: One of the biggest expenses for small businesses is employee salaries and benefits. If you’re facing a cash flow crunch, you may need to reduce staff costs by reducing working hours, salaries, or headcount. 4. Create Your Budget Now that you have all the figures you need, it’s time to pull them together and create your budget. Begin by making a list of all your income and expense items for the month on a simple spreadsheet or with the help of budgeting software for small business needs. Then, add up all your income and all your expenses. If your income is higher than your expenses, you’re in good shape. Otherwise, you’ll need to think about reducing costs and finding ways to increase your income. Now is the time to set your financial goals and see how your budget can help you achieve them. Do you want to save money for a down payment on real estate? Are you trying to pay off debt? Are you hoping to boost your profits? Once you have your goals in mind, you’ll start seeing the benefits of budgeting for your small business. Maybe you’ll realize that you need to rethink your investment strategy or make drastic cuts. Whatever changes you make, be sure to track your progress and fine-tune your budget as necessary to ensure you’re on track to achieve your goals. Final Words Budgeting is an integral part of running a small business. By keeping an eye on your cash flow, you can ensure that your business is on solid financial footing. Cost-cutting methods can help you free up cash that can be used to improve your business in other ways. And by setting goals and tracking your progress, you can ensure that you’re on track to reach your financial goals.