The common narrative in laundromat industry circles is that laundromats are a great source of passive income. The story goes, all an owner needs to do is collect quarters once a week and the business will basically be an ATM machine spitting out cash. The question is, is that still true? Was it ever true? And, most importantly, is laundromat ownership a passive investment that you should consider?
Three of the best ways to make owning laundromats more passive are to utilize technology effectively, utilize a management company, and utilize a fund.
The first way to make your laundromat business more passive is to properly utilize technology and systems to ensure you're providing high-quality service consistently.
Companies like Cents are creating platforms and integrations that are giving mom-and-pop laundromat owners big business capabilities without big business budgets. The Cents platform is a type of business-in-a-box that can meet laundromat owners where they are at. And I'm not just saying that because I’m writing this post for them.
Consulting clients of mine have used the Cents platform to start a laundry drop-off service or pick-up and delivery service, and they have also used it to scale their already robust businesses even further. It's a platform that meets owners where they're at in their business but can also grow with you as you scale larger or into different offerings.
Utilizing a Management Company
If managing employees and establishing and overseeing systems isn't what you're going for, there are other options that can make owning laundromats even more passive. One of those options is to utilize a management company to oversee your business for you.
A management company should handle the basic tasks of laundromat management for you, including hiring, training, and firing employees, money collection and deposits (optional), machine maintenance and repairs, and perhaps even marketing and advertising. They should also provide you with monthly reports that communicate the income and expenses for the month, any work done on the laundromat, and what will need to be done in the coming month. Companies like Cents make data collection and reporting simple and reliable allowing management companies to focus on what matters most: Increasing your revenue.
Utilizing an Investment Fund
When you invest in a fund, you're essentially pooling your money with other investors to invest in deals larger than you can invest in on your own and/or invest more passively than you can on your own.
A fund basically works like this. There is a target amount of money that a fund raises from investors. The fund managers then use that pooled money to buy investments in that they see the potential. Particular funds may target stable cash-flowing investments, value-add investments, or some combination of the two.
Are Laundromats a Passive Investment?
In the traditional sense, no, laundromats are not passive investments. They are, however, a business that dissociates your time from income and requires relatively little time to manage. There are also ways to make the business more passive for an owner/operator by utilizing technology, like Cents, and systems well. There are also ways to make the business a more passive investment by utilizing a management company or by investing through a fund.
Book a free demo to see how Cents can help you grow your laundry business and better streamline your overall processes.