How to Start a Laundromat in New Zealand

Opening a laundromat in New Zealand can be a profitable business opportunity with it’s growing population and an increasing demand for convenient laundry services. However, to ensure a smooth launch and long-term sustainability, it is essential to conduct thorough research and plan meticulously.

In this article, we will guide you on the steps to ensure a smooth business and long term sustainability on the costs associated with setting up a laundromat in New Zealand, covering various aspects from research and planning to financial considerations.

An Overview of the Laundry Business in New Zealand

With over 4,400 employees and 777 small businesses, the Laundry and Dry Cleaning Services Industry in New Zealand is one of the most stable, recession proof sectors. At projected value of $136.80 million in 2024, New Zealand’s Laundry Care Industry is projected to grow at a compound annual growth rate (CAGR) of 2.88% for the next five years. It’s revenue is projected to hit $157.70 million in 2029.

The country’s increased focus on sustainability means that laundry services are seeing a growing trend; a preference for Eco-friendly products and methods of dry cleaning. Technological advancements like remote monitoring systems, automated machinery, and an increase in coin or card based systems have made the laundry business more low maintenance for entrepreneurs.

The laundry business in New Zealand is regulated by the Dry Cleaners and Launders Association of New Zealand (DLANZ). Originally called the Textile Care Foundations, DLANZ sets the standards of service in the country’s laundry business. The organization champions sustainable and responsible practices in order to make the industry more vibrant. They also keep a directory of laundry businesses in New Zealand.

How to Make a Monthly Wage from a Laundromat in New Zealand

People will always have laundry to do. This means that already, laundromats have a steady stream of potential customers that can translate to a steady stream of income. As an entrepreneur, how can this translate into a monthly wage?

Let us say, for instance, that your laundry business charges $5 to wash 5kg of clothes, $4.50 to dry 5kg of clothes, and $10 for dry cleaning 7kg clothes. If you have ten people coming in daily to wash and dry 5kg each, that amounts to $95 in a day. In a week, your business also serves 30 hospitality companies, and each one dry cleans 21kg of clothes. This comes to a total revenue of $900. Altogether, that means that your business can earn $1,565 per week, and $6,260 per month.

This short example shows that the business is feasible and

How To Start a Laundromat in New Zealand

To start any business, an entrepreneur needs a carefully mapped out business strategy. The success of this strategy depends on various factors such as location, clients, amount charged, etc. Laundromats are no different. Starting a laundromat in New Zealand requires careful planning, research, and attention to various aspects of the business. This section would guide you through the various stages of planning that are required to start a laundromat in New Zealand.

Step 1: Conduct Market Research

Market research is the most important part of your business strategy. It informs other aspects of your business plan, while also giving you an understanding of your market, competition, and target demographic.

Develop a Comprehensive Business Plan

Your business plan has to clearly define the scope and objectives of your laundromat business. Will you provide self-service facilities only, or offer additional services like drop-off laundry or dry cleaning? Determine the operating hours, target market, and unique selling propositions to differentiate your laundromat from the competition.

Your business plan also outlines the services and amenities your business will provide.This may include self service washers and dryers, folding tables, seating areas, vending machines, and free Wi-Fi. Offering a comfortable and convenient experience can attract and retain customers.

You can use the internet to perform your research and save on the cost of hiring business advisory consultants. A typical market research and analysis can cost you $100 – $500, while Business plan development costs $1,000 – $2,000.

Location Selection for Laundromat Business

When choosing a location for your laundromat, there are certain factors you have to consider. For instance, what is the proximity to your target market? You have to consider areas with a high concentration of potential customers, such as university campuses, residential neighborhoods, or apartment complexes. Being easily accessible will encourage foot traffic and increase the likelihood of repeat customers.

You should also evaluate the location’s accessibility by public transportation and the availability of parking facilities. Customers should have convenient access to your laundromat, making it hassle-free for them to transport their laundry to and from the premises.

Another important factor to consider is the rental rates for commercial spaces in different regions of New Zealand. In places like North Shore, Porirua and Manakau, rent prices are relatively higher than other regions like New Plymouth and Christchurch. Prices can also vary significantly depending on size and amenities offered. Compare rental costs to ensure they align with your budget and revenue projections. According to For Lease commercial properties can cost anywhere from $393 – $2000 per week depending on the region and the square foot of the property.

Ensure that you carefully review the terms and conditions of commercial leases, including lease duration, renewal options, and any additional expenses such as maintenance fees or common area charges. Seek professional advice to negotiate favorable lease terms and avoid hidden costs.

Identify Target Demographics and Competition

To establish a successful laundromat in New Zealand, it’s vital to identify your target market and analyze the competition. Research consumer behavior and demand for laundromat services in different regions of New Zealand. Consider factors such as population density, residential areas lacking laundry facilities, and the convenience factor for potential customers. The demand in any region will help you to determine the viability of your laundromat and estimating potential revenue. Determine the demographics that will benefit from your services, such as students, apartment dwellers, or busy professionals. Assessing the existing competition will help you understand market saturation and uncover unique opportunities to differentiate your laundromat.

Establish Operational Procedures and Protocols

Implementing operational procedures is a crucial part of business growth. For instance, an inventory management system tracks supplies such as detergent, fabric softeners, and change for the machines. A maintenance schedule ensures regular inspections and servicing of equipment for optimal performance.

You can establish protocols for cleaning and sanitizing the laundromat regularly. Emphasize the importance of maintaining a safe environment, including proper handling of spills, addressing any potential hazards, and adhering to health and safety guidelines.

Step 2: Register the Laundromat as a Legal Entity

Choose a Suitable Business Structure

Consult with a legal professional or business advisor to determine the most appropriate business structure for your laundromat, such as a sole proprietorship, partnership, or limited liability company (LLC). Each structure has its own legal and financial implications.

Register a Business Name

After choosing your business structure, your next step should be to register your business name. This can be done through New Zealand’s Company Office website, and it costs $120.

Apply for a New Zealand Business Number

All businesses in New Zealand are required to have a 13 digit business number. You can apply for this through the Company Office for $55. Be sure to also obtain a Federal Tax ID (EIN) number from the Inland Revenue Department (IRD). You need this EIN number to open a business bank account, file federal tax returns, and even produce invoices for customers. You should also register for Goods and Services Tax (GST) if your projected annual turnover exceeds the GST threshold of $60,000. Compliance with tax obligations is essential for operating legally and avoiding penalties.

Obtaining Necessary Permits and Licences

Your laundromat will need certain permits and licenses in order to function properly. Apart from a general business license, you also need zonal permits that ensure you’re in line with local regulations on noise or waste management. Your laundromat also needs certain environmental permits to comply with health and safety regulations. These could be a Fire Safety permit, Business Sign permit, Industrial Waste Discharge permit, and so on.

Step 3: Source for Equipment and Supplies

Your laundromat business needs certain essential pieces of equipment to function. These are:

Washers, Dryers, and Folding Tables

Invest in high-quality washers and dryers suitable for commercial use. Consider both front-loading and top-loading machines to accommodate different customer preferences. The price of a typical commercial washers ranges between $3000 and $10,000. Dryers range from $2000 – $10,000, depending on size and quality.

Folding Tables

Your laundromat should provide ample folding tables to facilitate convenient laundry sorting and folding, especially if it is largely self-service based. Folding tables, seating, and other amenities cost $2,000 – $5,000.

Detergents, Solvents and Cleaning Supplies.

Laundry supplies such as detergents, fabric softeners, solvents, etc can cost more than $500. They are an essential part of the business, as they ensure that your customers clothes come out clean and fresh.

Coin-operated or Card-based Payment Systems

You can operate either a coin-operated or card-based payment system. Coin-operated machines may require additional maintenance and security measures, while card-based systems offer convenience and the potential for customer loyalty programs. Purchasing a Coin-operated or card-based payment system can cost you up to $6,000.

Sourcing Reliable Suppliers for Equipment and Supplies

Before you purchase equipment, you should research reputable suppliers of commercial laundry equipment. Compare prices, warranties, and customer reviews. Consider factors such as machine durability, energy efficiency, and after-sales support to make informed decisions and ensure a reliable setup. 

You can also explore energy-efficient machines and environmentally friendly laundry supplies. These can reduce operational costs and demonstrate your commitment to sustainability. Energy-efficient equipment can significantly impact long-term utility expenses and appeal to environmentally conscious customers.

Step 4: Marketing and Promotion

Creating a Brand Identity for the Laundromat

Your brand identity is an important part of your business. Ensure that you create a distinctive logo that represents your laundromat’s brand identity. Design eye-catching signs for the exterior and interior of the premises to attract attention and inform potential customers about your services.

Investing in professional marketing materials, such as brochures, flyers, and business cards is another way to build brand identity. An online presence on websites and social media platforms also makes your business more visible and accessible to its target audience. Engage with customers through regular updates, promotions, and valuable content.

Implementing Effective Marketing Strategies

Advertising your laundromat in local newspapers, magazines, and directories helps your brand reach a wide audience. Consider running promotions or offering discounts to attract new customers and encourage repeat business.

Through social media platforms like Facebook, Instagram, and Twitter, you can engage with the local community and target specific demographics. Implement digital marketing strategies, such as search engine optimization (SEO) and online advertising, helps increase visibility and drive traffic to your laundromat. These promotional materials and strategies can cost your business up to $1000.

Step 5: Financial Considerations

Estimating the Initial Investment Required and Capital Sources

In order to properly estimate the initial investment required to start a laundromat business, you need to calculate the total cost of acquiring equipment, utilities, marketing, salaries, and supplies. Once you have a proper understanding of your business costs, your next step would be to find a source of capital. This can come from personal savings, crowdfunding, traditional bank loans, grants, investors, or alternative lenders.

Analyze Pricing Strategies

When determining your laundromats pricing, you should consider factors such as the size of the machines, water and electricity usage, and market rates. You can also gain additional revenue by offering complementary services like drop-off laundry, vending machine sales or clothes sales.

Forecasting Revenue and Profitability

Your business plan should include financial projections. This helps you to estimate revenue and profitability based on projected customer traffic, pricing, and operating expenses. Consider factors such as seasonal variations, market trends, and customer retention rates.

Disclaimer: It is important to note that the cost estimates above are not fixed, and can vary depending on several factors, including location, size of the laundromat, equipment choices, and specific market conditions. It is recommended to conduct an in person research and create a detailed budget based on your specific circumstances to obtain a more accurate cost estimate for starting a laundromat in New Zealand.

Franchise Opportunities to Start a Laundromat in New Zealand

Exploring franchise opportunities can be a viable option if you’re considering starting a laundromat in New Zealand. Franchising offers the advantage of established brand recognition, proven business models, and ongoing support from the franchiser. It is essential to thoroughly research each option, review the franchise agreements, and seek professional advice before making any commitments. Carefully evaluate the terms, support provided, financial projections, and potential returns on investment to ensure the chosen franchise aligns with your goals and expectations. Here are some franchise opportunities available for starting a laundromat in New Zealand:

1. Speed Queen:

• Speed Queen is a globally recognized laundromat franchise with a presence in New Zealand.
• They offer a range of franchise models, including self-service laundromats and hybrid concepts with additional services.
• Franchisees receive training, marketing support, and access to high-quality equipment.
• The initial investment and franchise fees depend on the chosen model and location.

2. Green Acres:

• Green Acres is a well-established franchise brand in New Zealand, offering various service-based opportunities, including laundromats.
• They provide training, marketing support, and access to a network of franchisees.
• Franchisees benefit from the brand’s reputation and the support structure provided by Green Acres.
• The initial investment and franchise fees may vary based on the size and location of the franchise.

Conclusion

Setting up a laundromat in New Zealand requires careful planning, diligent research, and a thorough understanding of the costs involved. From conducting market research to choosing the right location, acquiring equipment, complying with legal requirements, and implementing effective marketing strategies, each step plays a crucial role in establishing a successful laundromat venture. By considering all aspects outlined in this guide, aspiring entrepreneurs can navigate the complexities and make informed decisions to set up a thriving laundromat business in New Zealand. Remember, the cost of setting up a laundromat is an investment in providing a valuable service to the community and creating a sustainable business that can yield long-term rewards.