As of 2022, there are 18,264 laundromat businesses in the United States that generate about $5 billion in combined nationwide gross annual revenue. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Dave Menz, aka “The Laundromat Millionaire.” Menz is the Founder and Owner of Queen City Laundry, host of Laundromat Millionaire Show and the author of Laundromat Millionaire: The Grit to Elevate an Industry. Together, they break the stigma of laundromat ownership by uncovering the real facts and figures that led to Menz’s millionaire status.
In this episode, you will learn:
- How to enter the laundromat business, including how much capital is needed to start and how to identify strong locations.
- How laundromats can evoke change in disparaged communities.
- Tips for operating and staffing a laundromat business.
- How to grow your laundromat business from a passive income source to a fully operated, fully staffed location.
- And more!
Welcome back to The Agent of Wealth Podcast, this is your host Marc Bautis. On today’s show, I brought on a special guest, Dave “The Laundromat Millionaire” Menz. He’s the founder and owner of Queen City Laundry, a chain of laundromats in Cincinnati, Ohio. Menz is passionate about teaching others how to obtain financial freedom through laundromats as a coach and through his podcast. He’s also the author of Laundromat Millionaire: The Grit to Elevate an Industry. Dave, welcome to the show.
Hey Marc, thanks for having me. I’m excited to have this conversation.
Great, so am I. On the podcast, I’ve hosted a lot of shows on alternative asset classes – everything from investing in wine to self-storage and mobile homes… Today, we’re going to talk about laundromats. Can you begin by sharing your background, and get into how you decided to go into the laundromat space?
How to Enter the Laundromat Industry
Yeah. I tell people it was dumb luck. I mean, who doesn’t grow up dreaming of owning a laundromat, right? No… the truth is that as a kid, I always wanted to own my own business – I was fascinated by entrepreneurship and business, and I didn’t care what the product was.
When I got older, around the age of 30, I was working in corporate America, and I realized it wasn’t for me (as I suspected). So I decided to do something about it. For several years, I spent my time off of work looking at businesses for sale, businesses to start, things like that. At the time, I didn’t have a whole lot of money: I was middle class. I had a wife and three young kids, so my risk profile was decent, but I had to make sure I could take care of my family.
With whatever business I ran, I knew I’d need to keep my full-time job for at least a period of time, because we didn’t have a ton of money. That led me to a few different paths, but I eventually ended up in the laundromat industry.
I was searching for businesses for sale on Craigslist, believe it or not, and found a local laundromat just a couple miles from my house. It was a rundown mess, as most laundromats are. While I didn’t know the laundromat industry well, I did know the laws of supply and demand, so I researched the market and the community, which I’d lived in for about 20 years at that point.
I ended up researching all the laundromats within a 20 mile radius of the store, and I found that all of them were in just as bad of shape as the one on Craigslist. I thought, ‘Well, man, I know my community – it’s growing – even though I don’t know a whole lot about the business, somebody has to be serving this market… and it doesn’t seem like anyone is.’
That, along with doing a little bit of due diligence, and finding a local equipment distributor, was enough for me to take the plunge.
So I bought the $85,000 laundromat. It was actually losing money when I bought it, and it was in a terrible state of disrepair. But I had this feeling that if I fixed it up and reinvested in the business, over time I should capture the lion’s share of the market in that area… and that’s pretty much exactly what happened.
Although I wasn’t making a lot of money (at that time), within four or five months I had the store profitable. I kind of “caught the bug” because I was doing this as a side hustle – in addition to my full-time job. At that point I thought, ‘If I made these profits in such a short period of time, imagine what I could do if I got a few more locations.’ Then, I could leave my full-time job and support my family this way.
That’s when I “caught the laundromat bug,” which is what I call it. I realized how great of a business this is, and how misunderstood it is.
Here we are 12 years later… I now own four locations and a commercial property. I’ve launched a pretty robust pickup and delivery business. The reason I titled my book “Laundromat Millionaire” is because in that window of time that I just described for you – which was about eight years – my wife and I went from a net worth of about $50,000 to being multimillionaires.
I learned in that timeframe that laundromats are one of the most misunderstood, yet one of the best, small business opportunities in America. That’s why I teach what I call “main street” – the people outside the industry – how great of a business this is if you approach it the right way.
That’s awesome. I think I read at one point, years ago, that there are more millionaires in the US from laundromats and dry cleaners than almost any other business.
Really? Well, I will tell you this. As I got into the industry, networked and built relationships, one of the things I learned is that most laundromat owners are totally fine with the mainstream idea that the laundromat business isn’t really a business. A lot of people look at laundromats disrespectfully, thinking we serve the bottom of society, which isn’t true.
There are people that run their laundromats like a bubble gum machine or a vending route. I’m not saying that isn’t a business model, but I’ve evolved to what I call “the top of the industry.” I networked, met a lot of wonderful people and learned from them over the last 12 years. I evolved from what I call the bottom of the industry, to what I now call the top of the industry. It’s a whole different world up at the top – and the business becomes very complex.
How Laundromats Serve – and Invest in – Communities
Something that I love is that when done well, laundromats can really change a community. My laundromats are an example: all of them were in terrible locations where the communities weren’t being served well at all. Yes, we invested heavily in those businesses, and I talked about the rewards we now get from those investments. But the fact of the matter is, every one of those communities are drastically changed.
A lot of people don’t realize that a laundromat is a vital community resource. It’s not just another pizza shop. I estimate, and this is just anecdotal, that 75-80% of the laundromats in this country are in bad shape. What I kind of figured out real quickly is that if you put those two things together – the demand and the opportunity – it screams success.
Let’s take a step back and go through the process of acquiring a laundromat. You mentioned the first one you bought was $85,000. Does someone need that money in cash? Or is there the ability to finance or borrow to acquire the location?
How Much Capital is Needed?
It depends on how you enter the industry. There are fairly sophisticated entrepreneurs and business owners that come into the industry with significant capital and great credit. These individuals can come in and build multi-million dollar operations very quickly. That’s the top of the industry.
But the beauty of the industry is that it’s actually fairly simple to get into. I’m an example of that: I started with about $30,000 cash and my net worth was about $50,000 total. It’s a highly leverageable business because it’s mostly infrastructure.
It’s hard to borrow money in a lot of situations – not too many lenders want to lend money for payroll or a commercial space – but they will lend money for capital, which laundromats can use for equipment. The business is capital intensive.
Is a Laundromat Passive Income?
A lot of laundromat owners say, “Every washer and every dryer in my store is like an employee, but they don’t call in sick.” Then I remind them, “Well, they do break down.” That’s the same thing as calling in sick, right?
The idea that this is a passive business is not accurate, but it is a very flexible business. There’s always things to do in the business, but as the business owners and operators, we get to choose when we do those things. If you have 40 washers in your store and two of them break down, you don’t have to leave your son’s birthday party to go fix them, they’ll be there tomorrow. But you have to fix them eventually.
The beauty of the business is there’s a lot of different ways to get into the industry. It doesn’t require a lot of cash, but it does require sweat equity.
You mentioned that it’s not really a passive business and that both you and your wife were working other jobs. How did you do it? Did you hire someone to run the laundromats? Did they not need someone there all the time?
Hiring Employees & Growing Payroll
Unlike a lot of businesses, you can get away with not always having an attendant at the laundromat. When we started out, the business we bought had no employees, it just had equipment and a lease. We ran the business for several years unattended, and then evolved to partially attended.
The first four or five months that I described for you, I had to be at work at 7:00 AM. I would get up at 4:00 AM and go to the laundromat to clean up from the overnight shift. Then I would go to work. I would work all day. Occasionally I’d get an emergency call, but for the most part, everything was okay at the laundromat while I was at work. Then, I would leave work and go straight to the laundromat to clean up from the day. Then I’d go home, spend the evening with my family, and after my kids went to bed, a lot of times, I would go back to the laundromat and clean up again.
That’s not a life anyone wants permanently, but I saw it as a means to an end.
One of the things we eventually did was grow a payroll. As the store got busier, we had an attendant working for longer hours. We eventually got to the point where our stores were no longer open 24 hours, instead they are open 7:00 AM to 10:00 PM. But now they’re fully staffed.
That raises your value proposition, right? It increases your competitive advantage by giving you a market differentiator, and you can charge accordingly.
So you were building up the laundromat and reinvesting all profits back into the business… When did you then decide to quit your corporate job?
Transitioning from a “Side Hustle” to Laundromat Millionaire
I’ll be honest with you, when I first bought the first business I never dreamed I could quit my job. I just thought this would be a side business, maybe making us a few thousand dollars a month. What happened is I caught that bug and acquired store two and three. I quit my job two weeks before we closed on that third store.
Up until that point, we hadn’t taken a penny out of the business. We had reinvested everything, paid down our debt servicing and saved up a nest egg. Our attitude was pretty simple.
When I quit my full-time job, there wasn’t no going back. I was jumping off a cliff.
At that time, my wife was a school teacher. She could have quit her job as a teacher much earlier, but she said she’d rather be a teacher. She loved working with kids. Fast forward to today, my wife just recently quit her job. She has a degree in accounting and is a bookkeeper by trade, so she does the bookkeeping for the business.
The interesting thing is that when I got to that point where I could quit my full-time job, I was able to work more hours at the laundromats, but work less hours in general. I had a better work-life balance.
As I started investing more time into our business, it really accelerated. As I quit my full-time job and could focus full-time on my staff, my operations and scalability, repeatability and all the things that come with being successful.
You mentioned that when you started you knew nothing about the laundromat business. Do you recommend someone take that same path, or should they learn the nuts and bolts before they dive in?
It depends on the person: your personality, your capital position, your business acumen… There are people that come into the industry without any knowledge. They buy a rundown laundromat, but because they have a lot of business experience they get it off the ground.
A lot of business experience is transferable from industry to industry.
One of the things that makes the laundromat business great is that the business acumen across the industry is low. So what I’ve taken on as my passion project is teaching people how to break into it. That’s why I wrote my book, launched my podcast and came out with an eCourse.
I’m very passionate about elevating my industry. My goal is two things.
- To teach people how to get started in the laundromat industry.
- To teach people in the industry how to do things better.
I’ve been able to bring together such an amazing group of people who I’ve taught how to scale and run their businesses. I’m just the visionary, they run the operations day to day.
Almost 100% of the people who are successful in this industry don’t want outsiders to know of their success. They love the stigma associated with laundromats. Because they don’t want people to know how great of a business it is, and one of my goals is to share that with people, I take a few arrows from them. They don’t like me calling attention to it, but it’s all a part of my passion project for elevating our industry.
When you purchased these laundromats, what due diligence was involved? What should someone look at in terms of the area?
How to Identify Strong Locations for Laundromat Businesses
Location is really important: you want to find a location with a good traffic pattern, in a thriving community. You don’t want to be in a community that’s dying, right? I grew up in Flint, Michigan, and almost everyone in my family worked at the GM factories. When they pulled out of town and went overseas, that whole city died. Look for communities that are bustling, that are growing.
You also need to look at supply and demand. Even though our industry is greatly underserved, there are some markets that are over penetrated. For example, if you go to Manhattan, LA or Houston, where there’s 10 million people, you’re going to find a pretty significant laundromat facility on almost every corner. While they can all do well, there’s probably not much value to add to those markets.
If you live in New York, or another major city, go 20 minutes out to the suburbs. Look for what I call a “submarket.” Look for the loss of supply and demand where people are underserved.
As business owners and entrepreneurs, we shouldn’t try to be the 13th pizza place in town. We should look for a place where there’s no pizza and say, “Holy cow, these people don’t have pizza. I have to do something about that.” With a vital community resource like a laundromat, it’s even more magnified.
Have you ever bought the property that your laundromat is in?
Yes. Out of the four laundromats we operate in Cincinnati, we own the property of three of them. That wasn’t always the case, but that’s been part of our growth pattern. We got to the point where we realized just how important the lease was. Even if you can have a long-term lease, all it takes is that property being sold to a new property owner. If that new owner wants to, they can find a hole in the lease and boot you out of there. Or they’ll just litigate you to death. Once we had the financial capability, I made it a priority to own the property.
There are different growth patterns and trajectories in small businesses. Some people have been in business for 10 years and own 30-40 laundromats. I would much rather own four or five and own the real estate. That gives me the stability that I feel comfortable with. I tell all entrepreneurs and business owners, “The beauty of small businesses is that nobody gets to tell us what to do.”
So what’s next for you, Dave? Are you going to acquire more laundromats? Is there some kind of improvement or scalability that you’re working on?
The beauty of our business is that I can do both. We plan on adding more locations. Nowadays, we can cherry pick to find the perfect location. We’ll probably always do that. Once we find the right location, our team is capable of growing and managing them without a whole lot of trouble.
I’m equally passionate about elevating our industry, so I want to continue creating more educational courses. Our industry has a really good trade association called the Coin Laundry Association, but it’s a small association. They have limited reach and ability. So I’ve taken it upon myself to give back. For the last 30 minutes, we’ve talked about a lot of business concepts that are harder to implement than they sound. They shouldn’t be as hard as they are to learn on your own.
Perfect example, I created a course designed to help people get into the industry the right way. The course is $1,000, which sounds like a lot, but I can confidently say after 12 years in the industry there’s probably a six figure value in that.
That’s great. Well we’re just about out of time. Dave, I want to thank you for being on the show. How best can someone find out more information on what you do and how you can help them on their journey?
Thanks for that, Marc. Yeah, they can reach me at, I’m on LinkedIn and Facebook as Dave Laundromat Millionaire Menz. My website, laundromatmillionaire.com, is where you’ll find my book, podcast, course and more. If you’re interested in getting into any industry, but specifically laundromats, take your time: It’s amazing what you can learn in six months.
Great, we’ll link to all of that in the show notes. Thank you again, and thank you to everyone who tuned in to today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.