It turns out that the bad economy is great for coin-op laundromats. Because, though houses with laundry rooms will be foreclosed upon, washing machines and dryers will break and be too expensive to fix, and sometimes, we lose our homes entirely, we still need clean clothes.
Long the refuge for college students, the young creative class, jobless, homeless and others not in possession of a few Whirlpools, laundromats are now flourishing. And the middle class is showing up, too, pride and laundry baskets in hand.
By all appearances, this would be a great time to get into the business of laundry; the Wall Street Journal recently profiled one such man, Brian McChristian, laid off in early 2008 and now running the Austin, Texas Community Coin Laundry; and he's one of the lucky ones. His business is doing well, thanks in part to his efforts to keep his parking lot and facility free of anyone not doing laundry.
And the coin-op business, on its face, seems a great one. With little skill required to manage the business, no inventory, and no credit or receivables -- as the WSJ says, "A quarter at a time -- prewash," (it's probably more like five quarters at a time, but that's not so elegant, I suppose) -- and only the ongoing cost of power and water, it's amazing more out-of-work would-be entrepreneurs aren't buying up the available laundries.
And why aren't they? Same reason McChristian probably lost his job as a loan officer: the credit crunch.
Coin-op laundries have almost no collateral; they're nearly always in leased retail space and used washing machines aren't exactly easy to liquidate. So with the tight lending standards these days, buyers are having a really hard time obtaining financing, leaving those laid-off would-be entrepreneurs stuck at home, and washing only their own family's dirty laundry.
The American Dream: buy your own laundromat