How much investment is needed to start a laundry shop?

 

Starting a laundry shop in Australia sounds straightforward, but the numbers can surprise even seasoned operators. Between the lease, fit-out, permits, and—of course—the machines themselves, the startup costs can range dramatically. But here's the twist: the real question isn’t just how much it costs to start—it’s how much smarter it is to rent rather than own your machines. Because what’s sunk upfront can also sink you long-term.

Let’s break it down.

---

How much does it cost to start a laundry shop in Australia?

Short answer: Expect to invest between $80,000 and $300,000, depending on the size, location, and business model (self-service vs. staffed service).

Here’s a rough cost breakdown:

Cost Item	Estimated Range
Commercial lease (3-6 months)	$10,000 – $50,000
Shop fit-out & signage	$15,000 – $50,000
Equipment (buying machines)	$40,000 – $150,000+
Council permits & setup	$3,000 – $10,000
Utilities & plumbing	$10,000 – $30,000
Insurance & registration	$2,000 – $5,000
Working capital (3–6 months)	$10,000 – $30,000

But there's a catch—your biggest sunk cost is the equipment. And that’s where smarter choices like laundry machine rental can tilt the economics in your favour.

---

Do I need to buy commercial washers and dryers outright?

Not necessarily. Many operators are waking up to the reality that owning isn’t always winning. Buying machines ties up capital and brings repair risks. That’s cash you could use for marketing or location upgrades.

Let’s compare renting vs. buying:

Feature	Buying Machines	Renting Machines
Upfront cost	High ($40K–$150K+)	Low to none
Maintenance costs	Your responsibility	Usually included
Equipment upgrades	Expensive, infrequent	Flexible, often included
Tax deductions	Depreciation only	Fully deductible monthly expense
Cash flow impact	High initial outlay	Predictable monthly expense

Put simply: renting de-risks your business model. It also builds in flexibility if you want to scale or switch locations later—an often-overlooked factor.

---

What are the hidden costs most new operators miss?

Anyone who’s been in the game knows the numbers on paper rarely reflect the surprises you hit post-launch. Here are some hidden expenses that creep up:

• Extra plumbing or 3-phase electrical work ($5,000–$15,000)

• Ongoing repairs on owned machines

• Unexpected council inspections

• Local marketing spend to drive foot traffic

• Staffing (even for casual hours)

One Northcote-based owner shared:

“I budgeted for the machines, but not for the 8-week delay waiting on a gas connection upgrade—and the $7K bill that came with it.”

This is where behavioural nudges come into play. A default assumption is “buying is better”—but that’s the status quo bias talking. Most buyers don’t run the numbers deeply enough to challenge that mental shortcut.

---

How do location and size affect your initial investment?

The bigger the shop and the more premium the suburb, the steeper your entry costs. Here’s a quick look at how your size and setting scale costs:

• Small suburban laundromat (4–6 machines): $80,000 – $120,000

• Mid-sized high-traffic location (8–10 machines): $150,000 – $220,000

• Large CBD shop with premium fit-out (12–20 machines): $250,000 – $350,000+

Inner-city councils often have stricter permit processes too, so factor in longer timelines and higher compliance costs.

---

Should you start with a self-service model or offer full-service?

This decision shapes both your upfront investment and your ongoing costs.

Self-service pros:

• Lower staffing costs

• Simple operations

• Passive income potential

Self-service cons:

• Slower customer growth

• Higher competition

• Requires strategic location

Full-service pros:

• Higher margins on wash-and-fold

• Customer loyalty potential

• More upselling opportunities (ironing, pickup/delivery)

Full-service cons:

• Staffing complexity

• Greater liability

• Longer hours or automation investment

A hybrid model—automated machines with a staffed peak period—can balance cost and customer demand.

---

Can you start a laundry shop for less than $50,000?

Realistically? Only if you cut corners or go mobile.

Some operators reduce costs by:

• Using refurbished equipment

• Partnering with a laundromat franchise (who may subsidise setup)

• Starting with a laundry van or pickup/delivery model first

• Subleasing space inside petrol stations or convenience stores

But these options often trade scale for speed. If you plan to grow, the initial savings might limit you later.

---

Is laundry machine rental worth it long-term?

This is the tipping point.

If your business needs flexibility, machine rental gives you:

• Room to upgrade as you grow

• Predictable budgeting (no repair shock)

• Speed to launch (most providers offer full fit-out support)

And the best part? You can still build equity into your brand, even if you don’t own the hardware.

One Melbourne operator noted:

“We started with rentals thinking we’d switch to owning later. But 4 years in, we’re still renting—because it’s just simpler, cheaper, and less risky.”

There’s a solid business case here: for a predictable monthly fee, you skip the capital drain and stay agile.

And if you're unsure about ownership vs rental trade-offs, this guide breaks it down with real numbers and examples that can clarify your thinking.

---

FAQ

What permits do I need to open a laundry shop in Australia?
Typically, you'll need a local council permit, plumbing compliance certificate, and possibly a water trade waste agreement.

Can I run a laundry business without employees?
Yes, many self-service laundromats are automated. But for services like ironing or delivery, you’ll need staff—even casuals.

How long before a laundry shop becomes profitable?
Most operators break even in 12–24 months, depending on location, machine costs, and competition.

---

Final thoughts

Starting a laundry shop isn’t just about machines and money. It’s about decisions—like whether to tie up your cash in hardware or stay nimble with a laundry machine rental model. The answer depends on your appetite for risk, scale, and growth. But one thing’s certain: the industry is shifting, and the smartest operators are the ones who’ve figured out how to flex, not just invest.

And if you want to explore how equipment flexibility can shape your business success, this complete guide to costs and savings in machine rental is worth a read.

Also worth exploring: this recent Australian Bureau of Statistics business case breakdown on startup viability across service industries.