As of May 2026, utilities are the single most misrepresented cost in laundromat acquisitions. Sellers routinely understate utilities by 25-40%, and buyers who don't verify get a painful surprise in year one.
Utility Cost as % of Revenue: The Benchmark
Industry standard: utilities should represent 20-28% of gross revenue. If a laundromat claims $400,000 in annual gross revenue, expect $80,000-$112,000 in annual utility costs. If the seller says utilities are only $40,000 (10% of revenue), that's a major red flag — request 3 years of original utility bills directly from the providers.
Water Cost Calculation
Formula: (Number of Washers × Cycles Per Day × Gallons Per Cycle × Days Per Year × Water Rate) + Sewer Surcharge. Modern commercial front-loaders use 12-18 gallons per cycle. Top-loaders use 25-40 gallons. National average water + sewer rate: $0.0035-$0.0065/gallon. Example: 30 washers × 10 cycles/day × 15 gal/cycle × 365 days = 1,642,500 gallons/year at $0.005/gal = $8,212/year.
Pro Tip
High-efficiency machines can cut water consumption by 35-45%. If buying a laundromat with older top-loaders, budget for equipment upgrade and model the utility savings — often pays back in 3-4 years.
Electricity Cost Calculation
Dryers consume 85-90% of a laundromat's electricity. Commercial dryers typically use 5-7 kW. 20 dryers × 6 kW × 12 hours × 365 × $0.13/kWh = $68,328/year in dryer electricity alone. National commercial kWh rate range: $0.09-$0.19.
Gas Cost Calculation (Gas Dryers)
Gas-heated dryers cost significantly less to operate than electric dryers. Average gas dryer efficiency: 12,000-18,000 BTU/cycle. At current gas rates ($0.80-$1.40/therm), gas dryers typically cost 40-60% less to operate than equivalent electric models. For a 20-dryer laundromat, switching from electric to gas saves $18,000-$28,000/year.
Identifying Utility Savings Opportunities
Common findings from the WashBizHub Utility Bill Scanner:
- Water softener installation: reduces scale buildup, cuts water use 15-20%, extends machine life 20-30%
- LED conversion: cuts lighting electricity by 65-80%
- High-efficiency machine upgrade: reduces water and energy use 35-45%
- Demand charge optimization: shifting peak dryer use reduces commercial electric demand charges 15-25%
- Solar panel installation: eligible for federal tax credits, typical payback 7-10 years
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