How to start a million-dollar laundry business

• Mark Vlaskamp started The Folde in 2017 and opened his first laundromat two years later.
• Last year, the company hit $1 million in revenue. This year, sales have reached $2.4 million.
• Vlaskamp broke down his startup expenses and the strategies he used to scale.

Mark Vlaskamp started a laundry-delivery business in 2017 in hopes of cashing in on a model that was gaining popularity.

"That was the time when everything was starting to get delivered," he told Insider. "It was a service that didn't exist, and it was super new and exciting."

The Folde's original concept was to pick up and deliver customers' laundry to local laundromats. But Vlaskamp and his cofounders, Jordan Suydam, Myles Bragman, and Aaron Bowen, soon realized their business model had limitations.

"There was far more demand than the laundromats could keep up with," he said. "We could attract customers, but we were struggling to fill the orders."

So in 2019, the cofounders opened their own laundromat in Austin, Texas. During the day, The Folde is a self-serve laundromat. It closes to the public at 9 p.m. and operates overnight to process all of the day's wash-and-fold orders.

The founders funded the company themselves until 2021, when they raised a small friends-and-family funding round. That year, The Folde achieved its first million-dollar revenue year. Business has grown since then. In 2022, the company opened a second location in Houston and The Folde hit $2.4 million in revenue from January to September, which Insider verified with documentation.

Here's how Vlaskamp built his laundry business and his advice for other entrepreneurs interested in starting one.

Startup costs hit all at once

Vlaskamp's first expense was buying the retail space, plus plumbing and electric bills. For the Austin location, he purchased 64 washers and 64 dryers at about $10,000 each and 13 delivery vans.

While the expenses all hit at once, so did the customers.

"We had a bunch of delivery-laundry-service customers at the time, so all of a sudden, you wake up and you can turn on the scale and the profitability," he said.

After the initial startup costs, Vlaskamp said payroll was his largest daily expense; the company has 72 employees.

"It's all a labor-based business," he said. "The more orders you get, the more payroll goes up."

That means Vlaskamp is on a "never-ending quest" to control costs. For example, he's modified the machines to be more efficient. Instead of using factory defaults, he's tweaked the settings to improve cleanliness and reduce utility costs.

Then there's the soap. At first, Vlaskamp drove to Costco every week to stock up on laundry detergent. Now he's relying on a wholesale supplier that delivers 55 gallons every three to four weeks. This saves him nearly 30%. While prices vary, the Costco detergent was about $0.11 an ounce, while the wholesale detergent is about $0.03 an ounce before delivery fees.

Customer retention is essential

To reach $1 million in revenue in a single year, Vlaskamp focused on retaining customers. He uses online marketing to engage and incentivize repeat customers.

"Laundry is very unique because it's very recurring in nature," he said. "If we can make you make a habit out of it, then we don't need to add as many leads to the top of the funnel to start growing."

Search-engine optimization is the best way to drum up business, as many customers find The Folde via Google and Yelp. The company has social-media accounts, though they are more of a reference check to reinforce trust than a method to gain customers.

"I've never stopped scrolling Instagram to look at a plumbing company," Vlaskamp said. "But when I need a plumbing company, I'm going to search and call the first one that I see on Google."

It's important to have easy communication with customers through calls, texts, and emails. More than 70% of the company's customer communication is over email and chat, Vlaskamp said. The Folde also has an app that allows customers to order and track their laundry deliveries from their phones.

Build a laundromat your mom would use

From folding clothes to tracking deliveries, Vlaskamp has a procedure for everything to ensure customers receive quality service every time.

Employees are trained to fold every piece of clothing according to the shape, size, and material.

"It's absolutely critical that they know exactly how to fold everything," he said.

Traditional laundromats stick to the bare minimum, but he believes every detail matters, from the lighting to the cleanliness. And customers are willing to pay for higher quality, he said.

"Our laundromat is more expensive than the laundromat a mile away," he said. "We have people driving out of their way to pay more for the machines because it's a better experience, better wash, better atmosphere, and better customer service."

If other entrepreneurs want to start laundry businesses, Vlaskamp encourages them to focus on providing a quality service and atmosphere.

"Build a laundromat that your mom would want to come into and deliver a service that your mom would want to use," he said.