If you have been following along, you know that I recently bought a laundromat. I am only a month into the business, but I’ve already learned so much about owning, running, and evaluating cash-based businesses.
I didn’t buy a laundromat because it’s a TikTok fad or because I thought it would be 100% passive income. I bought it because one of my goals for 2025 was to acquire more cash-flowing assets. This business fell into my lap, and it was a deal I couldn’t pass up. This article will highlight some of the pros and cons I’ve discovered so far about running a cash-based business. Hopefully, it offers insight to anyone considering starting or buying one.
Pros
1. Immediate Money in the bank
I bought my laundromat on a Monday night. The previous owners had already collected all the quarters from the weekend. We counted what was left, I paid him for the coins I was keeping, and he took the rest. By Friday, it was time for my first collection. Just four days into owning the place, I made my first bank deposit of earnings from the week.
In a cash-based business, you get paid right away. There’s no waiting on insurance reimbursements or billing cycles. Money comes in daily, and you can access it immediately. That instant cash flow is one of the biggest perks. It allows you to track how the business is doing in real time and make quick decisions based on performance.
2. No Transaction Fees
My laundromat, like many older ones, is coin-only. While this has its downsides, the upside is that we avoid transaction fees. Credit card companies can take up to 4% per swipe. At our current revenue, that would cost us around $7,500 a year. And as the business grows, so would that fee.
3. Slim Operations
With a cash-based business, there is no need for point of sale (POS) systems or digital infrastructure. We can run the laundromat lean and simple, which is a huge advantage when starting out. It’s easy to learn and manage, leaving room for future upgrades when we’re ready.
4. Easy Start for New Entrepreneurs
A cash-based business is a great entry point for someone looking to jump into entrepreneurship. The laundromat isn’t exactly passive (especially not if you buy a neglected one like me), but it was relatively simple to take over. There was no complicated software to learn or training on procedures to follow. Just collect the coins, fill up the change machines, and deposit the cash. This would be a great business for someone with some time to jump into and be able to learn very quickly.
5. Works Well in Underserved Markets
Not every laundromat is in an underserved area, but older ones like mine often are. My location serves several low-income apartment complexes and nearby RV parks. While we see a few customers from the Air Force base and college campus, most of our regulars appear to be locals—small families or older individuals, usually in their 30s to 60s. It’s a loyal customer base that values proximity and affordability.
For this type of market, a cash-based setup actually makes sense. Some of our customers may not have bank accounts, or may simply prefer to deal in cash. Whether due to financial limitations, immigration status, or personal preference, cash offers them a level of accessibility and convenience that card-only businesses don’t. It’s another example of how your operations should align with your market.
6. Tighter Control Over Reported Income
Cash gives you control over when and how much to deposit. While you should always report your income ethically, the flexibility in timing can help with cash flow and tax planning in a way digital businesses don’t allow.
7. Real-Time Business Feedback
In a cash-based business, you can literally feel how the day went. When you open a machine and see the collection, you instantly know whether it’s been a slow or busy week. That kind of immediate feedback loop helps you make smarter, faster business decisions without waiting to evaluate digital data.
For example, when we made some early changes to the laundromat—cleaning it up, fixing broken machines, and adding amenities, I didn’t need to wait 30 days to see if those efforts paid off. I could tell just by the number of quarters in the machines that customer flow was improving. If you’re hands-on with the business, you’re not just collecting the money, you are collecting your data. Using this, I’ve been able to keep very close tabs on how well the business is doing and if the changes we are making are paying off. I will also be able to monitor and plan for any drops that come in real time.
Cons
1. Limited Market Reach
Running a cash-based business limits your market reach. We’ve already had several encounters where people asked if there was another way to pay. Especially with younger customers, there’s almost an expectation that card or phone payments will be available.
There are a couple of ways to address this, like installing an ATM or offering a third-party payment solution, but both options come with their own set of drawbacks—they are expensive to install and maintain. We’re sticking with coin/cash for now, but we’ll continue to monitor the feedback.
2. Theft Risk
Keeping cash in the building creates an increased risk of theft, not just from the outside world, but unfortunately also from people working with or for you. Cash is hard to trace, and if someone wanted to pocket a handful of quarters or skim from a collection, it might be a while before you’d even notice. That risk is baked into the structure of the business.
We’ve thought about adding an ATM, but that opens another can of worms. More cash in the building not only increases the insurance premiums we’d have to pay, but also makes the place a bigger target. This isn’t something we can automate away or ignore; it has to be built into how we manage the business operations.
3. Manual Collection is Time-Consuming
Cash-based businesses like laundromats require someone to physically collect the money. In our case, we collect quarters twice a week to keep the machines operating smoothly and the change machines stocked. Each collection takes around an hour to an hour and a half, depending on how well we prepared everything ahead of time.
This is not a task you can automate or delay—it has to get done on time, every time. Right now, we do it ourselves. It’s not just about collecting the coins; it’s also about restocking the vending machine, refilling vending soap, and ensuring everything is set for the next few days. It’s a weekly responsibility that requires a time investment.
4. Difficult to Outsource Operations
The collections that are time-consuming are also difficult to outsource. Handling large amounts of cash makes this task one of the most tempting areas for theft if it’s not done by someone you fully trust. There’s no digital record tracking every quarter that goes into a bin, which means there’s no easy way to spot inconsistencies without being hands-on.
We haven’t found someone we trust enough to take this on, and I don’t anticipate that changing soon. This isn’t the kind of task you can easily hand off to an hourly employee or a service—it’s high-stakes and the core of our profits.
5. No Remote Monitoring
One of the trickier parts of running a cash business is the lack of real-time visibility. There are systems out there that can track coin intake or give remote updates on cash levels, but they’re expensive and complicated to install, especially on older machines. We’ve invested in a few digital solutions to manage the store remotely, like cameras, a text-based support line, and a form for customers to report machine issues. However, none of those tools can tell us how much money is actually in the machines.
That means if I want to know how the laundromat is doing financially, I have to physically go to the building, unlock the machines, and count the coins. There’s no app or dashboard for that. So while we’ve built out systems to help us manage from a distance, the cash is still something that can only be tracked in person. It limits flexibility, especially if you’re managing from afar or trying to grow the business alongside other commitments.
6. Higher IRS Audit Risk
Although we run everything above board, cash-heavy businesses can draw more scrutiny from the IRS. Because cash isn’t automatically tracked by a digital system, there’s more potential for underreporting income, even if it’s unintentional. And because of that potential, I imagine the IRS tends to keep a closer eye on cash-based businesses.
This means keeping detailed, accurate records of your income, collections, and expenses is critical. Don’t assume that you can be casual about documentation just because it’s cash. You need to treat every collection like it’s being audited—even if it never is. That discipline protects you down the road, especially if the business grows or you decide to sell.
7. Poorer Documentation for Loans or Investors
Even when evaluating this business for purchase, I was sifting through collection logs (notes on the seller’s phone), pictures of quarters being weighed, and their bank statements. At the end of the day, there was a level of trust involved—believing the business was making what he said it was making and hoping it would continue to do so.
Since acquiring the laundromat, I’ve looked at several other laundromats for potential purchase, and many don’t keep formal documentation of their coin collections at all. They rely solely on bank deposits, which can make it really hard to get a grasp on actual performance. Poor documentation makes it challenging if you ever want to sell, get a loan, or bring in investors. If you’re buying one, I highly recommend spending time observing collections and reviewing whatever financial records are available. Proper documentation might feel optional in a cash business, but it becomes essential when trying to prove value.
Conclusion
It has been fun to learn about a new business through hands-on experience instead of a course or conference. There are always going to be pros and cons in any business you get into, but cash-based businesses bring a very specific set of challenges and rewards. They’re flashy on social media right now, and a lot of people talk about them like they’re passive or easy. That’s not what I’ve found so far, and that’s not why I got into it.
I bought this laundromat because I wanted to acquire more cash-flowing assets in 2025, and this opportunity landed right in front of me. It hasn’t been perfect, but it’s been worth it. I hope this helped pull back the curtain on some of the realities behind owning a cash-based business. It’s not all passive income and coin-counting—work, risk, and learning are involved. But there’s also a lot of reward in building something of your own. I’ll keep learning, keep sharing, and hopefully keep growing this business and others along the way.