BUYING A LAUNDRY MAT HOW TO
The ones that are down are the owners who do not advertise and do not know how to run a store.” Very interesting point of view, don’t you think? Lessons LearnedĪfter reviewing dozens of financial statements as part of due diligence for prospective business buyers, beware of the following facts: When I mentioned that the industry was down 30% he responded with “Some people, not everyone, is down that much. One responded with, “If you do not have enough machines when your customers come in, they will leave and never come back.” He was arguing that it was better to have over capacity rather than under capacity. When I suggested to them that I might want to have a small location that would be operating at 80-100% of capacity. If I had a large location, no one would dare open another new location near my location. The equipment distributors’ reasoning was this. The cost to do this was over $1.2 Million dollars, depending on the city and water district set up fees. They all suggested that I needed a location that was over 5,000 square feet which could handle over 100 machines.
Here is what I learned from talking to the new equipment distributors. I then started my investigation into the costs of doing this. I figured after I built it, I could sell it since I knew it would be a money-maker. I got the wild idea that maybe I should find a perfect location, based on my criteria and build a new location from scratch, with all the newest ecological up-to-date equipment. One day in February 2011, I was thinking about all the people who would like to buy a coin laundry but couldn’t find one. The deal made sense because the buyer and I negotiated the price down to account for these problems, and the buyer was offering all cash. The places were dirty, 40% of the machines were broken, there was zero customer service and the cost of opening a new store was so high no one would do it. They were so mismanaged that the owners were fighting about how to fix the locations. Both locations were owned by the same owners. I blessed that deal.Īnother client was looking at the only two coin Laundromats in a small coastal town in Northern California. After months of work, he only made an offer on one of the two locations we had discussed together because it was the only location that fit all of his and my requirements. He then went on to evaluate another 35 locations using the tools I gave him. One of my clients had me educating him on two locations he found. Many clients that I am dealing with have been interested in coin laundries and have brought me financials to review as part of their due diligence.Ĭoin Laundries – A Sound Business Investment? Examples In fact 2% of all the business sold through business brokers are coin laundromats. This is because they are cash businesses and because they appear to be a good part-time business. Buying a coin laundry or laundromat appeals to a lot of business buyers.
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