The coin laundry is an All-Cash, Necessity of Life service business. What could be better? Yet, understanding how the business justifies such a high purchase price is baffling. In fact, many times the value is so misunderstood that it results in investors over-paying. Sometimes grossly over-paying.
First, you must understand that the coin laundry is a business of longevity. Its value is sustainable for generations; given the right conditions. It is this sustainable value that justifies the large price. But many laundries are not positioned correctly in order to accomplish this sustainable position. To their misfortune, many investors only look at the current income to establish the value. This is like marrying a one-night stand. You are taking a big risk.
The value is not found in any one place. Not in the equipment, service, layout, amenities or even in the demographics. It is in the combination of matching the needs of the community with the service you are offering; and developing a long-term business model that will benefit both the community and your reasonable return on and of the investment. So remember, each market area is as different as the people that live there. The community coin laundry is a place for your customers to come to do one of their least desirable weekly chores. It is a home away from home for a short period of time. Once the laundry is operating properly, it must be continuously sustained.
Over the years, I have been to more laundries than I can even believe, throughout California. I’ve seen some beautiful and well-run laundries. But, I’ve seen a lot more that are literally disgusting. The owners treat their business more like a quarter-factory than a service-oriented business. Many laundries continue to earn good profits for a long time, operating this way. Not taking good care, or replacing equipment when needed. They fail to regularly modify their business model to meet the demands of the changing community and often their customers begin to feel dissatisfied and even unsafe.
Unfortunately, the laundry owner can get away with this for quite some time. They tell their friends how easy it is to operate and how much they earn. Then, when the business model starts to fail and their mistakes result in a declining return, they sell it. They often sell it at a price based on the then, net return and without consideration for the re-investment costs necessary to sustain the business long enough for the new owner to return the purchase price.
By then the new investment required to bring the business model up to date is just too much to justify, after paying the price they paid. So, the laundry continues on this downward spiral. This is the danger of purchasing on the Net Multiplier. Much more needs to be considered.
Today, many of these bad investment decisions are resulting in a large number of laundries being made available for sale at too-high numbers. Be careful in purchasing these. While there are pearls, there are many more that may just stink. These are avoidable mistakes. When you purchase a laundry, look at the total investment required. This includes the purchase price and the re-development of the business model; if needed.
Also, please Remember, that if you purchase and operate a laundry, while you may not to need to be physically on site at all times, you do need to maintain the business in a manner that will keep it moving forward for generations.
About The Author: Chuck Post specializes in selling coin laundries and consulting with laundry buyers and sellers. Let my associates and I help guide you on the path to success: Laundry Specialists * Expert Witness Services * Coin Laundry Valuations * Monthly Workshops On Buying & Selling Laundries. With 25 years of experience buying, selling, valuing, retooling, analyzing and giving expert court testimony about coin laundries, Chuck Post is one of the nation's leading experts in the field. Those interested in buying, selling, or starting a laundry business should contact Chuck at 619-227-5711.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Brad Steinberg, Broker - Laundromat Specialists
Laundry specialists - founded in 1968 by three laundry professionals, PWS is a family-owned corporation. Through the years it has grown to become the largest vended laundry equipment distributor in the United States. Call Brad Steinberg at 323-721-8832 to sell or buy a coin or card laundromat.
|Larry Larsen, Broker, Laundry Specialist - Orange, LA Counties
Larry Larsen, Realtor has over thirty years of experience in the sales, ownership, management, and construction of coin laundries. He is a licensed broker active in the sale of coin laundries, a licensed insurance agent specializing in coin laundry insurance. Phone Larry at 714-630-9274.
|Steve Erlinger: Laundry Broker, Consultant - Orange/Riverside Counties
I specialize in the laundry industry (Broker/Consultant at 949-500-5893) - Riverside, Orange Counties. I assist buyers navigate the many facets of finding, evaluating, and operating a laundry business. I also help current laundry owners find additional stores, sell, evaluate an existing laundromat.
|Peter Siegel, MBA - SBA Loans, Non SBA Financing Assistance
For over 25 years I have provided niche business purchase financial advisory and loan placement services with SBA and Non-SBA Loans, Retirement Plan Conversions, Private Investors, etc. Financing amounts available: $20K to $7MM. Call today to get pre-qualified or receive financing: 866-270-6278.
|Mike Hurrell, Broker: Coin & Card Laundry Specialist Brokerage
Providencia Properties Inc in association with Golden State Laundry Systems is a full service Coin Laundry Real Estate Broker. At GSLS you will receive personalized attention from our professional staff of coin laundry experts. To sell or buy a Southern CA laundromat call Mike at 310-223-2240 X209.
|Chuck Post: Laundry Buyer Representation, Consulting, Due Diligence
Chuck Post has 32 years experience in the laundry industry, specializing in assisting laundry buyers (and entrepreneurs) with buying or starting up, building, re-tooling, laundries throughout California. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations.
|Elizabeth McGovern: Escrow Services - SF Bay Area
McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
|Diane Boudreau-Tschetter: Escrow And Bulk Sale Services
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
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Chuck Post hosts this live online webinar on Buying A CA Laundry. Upcoming webinar date(s) include: 7/15, 7/22 (Saturday). Have your questions ready for an open and honest discussion about both the Pro and the Cons of the Vended Laundry Business. Call Chuck direct at 619-227-5711 for info, RSVP.
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