Share This Info:  

Due Diligence - Buyers Role When Buying A Coin Laundry


Due Diligence When Buying A Coin Laundry

What is the extent of the Buyers obligation to investigate a business before purchasing it? To what extent should a Buyer rely on the Selling Broker for "decision making" information?  A "Common Sense" approach to buying a business should tell you that certain areas need to be investigated before completing any business acquisition. So why is it that so many people find out so much about the business they purchased after the closing of the escrow?

The Buyers diligence begins upon the early stages of developing the idea to begin a business. The Buyer needs to start by thinking out how deep his or her commitment to the business will be. Is the Business Model conducive to your life style? It is extremely important to be realistic, fully aware and prepared for the commitment of a new business. Regardless, if the business is easy to operate, like a Coin Laundry or more complex and time consuming, like a restaurant. An acquisition of a business requires independent thinking and a willingness to seek expert help and guidance, when lacking. While Business Ownership offers a sense of freedom like nothing else can, without proper preparation this dream can turn into a nightmare; and always, unnecessarily.

As for the purchasing of the business; does the Buyer possess the skills necessary to assess and evaluate the business? Doe he or she have a good understanding of the potential of the market place, knowledge of the age, efficiency, current nature of, and condition of equipment and fixtures,  marketability of the inventory and, of course the lease terms are critical to understand.. These are big questions and require investigation; along with the more obvious, books, taxes and receipts. Does the Buyer have a clear picture of the improvements that need to be made to advance the business? No one wants to buy a business that can't be improved. Typically, a new owner will want to make improvements. So, an understanding of the improvements that need to be made, along with a realistic estimate of their costs and the anticipated Net Effect; in terms of the Return on Investment, for these improvements need to be understood long before the lifting of contingencies or earlier.

It has been my experience that most Buyers anticipate that the Sellers Broker is on their team. This might very well be true; but you should start with a clear understanding of the role of the Broker. The extent of the relationship between Buyer and Broker needs to be clarified up front. In many cases, where the Buyer is fully capable of assessing the business and these other areas, the Sellers Broker alone might be sufficient. But in many transactions the Sellers Agent, is just that. Your questions might be answered but not unless you formulate them for yourself, first.

The key is to make certain you are getting what you are paying for. The Buyer is entitled to Fair Dealing practices from the Sellers Broker, but often times needed areas are neglected. It is important to have qualified representation looking after your interests. In selecting a Broker, be certain that the Broker you choose to work with has specific knowledge of the business and industry you are purchasing and your personal goals. Be certain that what you paid for is what you get.

With so much at stake; why is it, that in so many transactions the Sellers agent is the only agent? It might be due to the Selling Brokers reluctance to share their commissions. This is compounded by the Buyers reluctance to pay out additional funds for a Broker or specialist/consultant. The additional fee might seem unnecessary. To just complete a transaction, so, many Buyers rely on the Sellers Agent for assistance. This can create a misunderstanding; unless properly clarified at the beginning of the relationship.

I have personally acted as a Dual Agent in the majority of my own transactions. I believe that honest and experienced Brokers can deal in this role effectively; but, it must be understood early on. The Seller should also be aware of the Buyer/Broker relationship and understand its implications. It is additionally important that the Broker clarify the limits of the relationship and his obligation to the Buyer at the onset of the negotiations.

But once you have taken possession you are left on your own to discover the issues that were not brought into the conversation during the transaction. So start out right. You need and deserve individual attention. Be sure you get it!

Chuck PostAbout The Author:  Chuck Post specializes in assisting those selling or buyinig coin laundries throughout Southern California. He also offers other specialized services: Expert Witness Services & Coin Laundry Valuations. Make sure you check out his popular monthly workshops on the topic of buying and selling coin laundries. You can reach Chuck direct at 619-227-5711.


Categories: BizBen Blog Contributor, Buying A Business, Deal And Escrow Issues, Due Diligence Issues, How To Buy A Business



  Helpful Resources To Assist In Selling And Buying California Businesses
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.

Larry Larsen, Broker, Laundry Specialist - Orange, LA Counties

I have over forty 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.

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.

Steve Erlinger: Laundry Broker, Consultant - Southern California

I specialize in the laundry industry broker and consultant in Southern California. 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.

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.

Brad Steinberg, Broker - Laundromat Specialists

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

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.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Selling A Laundromat? Top Tips: Valuation, Pricing, Finding Buyers, Resouces

Laundrys are popular choices among business buyers as they often can be successfully run as an absentee run business. You need to be strategic about when you sell your Laundromat so you don't get taken to the cleaners! Peter Siegel, MBA (at BizBen) provides laundry purchase financing - 866-270-6278.

Interview: With Chuck Post On How To Buy A Laundry Business Successfully

Chuck Post (and his Associate Chris Mason) a California laundry consultant, due diligence specialist, buyer representative for laundry buyers shares his thoughts with Peter Siegel, MBA on his weekly BizBen Vlog & Podcast show. Chuck and Chris cover all related topics on buying a California laundry.

FREE Online Webinar This Week: For Buyers - How To Buy & Value Laundromats

Chuck Post hosts this live FREE online webinar on How To Buy & Value A California Laundromat. Webinars are scheduled every week! Have your questions ready for an open and honest discussion about both the pros & cons of the laundry business. Phone 619-227-5711 for more information & to RSVP today.

FREE Live Laundry Seminars For Buyers: See Our Upcoming Schedule Of Seminars

Looking to buy or start up a card or coin laundromat? PWS Laundry is presenting their schedule of upcoming Seminars for laundry buyers & entrepreneurs. These informative live Seminars will cover an overview of the laundry industry, selecting the right location, an overview of leases, Q&A, plus more.

When Buying A Laundry Why Buyers Should Have An Exit Strategy When Buying

Chuck Post (reach him at 619-227-5711) a laundry consultant, specialty broker, buyer representative & due diligence advisor starts this discussion on why it's important to have an exit strategy in mind while buying a laundromat! He & others explain why this concept is so important to serious buyers.

Laundry Broker Explains Laundry Leases: 4 Big Issues For Buyers And Sellers

Chuck Post (Laundry Buyer Rep, Consultant, Due Diligence) discusses what laundry buyers and sellers should consider when reviewing and considering a laundromat lease. A must read for potential laundry buyers and owner/sellers of card and coin operated laundromats. Reach Chuck at 619-227-5711.

Laundromat Business Valuations: Could Buyers Of Laundries Be Overpaying?

Chuck Post (laundry buyer rep, consultant, due-diligence expert) discusses the factors of appraising laundries. Why such high purchase prices is baffling - many times the value is so misunderstood that it results in laundry buyers over-paying for a laundromat. Reach Chuck direct at 619-227-5711.

Laundry Expert Reviews: The Laundry Lease And Its Effect On The Valuation

Read why longer leases increase the value of a card or coin laundromat when buying or selling a laundry. Chuck Post (Laundry Broker, Consultant at 619-227-5711) expands on the topic of lease structures on the purchase or selling of a laundromat. Laundry sellers and buyers will want to read this.

See All News, Tips And Events


Chuck Post Laundromat Industry Expert
Golden State Laundry System Laundry Business Brokers
Business Purchase Financing SBA Loans
Steve Erlinger Laundromat Broker
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million



BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2019, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Selling A Laundromat? Top Tips: Valuation, Pricing, Finding Buyers, Reso...
Read More News
Laundromat Business Valuations: Could Buyers Of Laundries Be Overpaying?...
Read More News