Postings Advertise Resources Blog Discussions About Us Register Login BizBen Podcast   BizBen Podcast  
BizBen.com
500 New & Refreshed Posts, Postings Daily
Over 8,000 Postings & 2,500 Resources
Assisting Buyers & Sellers Over 25 Years!

Categories

How To Sell Your Laundromat And Not Get Taken To The Cleaners!

Laundromats and coin operated laundromats are popular choices among business buyers as they often have minimal payroll expenses and can be successfully run as an absentee run business.

Additionally, Laundromats usually have predictable sales and cash flow making it an easy business to run.

With a popular business model, you need to be strategic about when you sell your laundromat so you don't get taken to the cleaners by a buyer and so that you maximize your profits.
  
When To Sell

Deciding to sell your Laundromat at the right time is critical in getting the upper hand in the sales process.  Ideally, you want to sell your business when sales are steady and your equipment is in good shape.  The condition of a Laundromats' equipment is the biggest factor in the due diligence process of selling this type of business.

If a potential buyer sees that the equipment is old, needs repairs and will likely need to be replaced, they may walk away from the opportunity or present you with a low offer to compensate for the investment they will need to make.  On top of that, if your equipment is getting worn down it may not be operating as best as it could and this could turn customers away causing your sales to dip.  Bottom line; sell your Laundromat when the equipment is still in good shape.

If you aren't sure what the life of your equipment is, here are some benchmarks for you to consider:

Machines:
                                                          
Topload Washers (12 lbs. to 14 lbs.) - Life Span 5-8 years
Frontload Washers (18 lbs. to 50 lbs.) - Life Span 10-15 years
Dryers (30 lbs. to 60 lbs.) - Life Span 15-20 years

Heating Systems:

Life Span 10-15 years

Coin Changers:
 
Life Span   10-15 years

Work With A Broker Or Laundry Consultant / Advisor

Just because your business is popular with buyers doesn't mean you should try to go through this process on your own.  While it may seem like the right thing to do to maximize your profits by not having to share them a broker, the opposite is true.  While you will have to give a broker a portion of the sale price for their service, brokers have the ability to help you position your business properly in the business for sale market and to connect you with qualified potential buyers.  Trying to do all of this on your own would take much longer than if you enlisted the help of a professional business broker
 
Issues To Be Prepared To Discuss

During the sales process you need to be prepared to handle objections and concerns from potential buyers that are critically evaluating your business.  One thing that is guaranteed to come up is the crime rate in the area your business is in.  If you're in a suburban area this probably won't be a huge concern but if your Laundromat is in a more urban area a potential buyer is going to want to know what the crime statistics are so they can understand what their risks are.

Going back to your equipment, be prepared to answer a lot of questions here.  Buyers are going to want to know who has maintained it and when things were last replaced.  If you have documentation of services and parts replaced, be prepared to present those to the potential buyer.

Last but not least, be prepared to discuss your utility bills.  As you know, water consumption is a big part of this business and an educated buyer is going to want to know exactly what he/she is facing in terms of a water bill.  Also, be aware of any new construction projects going on in your area and any new Laundromats opening.  Buyers will want to know of potential growth opportunities and new competition.  

The General Rules For Establishing A Price

Depending upon the market or location of the Laundromat, pricing can actually range between 1 and 1.5 times gross annual sales.  To start, determine the age and condition of your equipment.  This is the most difficult evaluation to make. Inspect the water heating systems, as this is many times the most expensive single component to replace. These two observations will go a far way in determining a laundry asking price, or variance from the standard of 100% of gross revenue as an asking price.

Another great metric is determining water usage. Quite often water companies will sell water in HCF or Hundred Cubic Feet Units. 7.48 gallons of water which is equal to one cubic foot of water, so 748 gallons of water equals a Hundred Cubic Feet. A standard top loader uses 30 gallons of water, and the 30 and 50 pound units are multiples of the top loader. The dryer revenue should equal at least half of the washer revenue, up to 100% of the washer revenue.

What Buyers Are On The Look Out For

Industry-wide there seems to be a reluctance to replace equipment near to or at the end of the life cycle. As a result many owners decide to sell rather than improve. The buyer then faces the realization that within a short time frame an investment in equipment will be necessary.  To position yourself a prime opportunity, don't fall into this category.  Instead do as I recommended and sell your business when your equipment is in good shape and still has several years in its life expectancy.

More Info And Resources On Buying Or Selling A California Laundromat:

All California Laundries For Sale & Wanted To Buy Requests:

http://www.bizben.com/business-for-sale/coin-laundry-laundromats-businesses-for-sale-type-california-ca.php

All Business Brokers & Agents Who Assist With Buying And Selling Laundromats:

http://www.bizben.com/business-brokers/coin-laundry-laundromats-businesses-business-brokers.php

Laundry Resources To Asssist You With Consulting, Financing, Due Diligence:

http://www.bizben.com/business-resources/coin-laundry-laundromats-businesses-resources-california-ca.php

More Articles & Blog Posts Regarding Buying And Selling A Laundry:

http://www.bizben.com/blog/coin-laundry-laundromats-businesses-blog-posts.php

One last thing . . .

Keep in touch - let me know if you need any assistance with either buying, searching for, or sell a California laundry - I will point you in the right direction.

Categories: BizBen Blog Contributor, Business Valuation Issues, How To Sell A Business, Selling A Business

Contributor:

Peter Siegel, MBA
Areas Served: Nationwide - All Areas
Phone:  925-785-3118 Cell, 925-785-3118 Text
Peter Siegel, MBA - Founder Of BizBen.com (since 1994), I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I advise/coach buyers, sellers, and brokers daily about buying & selling small to mid-sized businesses throughout the Nation. I can be reached direct at 925-785-3118.




Place A Posting To Sell Or Buy A Business, Search All Postings


Sell A Business Fast: Place A For Sale Posting Now To Sell A Small Business - 7 Programs To Select From >
Find A Business To Buy Fast: Place A Wanted To Buy Posting Today - Best Way To Find & Buy A Business >
Search Business For Sale & Wanted To Buy Postings On BizBen - 500 New & Refreshed Postings Daily! >

Other Related Blog Posts, Articles, And Discussions You May Be Interested In

Due Diligence Gas Station Purchases Buying A Gas Station Business: What To Look For When Doing Due Diligence

Doing due diligence when buying any type of business is extremely important. Regardless of what type of business you are buying there are certain things you will always look at such as, financials, equipment, legal issues etc. We take a look at several angles for optimal gas station due diligence.
8 Questions To Sellers 8 Questions You Most Likely Will Be Asked When Selling Your Small Business

When selling your small business, you'll be bombarded with questions - from the brilliant to the ridiculous. You need to be prepared. Here are some of the key questions you can expect to be asked. Tim Cunha (SF Bay Area Business Broker) reviews many of these possible questions from potential buyers.
Buying An Absentee Small Business The Pros And Cons Of Buying An Absentee Run Small Business In California

Peter Siegel, MBA - BizBen Founder discusses the difference between a hands on owner and an absentee owner. It covers why someone would want to be an absentee owner and then goes on to discuss the pros and cons of buying an absentee run small business in the California marketplace.
Buying A Health Club Successfully Working Out A Deal: Things To Consider When Buying A Boutique Fitness Gym

First thing you may be asking, what is a boutique gym? Simple, a boutique fitness gym is on average much smaller than your typical large-scale gym, ranging from 800 to 2,500 sq ft. In this BizBen blog post, Joe Ranieri (Southern California Business Broker) discusses this topic for gym buyers.
Buying A Business Losing Money Should I Buy A Small Business That is Losing Money? Brokers & Agents Discuss

When considering buying a business that is losing money one has to be very careful. There are reasons that the business could be losing money that aren't fatal or extremely difficult to fix and there are other reasons that should send you running in the other direction. ProIntermediaries discuss.
Selling A Business 13 Crucial Tips Selling A Small To Mid-Sized Business: 13 Crucial Items To Sell A Business

Only 30% of all small businesses for sale that are put on the market overall are sold! A surprising statistic to most business owners, agents, and brokers trying to sell a small business! If however you follow the strategies (BizBen Protocol Method) in this blog post you should see success!
Dual Agency Brokers Does Dual Agency Really Work For All? ProIntermediaries Discuss This Topic

Who really represents the buyer? The selling broker or agent through dual agency? Many brokers and agents weigh in on this Discussion on BizBen. Bottomline is all business buyers need to know who really represents them and has their best interest at heart when seeking and negotiating on deals.
Giving Buyers Tax Returns Should Sellers Of Small Businesses Give Potential Buyers Their Tax Returns?

Should small business owners/sellers or brokers/agents give potential buyers direct access to past company tax returns and financials (profit & loss statements) either before or pre the due diligence process? Multiple ProIntermediaries and ProAdvisors discuss this topic on this BizBen Discussion.
Business Buyer Feedback On Postings 8 Items Buyers Of Small Businesses Find Critical When Reviewing Businesses

In this month's Business Buyer survey for BizBen.com, we asked participants in our ProBuy Program and 250 other random business buyers what they look for and avoid when looking at a business for sale postings online. Of the 20 potential posting characteristics we asked about, 8 stood out with most.
Questions When Buying A Liquor Store Buying A Liquor Store: 3 Questions To Consider And Ask Before You Purchase

Buying a liquor store? First, ask yourself these three critical questions to find out if owning a liquor store is right for you. Questions like hands on vs absentee ownership, inventory turnover, licensing issues. Peter Siegel, MBA (BizBen ProBuy & ProSell Program Lead Advisor) explores this topic.