The Re-tool laundry is simply a laundry that is in a position to be advantaged by adjusting your business model, including replacing some or all of the equipment. While the idea of replacing equipment after already investing a great deal of capitol is uncomfortable to many owners/investors. The fact is that every day the equipment gets older, as does the lease gets shorter. If the equipment mix or the condition of the equipment is not kept up to date in a laundry, or it is no longer meeting the desires and needs of the market place, you have no reasonable choice but to do exactly that.
Failing to take the necessary steps will be the start of the businesses and the probable erosion of your investment. The re-tool process, done correctly can greatly increase your position both in bottom line cash flow and your investment value; sometimes far beyond what the additional investment combined with your base investment might have been. The best news is that doing these improvements are financeable at up to 100% of all costs. I teach my Clients that they can’t just look at the purchase price alone in evaluating a business investment. They must also look at the total required investment, including the needed improvements and include these in their investment allowance.
Why is this important to a business buyer? The answer, this is the best way for a business operator/entrepreneur to realize the true value when purchasing a business; certainly in a business like the laundromat where the income and the value is supported by very expensive equipment. So if you are going to accept the challenge of advancing yourself in this economy, you need to look at the true risk as well as at the work ahead of you as logically and as analytically as possible. Only then will your readiness combined with the opportunity = your success. Let me just add that opportunities abound today.
It can be easily added that if current owners of businesses understood this and have the wherewithal to make these changes and would, they could greatly improve their position as well. Why they don’t has baffled me for more than the 27 years I have been in the vended laundry business. Although, it was much like that when I was in the Bicycle business too. But for today’s prepared buyer, there lies the opportunity.
So what do you do with this information? I would recommend writing down every well thought out, seemingly obvious and even somewhat stupid question you have and start getting answers. Everyone reading this is at one stage of buying and/or owning one business or another. So start by jotting down the business types you are interested in. Understand both your personal cash flow requirements and your investment goals. Be realistic in asking yourself if you do qualify. (Note: In Southern California a vended laundry purchase will require a cash infusion well into 6 figures or more and good credit as well.)
It is true that in some cases a laundry might be purchased at a lower rate but in reality it is likely that it is in need of some amount of additional investment and that could be as much as 100, 200 or even 300k in after the purchase investment; in order to get it operating at a good model level. The risk of undercapitalization in this business can have disastrous effects. Fact: a laundry with 12+ year old equipment will need to have the equipment replaced; at least soon and keep in mind that a single new washer, alone including freight and basic installation will cost about 150.00 (per pound of wash capacity) or more.
However, after all this is said, if you prepare yourself and you follow sound reason on your journey toward independence, study hard and be sure to look at the worst of the lot and learn. Ask why it’s like this. Ask what will need to be done to correct the problems; ask if you are prepared for what needs to be done to correct the things that are negatively affecting the business. Most importantly ask if the location is sound? If so, you might have just found the “Diamond in the rough”. As for one personal plug; if you are wondering who you might ask?
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. You can reach Chuck direct at 619-227-5711.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|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.
|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.
|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.
|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.
|Helen Yoo: Escrow & Bulk Sale Services - Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|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.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
|Increasing Your Laundry Business, Getting Your Laundromat Ready For Sale
Running a laundromat is simple, yes, but it's not easy. In this article Steve Erlinger - Laundry Broker & Consultant at 949-500-5893 will cover what it takes to increase business and get your card or coin, laundromat in top shape ready to sell for top dollar in any economic environment.
|Buying A Laundry: Coin Operated Laundromat Or Card Operated Laundromat?
More and more we see "Coinless Laundries". Anyone in the business or entering the business will face the age old question; Coin or Card? Well, perhaps it's not an age old question, but it is a question worth considering. Steve Erlinger (Laundry Broker & Consultant at 949-500-5893) explains.
|Buyer Asks: Is Buying A Service Based Business A Good Choice These Days?
I've been selling businesses a long time & I get many calls from buyers who are open to buying something but aren't sure what would be a good investment. I'll get asked what I would buy if I was them and my answer is always the same, "a service business". Business broker Chris Lazurik explains.
|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.
|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.
|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.
|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.
|Determining The Value Of A Laundry Business: What Factors Are Important
Steve Erlinger (laundry Broker & Consultant at 949-500-5893) discusses how to value a laundry. Issues that affect a value include: demographics, the lease, past financial performance of the laundromat, age and condition of the equipment, utility costs, competition and other factors all play a role.
|See All News, Tips And Events|