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|
|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 - California
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.
|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.
|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.
|Larry Larsen: Laundry Consulting, Brokerage, Insurance - Southern California
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. Phone me at 714-630-9274 or 714-630-Wash.
|Shalonda Chappel-Pilgram: Escrow & Bulk Sale Services - Southern California
Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.
|Joe Sandbank, Esq: Legal Services For Buyers, Sellers, Brokers - Throughout California
I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process. Please phone 916-672-8018 for more info.
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services - California
Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.
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|Interview: With Chuck Post On How To Buy A Laundry Business Successfully
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|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.
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