Owning your own laundry business can be the most rewarding adventures one can take professionally. But for some it is a nightmare. The most common reason for this is poor awareness and poor preparation.
If you are considering investing in a laundromat business you must look forward first. The accomplishments or failures that the business has experienced to date are the businesses history but not necessarily its future. Most likely the business has experienced both successes and failures. This is expected and it is one of the most common gauges of value; but what you must look at when purchasing the business is the potential going forward.
Most importantly what will it take to get it there? Of course you must be realistic in both the expectations (projections) and the costs.
Answer these 6 questions before making an offer:
1. Get a complete history of income and expenses for 2-5 years. Note that it is ok to enter into a Letter of Intent Agreement prior to an actual offer in order to get information released for pre offer review. Typically you will have a brief period to determine if you are going to go forward. To do this you will need to establish credibility as a serious and qualified Buyer.
2. Develop a clear and realistic vision of what this laundry business will become under your direction. Find out what it will take to make it into that. Most importantly is to make your mark immediately. I am most comfortable when a Client updates the business model of a business as soon as they take possession. Put your mark on it now because sometimes-negative thinking and Naysayers will keep you from seeing your vision through when you wait. I have witnessed too many who failed because of not advancing their business plan.
3. Get a copy of the lease, including all Addendums and Assignments. Find someone to review the lease, who understands the particulars of the specific industry and market you are considering purchasing. An attorney should additionally review it. Neglecting either of these could lead to regret later. Don't forget to answer the questions "what are the industry and market norms and expectations" or other directly related particulars that make the lease desirable. As a rule I address many issues of every lease that comes my way. There is almost always something I don't like or wish to include or items that needs to be modified, added or what have you.
4. Knowledge is king. If you are going to purchase a business in an industry, you should have a good knowledge of the industry and who the players are. The same will be true for the products you sell and the services you provide. Ask yourself who are the competitors and how will you compete? A solid plan is essential. Research articles and on line sources suspiciously.
5. Be comfortable with the agent/brokerage you are dealing with. You should demonstrate good will to them. Disclose information to them and let them know that you are serious and qualified. Listen carefully. This is time to gather information. You can argue points and concerns when you are clear on what your needs are. But you should be immediately confident (before signing an NDA) that they will make sure to get you the information you need. If not then unless there is good explanation your best interest might not be important enough to them.
6. Don't let anyone tell you that you cannot have outside representation. You can find a broker that works as a Buyers agent and pay him. You can also pay an attorney. I would recommend one that knows the industry or that you have confidence that they understand the deal points in this situation sufficiently. If the broker has a problem with that then you might have reason to move on.
Well I can see there is too much to still say to be able to include it in this writing. Just remember, in the end it will be what you put into your business in terms of energy and finance combined with this early preparedness that will make you successful. No matter what business you buy it is called a "business opportunity" for a reason.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Mike Hurrell, Broker: Laundry Specialist - Southern California
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
32 years experience in the laundry industry, specializing in assisting laundry buyers with buying or starting up, re-tooling, laundries in Southern CA. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations. Call 619-227-5711 (Cell).
|Peter Siegel, MBA: Business Purchase Financing Solutions
Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.
|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. Call 949-500-5893.
|Peter Siegel MBA, BizBen Founder, ProBuy, ProSell, ProIntermediary Programs
Founder Of BizBen.com (since 1994). I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I consult daily with buyers, sellers, and brokers daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.
|Larry Larsen: Laundry Consulting, Brokerage, Insurance
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.
|Brad Steinberg, Business Broker: Laundromat Specialist
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.
|Shalonda Chappel: 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.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
|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 Southern CA 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.
|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 this BizBen Podcast & Webinar. Chuck and Chris cover all related topics on buying a California laundromat.
|Who Is Today's Laundry Business Buyer/Investor: Blue Collar Or White Collar?
Today, we see more growth in the white-collar sector than we do in blue-collar entering the laundry business. We are also happy to see a rapidly growing representation of Black and Hispanic investors; women entrepreneurs are possibly one of the fastest growing segments. Chuck Posts 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.
|Laundry Broker Reports On The Latest Trends From The Laundromat Industry
Steve Erlinger, (laundry broker specialist/consultant 949-500-5893) reports the latest laundry industry trade show & what's new in the coin and card laundry industry. He discusses what various manufacturers are doing and why laundry distributors can be important ally when buying a laundry business.
|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.
|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 - 925-785-3118.
|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.