If you are considering buying a laundry business, you are in good company. The laundry business offers all of those rewards of business ownership, with much fewer headaches than with most other businesses. Owners are able to operate their business with less time involvement than with almost any other storefront business.
The return on investment is generally good, as compared to other investments and the risk is generally low, assuming you don't make the big mistakes when you make the purchase of your business.
What are the biggest mistakes when buying a laundromat?
1. Accepting a lease that does not protect you long term. Many Landlords do not understand the model of a coin laundry and treat them like any other tenant. While educating them is not always successful, you need to make sure that the lease you end up with will support your investment objectives.
2. Not having an understanding of value. The value in a laundry is often hidden. It is easy for the untrained eye to make a mistake. This is often because the buyer looks at the cash flow instead of what creates it.
3. Inadequate Due Diligence. A laundry needs to be viewed in terms of its longevity. It is not enough to verify the cash flow and expenses. You must also have confidence in the business to give a sustained return, proportionate with your investment.
4. Failure to review and analyze the working model. In any period of time a laundry is subject to some level of stagnation or even obsolescence. Old ideas have run its course and equipment has a useful life. These issues should be evaluated. To grow or even maintain the cash flow, continuous upgrades or re-tooling will be required.
5. Poor discovery in regards to the fixtures and the equipment, how much effective life there is left and how well it satisfies the needs of the customers and the return of investment to the owner.
6. FAILURE TO ACT! Truly the biggest mistake I have witnessed comes from Buyers not following through with their plans. During the due diligence period the new model outline should be developed. This should include the direction you want to go, the added costs to make the improvements and you should be absolutely comfortable with the projected outcome. You should have a time line of what needs to be done when and have the funds secured in order to do it. Do not procrastinate. You should be able to include the improvements into your costs of purchasing the business and finance them along with the acquisition. Those that follow through with the improvements tend to increase revenues and end up selling for a profit. Those that don't watch their investment deteriorate.
A laundry will age. When it does the asset can erode. The lease gets shorter and the equipment gets older, every day. These are the primary assets you are purchasing. The cash flow is relative to the condition of the laundry and how well it competes and markets its advantages. To protect your investment the laundry investor must keep up on the working model. Not following through with wisely thought out planning is the biggest mistake you can make.
About 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.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|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.
|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.
|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.
|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.
|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.
|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.
|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.
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services
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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|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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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.
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