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.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|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.
|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).
|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.
|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.
|Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area
Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.
|Elizabeth McGovern: Escrow Services - San Francisco Bay Area
McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
|Helen Yoo, New Century Escrow - Escrow Services In 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.
|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.
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