How to Buy Your Own Laundromat
So, you want to own a business and have seen numerous success stories of laundromat owners and reports on its high return on investment. After all, laundromats are a recession-proof choice bringing steady income with reasonable daily demands.
But how can you buy a laundromat anyway? It’s not just about thinking of the washers, dryers, and laundry parts from stores like Laundry Replacement Parts! Here are the tips to follow so you have a higher chance of success.
- Understand the Business Model
Business owners will handle everything, from equipment maintenance, staff management, marketing, and financial management. That’s why, as a potential laundromat owner, you must have a basic understanding of running a business and learn the laundromat’s business model.
Doing so will help you accurately evaluate your potential purchases’ strengths and weaknesses, which will help you find the best laundromat to purchase.
- Finding Laundromats to Buy
There are three major areas you can find laundromats to invest.
- You can ask brokers who can send you email lists of businesses for sale, including laundromats. With brokers, you receive earlier access to deals. Unfortunately, brokers aren’t cheap!
- Scour the internet, which is quick and convenient. A Google search on laundromats for sale will allow you to find dozens of opportunities within your area alone. However, you need to research carefully to avoid scams.
- Speak with the laundromat owners. Drop by your local laundromat and ask if they are selling their business. If not, you may receive recommendations on what other laundromats are for sale.
- Verify the Income and Expenditures
Once you narrow down the list of laundromat businesses to purchase, you’ll need to discover the value of the laundromat. There are two significant variables to consider as you discover the Net Operating Income of the laundromat, including:
- Laundry equipment and alliance laundry parts’ age and condition. That’s why you must evaluate the laundromat’s equipment, ensuring it matches the need of your target customers and that they have a long effective life.
- Lease. Location matters as much as the rent, and it can make or break your business!
You can find out more about the variables and how to value the laundromat from a broker.
- Due Diligence
Ask the laundromat owners these questions and verify the information you receive:
- Does the laundromat earn what the owner says it’s earning?
- Does the laundromat spend what the owner says they spend?
- Is there a profitable future for the laundromat?
- How can you increase the laundromat’s value?
You can verify the income through ways like coin count with water meter readings, bank deposit statements, tax returns, and water calculations. You can also verify expenses based on the actual bills, contracts, lease agreements, and the like.
As for the profitability of a laundromat, you can create a solid plan, including having equipment in excellent condition, robust infrastructure, and a reliable, long-term loan.
Wrapping It Up
Keep these tips in mind as you purchase a laundromat to earn a steady income. Good luck!