In 2008, the laundry industry in the United States brought in about $4.36 billion. Because of this lucrative potential, you can work to earn a piece of this pie by opening up your own laundromat. Before running out and spending any money, you will need to do your due diligence on buying a laundromat. To know what these steps entail, you can start with the three tips below.
Tip #1: Focus on the lease
When you are buying a laundromat that is on the market, it will typically be under the understanding that you are taking over an existing lease. This is a great opportunity to find lower rates, since the laundromat has already been grandfathered in, when compared to current market conditions. If not, you might have the option to negotiate a new lease that is advantageous to you. You will need to get a lawyer and a consulting company to go over the terms of the lease with you to make the best decision possible.
Tip #2: Assess your commitment to the laundromat
A big part of purchasing a laundromat comes down to assessing your business acumen, the stage of life you are at and your overall commitment to the laundromat. For instance, is this a side business or your main source of income moving forward? Would you like to be hands-on or have a strong team in place around you? Laundromats are a time-consuming business with many complexities, so you always need to get the help of experts that can assist you every step of the way, like those at PBI Laundry Consulting.
Tip #3: Provide detailed analysis
The biggest part of due diligence is focusing on a detailed analysis, which should take you at least 45 to 60 days. This involves steps like location analysis, income analysis, equipment analysis, store value analysis and expense analysis. Location analysis involves the assessment of demographics, neighborhoods and permits required. Income analysis refers to the verification of the income that the laundromat regularly received.
Equipment analysis involves taking inventory of all of the laundry equipment, to include the condition and detailed maintenance and repair receipts and records. Store value analysis lets you understand the overall monetary value of the business. Expense analysis refers to important costs that you must account for, including the hiring of staff, workers compensation insurance and security costs. By focusing on these factors heavily, you will be a far more informed buyer.
Follow these three tips so that you are able to put your best foot forward when buying a laundromat.