Get A Laundromat That Fits You

 

If you are serious about getting a laundromat or a second laundromat (or third or tenth or whatever number) get one that fits your lifestyle and business plan. Don’t be dazzled by only new large stores. A small neighborhood store might be what you are looking for.

I’ve directly sold, or connected the seller and buyer, for 19 laundromat sales.
In one recent transaction there were some new potential owners looking at a property. They had visited and even were customers of the mat before looking to buy it. Unlike a lot of people that “kick the tires” of getting into the laundromat business they had started to talk to distributors and even researched other stores in the area, and studied resources like the CLA website. I happened to be there with the owner when these new potential owners came in for another visit. They had told him it was to make him an offer on the business. The owner had worked with these people on previous visits and was fully expecting to negotiate a deal with them that visit. Since the equipment was a brand I sold, the owner thought it would be nice if I was there to answer specific questions on the equipment.  Instead of an offer, the potential new owners told the current owner that the store was too small and they were advised by a distributor they contacted that they should get a 3,000 sq ft store rather than a 1,400 sq ft store and they were no longer interested. The owner was very disappointed as he had spent a lot of time working with these prospective owners and educating them on the laundromat business and his store in particular.

Since there was no longer a chance for a sale, I asked them some questions just out of curiosity.
Their answers were interesting:
-they had about 35K to invest in a store
-both never ran, owned, or worked in a laundromat
-wanted a business they could work themselves or maybe with one employee
-had several small kids and hoping to work a business flexible around their schedules and school time
-wanted reliable equipment they wouldn’t have to fix as much in the beginning until they were used to it
-make somewhere between $20K-$50K

I listened and asked if they had found a 3,000 sq ft laundromat to buy, property to build one, or made contact with an owner who was selling or even researched what a larger mat might entail.
They said no.
The salesman for the distributor they were working with convinced them that scale of business was the same for a large store as it was for a small store so why not take the bigger store and work for higher returns.

I asked if they were prepared to spend $1M-$2M on a new mat, or spend $750K on an existing mat if they found one for sale, have employees, or are willing to wait for a year before they open when you take into planning and financing if they built new. They said no.
I then asked what makes them think they will even like the laundromat business to begin with.
They said being customers of this location they enjoyed doing their laundry there and thought it would be a fun business to try.
I asked if they had fun being customers then wouldn’t it be better to start in the industry by owning something that was familiar and fit into their present life style and the goals they wanted rather than take a chance on something bigger that they might not find,
have to spend a lot more time and money to build,
and with no guarantee they would like the business or even be good at running a store?
They agreed my logic was sound but they had made up their mind about this store already. 

I asked them if it was okay if I kept in touch as I found stores for sale.
They said they would appreciate that and I did exactly that.
Each time I found a 3,000 sq ft store it was too expensive. They couldn’t get funding for building.
They passed up all smaller stores.
Eventually they told me they had given up on the laundromat idea and were no longer interested.
A lost opportunity.
They had a chance to get a store and learn the ropes, have fun, make some money, and set themselves up for future growth but never pursued it.
They were so  excited to get into the business and have nothing to show for it.
It is true that a larger store does give you the potential for more money, but it also gives you the potential for more headaches and responsibilities.
Look at the numbers of the existing store your are considering purchasing. Do the math.
What is the 15%, 20%, 25% 35% profit margin of that store.
Is that amount of money worth it to you for a part-time job or income?
If it is, grab that store!

Remember when you get into the laundromat business, get the store that fits you and your family and your goals, and not the goals of the distributor or the equipment salesperson. You and your family will have a happier ownership experience for it.
Ev
A Heck of A Nice Guy