If you’re thinking of steaming ahead into buying a laundromat, here are some practical insights on how to make your buying process as smooth as silk.
Is the laundry industry right for you?
In order to successfully buy and run a
- Are you a good communicator? Combining strong customer service skills with good listening skills will serve you well. You’ll be better able to make your customers feel valued and respond pleasantly to their suggestions for improvement.
- Do you have a creative side? An innovative entrepreneur should be willing to think outside the box to provide additional services, promotional offers, and unique advertising methods.
- How’s your energy level? You should be—or should hire—a high-energy person who is able to meet the demands of a rigorous schedule that requires you to be on call during business hours to respond to machine breakdowns or other customer complaints.
These are just a few of the key skills that can help make running a laundromat more enjoyable for you and your clientele and set you up for success. Take the time to think about your greatest strengths and weaknesses so that, as you enter your new business venture, you are fully prepared for the journey ahead.
Have you checked your pockets?
Buying into the laundromat industry requires a substantial initial investment. Depending on the type and size of laundromat you purchase, the price can vary anywhere from $200,000 for an average-sized laundromat to as much as $2,000,000 for a large, well-established business with a large customer base and that offers multiple additional services.
Visit here for a helpful
Your costs may include any of the following:
- Initial market research (literature/subscriptions/association fees)
- Renovations and
- Washer hook-up fees for sewer connections
- Equipment repairs or purchases
- Laundry carts and vending machines for laundry supplies, snacks, and drinks
- Any additional services you choose to provide (games, food, children’s play equipment)
You will also have multiple ongoing costs such as:
- Lease/rental costs
- Utilities (gas, sewer, water, and electric)
- Insurance (fire, theft, and liability)
- Employee payroll/benefits
- Miscellaneous supplies (cleaning and bathroom supplies, soap, food and drink costs)
- Cleaning service if hiring a professional company
- Accountant if needed
Taking a full inventory of these costs will allow you to be more confident of the capital you will need to acquire the business and hopefully avoid as many “surprise” costs as possible.
What should you look for?
Finding the right laundromat to fit into the goals and plans you have for your business is key. Some important things to consider when looking at your options are:
- Location: Location is crucial to the overall success of your laundromat. Before purchasing an existing laundromat, do your research and find an area that’s experiencing population growth. Study the surrounding areas and the local demographics to ensure it is a high-demand area. Remember that eye-catching signage should be highly visible in an area with ample parking and substantial drive-by traffic.
Competition: Be sure to evaluate
existingcompetition. Keep in mind, even if you purchase an existing laundry service in an area that has competition, your laundromat can still thrive if you offer a bigger store, more machines, additional services, or better customer service. This is a great time to put those creative skills to work!
- Income: Does the current owner turn a significant profit? If not, are there obvious areas where you can easily improve profit margins? Will the current income sustain the laundromat?
The bottom line is, do your research and be patient. Again, the more you are able to wait for the right property to buy the more confident you will be when it comes to signing on the dotted line.
What does due diligence look like when buying a laundromat?
Determine initial costs: Do extensive research prior to buying to determine
- Licences and permissions: Requirements for licences vary tremendously in each state and territory, so be sure to do your research regarding potential licences and permissions you will need to comply.
- Evaluate current water and power costs: Check the water and power bills for the last couple of years. Unusually low costs may indicate that the business is not as lucrative as it seems, while very high costs may offer an opportunity for cost savings to increase profit.
- Find out the seller’s reason for selling: If you're buying an existing laundry, talk to the owner and determine the reason for selling.
- Determine the value of the business: Study profit and loss statements to accurately determine the value of the laundromat.
- Evaluate the facility and equipment: Hire an expert to evaluate the condition of the facility and any equipment included in the sale. Ask to see proof of regular maintenance on the machines.
Now that we've helped iron out some foundational tips on buying a laundromat, we are here to help make the process even easier. Click here to take a look at what’s currently available and let us help you on your way to successful business