Have you decided it’s time for a change? While the prospect of a new venture can be exciting, it can also be emotional and overwhelming.
Before deciding to sell your laundromat, it is important to determine your reasons for selling along with the pros and cons of selling at this particular time.
Here are some questions to consider: Do you want to retire or simply take an extended holiday? Are you ready to start another business and embark on a new adventure? What’s the market outlook for a successful exit in the laundromat sector right now?
Research shows that 52% of small business owners sell their business because they want to retire, while 14% intend to start another business. Regardless of your reasons for selling, however, the key to a successful sale lies in careful planning.
Preparing for a clean exit
Just like a good spot cleaning helps to get those stubborn stains out, a thorough exit plan will help ensure a more successful and profitable outcome. Follow these steps to position your business for a stress-free sale:
Maintain good records: Consider enlisting the help of a business broker, real estate agent,
andaccountant to prepare for and facilitate the sale. Be prepared to show profit and loss statements, as well as tax returns for the last three years.
Clean and renovate the facility: Look at your laundromat from a potential buyer’s perspective, and keep in mind, you only get one chance to make a good first impression. Hire a professional cleaner to get everything in top shape, and consider giving your store a fresh makeover:
newcoat of paint, improved signage, better furniture, updated fixtures, etc.
- Repair or replace equipment: Make sure all existing equipment included in the sale is in prime condition. Conduct any necessary repairs and be prepared to present a thorough record of maintenance.
Consider the following average life spans for standard laundromat equipment to determine if you should invest in replacements:
- Top-load washers: 5–8 years
- Front-load washers: 10–15 years
- Dryers: 15–20 years
- Water heating systems: 10–15 years
- Coin changers: 10–15 years
Keep in mind, potential buyers don’t want to have to air out the previous buyer’s “dirty laundry”! Taking care of all these details will not only attract buyers but will also help guarantee a faster exit.
A fair and profitable price
Typically, the most accurate valuation model for laundromats is the “income approach.” This method takes the annual cash flow projection divided by the capitalisation rate to arrive at a value for your business. Usually, pricing ranges between 1 and 1.5 times gross annual sales.
An important detail to keep in mind is that the age and condition of your equipment will be one of the greatest factors to consider when establishing your selling price. So, either replace and repair
I strongly recommend hiring a knowledgeable business valuation expert, broker, or accountant to help appraise and value your laundromat. They will help you determine the value of your business and give you and your potential buyers confidence in the sale price.
Experienced professionals will also help you position your business properly in the market and connect you with the most qualified and
Selling your business can be stressful, but you don’t have to go through it alone. Although you’ll have to give a portion of the sales price to any professionals you hire, their expertise will give you peace of mind and most likely ensure a higher selling price and a smoother sale.
Be sure you’re personally and financially ready to sell before embarking on the sales process. A prospective buyer will want to know your reason for selling and will ask to review the following:
- Financial records and tax returns from at least the last three years
- Proof of compliance with current legislation and environmental regulations
- Service and maintenance records for all equipment included in the sale
- Crime statistics, specifically if your laundromat is located in an urban area
- Water and utility bills
- Future construction projects in city planning
- Potential growth opportunities and new competition in the market
Again, this is another area where a broker can help lend their expertise. It always helps to have another perspective to make sure you haven’t missed anything!
After all, even though you’re selling, you’re still the owner and will be busy running your laundromat until the right buyer comes along. So, be sure to enlist the help of experts, and let them carry some of the load.
It’s never too early to start planning your exit, even if you don’t plan to sell for years to come. When you are ready to sell, visit us here and let us help you find the perfect buyer for your laundromat.