The laundry industry is unique in that most laundromats have no receivables or inventory. Instead, most laundry businesses are coin-operated, also known as self-service. People will always need clean clothes, which has helped the laundry industry remain a fairly steady business. If you’re considering buying a laundromat, make these considerations first.
The laundry business can provide steady income and doesn’t necessarily have to become your full-time job. Most laundromats are coin laundry businesses that offer self-service laundry. Alternatively, some businesses own and maintain the laundry machines within apartment complexes.
Before you start looking at local laundromats for sale, familiarize yourself with the industry to ensure you’re making the right business decision for you. Once you’ve found an existing laundromat that you’re interested in, you should address the following questions with the current owner.
Business owners may sell their laundromat because they’re nearing retirement, interested in a new business venture, or burnt out. However, there may also be financial reasons that they are exiting the business. While you may be able to turn the laundromat around as a new owner, you must address these concerns before you sign any paperwork.
There’s only so much you can do to set your laundromat apart in terms of pricing and service options. As a result, the location and foot traffic of the business is critical. Before making a business investment in an existing laundromat, take stock of how many apartment complexes are in the area. In an urban area like New York City, you will likely have more consumer volume and, consequently, profits.
Just like the dry cleaning industry, the equipment required to operate a laundromat adds up quickly. Determine whether or not commercial washing machines and dryers will need to be replaced soon, and factor these into your investment costs.
The laundromat business is highly competitive. As more people purchase home washing machines, the customer base for laundromat businesses has dwindled. To stay competitive, look for established laundromats that are offering the convenience of food and drink vending machines, change machines, specialty cycles, and more.
Additionally, make sure that the space is warm and inviting, and consider whether or not you’re able to offer time-saving options such as wash-and-fold, pick-up, or dry cleaning services. Some laundromat owners are even incorporating live music, snack bars, and children’s play areas.
As you get closer to making an offer, you’ll want to take a look at financial documents to get a sense of taxes, utility bills, and employee costs associated with the laundromat.
Last but not least, find out how the current owner arrived at their asking price. If they used a third-party valuation service like a business broker, then it’s probably a fair assessment of the business’ worth. Work with a business broker to evaluate comps in the surrounding areas and assess the market to ensure the price is competitive.
Finding the right business for you is no easy task, but working with an experienced professional can pave the way through the process. For help finding a laundromat, get in touch with your local Sunbelt Business Brokers office. Our brokers have proven success matching entrepreneurs with their ideal businesses, and are happy to assist every step of the way.