Laundromats in my country are much much smaller. 6 washers, 6 dryers. Open 24/7. I don’t know how much they’re making but it would be nice to buy a franchise.
Found you from Jordan’s podcast and follow you here. Love your vdo and everything you saying here thank you for doing this I love to learn more.. a little feedback though if you don’t mind.. the music though 🙃 a little too loud 😣
Thank you for the feedback! That’s great to know and I’ll keep that in mind for future videos. 😊 Let me know if there are any questions I can answer for you!
How do you regulate the opening and closing of the business? Do you automate the opening/closing or does someone physically lock/unlock? What is a good size (sq ft) if you were to start from scratch? FYI, i'm in the midwest. $10 psf triple net is about the going rate here.
Our door is on an auto lock/unlock. So it unlocks in the morning and the first customer in just opens the door. We have an employee who closes at night (the door auto locks but does not auto close). I think the ideal SF really depends on what you want to do. My laundromat is fairly small (about 1000 sf). It's in San Francisco, so that's not too uncommon. The main thing I would be concerned about space wise with a new location would be having enough room to both serve the self-serve customers and also have a wash & fold component. We actually took out some old washers and created more folding space because there were times we didn't have room to do the wash & fold orders. If you had a separate area for wash & fold, say a large office with a couple machines and folding space dedicated specifically to wash & fold that could help too.
How do you track laundry that is dropped off for wash and fold? Meaning, say I give you a bag of laundry, and you wash and fold it I get it back and say I'm missing a shirt or whatever, regardless of if it's my fault and it got left in bottom of the hamper...I see that as an issue😊
Great question! I was actually surprised at how few times this happened. In over a year I think I've had 2 wash & fold customers reach out asking if we had seen a particular item. We're really careful about tagging customer's laundry and checking machines before we put clothes in and after we take them out to avoid mix ups and lost items. The couple times a customer reached out asking if I had an item I let them know I would certainly be on the lookout for it and would reach out if it turned up. I would explain our organizational procedures and that I thought it was unlikely it was lost during processing, but that I was sorry if that was the case. Even though I didn't think it was our fault and that the item was probably around their house, I wanted the customer to leave with a positive experience, so I would offer a $20 credit on their next order. If this situation had occurred more frequently, I probably would have needed to think of a different response, but as I said it was rare.
@Keira_Hamilton makes sense..,I am under contract on a property that I own and will soon have cash, I'm a big fan of the age old cash is trash, and looking at different things to invest in. As of now I am in gold/silver and I have a sniff spot on my property that nets $1,200 on avg a month. By no means weathy, but looking at options. I cannot do a 1031 for gains due to the property is rural minning land, so considering if I should invest into m own small biz and get something else going or real estate etc. Stocks seem like a very volatile place to be as of now with limited upside.
@@Mountaintoptractor I offer weekly office hours if you ever want to come by to ask questions about business acquisition and financing. calendly.com/keirahamilton/business-acquisition-office-hours?back=1
This is a great question, and ultimately business valuation has a degree of subjectivity. Most small businesses are valued based on a multiple of Seller's Discretionary Earnings (SDE). That multiple can range, but it's typically in the 3x-5x range. Factors that can affect where a laundromat valuation falls within that range include machine age and condition, lease length/terms, and the overall operations. If the machines are 15+ years old, I recommend getting a quote to replace them and then determining what your monthly loan payment would be and factoring that into your cash flow projections. There is no perfect way to value a business. Ultimately, you'll need to determine what the cash flow would have to look like in order for the investment to be worth it to you and then negotiate with the seller from there. Something to keep in mind is that there are a lot of laundromats for sale for under $500k. While you can certainly get SBA financing for a smaller deal, you are going to run into a lot more cash buyers at this size. A cash buyer's valuation may be different because they are not factoring in a monthly loan payment. It makes the process more competitive, especially if you're trying to finance your acquisition.
Thank you for this content. The big question for me is how does one buy a laundromat that has a solid return? I’m totally down to work in the business, but have the fear of buying a dud. Thanks!
Thanks for commenting! Is your question more around how to find a cash flowing laundromat in the first place, or how to analyze financials to know if there's a solid return? Or something else?
Hi K. Thanks for the response! It’s more about finding a mat that’s busy so I know there’s somewhat of a guarantee of a decent return. I understand I can send inquiry letters to the mats that are busy and not selling (to find out if they are interested in selling), but are there any other areas I can look into so I feel more confident in the potential profit? PS - I heard you on Justin’s podcast (I think that’s his name) and was drawn in by your story. I’m a tv producer looking for a pivot into a business of my own - something that AI can’t swallow up! Thx again!
@@TBJaeger I'd be happy to connect with you to answer this question further, as I think my answer might be a bit in depth. Shoot me an email! keira@arenacommercialcapital.com
Hi @Keira_Hamilton I have the very same question as this gentleman. I'm very new at the industry and in business. This would be my very first business so it can be a bit overwhelming to grasp initially. Would it be okay to shoot you an email to get the answer?? Also, thanks so much for taking the time to make this very detailed and informative video. 👍🏼
@@Daisy_92 Thanks for commenting! It's a bit of a long answer, and it depends on what specific follow up questions you have. You're welcome to list out your questions here and I will address them in future content, or you can book a consultation with me one-on-one. keirahamilton.setmore.com/
@Keira Hamilton I am looking to get into this business as well. Do you have any advice on what brand of machine is good? say If i want to do credit card plus coin or just coin laundry? How often does a particular brand need to serviced compared to others? To be honest I'd like to ask a ton of questions, but l don't want to take up a lot of your time
We have Dexter and Speed Queen and I think both those brands are solid and make equipment that lasts a long time. We use PayRange on both of them for electronic payments, although I would guess they integrate with other electronic payment options as well. I’m not sure about which types of brands need to be serviced over others, but I would not recommend going with a lesser known brand because it will likely be harder to find techs that can work on them. For example, there aren’t as many techs who work on Wascomats, at least in my area. Feel free to ask more questions!
No, we live in Oakland which is across the bay and distance has definitely been a challenge for us. Personally, if I were to buy another laundromat it would need to be less than a 30 minute drive away. Now we're at a point where we only go in usually once a week, but there are times when we need to go in more frequently and spending over an hour sitting in traffic is no fun.
Great question! We have not had significant issues with crime. We recently had someone try to drill the locks on one of our changers, but they weren’t able to get inside. That’s the only time something like that has happened since we’ve owned it. There were a lot of laundromats we passed on because they were in neighborhoods we weren’t comfortable with.
Very good video. Congratulations on your laundromat, we wish you many years of success.
Laundromats in my country are much much smaller. 6 washers, 6 dryers. Open 24/7. I don’t know how much they’re making but it would be nice to buy a franchise.
Found you from Jordan’s podcast and follow you here. Love your vdo and everything you saying here thank you for doing this I love to learn more.. a little feedback though if you don’t mind.. the music though 🙃 a little too loud 😣
Thank you for the feedback! That’s great to know and I’ll keep that in mind for future videos. 😊 Let me know if there are any questions I can answer for you!
How do you regulate the opening and closing of the business? Do you automate the opening/closing or does someone physically lock/unlock? What is a good size (sq ft) if you were to start from scratch? FYI, i'm in the midwest. $10 psf triple net is about the going rate here.
Our door is on an auto lock/unlock. So it unlocks in the morning and the first customer in just opens the door. We have an employee who closes at night (the door auto locks but does not auto close). I think the ideal SF really depends on what you want to do. My laundromat is fairly small (about 1000 sf). It's in San Francisco, so that's not too uncommon. The main thing I would be concerned about space wise with a new location would be having enough room to both serve the self-serve customers and also have a wash & fold component. We actually took out some old washers and created more folding space because there were times we didn't have room to do the wash & fold orders. If you had a separate area for wash & fold, say a large office with a couple machines and folding space dedicated specifically to wash & fold that could help too.
How do you track laundry that is dropped off for wash and fold? Meaning, say I give you a bag of laundry, and you wash and fold it I get it back and say I'm missing a shirt or whatever, regardless of if it's my fault and it got left in bottom of the hamper...I see that as an issue😊
Great question! I was actually surprised at how few times this happened. In over a year I think I've had 2 wash & fold customers reach out asking if we had seen a particular item. We're really careful about tagging customer's laundry and checking machines before we put clothes in and after we take them out to avoid mix ups and lost items.
The couple times a customer reached out asking if I had an item I let them know I would certainly be on the lookout for it and would reach out if it turned up. I would explain our organizational procedures and that I thought it was unlikely it was lost during processing, but that I was sorry if that was the case.
Even though I didn't think it was our fault and that the item was probably around their house, I wanted the customer to leave with a positive experience, so I would offer a $20 credit on their next order. If this situation had occurred more frequently, I probably would have needed to think of a different response, but as I said it was rare.
@Keira_Hamilton makes sense..,I am under contract on a property that I own and will soon have cash, I'm a big fan of the age old cash is trash, and looking at different things to invest in. As of now I am in gold/silver and I have a sniff spot on my property that nets $1,200 on avg a month. By no means weathy, but looking at options. I cannot do a 1031 for gains due to the property is rural minning land, so considering if I should invest into m own small biz and get something else going or real estate etc. Stocks seem like a very volatile place to be as of now with limited upside.
@@Mountaintoptractor I offer weekly office hours if you ever want to come by to ask questions about business acquisition and financing. calendly.com/keirahamilton/business-acquisition-office-hours?back=1
God bless your
channel.
Excellent vid. How much was your laundromat?
Thank you! $190k
I'm meeting with an owner next week to discuss buying my first laundromat. How do you figure out if the asking price was fair and affordable?
This is a great question, and ultimately business valuation has a degree of subjectivity. Most small businesses are valued based on a multiple of Seller's Discretionary Earnings (SDE). That multiple can range, but it's typically in the 3x-5x range.
Factors that can affect where a laundromat valuation falls within that range include machine age and condition, lease length/terms, and the overall operations.
If the machines are 15+ years old, I recommend getting a quote to replace them and then determining what your monthly loan payment would be and factoring that into your cash flow projections.
There is no perfect way to value a business. Ultimately, you'll need to determine what the cash flow would have to look like in order for the investment to be worth it to you and then negotiate with the seller from there.
Something to keep in mind is that there are a lot of laundromats for sale for under $500k. While you can certainly get SBA financing for a smaller deal, you are going to run into a lot more cash buyers at this size. A cash buyer's valuation may be different because they are not factoring in a monthly loan payment. It makes the process more competitive, especially if you're trying to finance your acquisition.
Thank you for this content. The big question for me is how does one buy a laundromat that has a solid return? I’m totally down to work in the business, but have the fear of buying a dud. Thanks!
Thanks for commenting! Is your question more around how to find a cash flowing laundromat in the first place, or how to analyze financials to know if there's a solid return? Or something else?
Hi K. Thanks for the response! It’s more about finding a mat that’s busy so I know there’s somewhat of a guarantee of a decent return. I understand I can send inquiry letters to the mats that are busy and not selling (to find out if they are interested in selling), but are there any other areas I can look into so I feel more confident in the potential profit?
PS - I heard you on Justin’s podcast (I think that’s his name) and was drawn in by your story. I’m a tv producer looking for a pivot into a business of my own - something that AI can’t swallow up! Thx again!
@@TBJaeger I'd be happy to connect with you to answer this question further, as I think my answer might be a bit in depth. Shoot me an email! keira@arenacommercialcapital.com
Hi @Keira_Hamilton I have the very same question as this gentleman. I'm very new at the industry and in business. This would be my very first business so it can be a bit overwhelming to grasp initially. Would it be okay to shoot you an email to get the answer?? Also, thanks so much for taking the time to make this very detailed and informative video. 👍🏼
@@Daisy_92 Thanks for commenting! It's a bit of a long answer, and it depends on what specific follow up questions you have. You're welcome to list out your questions here and I will address them in future content, or you can book a consultation with me one-on-one. keirahamilton.setmore.com/
Love this!
we got a local laundrymat in my small town and every now and again i think about what i'd be like to own one but sadly i never have the funds for it.
Awesome !
@Keira Hamilton I am looking to get into this business as well. Do you have any advice on what brand of machine is good?
say If i want to do credit card plus coin or just coin laundry?
How often does a particular brand need to serviced compared to others?
To be honest I'd like to ask a ton of questions, but l don't want to take up a lot of your time
We have Dexter and Speed Queen and I think both those brands are solid and make equipment that lasts a long time. We use PayRange on both of them for electronic payments, although I would guess they integrate with other electronic payment options as well. I’m not sure about which types of brands need to be serviced over others, but I would not recommend going with a lesser known brand because it will likely be harder to find techs that can work on them. For example, there aren’t as many techs who work on Wascomats, at least in my area. Feel free to ask more questions!
Is it best to buy one or build my own from the ground?
Great question! I'll make sure to answer this in my upcoming content.
Do you live in San Francisco? I'm trying to buy a laundromat I'm afraid it's too far away from my house
No, we live in Oakland which is across the bay and distance has definitely been a challenge for us. Personally, if I were to buy another laundromat it would need to be less than a 30 minute drive away. Now we're at a point where we only go in usually once a week, but there are times when we need to go in more frequently and spending over an hour sitting in traffic is no fun.
Where do you look for a decent laundromat?
Hey! I actually talk about how to find a business for sale in Part 2 of my How to Buy a Business series. :)
@@Keira_Hamilton thank you very much I’ll watch that real soon
Does crime play an issue in owning your laundromat???
Great question! We have not had significant issues with crime. We recently had someone try to drill the locks on one of our changers, but they weren’t able to get inside. That’s the only time something like that has happened since we’ve owned it. There were a lot of laundromats we passed on because they were in neighborhoods we weren’t comfortable with.