Guide to building a Laundromat business

If you are looking for a business to buy or build, a laundromat, or coin-laundry is a great option.  The business model is basic and has been around for a long time.  This is also an industry that is widespread and something you can get into in almost any city or town in North America.  There are a few things that you need to be aware of before you sign on the dotted line.

There are a lot of great opportunities all over the country.  Just looking at the business listings I can easily find hundreds of laundromats for sale all over, in almost every city.  This is a good and bad thing.  The good side to this is that there are a lot of options for you to pick from and you can find the right size and location that suits you.  The down side is that you need to make sure you are picking the right one and not a business that is failing or in a declining market area.

This is when your market research will make the biggest difference.  This is standard process for all business investment anyways, but I still need to mention it.  The key to a successful business includes many things, the most important is the work you do before you buy into or build it in the first place.

Here are some of the basic steps to prepare for building a laundromat business

Your personal commitment

The first decision you need to make is if you are willing to move from your current home or city if the business opportunity arises.  I am asking you if you are willing to move to where the money is really.  The basic concept here is “what are you willing to do” and “what are you willing to sacrifice”.  This is a big decision.  You need to decide if you are willing to give up certain things in your life in order to make a successful business in the right location.

This leads into the second most important part of running a small business.

Location

The location of your business is critical to its success.  It is not only a matter of location within a community, this also applies to the city or even state that you open or buy a business in.  This relates to the first question, how far are you willing to go to get the right location.  The best option is to allow yourself to be open to all opportunities in any city.

Market Research

The market research you do will include several steps.  Deciding to buy an existing business that is for sale, or building your own from the ground up.  If you are an experienced business owner, then this might be a little easier.  For someone who is new to small business ownership, then I actually recommend buying an existing business.  I recommend this because there are a large number of laundromats for sale in almost every city and cover a wide range of budgets.  The second step is determining your initial capital investment.  This is all on you and how much money you have as well as what financing you qualify for as a business owner.

Business financing is a topic all on its own, I plan to cover here in the future.  For this purpose, you should look at your local bank to start with.  There are also many other options including brokers and industry specific lenders.  Financing your initial investment is usually easier when you are buying an existing, established business.  The reason for this is that you are able to provide, in most cases, previous financials of the business as part of your negotiating with the seller and your financial institution.  This will require several rounds of meetings and talking before you settle on anything.  To start with, you will need to know your targeted capital investment.

Legal and Profession services

You cannot skip this part of the process.  Before you start or consider any business sales offer you should consult 3rd party lawyers and/or professional business brokers.  These services are not cheap, but well worth the cost.  You will need a lawyer to review any contract.  You should also look at hiring a 3rd party consultant who deals with small business sales or a specialized service that has experience with laundromats and similar services.

There are also many consulting and broker services that will assist you in selecting an appropriate business for you.  You can  also start your search with one or more of these service agencies.  They will be able to help you determine the right business for you.

Always get a second opinion.

Buying a Coin-Operated Laundromat Business

For buying a laundromat business facility or how to purchase a laundromat, you will want to learn as much as you can about it. Procuring a laundromat business is something every person should consider. You can build a coin-operated laundromat quite easily without worrying about things like maintenance costs or having extra employees. The Laundromat business is one that can exist for a long time because of the high demand for this service in any community. The main prerequisite in buying a laundromat service is that you have the wisdom to research it properly. This is the most important thing you need to do before obtaining or constructing a coin-operated laundry business.

The location is probably the most critical item when building a laundromat business. When you buy a coin-operated laundry business or obtaining a coin-operated laundry service, you should discuss the reasons the seller is leaving the business. You need to be tenacious when researching your new business and ask all the questions that you can think of. It is in your best interest to find out why they are selling because you will have to deal with any issues that come up after the fact. It is possible that other coin-operated laundry services are available in the area or the machinery is due to be replaced, or the lease of the space is going up. You must do you research, and do it thoroughly.

The next thing you should be doing is to size up the revenue generating aspect of the coin-operated laundry service business. Figure out what your potential income can be, and then spend some time to research the business in question and make sure you can get what you are expecting. Never underestimate the ability of a seller to inflate his numbers to make the business look more profitable then it really is!

If you are going to buy a business, you will need to find out where your startup capital is going to come from. You have a lot of options available to you. You can ask a relative who may have some extra money available to them. If you already have an existing relationship with a bank or other financial institution and heaps of data regarding the business income, you should be able to obtain a business loan from any financial institution. However, in this recession market, many banks and loan companies are reluctant to give out loans. It is somewhat easy to buy a laundromat, but maintain a reasonable profit margin is a lot harder. If you don’t do you homework, your coin-operated laundromat business could fail.

If you are going to start a laundromat service or you are purchasing a laundromat, you must have properly running equipment. How do you expect to make your business profitable without the proper tools and equipment? If you are obtaining a coin-operated laundry service, you can have a local machine or repair shop evaluate the machines in the building. the general status of the machinery should be taken into consideration into the price of the business. Remember, operation of a laundromat does involve some regular upkeep – all appliances need fixing eventually. I recommend acquiring an expert to do your maintenance and service instead of doing it on your own, it might be a bit more money, but they know what they are doing, you may not.

After building a coin-operated laundry service, all you have to do is just make sure the machines are running, service the machines, keep it clean, and collect your money from the machines. Owning and operating a laundromat business is very easy to do, but the difficulty is in selecting the proper location and not over-paying for a coin-operated laundry service. Whether you are starting a laundromat service or you want to purchase a laundromat business, you need to do your research.