PBI Laundry Consulting
From beginning to end, and everything in between, PBI Laundry Consulting can help you every step of the way with your Laundry Investment.
Let PBI help guide you to success, contact us today at:
The Lease & Valuation.
The Lease is your most valuable asset in a Coin Laundry. Remember, that all of the Plumbing fixtures, electrical service, the sewer and building fees, along with all of the physical surroundings of the laundry are totally dependent on the property and an asset for a limited period of time. A laundry is not a relocatable asset. These factors require a strong lease. When possible, it is always better to purchase the property.
Many landlords are reluctant to issue long lease periods. And the fact is, if you cannot have adequate time to reinvest into your business and get a reasonable return on the investment, you probably will not. We at PBI can help you with Lease Negations.
The Vended Laundry is an Investment Business.
Most investors in the laundry business know that at some point they may wish to sell their business. There are windows when this can be optimal. Whether you are the Buyer or Seller, you will want to maximize income but you also need to look at the length of time you will have to return the investment.
The Coin Laundry is a business of longevity. Its value is sustainable for generations; given the right conditions. The value is not found in any one place. It is the combination of matching the needs of the community with the services you are offering and also developing a long-term business model that will benefit both the community and your reasonable return on and of the investment.
- Information provided by Chuck Post; Chuck is a licensed Broker that has over 30 years of experience specializing in assisting those buying &/or selling Coin Laundries. PBI Laundry Consulting provides services Nationwide!
The equipment condition and age all have considerable value to the purchase decision; but not as much as you might think. In a new Laundry, the cost of equipment is typically only about 55% of the total price; less in many cases. The cost of providing the services (sewer, water, mechanical work, fees, plans, permits and construction) account for the rest. In a laundry with equipment that is 7 years or older, you should anticipate making equipment changes as a part of your acquisition planning. This might seem strange; with equipment still well under its useful life, but the benefits of up-dating (re-tooling) the laundry and increasing the income can be significant. The wrong equipment mix can keep you from achieving your investment goals. Many changes in the Laundry Business have advanced the profitability, over the last decade. Larger and more efficient equipment is commonly used now. If you are loosing business because the equipment is wrong for your clientele and does not satisfy their needs, you get the same end result as if the equipment is in bad condition.
The Market Area.
You need to understand the demographics surrounding the laundry you are considering. The population mix, housing make up, family size, market trends and the apartment-house laundry operations all must be considered. In our “Quadrant Studies” we look carefully at the apartments and their laundry rooms, make-up of the population and the long-term plan of the community. We will study the other laundries in the area and analyze the potential market area to determine what the probable added investment will be and what the likely return on that investment will be.
The Business Model.
This is where the smart (and experienced) operator makes the highest return. There is a mathematical equation to the laundry business. If you follow it, your net income can be maximized. Laundry owners that have not made the modifications necessary to maximize their income have opened the opportunity up to the next owner. So now, the knowledgeable Buyer purchases the laundry at lower, current values and makes the modifications to the business model and earns the rewards of making the investment and taking the risk.
More information on the business model is also something we discuss at great length during our Workshops and in private consultation. For details on our upcoming Webinars & Workshops, click here.
New Laundry or Existing with Re-Tool?
A new laundry offers the investor the advantage of new equipment and a long term lease and should have advantages in marketing (people like trying new and bigger laundries with plenty Big Equipment). The equipment will be the most efficient and usually will have a good mix. Most new laundries cost in the 650K to 1.1 Million range. Typically, you will be required to put a down payment of 40% or so. Equipment financing for a period of 84 Months is usually available from the equipment companies. The rates with the equipment companies are generally reasonable and they are largely fair to deal with. You are encouraged to seek other financing sources (SBA lenders and others) to compare rates and overall benefits. A new laundry will take up to 6 Months from beginning to end. Most are traditionally sold before completion. So, time is an issue.
The existing laundry has a history to look at. The business model can often be improved to increase earnings; and laundries are available at pricing of all ranges. The difficulty is in income verification, lease terms that are inadequate and unknown physical factors of the equipment, services and market area. Everything needs to be looked at. Over the years the existing laundries have been sold on a multiplier of net operating income that has dipped to as low as 50 times monthly to as high as 75. There is no right multiplier to use because it leads to making narrow and under researched decisions. You need to look at finding the right business first.