Newbie looking at first mat!

[Sal]

Hi Everybody,

I know ya'll hear this alot but thanks for the great advise I have gotten here already!

The owner is looking to slow down and retire soon (60) is the reason he has for selling. It has 12 SQ Top loaders, 12 SQ Dryers, 3 - 35# SQ Front loaders.(5 to 7 years old?) Has attendants and is kept very clean BUT it is small (will find out sq. foot on Sat.) don't know about expanding to add more dryers. Does do some WFD business but don't know how much yet.

It is located across from large university and in better part of town. He has said the landlord will sign a long lease but his is coming up for renewal.

Will try to meet him on Saturday to discuss the utilities and lease...I ask for statements from the gas, water and electric companies (Ya'll have trained me well) and balance sheet.

Hoping for more HELP...will let you know when I get the figures.

I was ready to walk away when he said all he used was his check book and I could look at it. But when I called him back he was willing to get the necessary documents...once we meet I will be running back here for some advise.

Thanks for your time...I wouldn't be doing this without your help,

Sal

[Anonymous]

Befor you sign anything with the seller talk to the landlord, he may be willing to do a long term lease but at what rate etc..

[mike]

I hate to put a "fly in the ointment", but,

this store is just to small to make it ! (yeah, I don't know the footage yet.)

The upside potential here for you (a new owner) is very limited to say the least.

Sure, you can change out the dryers for stacks, and that will give you room to put a couple of extra washers in.

You can change some of the washers for fronts, at higher vend prices (and
capacity) but then that's it.

You can only maximize income by doing WDF, and the store is too small to pay for an attendant.

Before everyone tells me they have a small store doing just fine,

Un-attended maybe, already there (and paid for) maybe.

You might make a hundred bucks a week, can you live on it ? (assuming you only have one store)

An analogy:

Planes used to fly the atlantic to europe, 20 passengers at a time.

It can't be done any more, even if you had one of those sized planes.

[mike]

Another thing,

What is the present owner "slowing down" from ?

It takes very little work to own a store, especially if he has attendants.

What are you bringing to the table ?

What will you do to make money at this store, that he isn't doing ?

He isn't making money (not much anyway) and he has it paid for already.

I'm trying my best not to sound too pessimistic, (given my nature, that's hard !)

Most new people have dreams rather than reality about the amounts of money made in this business.

Other than that, best of luck,

Pursue all the figures, by all means, but add them up yourself, and don't forget, there will be many expenses he "forgot" to tell you about.

[ajay]

I agree with mike(love your analogy btw), small store can only earn so much - even if the rent etc is low, there just not enough to enjoy the business. Granted if you're already a multi-store owner and one little one added will only supplement your income - even then I would have to think about. For example, if the store is doing $500/wk - 2000/month. Your rent is around $500, utility is around $500, misc. expense is $500(ins, gas, time, maint), you pocked around $500/month. Is that worth it ? maybe! Depends...
but real figures will indicate a good buy!

Ajay

[Sal]

Thanks for the feedback..(I think) No, these are things I need to consider and I appreciate your input. I am taking this process very slowly. Will let you know what I find out at our meeting this weekend. (I will need your expertise to sort out the figures.) If that goes well then the next step is to meet the landlord and see what he has to say.

Thanks to all that has responded so far.
Sal

[BWJR]

This is a very high capatilized business. You don't start making serious money normally until your mat is doing over 140,000.00 to 160,000.00, and that is if you expense factors are in line. If you haven,t already asked to see his C Schedules, and copies of his last three years utility bills, then do so. Again good advice is to speak to the landlord, and get a Real Estate Attorney that you can trust.

Good Luck,

BWJR

[Winston]

A wise business man once told me that if a business (any business) doesn't gross $200,000 a year, it's not worth your full time effort to run it. No matter how efficient the business is, it must have sufficient gross revenue to have any chance at a good net.

I'm sure many owners have stores that gross far less than $200k, but is the smaller store all that they have on their plate? I would hope that my full time effort at anything would be worth at least $50k, so why undertake the risks of owning a laundromat for less?

This assumes (over simplifies) that with a gross of $200k, 1/4 would be spent for rent, 1/4 for utilities, 1/4 for everything else, leaving 1/4 for me.