Looking To Buy Existing Mat

[Anonymous]

I am looking to buy an existing mat in my area. I have never owned one before. The mat is owned by an acquaintance of a friend. I have read a lot about buying a laundromat, and am trying to figure out what it is worth. I have read that a good starting point on price is either 50 X monthly net or 3-5 X yearly net. He gave me a monthly expense and income sheet which broke every thing down. What he didn't include was expenses for paying his employees. (He has drop off for dry clean and wash & fold. He has 2 girls that work for him. His wife also works some hours on the weekend.) The mat is fully attended. It is open 8-8 on M-F, and 8-6 on Sat & Sun. Do I need to include the expense for employees when I figure his average monthly income? (which would change the price substantially). And, which of the two ways that I mentioned, (for figuring selling price), is most commonly used?
Any answers and input that you could give me would be greatly appreciated.

[Coinwash]

Why don't you take an ad out in the Coinwash.com classifieds.

Maybe, just maybe this could catch on?????

Just a thought ;)

[rharris]

Hi,

I am in your position. I do not own a matt, and I am currently researching the posibility of opening my first. So if you wish to discount my advice, I understand.

In my research, employee cost is part of the negotiation of the purchase price. Think of it as an expense like any other. Don't just count wages, but be mindful of the full overhead of the employee. Also, I would assign a wage to the family member as well. You will need to pay someone to make up for the wife not working.

I've found some decent research on how to value a store.

This fellow has tips on calculating water usage to assure the books are correct.


Don't forget the CLA - this place is a gold mine of info... I found an old article on how to price your matt. I'm using the info to assess what I want to buy


Look for the article named - February 2001 - Stores For Sale

http://www.coinlaundry.org/pdf/01febCS.pdf

The 50 times Month net is one way. But be mindful of what the real net is. Also, take an average based on three years. A 10% to 20% fluctuation in monthly gross is considered a industry standard. I have been told that monthly gross is seasonal. Most seem to agree that the 50 times month net is not an exact formula. There are modifiers like...

The lease
The location
The equipment
The parking lot
The condition of the store
The competition or prospect there of

Good luck, and keep us informed. I'd like to hear how thins pan out for you.

Rod

[Anonymous]

Thanks, Rod. As it turned out, I decided not to buy that mat. The guy that owned it lived in the town that it was in, and therefore was able to open it up every morning. I work a 40 hr. week and wouldn't have been able to do it. I work in downtown Chicago and the mat is in the south suburbs. My wife wouldn't open the store also, because she was very skiddish about the area. And, as luck would have it, I got a call from a broker who knew a guy that was selling an unattended mat in the same area that I live in. It is a smaller mat (1260 sq. ft.), which is what I really wanted for my first mat anyway-a smaller unattended mat. So, I am waiting for the financing to go through, and I can't wait to get started. By the way, thanks for the links.

Tim B.

[rharris]

Man, I've just spent the last 2 1/2 hours reading posts on this site.

There is a lot of good advice here.

I live in So Cal. I don't plan on driving more then 30 min to my matt. I work in Orange county and live in LA county. I intend to keep working, so finding a place to the south would be best.

I've been talking to a few owners and a few brokers.

I am looking for an unattended store. Most stores around here open on a timer and then the owner has the cleaner close up to make sure every one is out of the store.

I'm a software engineer by trade, but I spent a few years as a heavy equipment mech, so I intend to do some of my own repairs.

I've found over 200 Mat's in a 10 mile radius from my house. Some thrive, some are dives. I'm working hard to understand the difference, and I spend a lot of time trying to talk to the owners that seem to have good stores. Most of the dives are easy to see why. There is a bar close by, or the place is dirty, or the equipment is no better then you can find at home.

Most of the Mat's I've seen are un attended. Unattended Mat's are usually located next door to a Cleaners so Wash and Fold is usually not an option.

For any of the locals reading this... thanks for all the great info.

I'll keep ya posted.

P.S. I've read several posts claiming PWS as the enemy. They are huge out here. They have a brand name "Suds" among others. I have seen several of their stores thriving. One was across the street from a mom and pop. And amazingly, they were both thriving. High Hispanic, high rental area. Very poor. One attended, the other not. The attended store looks like it has a bit more traffic, but they are on my way home from work, I've been driving by every morning and every evening and there is always traffic.

So....

I'm going to the PWS convention tomorrow. Should be interesting. I mostly hope to meet owners.

Rod