Laundromat Valuation

[tgifbos]

What would you value this fully attendant Laundromat:
3 years old, all washing machines and dryers are Wascomat (Gen 6 and TD 30/30) (except for Maytag toploaders). All in great condition.
Exclusive use of a 15-car parking lot.
Gross Revenue: $250,000 year
Utilities: $70,000 year (including electricity for Central A/C and gas for heat)
Rent: $1,500 per month. 15 year lease, increasing $250 every 5 years.
Payroll: $60,000 year (do you even include this for valuation purposes?)
Insurance: $4,500 (including workers comp).
Misc Exp: $18,000 year (including phone, supplies, maintenance, etc).

Thank you!

[mr_soap]

Did I miss water and sewer expense?

[tgifbos]

Water and Sewer is part of the utilities expense (and so is electricity and gas)

[Kitty]

Whats the vend price and machine mix?

[Gary C]

first thought around 250-300k 79,500 net is pretty good but there are a few other questions.

Machine mix and count
TPD
does payroll include the owner at this point

Gary

[smellysocks]

utilities seem high, what about drop and vending. Make sure they are not double counting the drop off( only count half since half is put in the washers THEN WOULD BE COUNTED ALSO WHEN collecting) make sure you check out compitition and any new consruction also. The look too see how much you can increase business and how. good luck

[Kitty]

When someone asks the opinion of a sale isn't the most important issue the verification of the revenue?

Determining the expenses has no merit if we cannot determine the sales. Sales of 250K mean nothing if machine mix and vend price are not mentioned.

We can determine the TPD by machine vend price and mix and the TPD is very important in determining the success of a store. Expenses should be listed line by line. A 3 year old store should be scrutinized very closely to determine the potential.

Kitty

[pete f]

My thoughts were in line with Gary, based on the limited info. I assume the payroll is nessacery to make the gross revenue, so it would be counted. The rent doubles over 5 years, I took the 3 rd year rent and used that expense number. I would assume you can't build a store like this for 250, 300k, or much less, so given a steady revenue stream, and a cheap rent relaitive to the gross, 4 times a cash flow would seem Ok if all the ususal other factors are OK. The one thing I would look at is how much is coin, how much w/d/f, and if any 1 or 2 customers make up a good portion of that w/d/f revenue. Also, the check of if you got rid of w/d/f, and payroll, what is the result? this is more of an "acid" test to me, showing the core business, at least the one I care about. Remember, I do not do w/d/f.

[Anonymous]

If the rev & exp figures can be confirmed, this sounds like a great buy...... at $300k

Putting 1/3rd down, and financing the rest @ 7% over 7years will give you a cash on cash return of 43%! Quick and dirty of course, so check with a professional, and let me know if you decide you're not interested!

Good luck.

[cesar]

tgifbos, Are you thinking of selling?

[CharlieS]

Depending on the market, 4 times net is a decent number for this mat. $300K to $350K.

And yes, you include the payroll. Whether you do it, or someone else, the labor should be paid.

Charlie

[ajay]

utility is in line w/ gross and rent is reasonable. what's the equipment mix - exactly? tpd? vend price will be good as well. Although the water&sewer is part of utility, you should break it down to see if it's 10% of gross. Also, verify if w&f cost is part of gross...we back out ours weekly!! Employee cost is "chosen" lifestyle(i.e. you may not want to have employees). I don't consider that in my calculation!

ajay