Spend too much money !

[MyLaundry]

Hello Newbie,

I just spent too much money to build a new store. Total $600,000.00 for a 3500 sq ft. with some fancy stuff. About $120,000 over the budget.

About $80,000 went to the upgrades of water, gas and electric supply outside the building under the parking lot. New 4" water main dedicated to my store, 2" high pressure gas with 11" gas meter, 800 amps 3 phase power supply with brand new power transformer built across from my store and 4 way 4" PVC electric conduit to bring that 800 amps from transformer to my store. Utility companies don't want to contribute and of course my landlord doesn't want to pay a dime even those these upgrades are for the benefits of whole shopping center in general. So I have to pick up all the costs of breaking up the parking lot, upgrades and materials for these.

With $600,000.00 capital around, does it worth it to invest in the self-serve laundry business ? I do not have the answer for you now. But can this money better invest in something else ? Probably yes.

With the money keep spending each day awaiting final inspections, my confidence of getting all the money back in a reasonable period of time is diminishing everyday !

[Kitty]

I hate that you are having negative feelings over your choice. But, I hope your admission to over spending/under budgeting with the expenses of your mat will help others entering the biz.

As you have realized, water, gas and electical costs are crucial to the life of the business. Thorough research and education will reduce painful mistakes. Anyone that considers investing in business should be sure they realize how the business will succeed as well as the potentials that could see it fail and avoid all the pitfalls.

[anonymous]

wow that is high for 3500, did you put in gold coin slides? I would love to see a picture. why a 11 " gas line, you are probably going to pay a higher rate for that big a line, how many machines did you get in. Good luck

[Kitty]

In my area, a new 3500sqft building and equipment would surpasse the 600K mark substantally. The plumbing, gas and electric is the biggest expense other than the installation! Understanding the requirements and questions to ask during the build or build out is imperative to a good start!

[anonymous]

I saw 3500-5000 sqft ,500-700k stores pop up in my area almost every months.One of my store is between all the nice looking stores,I am just glad I only have 4 more years to pay off the building and business.
It depent on your location,I know a store did over 14k in the first week,some super stores just pay the bill.
The update always expensive ,some stores cost $30k-70k just get the water and drain hook up to city pip,80k is expensive but not bad,this is the reason I have not built a new store after 14 years in this business.
I just called off a land deal this week since it will cost me about 1M to build building,parking and laundromat,I feel that is just too much.
Good luck!

[MyLaundry]

I haven't got to the point where gold coin slides or marble folding tables are used. They would be nice if I have extra money to spare..........

But I already put in fancy stuff like 42" plasma TV with satellite channels, designer ceramic wall tiles all around, $10K worth of neon border lines around the store, and many other nice stuff. If somebody can tell me how to post pictures on this site, I may do it after store open.

Total 52 washers and 30 dryers.

With rising energy cost and dimishing profit margin, I don't think I can recoup my investment in due time.

Maybe this isn't the right time to heavily invest in laundry business !?!

[mike]

I hope that is 30 stacks, (ie. 60 drums) otherwise you do not have enough dryers.

I'm thinking of something positive to say........

Best of luck !

[KJD]

I'm with Mike here, you better have more than 30 pockets.
I need 30 on the weekend and only have 30 washers.

[pete f]

I haven't got to the point where gold coin slides or marble folding tables are used. They would be nice if I have extra money to spare..........

But I already put in fancy stuff like 42" plasma TV with satellite channels, designer ceramic wall tiles all around, $10K worth of neon border lines around the store, and many other nice stuff. If somebody can tell me how to post pictures on this site, I may do it after store open.

Total 52 washers and 30 dryers.

With rising energy cost and dimishing profit margin, I don't think I can recoup my investment in due time.

Maybe this isn't the right time to heavily invest in laundry business !?!

You can save a few bucks by dumping the plasma ( or put it on your yacht) and the statilite TV. People don't have time to watch TV and do laundry. The neon is probably a nice touch..
We used to say it cost $100 PSF to build a mat, you are going to change that number. My card store is comming in a little higher than that ( the $100) and I see cost overruns, make that cost underestimates, daily now.
What is the popualtion density per sq mile ?

[Anonymous]

now that a few years have passed I wonder how they are doing

[pete f]

I saw 3500-5000 sqft ,500-700k stores pop up in my area almost every months.One of my store is between all the nice looking stores,I am just glad I only have 4 more years to pay off the building and business.
It depent on your location,I know a store did over 14k in the first week,some super stores just pay the bill.
The update always expensive ,some stores cost $30k-70k just get the water and drain hook up to city pip,80k is expensive but not bad,this is the reason I have not built a new store after 14 years in this business.
I just called off a land deal this week since it will cost me about 1M to build building,parking and laundromat,I feel that is just too much.
Good luck!


This has always been my point.. How come these new stores are not being built by those who are already in the business???
They know the numbers better. I am the only owner I know building a new store for years in my area, and the new store was a mat to begin with years ago, and I have spent years searching. Durring my permiting/design stage a distrib had remodel at mat, sold it for around $385k in a shopping center. There used to be a decent store there, not as big, but this distrib sucked these people into a big store for 385k!
They live about an hour away, those long rides with which spouse made this decsion will be rough.

[MyLaundry]

Mike, total 52 drums to dry clothes. No worry.

Pete, the demographics within 1 mile of my store looks like this: 1) Total population--22200. 2) Total household--9270. 3) Average household size--2.34 4) Average family size--3.12

[MyLaundry]

This has always been my point.. How come these new stores are not being built by those who are already in the business???
They know the numbers better. I am the only owner I know building a new store for years in my area, and the new store was a mat to begin with years ago, and I have spent years searching. Durring my permiting/design stage a distrib had remodel at mat, sold it for around $385k in a shopping center. There used to be a decent store there, not as big, but this distrib sucked these people into a big store for 385k!
They live about an hour away, those long rides with which spouse made this decsion will be rough.

PeteF is always right ? But I wish he could be wrong on my case. I still enjoy those story told by my equipment distributor. They told me I got a gold mine location, hidden treasure, once in a lifetime opportunity. TPD can be 6 or more. The seminar was really nice and informative and it was free !

Let me end with this saying: If it was that obvious, everyone would get it.

[anonymous]

6 or more TPD?
Is it a little high?
As I said before,I know some super stores gross a lot money,most are in large city and some large stores were owned by dealers.
You may do ok and you don't have old store's problems.I have to clean the drain today,fix my water line next week....

[pete f]

Mike, total 52 drums to dry clothes. No worry.

Pete, the demographics within 1 mile of my store looks like this: 1) Total population--22200. 2) Total household--9270. 3) Average household size--2.34 4) Average family size--3.12

Your density is about 4 times mine, next question would be how far away are competing mats. we average about 1 per 10 blocks, and TPD less then 3. There are certain locales that really do well. Most mats 1200 SQ ft or less.
So it looks like 4.16 SQ ft of mat space per 5000 people per sq mile.
I know mats in high density do double, triple what mats in lower density. Wait till you open,. then the dice roll for the come out.
You will know very soon if you got 7/11 or craps....

[anonymous]

Mike, total 52 drums to dry clothes. No worry.

Pete, the demographics within 1 mile of my store looks like this: 1) Total population--22200. 2) Total household--9270. 3) Average household size--2.34 4) Average family size--3.12

I guess I will have to study this if I ever build a new store.
I have never done any demographics study since I only buy used store,I checked the parking,bill history,other stores in the area and just driving around the area for a few days.
Most dealers will give you a very nice picture,I don't trust any of them.
I was in my store today,a salesman stopby try to sell me machines,I know his boss just built and own a 4000 sqft store one mile from me and offer free dry,he still tried to sell me something,it was really funny.

[pete f]

This has always been my point.. How come these new stores are not being built by those who are already in the business???
They know the numbers better. I am the only owner I know building a new store for years in my area, and the new store was a mat to begin with years ago, and I have spent years searching. Durring my permiting/design stage a distrib had remodel at mat, sold it for around $385k in a shopping center. There used to be a decent store there, not as big, but this distrib sucked these people into a big store for 385k!
They live about an hour away, those long rides with which spouse made this decsion will be rough.


UPDATE on this " The owners of this new store have walked away from it! After about 80 days in the business, they gave it up. I heard they had 200k in it cash.. People need to know the local market and use that as thier guide.
Pitfalls: high rent in a low rent district
in low volume shopping center
The surrounding area to residential, not many apartments
Store SQ Ft way to big for the market
store built as attendend, hard to make unattendend
That 1 hr drive to a store sucking thier money got to them

[MyLaundry]

UPDATE on this " The owners of this new store have walked away from it! After about 80 days in the business, they gave it up. I heard they had 200k in it cash.. People need to know the local market and use that as thier guide.
Pitfalls: high rent in a low rent district
in low volume shopping center
The surrounding area to residential, not many apartments
Store SQ Ft way to big for the market
store built as attendend, hard to make unattendend
That 1 hr drive to a store sucking thier money got to them
As I mentioned before, it is not obvious to see a store's potential or location's greatness. That is why so many owners got burnt or miss the gold mine. This is not "build it, and they will come" business !

If it was that obvious, everyone would get it...

[anonymous]

the gold mine days are long gone it takes alot of hard work to do good. Only two things hard in my opinion, finding location at good price and having the money to play the game, but with that said i love the business. you have to your homework even after your distributer tells you its great. good luck