Newbie needs help analyzing numbers...

[laundrylass]

Hi all, thanks for the wonderful info. I am currently looking at purchasing a small mat AND the real estate.

These are the sellers numbers, she supposedly is getting out because she has another internet business which is taking up too much time. I think it may be that the mat is not worth the time for the money. If the numbers are accurate, even though they are low, it is worth it to me, as it has a small manager's apt. on site which will lower my cost of living while also providing me with some cash flow. Here's what I've got. let me know what you think thanks!

I would like to make an offer for the business and real estate at for 199k. The property contains 15 top loading speed queen washers, 12 stacked speed queen dryers and 2 heavy duty speed queen washers. All equipment is new and still under manufacturers warranty. The property is approx. 1900 sq. feet.

Income includes revenue from washers, dryers, soda machine and soap sales. Total income from May 2004 through January 2005 was $31,532 (pls. note: laundry was closed from mid July through Mid August for renovations and to install the new machines).

monthly breakdown is as follows:
Jan 05 $4,910
Dec 04 $3,860
Nov 04 $4,585
Oct 04 $4,550
Sept 04 $4,165
Aug 04 $2,595 (closed from 1st-15th)
July 04 $1,505 (closed from 17th for remodel)
June 04 $2,920
May 04 $2,442

Utilities and bills fluctuate with use, bills include gas, electric, water, misc. repairs, soap and coke orders, and approx. $150 mo. for attendee (which I would eliminate by living and working onsite).

monthly breakdown is as follows:

Jan 05 $1,101
Dec 04 $1,141
Nov 04 $1,065
Oct 04 $1,350
Sept 04 $1,072
Aug 04 $608 (closed from 1st-15th)
July 04 $75 (closed from 17th for remodel)
June 04 $1,217
May 04 $993

I'm still waiting to find out what my note will be but I'm budgeting for around $1200, and am going to ask what the seller has been paying in sales tax, so that's an unknown at this point.

What should I budget for cleaning supplies and insurance?

The mat does not do Wash & Fold, so I'm going to look into offering that, and also purchasing an arcade game.

I was also thinking about offering WiFi, does anyone have experience with that?

Have I forgotten anything? thanks again for all the great feedback.

Laundrylass

[Kitty]

There was significant decline in revenue when the store was closed. And there is no track record of an increase since an upgrade.

Tell more about competition, the customer base and the real estate values

[laundrylass]

The revenue was down because the store was completely closed for one month and totally redone. New floors, new roof, all new machines...so the revenue for July and August is only for half of each month. What should I be looking for in revenue increase after the remodel? It seems like it went up from the June revenue to the Sept. revenue but I don't know what state the equipment was in in June. How long does it take after a remodel to ramp back up? This mat is located in an urban area in the south with a lot of renters and a lot of colleges and universities. I'm expecting revenue to slip in the summer months. The property values are going way up in this neighborhood which is a mix of affluent older, historical homes, rental properties and condos. The property is probably worth 225-250k, so on that front I feel like it's a safe investment, that at the very least, should pay for itself and offset my living expenses, of course it would be GREAT if I could actually live off the business too. OR sell the business once I've added more services and then I could just be a landlord.

[laundrylass]

oops, I almost forgot competition...there are a few other mats in the area but all (including this one) have been in the same locations for years.

Anyone know if offering WiFi brings in customers, or is it just an expense that doesn't lure customers...


thanks!!

[Kitty]

Usually the upgrade increases business. Not sure this is happening here?

Ask if they close every year. Go to competitor and discuss the closing of this store and see if there has been new comp in this market........see what the comp does.

Let me know

[mike]

The property is approx. 1900 sq. feet.


Laundrylass

If that 1900 sq. ft. is the size of the store alone, you have lots of space to add more machines, or have another income business in the space.

It sounds to me like a good deal,
You seem to have realistic expectations about the amount of money that can be generated, (not enough to drink cognac ;-(

[laundrylass]

thanks! one more question if I can.....do the utilities seem in line with the sales?