Saving a store

[WTLaundry]

My father-in-law has been in the laundry business for a long time, but health has required he retire. He at one time had four stores and finally ended up with one last store after areas changed and the buildings he was in were sold and torn down. The last store he had was started in 1975 and has been the only laundry in town most of that time and the one other laundry that went in years ago died quickly.

In 2001 his daugther took over and it started out well. Soon after though the landlord in a 2 year time has doubled the rent. Gas has doubled, water and electric have gone up. In 2003 two new stores have opened up each with a quarter mile of us, the city put a building halt on for 8 months which caused 40% of our clientle to move to another city where building was booming.

We run the store 24 hours un-attended, the new stores are 7-10 and 8-9 and we do see alot of business show up after the other stores are closed. We keep the prices below the other stores pricing and keep the store very clean and maintained. Still we are just meeting the expenses.

I work full-time in a job I've been at 31 years and my wife has had to go back to a full-time job to make ends meet.

We are trying to keep the store running, monitoring it from the internet during the day and cleaning and making repairs at night. I work from home most of the time and can make it to the store in 5 minutes in case of an emergency, but do have to travel out of time all week which makes it hard for the wife.

I know the other two new stores can't be doing well as when I compare business they aren't doing much based on the cars there, sometimes I have more sometimes they do. They have to have more overhead than I do having brand new stores and being fully attended. My equipment is all paid for and doing the repairs myself, or with dad's help keeps the equipment costs low.

I don't know what to do to retain the business but hate to have it fail as I feel responsible. I had a call from another store 15 miles away wanting to know if I wanted to buy their store because they are going through the same thing, so I know I am not alone on this.

Is it time to bail or do I hold out?

[Gary C]

as much as it may hurt it sounds like it's time to jump ship. If you owned the property it might be a little different. Sometimes there is nothing you can do.

Gary

[Chase13]

Take a step back and put it all down on paper. If there is no money being made the way it is today and you do not want to risk putting in new machines then walk away or try to sell for any amount. I have been in your shoes losing a family business is hard and you do feel responsible, but you must think of your future and let you mind do the talking and not you heart.

Good Luck
Chase

[David]

My first store I spent many, many hours of sweat equity, cleaning, painting, repairing, rearranging, and installing different equipment. Then, two brand new 140K stores opened up about a mile away, across the street from one another and started a price war.

I struggled for months trying to decide what to do. Finally, I sat down and wrote it all out, pros and cons. In the end, it was just a business decision. Emotionally, I really didn't want to get out, but at the same time, the business was going down and if I didn't get out, it was going to take it with me.

Good luck!

[William]

Though it may seem counter intuitive to you, I would consider raising prices. Why not match the competition? If you are clean, and you offer hours they do not, they you shouldn't see a decline in business if you raise the prices.

[WTLaundry]

Thanks for the information. It may be out of my hands. The owner of the property next door came in today and has been approached by a real estate agent who will also be contacting my buildings owner and I think may be the one to have just purchased the car wash behind us and is looking to develop the whole corner. There is a medical clinic about 5 years old and a CVS Pharmacy is just opening up on the remains of the block. If the owner sells I guess I'll be gone anyway depending on what they are looking to develop.

My lease is up and I haven't heard from the owner about a renewal yet. Now there is a chance that the old owner who died and left this to his wife, may have put the property in a life estate for his daughters and wife and she may not be able to sell. She has threatened in the past to not renew and place a laundry in our place, is that legal, do we have any recourse on that issue? If she gives us a lease and then does sell, what is our stand with the person who buys the property? These are not issues I have dealt with and don't know anything about.

If the new owner develops the block and has a place for us, we could be better off as the age and state of the building and surrounding property is why we have also lost some of our business. 9 properties across the street have been sold to make way for a new Walgreen Pharmecy so the area is growing quickly again.

[Ken]

If anyone buy the building,they will have to honer the original lease,otherwise they will have to buy you out.
I signed a great lease with landlard's son ,he sold the shipping center 2 weeks after we signed the lease.The new landlard didn't really like the lease but they have to stuck with me and the lease for next 10 years!
As far as your laundromat,if you did all you can,still not making money,you have to find the way out,your rent will get higher but can you charge more?If you own the building or using the store to pay for the building,it will be a different story.Helping family or doing business with family is always not easy.I know because I been there,good luck.

[mike]

Eventual success often boils down to "who owns the real estate"
in this business :-)

WTLaundry, Do the other mat owners own their real estate ?

If not, you may have a chance.
(a chance that THEY will fold eventually, but that alone does not secure YOUR position as a renter)

Best of luck !

[pete f]

I have a store that had not been a great performer, many factors, some as you mentioned. Nuts and bolts. Last ditch effort I tried, and it worked. DROP your PRICES by at least 15%. Undercut those high overhead stores buy the gills. I took my tops from 1.50 to $1 and put put a big sign "WASH $1 " I lowered my other machines at least 50-75 cent.My store was clean, 24/7, etc but loosing volume, By doing this I cranked up the volume and now turn decent TPD and cash flow.
You have no debt, and can fix your stuff, so you are in good shape. I hated cutting prices, but it worked, everyone loves a deal.
as for your lease, sounds like a mess. You need to get one. Try to break everyone else if you have to go down. If you get a lease worked out then go from there.

[WTLaundry]

I forgot about the buildings. The first new store is in another strip center and does not own the building. The second bought a vacant lot and put his own building in with a carwash laundry combination. He does a fair amount of carwash business too. He has 7 other laundries in the metro area, none near us but I am sure they help cover the loss from this store.

Here's what I came up with for the past 3 years we had the store:

2002
Gross 104k
Net 56k

2003
Gross 86k
Net 38k

2004
Gross 55k
Net 12k

The mix of equipment I have is 12 toploaders @1.50, 8 double frontloaders @1.50, 4 triple frontloaders @2.25, one 40lb front loader @3.25, a 35lb milnor @3.00, a 35lb boch centrifuge @.50, 4 50lb dryers @.25/7 min, 11 30lb dryers @.25/7 min and 1 stack dryer @1.00/30 min. I've always felt the store was short on dryers but there was little extra space available so I would have to swap out for some stacks.

There is a store some 50 miles away that the owner moved and is looking to sell off his equipment and I was thinking of getting 5 stacked dryers and 3 40lb washers. I know I could rework what I have to get these in if I decide to hang in there.