Decline of sales in college town coin-ops??

[Anonymous]

Hi,

My question relates to the ability of marketing to turnaround a coinop in what appears to be a declining college town market.

We have recently been offered to buy one of the 3 coin-ops in the city for $45K (does not include property). It has been in steady decline though (see below). In it's heyday, the owner, whom we trust (for reasons not worth getting into) said the net income was between $30-$40k, and the mat has been open for 20 years.

Sales Net income
2000 110k 12k
2001 107k 10k
2002 99k -13k (equip purch this year)
2004 77k -2k

Rent is 2.5k/mo.

The town is about 26k people, and the college has about 24k students, so you can see that the town is small. Now this coinop has been around for 20 years on one of the main streets in town with well marked street signage.

The owner is pitching to us that since we are young and energetic perhaps we can better market the place, which the owner has not done in the past 5 years.

So my questions are:
1) What kind of really effective marketing can we do in a town so small with such a great location? My impression is that it seems like everyone knows where all 3 coinops are in town anyways.

2) Has anyone else out there noticed a marked decline in business in a college town?

Let me also add that there doesn't appear to be anything wrong physically with the place. Good machines, well lit, no rat infestation, attended, wash and fold service, etc.

I'll take whatever comments ya got, don't necessarily have to have experience running a coinop in a college town.

[Kitty]

First, I'd look at the college itself and the numbers of students over the same period. The Dean of Students should have information whether there has been a decline in students in recent years or an increase. If there has been a significant decline in students this may be something you will not be able to have any sort of effect to possibly change in a Laundromat Business.

My opinion is that 3 coin-ops with 24K stiudent and 26K Population is too many options. Has the school built a laundry facility?
What years were the 3 coin ops all built?

[Anonymous]

Student population is actually growing over same period. The school does have laundry facilities. We actually run a laundry dry cleaning and delivery service that caters to the college students--we outsource production. We notice that we have a great freshmen customer base that goes away when they move off campus into apartments. Nearly all of these apartments have W/D in them. The dorms all have W/D in the basements, etc, it's just the level of inconvenience of walking down to the basement, waiting, etc, makes us have a lot of freshmen customers.

[pete f]

the rent is outstripping the income for a couple years, not good. If you can but the mat for 2-4 times income, than maybe turn it, OK, if not, do not pay for potential income!
If you want deeper insight please see my post about valuations of mats for newbies. ($500)