is owning a laundry the right choice...

[sean6293]

...for someone who wants to devote his time to a business that will serve as his sole source of income?

i'm sure its mostly up to the person involved, but i'd be interested in hearing any first person opinions on the matter. i have family members who are willing to invest money in me to help me establish a business that i can live off of for years to come as well as build upon. I have been researching laundromats simply because i enjoy doing laundry and it seems like a simple business to learn and operate with a lot of potential for owning multiple stores and eventually making a rather nice living. am i misleading myself?

[Ken]

Laundromat is like any business ,some people make a lot money ,some lose,some people make in not so good store,some poeople fail,in the best location.If this business don't make money,nobody will do it.
You are asking a question has no real answer.
Stay away from family members invest your business,it is bad news,been there ,done that.
If you don't have money to start,I will suggest you get a job ,save your money,if you have house,you may get a loan from bank.
You enjoy doing laundry?I hate to do laundry,did a lot laundry when I start,have not done any laundrey for over 5 years,I don't even have washer,dryer at home,my attendants do them now.I enjoy this business.I owe multi stores,still keep my real job.
I may not give you the answer you like but it is honest suggestion.

[sean6293]

Laundromat is like any business ,some people make a lot money ,some lose,some people make in not so good store,some poeople fail,in the best location.If this business don't make money,nobody will do it.
You are asking a question has no real answer.
Stay away from family members invest your business,it is bad news,been there ,done that.
If you don't have money to start,I will suggest you get a job ,save your money,if you have house,you may get a loan from bank.
You enjoy doing laundry?I hate to do laundry,did a lot laundry when I start,have not done any laundrey for over 5 years,I don't even have washer,dryer at home,my attendants do them now.I enjoy this business.I owe multi stores,still keep my real job.
I may not give you the answer you like but it is honest suggestion.
i'm young and don't have any assets, and the best job i'd be able to get right now would be a low paying one. i don't have any interest in going back to school to get a degree that will land me in a corporate job. What i've always wanted to do is work for myself. I'm reluctant to use family money as venture capital, however it is better then the alternative. Family has agreed to loan me the money at prime interest rate for up to five years. i'm doing my homework and trying to find a mat that would be profitable enough to cover these loans as well as any other financing. i plan on running the business myself so with no payroll (or minimal) i feel i'd be able to pull it off for the first few years until all loans are paid off.

and as far as doing laundry, i don't know why, buti find it oddly relaxing. i always did the laundry for everyone in my house instead of doing other chores when i was growing up. heh.

[Bob]

If you don't need much to live off of for the the first 5-7 years it can be great. I built a new store and business is very good. I'm doing about 4 1/2 turns per day and I am bringing home just a very little bit of money each week. Certainly not enough to live off of. After the loan is paid, I will be doing quite well. I have been in business for about 2 1/2 years and I knew nothing about this business before I got into it. I researched for more than a year and then another year of planning and research for the build out. I have a self-serve laundromat and I am the only employee. My wife and teenage kids help out on occasion. I think that this is a great business but very expensive to get into. You must have very good credit, a good down payment, and a lot of time to put in before you get a return. I should have the store paid off in about another 2 1/2 years. I can't wait.

Bob

[sean6293]

the location i'm seriously considering right now is a laundry located in the forest hills area of Queens, near St. John's University. sales are listed as 130k annually with net profits at 42k and 32k in payroll (i would lower payroll to under 10k/year and work the rest myself)

assuming these numbers are accurate, i'd have more then enough cash flow to repay a loan and live off the rest.

[pete f]

...for someone who wants to devote his time to a business that will serve as his sole source of income?

i'm sure its mostly up to the person involved, but i'd be interested in hearing any first person opinions on the matter. i have family members who are willing to invest money in me to help me establish a business that i can live off of for years to come as well as build upon. I have been researching laundromats simply because i enjoy doing laundry and it seems like a simple business to learn and operate with a lot of potential for owning multiple stores and eventually making a rather nice living. am i misleading myself?

Laundry mats are generally not get rich quick business, and costs are high so return is not that great compared to other business where you have lower start up and higher margins. I would say buy a mat on the borrowed money, pay it off as quick as possible and work a full time job elsewhere for your living expenses. This way you have 2 jobs, one running the mat another that makes money. Once you have it paid off in 3 -5 years, then you can look for another and do it all over again. At some point you can quit the regular job and run your empire. I bought my first business on 100% borrowed money, but the down payment ( 25%) was a loan with no payments or interest or any time limits from family. I also had a partner, who put down another 25%, so we had 50% down going in, and it was high profit business I had experience in for several years prior. We worked our butts off and it was not a clean job. Grit, grime and back breaking work. I bought out the partner 3 years later, sold the business and real estate 10 years later and retired at 35 years old. It can be done, but it was not easy. Got bored , started with 1 mat to keep busy and extra cash for gas in my boat, now have 5 laundry mats and want to retire again!

[sean6293]

Laundry mats are generally not get rich quick business, and costs are high so return is not that great compared to other business where you have lower start up and higher margins. I would say buy a mat on the borrowed money, pay it off as quick as possible and work a full time job elsewhere for your living expenses. This way you have 2 jobs, one running the mat another that makes money. Once you have it paid off in 3 -5 years, then you can look for another and do it all over again. At some point you can quit the regular job and run your empire. I bought my first business on 100% borrowed money, but the down payment ( 25%) was a loan with no payments or interest or any time limits from family. I also had a partner, who put down another 25%, so we had 50% down going in, and it was high profit business I had experience in for several years prior. We worked our butts off and it was not a clean job. Grit, grime and back breaking work. I bought out the partner 3 years later, sold the business and real estate 10 years later and retired at 35 years old. It can be done, but it was not easy. Got bored , started with 1 mat to keep busy and extra cash for gas in my boat, now have 5 laundry mats and want to retire again!


do you think these numbers seem inaccurate? 130k in sale, profit at 40k? then if you subtract payroll it'd be at 70k.

[pete f]

I do not know anything about the mat you are interested in, so can't really say much. Some mats can net 50% others 20%.

[Sunflower]

Sean,

You seem really gung-ho. I've read a lot of your posts and you appear quite solid. (Come on guys, what young person would be considering the glamerous ball and chain of a laundromat).

Pet F. had a lot of wisdom in his post. (It's a love and hate thing. But he is smart.)

You just better be ready to work. The only people that don't have to work are pure trustfunders.

Personally, we wouldn't buy any business if we weren't buying the property it was attached to. We are also scavengers (buy the worst house on the block - garage sale - folks) and every day we are so happy we got the property we have and the laundromat or what was left of it for free. Everything we are making off of it is gravy. And the property is likely appreciating as fast as our profits. BUT and I say BUT we are not expecting to live off this investment. We think of it as a secured, conservative, steady mutual fund. 10-15% after EVERYTHING - property purchase, all taxes, ALL expenses, and we know at least for now that nobody could put another laundromat/shower facilty in our town. There are absolutely no more hook ups available. We are also in an area on the far outskirts of a major city that is growing by leaps and bounds (but not specifically in the town because there's no more water) so unless we get the smitherines bombed out of us, it's a gauranteed trip to the bank on the sell of property and or business.

I'm rambling. My point is, you seem quite grounded. Your family is willing to loan you money (usually a bad idea). We don't know your family or how deep your relationship or their pockets. IMO you might be better off to buy some dive (that your not risking life and limb in) and work your A-S-S- off in,triple the revenue, prove to Mom and Dad what a go-getter you are and then have them invest 50% or less in your NEXT purchase. That way it will be harder for them to meddle. Maybe they could buy property attached to mat where you have first right of refusal on...

YOU DEFINITELY DO SEEM TO BE PUTTING A LOT OF THOUGHT INTO THIS.

My husband and I walked into this blind and came out smelling like roses. BUT we also had the capital to invest in it ourselves and we also have two other businesses to fall back on.

(That said, you might be able to live with family which would only further your entreprenuership so you might not need other money to fall back on.)

I SAY GO FOR IT!

[sean6293]

thanks for the inspiring post sunflower. i think i would really enjoy owning a laundromat. i like the pace, i find doing laundry relaxing (who knows why) i don't have to worry about ordering or keeping track of merchandise (for the most part)...it seems like a very simple business to learn and operate. i have no hesitations about learning how to do simple repairs on my machines. as far as borrowing money from my family, my aunt who i am very close with has agreed to loan me money over 3-5 years at 8% interest. this shouldn't be a problem, what i forsee being a problem is coming up with the rest of the money i need in either seller financing or bank lending.

[SmartCard]

For some people it's like owning a boat... The two happpiest days of your life, the day you bought the laundry and the day you sell it.

[sean6293]

For some people it's like owning a boat... The two happpiest days of your life, the day you bought the laundry and the day you sell it.
what parts of owning a laundry would consider negative? as long as you're making enough to pay the bills and making a decent profit, it seems like a nice business to be in.

[pete f]

If you buy a mat at 5 times cash flow, that is a ROI of 20%. If you buy a mat at 3x cash flow it is an ROI of 33%.
If you borrow 30% and pay back in 3 years that is a paying back 33% of the loan every year plus inteterest. If you get the owner to hold a note for the balance over 5 years that is a payying back of 20% a year plus interest.
If you have an ROI of 33% and payment of 33% plus interest how do you make a living off it? Writing off taxes from your other source of income. If you try to buy the mat 100% you will work for free for at least 3 years and will need a job to live from. There is no long term financing in the laundry business, only on real estate. Real estate lenders like to see you being able to make the payment without the business income, and have cash of your own going in, or at least hefty assets. If you can get your aunt to loan you the money indifinately with no payments you have a chance.

[Ken]

A few things you need when you want to own any business:
1,money or good credit
2,the drive,willing to work long hours.
3,learn the business
4,some luck
Laundry is good business in the right location,market,I like it since it allow me to keep a real job,have multi laundromats and have other business at same time.It is a right choice for me at this time,when I find other business give me the same ,I may jump ship :-)

[goingtoarizona]

Be ready to work long hours, learn to fix the machines, and when all is done, reap the rewards. We have two mats. We are in the process of updating both. One is ok, the other is run-down ( but we own the real-estate). We closed escrow last Monday on the second. Worked everyday until midnite or so, until 3 am on Sunday (put in some newer, used equiptment). Then,at 3am, went to our first mat, stocked the soda machine, pulled out the money(one changer ran out of quarters because we weren't even there all week), got to bed at 5:15AM. The good news is, in six months, we'll have three re-vamped mats, and we'll be able to live off them, and have the flexability to do what we want, when we want. It's not that easy, you have to be very mechcanicaly-minded to fix machines,install equiptment (door locks,vending machines,new equipt,cameras), or have very deep pockets to pay people to do these jobs for you.

[Silent Roo]

sean6293

You ask what part of the laundry business is negitive.

1. People who don't understand that it is WORK. I am in the process of selling three mats I own to the couple who runs them and am a equipment salesman. I talk to people who have been told by another distributer in town all they need to do is empty the quarters and take the cash to the bank! Some distributers will say what it takes to get you to sign and put some cash down. It is a problem in our industry.

2. People who go in with out a clue. Too often I deal with people who have done no research on the issue facing an owner.

3. Calls. Customers workers, sales reps.... (I actually as a Sales Rep Get calls from other distributers trying to get me to update my laundry.... They always seem to come at dinner or bed time, or my kids sports event.

4. Customer Issues. They Lie and Steal and Complain....

So honestly it is about the same with every other business out there.....