New to the Business, Need Help and advice

[al7480]

First of all, I would like to thank all of you advance. I am new to this forum and to the laudromat business. I found a nice spot in Memphis in a low income area. The building is about 800-1000 sq.ft, and has all the plumbing set up for a mat.

My questions are:

1) How much can expect to spend on equipment and everything else that goes with the set up?

2) Are milnors good machines?

3) Do you recomend new or used equipment?

4) Is financing easy through the supplier or bank?

5) How much cash do I need on hand to open the doors?

6) Did I ask too many questions?

Thanks Again.
Al.

[William]

First question you need to ask is why did the old laundromat leave the building...

[al7480]

I already asked that questions, and it seems the church was running the place and the would'nt open on sundays. that explains why they had to shut down. they were also closing at 8pm, and only hired volunteers from the church as attedants.

[Barefootbay]

Milnor > solid yes
Used > be very careful

I would visit local competitors at differing times to see what traffic flow they hold. Study vending prices and any specials they may have. A must should be a very reliable video survielance system. Money saved is just as important as money earned.

[al7480]

Thanks!
I also called the local water and power company for memphis and they were able to give the average water usage at the location. These numbers are two years old, so take that into consideration.The Water usage was between 16,700-27,000 gallons per month. Also the location was not open on most sundays, and they closed at 8pm everyday.

[pete f]

What is your budget for the project, and what are you expecting in income?
Leased or owned? When was the original mat built? How close to where you live now?
I do not like old Milnors, but some do. They are tough, maybe last to long!

[al7480]

leased, 1600 sq.ft, $1200/month,close to my home, I have $10,000 on hand as cashflow, and I'll finance the rest. I expect to keep my current job, and earn extra income from the laundromat, but I don't expect to make lots of money, at least not in the first few months to a year. I just need to know if I should buy used or new, and with the water numbers I provided above, is there any way you can tell me if this place is worth the investment of my time. I am willing to bust my butt and make it work, but I guess I am just looking for some assurance and numbers to look at.

Thanks!!!!

[Gatorlenny]

Do yourself a favor: Buy an existing, operating mat with positive cash flow from day one. Your 10K will cover deposits and some other stuff, but re-opening a mat will take at least one or more years to get busy. Do you have the cash to sustain two years negative cash flow while business builds?

[al7480]

I appreciate your suggestion, but I have looked for an existing one but can't seem to find one that's good. Most of them either have unverifiable cash flow or the owner is asking for too much. I don't have the money to last me two years on negative cashflow, but I think this location has great potential because it has at least 400 apartment units within the immediate area, and not to mention the old homes in the neighborhood.

Thanks!!!

[pete f]

leased, 1600 sq.ft, $1200/month,close to my home, I have $10,000 on hand as cashflow, and I'll finance the rest. I expect to keep my current job, and earn extra income from the laundromat, but I don't expect to make lots of money, at least not in the first few months to a year. I just need to know if I should buy used or new, and with the water numbers I provided above, is there any way you can tell me if this place is worth the investment of my time. I am willing to bust my butt and make it work, but I guess I am just looking for some assurance and numbers to look at.

Thanks!!!!


Hard to day what.. the original post was for a "800 to 1000" sf ft mat. Now is for 1600 SQ ft and you ony have 10k for capital. You need 50% capital to make it on your first mat. That is my rule of thumb. The hard work and busting your butt is a given. Close to your home is very positive.

[al7480]

so I shouldn't do it if i don't have the money? Thanks.

[pete f]

so I shouldn't do it if i don't have the money? Thanks.

I am looking at an existing place now, to redo it the way I want my budget is 80k, does not include equipment or the price of the store. It can and probably will be done for less, but plan for the worst.

If you are going to get a place for free, has a/c, and is set up for a mat, you might get by with 20k cash to retool it and do it right, assuming you do not need to bring in new power or redo all the plumbing, build ADA bathrooms, etc.

[al7480]

The place already has the plumbing, AC, Heater, change machine, vending machine, Gas and electrical connections. It looks better as is than the nearest competition. All it needs are the machines, some paint, the floor needs tiles, and the electrician needs to come in and check everything for safety reasons because it has been closed for sometime.I took a month vacation from my regular job in October to focus on opening the place up, and I have very good ideas that am willing to try, but cash is King and I don't have a lot of it.However, I do have a credit card with $10,000 available to me @7.9%. My brother is willing to help me for about a month with no pay at the laundrymat, and my brother in law will paint the inside and outside for free.Lastly, should I go with new equipment or used, or a mixture.

Thanks a lot for your advise.

[Sunflower]

Do yourself a favor: Buy an existing, operating mat with positive cash flow from day one. Your 10K will cover deposits and some other stuff, but re-opening a mat will take at least one or more years to get busy. Do you have the cash to sustain two years negative cash flow while business builds?

I don't agree. JMO. If it's as good as spot as you think it is and you are willing/able to CLEAN it, keep it open longer hours, are fairly handy at fixing little annoying things that go wrong I think you will do okay.

BUT--

It gets old going in day after day, seven days a week to clean up after people, deal w/nuisances, etc.

I am curious how many machines you have room for? Maybe 20? Let's say you have 17 frontloaders at 2.00 and 3 50 fronts at 5.00. At the "profitable" mark of 3 turns per machine a day you'd be bringing in $147 x 28 = 4,116. Minus
1200 in rent = $2916 minus
150. for ins.
400 for water/sewer
500 for gas
200 electric
100 phone = 1,566.
????? Machine financed payment (you probably need $100,000 w/of wash-machines, dryers and security system)
????? Repairs/Maintenance

I'm assuming a payment on equipment would be at least $700 a month stretched over a long time.

By the time you didn't have a payment on your machines it would be time for new ones.

IF you were able to turn 3, you'd be left with about $850 a month (check my math--I stink at it). I'm probably forgetting something. But would that amount of $ be worth it to you?

Do the nearby mats have an overflow of business?

My laundromat is about the size I'm guessing you have room for and I am in there about 4 hours a day, seven days a week plus my husband pops in and out as does my Father in Law. This is the bare min time to keep it presentable so people want to come in.

Thank goodness we are only a short distance from it. It's just an scenario and maybe way off from your real-world.

[Sunflower]

I meant to say I think you should buy new unless you have a used seller around the corner who is willing to come and install them.

[al7480]

I thank all of for your input, and the more I read the more I want to do it. I was hoping to
break even for the first few months and make profits in the future. The numbers Sunflower gave do not include wash, dry, and fold. Did I also mention that I work at the airport and plan on offering w/d/f, and delivery to airport hotels for those business travelers who don't have time for laundry and are willing to spend money. I am planning as if the laundry will just pay for its expenses and I'll find creative ways to make my profit.The laundry mats around me are not overflowing, but they are not offering good customer service either, so I am assuming some ppl even drive away just to do their laundry. Lastly, the church that owns the building is around the corner and the pastor promised me that he will tell the congregation once I open. ppl in the south listen to their pastor!!A lot ppl in the community have also told they would support someone who is trying to do good in the community. I plan on purchasing a majority used and may be 2 or 3 50lbs, the rest will be smaller used front loads. I have a guy that's selling 30lbs sc dryers that are about 10 yrs old for $300 each. he has 14.

[Sunflower]

Btw, Don't know if you have quarterly B&O and/or sales tax to pay to the state before your Fed tax but that's something to keep in mind.

GOOD LUCK!

[pete f]

OK, you have been warned on going cash flow poor. yet the will to succeed may overcome this. Maybe. Most of us know an old mat needs a complete retool to make it modern and effective in an urban competitive environment. This means moving the whole floor plan around from the layout of 20-30 years ago. This is what cost alot of money. If you are going to stick with existing plan, wheel in some equipment and start off, it has worked. I have some 3 phase and single phase washers for sale coming out of remodel situations, all working, look decent,, maybe some newer stacks, if you have a truck email me.

[al7480]

Pete send me the pictures of the machines and the brand, model or whatever is useful. Of course the price. my email is ahmed8074@yahoo.com. I can rent a truck and haul the stuff to memphis.

thx.

[Coinwash]

Please NO buying or selling on the Board Please ;)

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Thank you...

[al7480]

I am new, so Sorry.

[Coinwash]

;)

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