So, Laundries arent an investment

[rmathome]

So, Laundries arent an investment and, at best, they are low hours. Most likley - they are significant work.

So now I have to ask - what exactly is the work? If you have an attendant they should keep the place clean, accept and do the w/d/f, open in the morning and close at night, and all other regular daily tasks.

Of course collecting money is the owners job. And checking in to make sure the attendants are doing there job. But neither of these things can take more than a couple of hours in total.

But other than that it seems your time would be spent on problems - emergencies, repairs, worker not showing, etc. But these things should be rather rare.

What am I missing... what is the effort that some speak of that constitutes 30 hours a week?

[Fred50]

You have got to be kidding, or are you that naive?

Everything in life is an investment whether it be time, $$, or mental/emotional energy put forth or a combination of the 3. Only you can decide what your time, $$ and brain power are worth and what level of return you are comfortable with.

Some pure investors get into this business and they are OK with a 10% ROI, and some are not happy with less than 30%.

Read the attached post that was written a few years back by a new owner and you may have a better idea of what lies ahead.

Beware of those that give advice and have everything to gain by you moving forward. It's a jungle out there.

__________________________________________________ ________


Confessions of a newbie!

--------------------------------------------------------------------------------

I would first like to thank all of the folks who have given me sage advice during the last 1-1/2 years that I have participated on this forum, especially Kitty, Howard, Pete F, and many others. Sorry if I left someone out, but I am a bit tired.

I opened my new mat 3-1/2 weeks ago and it has been a blast. I listened to everything that I have heard and read and took the best ideas that suited my situation. So far, so good!!

Now for the eye opening part for anyone who is looking to get into this business:

1- I spent almost 2 years full-time trying to find an existing mat or a location for a new mat that would meet my criteria.

2- I spent 9 months full-time (including nights and weekends) supervising the planning and construction of my mat.

3- I have not had a full day off in about 6 months.

I am enjoying every minute of this so far, but it is certainly not for everyone.
Note that my place is completely new, including the building. I have had false alarms, bra wires in drains, screws jammed in washers and dryers, crayons and candy in dryers staining people's clothing and about every basic complaint that you may have read here. Oh yes, and both of my Card Machines have had their bill acceptors jammed.

Note also that everything is under a full warranty now, but you can't wait on a Sunday afternoon for the mechanic to arrive, especially if it means losing revenue on your busiest day.

I used to laugh before when I went to some distributor's seminars and they called it an absentee business that you only have to show up to to collect.
Now it is really being driven home.

This business has gotten so competitive that you have to be involved and you have to take advantage of every possible opportunity to increase your market share and / or keep your competition at bay.

One last bit. I told you folks a while back about a small, neglected mat down the block from me that closed down the week before I opened. Well, someone bought it and cleaned it up a bit. They definitely didn't do their homework and they are suffering for it miserably. Their last wash is 9:00 PM, but it was lights out at 6:00 PM last Saturday!

Good luck to you all and to you newbies - DO YOUR HOMEWORK!!

Remember how much $$$ and time and effort is at stake before you commit to something and don't be shy about asking about anything that concerns you and get everything in writing. The cost of the business may be the least of your obligations. The cost of the lease can easily exceed that over time and you have to be damn sure that the business can cover it.

[Kitty]

All businesssess are an investment . In my opinion at the rate the equipment cost continue to climb the amount of investors looking into this biz are rapidly decliniing and that will be a good thing for most of you in the biz today.


So many people want quick returns and do not want to work for the longetivity the mother load of the small biz brings and that most do not want to work really either which is the biggest shame.

[Palmyra Jim]

I anticipated working 7 days at 10+ hours a week for at least 6 months and am not afraid of it...thank you for the "grounding" into the day to day grind...or spin!
Jim

Thought I would edit that post!

[Silent Roo]

It is like any other business.

If you want to pay someone to fix what is wrong, they will take $60-100 an hour plus travel plus parts. It takes a LOT of turns to come up with the price of an average service call.

Yes your attendants can run the place. but remember that rude teen in the gas station might do more work than your attendant! Good employees cost and are tough to find.

I for a number of years was an owner of a number of mat 200ish miles from me. I had a local guy who ran them and made sure they were right. I came through town once or twice a year. My ROI was much lower than if I had done the work myself. However I did not care. I had so little into them that if they paid them selfs off and gave me something I knew my return would come when I sold them.

I do not have 10 hours a week to give to a mat. I do not believe it is the equipment cost that are taking investors out of the market. It is the work required.

Business requires work. If you pay someone else to run it and manage it you get a much lower return. That is true in EVERY business. Your expectations are what is important. At some point Laundries will become attractive again. As we go through the next couple of years I think there will be many more laundry customers

In business there are cycles. There are discussions as to whether Coin Laundries are in the buggie wheel stage of their life. I think someone is going to figure it out and you will see a chain of Laundries go regional and national and be profitable....

[pete f]

So, Laundries arent an investment and, at best, they are low hours. Most likley - they are significant work.

So now I have to ask - what exactly is the work? If you have an attendant they should keep the place clean, accept and do the w/d/f, open in the morning and close at night, and all other regular daily tasks.

Of course collecting money is the owners job. And checking in to make sure the attendants are doing there job. But neither of these things can take more than a couple of hours in total.

But other than that it seems your time would be spent on problems - emergencies, repairs, worker not showing, etc. But these things should be rather rare.

What am I missing... what is the effort that some speak of that constitutes 30 hours a week?


I do not spend 30hrs a week at my mats, however I am on call 24/7 so I am ready to roll when needed. Sucks when 3am, but it happens. I really do not like anything before 10am, but it happens. Sunday dinner, call comes in, I leave, eat the cold leftovers later. ( Really, I do not eat Sunday dinners, but I do get the calls)
Besides not having the money, do you not have the time? Seems like a double looser to me.

[Fred50]

Touche Pete! I think it was mentioned earlier on if mathome could get away from his job on a moment's notice. I did not see a reply. The being on call 24/7 is the toughest thing about owning a mat as far as I'm concerned. It is really tough making social and vacation plans, especially on the weekends.

When I was in the corporate world, I took my 8 weeks vacation a year and never looked back. It is much harder to get away now.

[Amex]

Pete F is correct 24/7 on call. Last night I went out drinking and got home at 3:00AM and went to bed. At 6:15 AM I received a call from a customer who had their clothes locked in a machine and I had to crawl out of bed and drive to the mat to help the customer.

[pete f]

Pete F is correct 24/7 on call. Last night I went out drinking and got home at 3:00AM and went to bed. At 6:15 AM I received a call from a customer who had their clothes locked in a machine and I had to crawl out of bed and drive to the mat to help the customer.

Funny, I got the same type call, at 6:20am a customer called me told me my soap vendor was wide open. I found later the cleaning lady who stocks it did not lock it right and the people the night before got it open, they stole about 10-15 packs of GAIN. As luck woudl have it I was not out untill 3am the night before, but I had stayed up late watching movie.

[ericnyc]

Pete F is correct 24/7 on call. Last night I went out drinking and got home at 3:00AM and went to bed. At 6:15 AM I received a call from a customer who had their clothes locked in a machine and I had to crawl out of bed and drive to the mat to help the customer.

I would imagine being on call 24/7 is mostly for unattended laundromats. Once it is attended it should be easier. Right?

Also, if it is a super mat doing 6 figures it would be possible to hire a "manager" to be on call 24/7 for you.

Please correct me if i am wrong.

[DaveLevenson]

My store is open 24/7 and attended during the busy hours. Like all small business owners, I consider myself to be on-call 24/7. My work consists mostly of cash-handling and machine maintenance. The attendants do a lot of WDF work, which is what justifies the payroll cost. The most important WDF work comes from a few commercial accounts.

Some weeks, I hardly spend two hours in the store. Some weeks, it begins to feel like a second home. Last weekend, for four different but plausible reasons, not one of my four attendants could work the Sunday PM shift. One of my commercial accounts needed same-day service on approximately 110 pounds of robes and towels. So, I worked the shift, which meant that I washed, dried, and folded 110 pounds of terry-cloth. I wouldn't do it every day, or even every week. But I'll do anything, occasionally, to keep the business running and keep the customers happy.

[ericnyc]

I currently work in corporate world (accounting/IT) and thinking of leaving it and buy laundromat. I do not mind working 20-30 hours a week managing one at the beginning. I am also thinking of maybe then going back to corporate for a couple of years until the loan is more or less paid off.

My main concern is generating enough income from laundromat to cover my current salary low $100s and getting a reasonable return on investment/down payment at the same time. Living in NYC i would imagine i would have to buy one of the "super mats" to accomplish that.

Dave,
Did you go into laundromat business after working in corporate? If you did, how did you find the transition especially in the first year or two? Would you do it again?

Anyone else here went from corporate job to being laundromat owner who can share their experience.

Thank you for your replies.

[DaveLevenson]

Dave, Did you go into laundromat business after working in corporate? If you did, how did you find the transition especially in the first year or two? Would you do it again?


I am in my early 60's. I have spent most of my working life writing computer software. I spent 3 years working for a computer manufacturer, and then about 10 years working for a division of Litton Industries (remember them? the 'model conglomerate' of the 1960's-1970's). I worked as a self-employed contractor doing software development at Conrac Systems, AT&T, and several smaller companies. I have owned a pay telephone business for almost fifteen years. I bought my laundromat about three years ago, as pay phones began slowing down due to widespread adoption of cellular phones. So the transition from 'corporate America' to self-employment was a gradual one for me.

I find life as a small business-owner far more satisfying, though somewhat less predictable, than working for 'the man'. At this point, I couldn't imagine ever going back to big-company employment. First couple of years? I hardly remember them, except that it began to feel more comfortable over time. Do it again? You might say I've already done it three times. I'm kind-of hoping that I can stay with the laundry business for the rest of my working years, but I've learned not to make long-term predictions!

But I'm not sure why you asked. What I find satisfying/comfortable/worth it is mostly what fits my own psychological make-up, my financial, social, and family situation. It is not necessarily applicable to anyone else. Comparing such decisions is a little like comparing religious or political preferences. There's no universal 'right' answer to such questions. But you're in NYC, probably not more than 25 miles from me. If you want to sit down over a cup of coffee and chat about life, I've got time -- remember? I'm self-employed.

[DuboisLaundry]

When I bought mine, I was well aware that what I was buying was a "job".

I've had lots of jobs in my life,
most with an idiot for a boss.
None compare to the one I see in the mirror.
Difference being that now I can say that
and know it won't get me fired.

[ericnyc]

But I'm not sure why you asked. What I find satisfying/comfortable/worth it is mostly what fits my own psychological make-up, my financial, social, and family situation. It is not necessarily applicable to anyone else. Comparing such decisions is a little like comparing religious or political preferences. There's no universal 'right' answer to such questions. But you're in NYC, probably not more than 25 miles from me. If you want to sit down over a cup of coffee and chat about life, I've got time -- remember? I'm self-employed.

Dave,
We actually have a lot in common.

I am in my early 30s working as a "self-employed contractor doing software development" for a bunch of Wall St firms. I also worked for Pfizer in Parsippany. At one point after attending a franchise show at Javits i almost bought several payphones (was just out of college so did not have money to do it).

Right now programming is much less stable profession than it was when you were doing it (at least that is what i was told) because of outsorcing to India, work visas etc. That is what got me into thinking of going into more stable and recession proof business such as laundromats.

What i am trying to figure out is whether it is really for me and if it is as good as i am making myself believe it is. I was accounting major in college so i am pretty sure i can handle the business management side, it is day to day things that concern me as well as being able to buy the right place for the right money.

I really appreciate your offer to meet for a cup of coffee, in fact i will gladly buy you lunch. What day time works for you? Feel free to PM me.

[Ronald]

I would say if your not going to work at it then the mat business is not for you.
It is hard work.
Ask me if I would do it all over again..YES I would but then again I am a worker.
Don't depend on anyone to do all your work for you.

[Kitty]

I am back in the restaurant biz sales side and I would do anything to go back to laundryland... I spend my days consulting with managers and proprietors of independant restaurants and if you guys remember the gas crunch, the food cost crunch is far scarier for thier businesses today than the mat biz a few years ago. These restaurants cannot raise prices at the rate food costs are rising. Changing menus and purchacing practices are a strategy but to some biz it is like showing old dogs new tricks.

Labor, inventory and waste control is a huge factor in food business, hands on ownership or top notch management is imperative to succeed in todays violitile market for restaurant industry. 4-6% is a decent ytd margin but the work is tremendous. Work is work but the mat biz is much different and can be far more rewarding and and very profitable.

Mat biz is profitable most of the time.... It is also a business where customers are loyal, owners can learn alot about the community and enjoy familiarity with their customers while they are in their business. Inside the business it is almost a different world. If business thrives long enough you may see three generations of customers. I still see customers from my mat days, Im still refered as the laundry lady and I still get hugs from the old ladys and they call me sugar...

I'm not the swweet sugar anymore....
These days I get cussed out from tempermental chefs because the price of sugar is too high....:) it's all my fault

I have got to get back to laundry land.
Kitty

[pete f]

I currently work in corporate world (accounting/IT) and thinking of leaving it and buy laundromat. I do not mind working 20-30 hours a week managing one at the beginning. I am also thinking of maybe then going back to corporate for a couple of years until the loan is more or less paid off.

My main concern is generating enough income from laundromat to cover my current salary low $100s and getting a reasonable return on investment/down payment at the same time. Living in NYC i would imagine i would have to buy one of the "super mats" to accomplish that.

Dave,
Did you go into laundromat business after working in corporate? If you did, how did you find the transition especially in the first year or two? Would you do it again?

Anyone else here went from corporate job to being laundromat owner who can share their experience.

Thank you for your replies.


I will let you in on the formula, you can expect $300 a year income for every $1000 you invest in saved cash. So if you want 30k a year free cash flow, you need to plop down 100k. You don't expect to make 30k a year by only putting up 10k do you? Let's get real here. This of course does not include highly levereraged mats with less than 30% cash down. If you can get Dave L to sit and talk you have strong person to guide you. He may differ on my calcs, ask.

[DaveLevenson]

If you can get Dave L to sit and talk you have strong person to guide you. He may differ on my calcs, ask.

Yes, Pete, we differ, but not by much. My rule-of-thumb is $250 / $1000 cash invested. Maybe money goes farther in Florida than in NJ?

[ericnyc]

Yes, Pete, we differ, but not by much. My rule-of-thumb is $250 / $1000 cash invested. Maybe money goes farther in Florida than in NJ?

Dave and Pete,

Thank you for the information. What assumptions for the items below did you use to come up with $250 and $300 / $1000 cash invested estimates:

1. Price of store/cash flow multiple
2. Down payment %
3. # of years to repay loan
4. Interest rate %

Thank you again.