Would this work?

[ntbushwick]

Hello everyone. Just looking for thoughts...how does these numbers look? What else am I missing? Numbers are verified.

Asking price is $132K, my partner and I are considering offering $43K - $58K.

gas $951 10.28%
water $800 8.65% Utils
electric $350 3.78% 2101 22.71%
labor $1666 18.01%
lease $2000 21.62%
insurance $170 1.84%
phone - telecom $84 0.91%
alarm - security $22 0.24%
garbage $38 0.41%
supply 40 0.00%
cable $22 0.24%
atm $0 0.00%
loan 7.99 2.5yr $2216 23.95%

Expense Total $8319
Gross Total $9251
Operating Income $932

[Coinwash]

The Financials

Seller’s stated Profit and Loss Statement
Water Bills (last 12 months)
Electric Bills (last 12 months)
Gas Bills (last 12 months)
Parts? Receipts on repairs? Service Contracts?
Tax Filings?


The Assets

Washers and Dryers / Make,Model/Yr/PriceVend
Water Heater(s)
Condition of Floors
Condition of Counters/Tables for Folding.
Vending Machines
Soda Machine
Soap Machine
Candy (Gum/Bulk) Machines
Pay Phone
Video Games
Changer Machines
# of Carts/ Baskets
Alarm System
Which Alarm Company is being used?
What type of service is in place?
Can I see the contracts?




Vending

Which machines are owned?
Which machines are leased?
Vending Lease Contracts/Agreements?




Service

Who has been providing equipment upkeep and service?
Receipts?
Any Contracts/Agreements?
Who has been supplying vending goods? Soda?
Who supplies the video games?
contracts? Agreements? What’s the cut?




Insurance

Liability Insurance
Hazard Insurance
Current Insurance Carrier?
Any problems with insuring the place?
Get the current insurance contract, check for clauses.




The Employees

# Of Employees
Hours and Pay
Contract Personnel? Salaried? Hourly?
Duties
Are they willing to stay on after purchase?
How long have they been contracted/employed?


The Legal and Corporate Issues
Accounting Fees
CPA Costs Annual / Quarterly Reports
Legal Fees?
Business License Cost




The Company’s Contracts and Leases
Vending Contracts/Agreements?
Supplier Contracts/Agreements?
Video Game Contracts/Agreements?
Alarm/Security Company Contract/Agreements?
Any Insurance Contracts/Agreements?
Property Lease Contract/Agreements?
Equipment Service Contracts/Agreements?




Property Lease

CAM Fees – cost / what is included in the CAM Fees
how are CAM fees divided amongst tenants?
Who determines CAM fees and items?
What percentage of fluctuations in CAM fees in
the past or foreseeable in the future?
Can I get a breakdown of the CAM/ RE Insurance / RE Tax?
What is personal property tax? Of $33?
Current Lease
Lease Increase Rate
Lease Expiration/Options
Lease Deposit




The Suppliers

1. Vending Suppliers? Any Contracts?


There is much more.....

[ntbushwick]

I have all of that information and it is reflected in the numbers I posted.

I have all the information on the washers / dryers, carts, baskets, condition of the floor and ceiling. I know the CAM costs, CPA costs, utility bills, deposits. There is no vending, I viewed bills for parts / repairs, contracts, and everything else. I know how many employees, their pay and their schedules. I have investigated insurance, special clauses, license fees.

If I am missing something please point it out so I can really learn something...that's why we are all here.

[pete f]

Hello everyone. Just looking for thoughts...how does these numbers look? What else am I missing? Numbers are verified.

Asking price is $132K, my partner and I are considering offering $43K - $58K.

gas $951 10.28%
water $800 8.65% Utils
electric $350 3.78% 2101 22.71%
labor $1666 18.01%
lease $2000 21.62%
insurance $170 1.84%
phone - telecom $84 0.91%
alarm - security $22 0.24%
garbage $38 0.41%
supply 40 0.00%
cable $22 0.24%
atm $0 0.00%
loan 7.99 2.5yr $2216 23.95%

Expense Total $8319
Gross Total $9251
Operating Income $932

The loan payment is not a calculation to determine the value of a mat. Take the cash flow, which is $932 plus the $2216 equals $3148 a month, so $37,776 a year, all things being equal assuming decent equipment and lease, 3x net is $113,328 for a starting point. 43k to 58k? you will look like a fool and piss off the seller.

[ntbushwick]

I should have clarified my question. Their net as it stands right now is ~$27K/yr. The number I posted above would produce a net ~$10K higher because they are based on changes I would make to the number of employees after it was purchased.

So for all intent and purposes if they net $27K, you don't think a $60K offer would be considered? The machines are 7 year old wascomats, 2600sqft, 34 washers 26 dryers, well cared for (everyone was operational).

The current owners live 48 miles away (one way), 1.5 years left on lease (land lord willing to renegotiate - seems like nice easy to work with guy), the owners now have a new addition to the family, husband no longer has time to work there, wife busy with new child.

Thanks for your thoughts...

[TLR]

water and electric looked reversed

TLR

[Palmyra Jim]

Everything I read said to take the monthly net and use a multiplier between 45 and 65 depending on the quality of the equiptment, customer base and others. I am also purchasing a laundromat and I need to clean and repair on my own and can not bring the employees over due to debt service costs. I calculated the value at monthly net x 45 due to age of the machines (older than yours) and came out pretty close. There is a strong consistent customer base to support the debt and some.

that is my two cents x 45....

Jim

[ntbushwick]

That is wayy more than I expected. Are people still getting that much in this current ecomony?

I thought under the conditions they would be happy with 2 x net (not entirely based on the mat but other external factors). Do you all take things like that into consideration? It should play an important part in the offer...dont you think?

[Gatorlenny]

2x net???? I WISH! This is why you should contact several good distributors in your respective area and find out what typical offers should be. If three distributors tell you the asking price is from 3-5 or whatever, that should be a pretty good indicator. What makes one asking price higher depends on a number of factors but one of the biggest keys would be age of equipment. Two stores that net the same, but one has only 5 year old equipment, is going to ask a lot more money than a store with 15-20 year old equipment. Number of machines, wash dry fold, all that stuff is a factor. Quit guessing and get the local scoop!

[pete f]

I should have clarified my question. Their net as it stands right now is ~$27K/yr. The number I posted above would produce a net ~$10K higher because they are based on changes I would make to the number of employees after it was purchased.

So for all intent and purposes if they net $27K, you don't think a $60K offer would be considered? The machines are 7 year old wascomats, 2600sqft, 34 washers 26 dryers, well cared for (everyone was operational).

The current owners live 48 miles away (one way), 1.5 years left on lease (land lord willing to renegotiate - seems like nice easy to work with guy), the owners now have a new addition to the family, husband no longer has time to work there, wife busy with new child.

Thanks for your thoughts...


Your numbers do not make sense. A store with 7 yr old machines netting 27k ( your number) should sell for 108-120k. like I said, 50k piss them off. have fun.

[ntbushwick]

Thanks for everyones opinions. I am meeting with a distributor on Tuesday. We are going to look over what I have and he's going to provide insight into what would be a reasonable offer. Would you all like any additional information from me?