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Just Elementary, Inc. » Business Tips » 4 Reasons to Buy A Laundromat.

4 Reasons to Buy A Laundromat.

Laundromat Dryers

Laundromat Dryers

Without further ado, here are the commonly bandied around reasons why laundromats seem like great investments.

1.  Passive Income

2.  The Business Offers a Valuable Service for the Neighborhood that you can take pride in providing

3.  Flexible Hours

4.  Simple Cash Business

You just got back from that Robert Kiyosaki, Donald Trump, T. Harv Eker seminar and you are pumped to get some passive income.  Yes, and Laundromats may have come up as a source of passive income.  So now you are google searching for a good coin laundry investment.  Do you even know what you are getting yourself into?  Here in Southern California, if you are not careful, you will get into a big MESS.

So let’s break this down point by point starting with Passive Income.  Laundries are not 100% passive income.  Laundry owners that we have come across tend to spend more time on their laundry than they ever expected.  When we attend CLA (Coin Laundry Association) meetings, we meet laundry owners who run their laundries like a real business.    This means that they have a marketing plan in place, and customer service program in place, a maintenance program in place etc.  As our friend, Bob Killen, of laundryanalytics.com likes to say ‘Laundries are Full Time Income with Part Time Work.’  Key word is part time work.  As we stated earlier, even the successful laundry owner from the CLA spend 10-15 dedicated work hours.  The rest of the owners that just treat their laundries like vending machines go one of two ways, either they slave full time at the laundromat or they ignore their laundromat and let it run down terribly.

Thus, be prepared to work.  If you think you are going to show up once per month to pick up cash and go to the bank, you are sorely mistaken.  A self service laundry is like most other businesses.  You need to be actively involved in running it like a business.  That means staying on top of everything from customer relations, equipment maintenance, marketing and expense control.  You CAN set up a laundry to run without you being chained to the store, but you still have to be involved part time.  Some tips for how you can set up a laundromat to run without you less: Set up a surveillance system that you can remotely monitor, train your employees well and hire a maintenance service.  Well trained employees can more than pay for themselves by attracting more and better customers.  Even better if you can train your attendants to perform minor and basic repairs to cut back on outside maintenance expense.

The second point is providing the community a useful service.  This point is key, and really the only one without a flip side that is negative.  The typical demographic for a laundromat is a rental housing neighborhood, and in these areas, other businesses tend to be catering to the vices or unhealthy habits such as fast food restaurants and liquor stores.  Making a difference in the community by hiring local workers and helping people live clean lives should be and is a reason to be proud.

The third point is about flexible hours.   If you run the laundromat like a business, then you will keep regular hours, but you will have the flexibility to take time off.  Having well trained attendants is the key here.  If you hire friendly, hard working people from the local neighborhood, then you will be in good shape.  The customers will respect the local employee and treat the store better.  And with a trained and reliable staff, you will actually be able to take vacations and have the laundromat not skip a beat.  Being able to tailor your work hours the way you want to, allows you the flexibility to be there for your kids, or to make the day game at the baseball stadium.  Just beware to buy a laundry with some upside, which at the minimum means a decent size and not too much competition nearby.

Simple cash business is the fourth point.  This is true to a point.  Simplicity lies in the fact that the customers are essentially self service customers, and they are paying in cash.  Also, unlike most other business, there is typically no need to have a permit from the State Board of Equalization (B.O.E.).  That is a big deal, as the BOE can be a source of a big headaches, especially when you are trying to sell or buy a business.  Just keep in mind the recommendations from the first point, which is be prepared to work and learn.  You will need to learn the ins and outs of your equipment to stay on top of maintenance and upkeep.  If you don’t, your business won’t be so simple anymore as you will have machines out of order and customers taking their business elsewhere.  Do your Due Diligence when investigating laundries not just on the particular laundry you happen to be looking at, but also the competition and local market trends.  Talk to the local utilities servicing the business, make sure there aren’t pending huge increases in utility costs, or your business will be simply unprofitable.

Back to the main question, you are buying a laundromat to make MONEY.  To provide for your family and to keep the roof over your head.   For More information on how Just Elementary, Inc, Commercial brokers can help you investigating laundries call (323) 213-9193 or email cs@justelementary.com

     

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