Monday, November 23, 2009

Is The Economy Affecting Laundromats?

So According to the Wall Street Journal, coin laundries are suffering in this economy as well. The article is an interesting read, but it does not represent all Laundromats in this industry. And yes, while some stores have experienced a downturn, others are actually growing in business. Most of the downturn, has more to due with a change in the demographics of a neighborhood's base customers (mainly people moving back across the border), than it does with the fundamentals of the business itself. In areas of the country where there has not been a large change in core customers of coin laundries, business has been stable. This is generally the case in major metropolitan areas.

Here is the Wall Street Journal Article Even Laundries Tumble..."

Click the link below if you would like to learn more about the Laundromat business and listen to a FREE call explaining how to get started in this exciting business!

Wednesday, July 15, 2009

Sales Training to Improve the Bottom Line!

Well I just got home from spending the day with a very good friend of mine, Eric Lofholm, up at his office in Roseville, CA. Aside from being a personal friend, Eric is my sales coach and mentor. Now you may be asking yourself what does a Laundromat have to do with sales? The customers come in and wash, no sales required, right?

Well you're right and you're wrong. In order to get your customers in the door, you need to sell them on why your Coin Laundry is the right one for them. Once they come in, you need to sell them with your stores amenities, your attendants, your equipment, and your service experience that you will provide them.

The reality is that most Laundromat owners never think about the customer experience in terms of sales and in my opinion that is a mistake. They are leaving money at the door or in most cases, the money never even makes it into the store because the customers never came in. It doesn't have to be that way. What if you had a sales plan, a written plan, that would not only get more customers in the store but also get them to spend more money while at the store.

Remember every increase in gross revenue drops 70% to 85% to the bottom line. To put it another way, each new customer is worth between $500 and $650 per year to you. That is the power of a well thought out sales strategy and no one I know teaches this better than my friend Eric Lofholm.

I have personally added thousands of dollars a month to my bottom line from the strategies he teaches and I wanted to share with you, my readers, how you too can learn these same strategies from Erik himself.

Eric is hosting a very special 2-day event called "The Close" that you can attend for FREE at the end of July in San Francisco.

Here are the details:

July 24-25, 2009
Friday & Saturday

Doubletree Hotel
San Francisco Airport
835 Airport Blvd.,
Burlingame, California 94010
Phone: (650) 344-5500

The hotel ballroom only holds 200 people and right now there are already 145 people registered for the event. I will be there myself, both days trying to learn more sales distinctions and I hope to see you there! The last time I went to this event it was a sellout and the seats will be gone soon.

Register now and attend with me, by going to remember this event is FREE. If you learn just one new idea that gets you one customer that is worth $500 to $650 per year to you.

To your laundry success,

Click the link below if you would like to learn more about the Laundromat business and listen to a FREE call explaining how to get started in this exciting business!

Tuesday, June 23, 2009

Survival Skills

Well I am back from the Clean Show of 2009 held in New Orleans and I wanted to share with you an article written by American Coin Op magizine about the panel discussion I was apart of to kick off the convention. See below


Profiting in Today's Economy
Paul Partyka, Editor , American Coin-Op
Published 06/18/2009 - 12:37 p.m. CT

Brian Wallace, CLA president/CEO (left) served as moderator for a panel consisting of (left to right) Paul Pettefer, Brian Brunckhorst and Keith Griffin.

Paul Partyka, Editor

NEW ORLEANS — What does it take to run a successful laundry?

A panel at a morning Clean-Show educational session discussed trends facing the industry today, and made projections on developments 5-10 years in the future. The panel first tackled a popular question: Is this a recession-proof industry?

“Yes, I would say so, compared to other businesses” said Keith Griffin, an Arkansas operator. “It’s not recession-proof; it’s more recession-resistant,” said Brian Brunckhorst, a San Francisco operator. “The demographics are key.”Paul Pettefer, a Lake Charles, La., operator, doesn’t believe it’s a recession-proof business. His business is down due to transient workers leaving the area.

The top challenges vary for the three operators. Providing the right customer service is key for Pettefer. Acquiring financing is the top challenge for Brunckhorst. Finding good employees and keeping turnover down keeps Griffin busy.

Are there down-economy opportunities? Weaker owners are leaving the business, which opens up some buying opportunities, says Brunckhorst. In down times, there are better deals to be had with contractors, distributors and landlords, says Griffin. Now’s a great time to add equipment, Pettefer believes. It’s also a time to create a great customer experience and build market share.

The panel all agreed that the future looks good. “People still need to wash clothes; operators can’t fall asleep,” Pettefer opined. “I’m very optimistic about the future,” said Brunckhorst. “The boomers are retiring; there will be downsizing. There will be more renters.” “This is a good industry,” said Griffin. There’s a trend toward multi-store owners with big stores, he adds.

To read the origional article you can go here.
Click the link below if you would like to learn more about the Laundromat business and listen to a FREE call explaining how to get started in this exciting business!

Thursday, May 07, 2009

More Evidence That Coin Laundries Are The Best Small Businesses

Here is an article written for one of the best online business for sale sites in California. This one talks about the valuation of a Coin Laundry and how a Laundromat is one of the most sought after small businesses. Remember when considering buying a Laundrymat, make sure you do your homework, get educated about the business and the purchase process to avoid overpaying for a Laundromat business. At the bottom of this post is a link to get some free information that should help you on your way!


Coin Laundries For Sale - What Buyers Need To Know

Buyers of small businesses have learned that in most cases it will be necessary to work full, or nearly full-time in their new enterprise in order to enjoy a return on their investment. In fast food, retail and most service companies, for example, if the owner isn't there much of the time to "carry a load" of the work to be done, he or she will notice that much or most of the profit is being paid out as compensation for employees to handle the assignments.
A notable exception is a coin operated laundry for sale (also referred to as a Laundromat), which typically can yield a 20% to 30% profit (before taxes, interest, depreciation and amortization) on gross revenues to the owner.
And the buyer soon learns that the privilege of earning a substantial margin on sales as an absentee owner comes at a price. While the typical owner-operated small business selling a business might be priced fairly at a multiple of 1-1/2 to 2-1/2, against annual earnings, even a modest looking and performing coin laundry-one that has only an average-duration (five to seven year) lease and some equipment in need of replacement-will likely generate offers of four times earnings.
The eager interest in laundromats for sale is understandable, particularly at the present time, when the U.S. economy is losing some of its momentum. A decline in home ownership and the slowdown in purchase of expensive appliances, such as washers and dryers, set the stage for a lucrative business environment and profitable future for owners of coin laundries.
Neighborhood factors represent the first level of investigation for a would-be buyer of this type of business. An area with high population density, and a preponderance of apartment buildings represents an ideal market for coin-operated laundry. There may be more than one of these operations in say, a 10-block radius, and so the prospective buyer is advised to visit all the laundromats in the area to determine if each seems to be thriving, and to verify whether the specific company being scrutinized seems to be doing its share of business.
Checking the condition of the business for sale--whether the premises are clean and the equipment seems to be in good repair-is the next step in analyzing a coin laundry for a possible purchase. The careful buyer wants to make sure there are no floor puddles--a sign of equipment or plumbing problems, and possibly an indication that the servicing and repairing of the equipment is being neglected. Another bad sign is the presence of a sign--especially if there are three or more of them-which say: "Out of order."
An "ailing" piece of equipment is a common occurrence in the coin laundry business. But if there are several machines down at one time, and if they remain out of service for more than a day or two, the prospective buyer should begin to get the message that there are deferred maintenance problems which the seller may be planning to transfer along with the business.
If the buyer is satisfied that a coin operated laundry enterprise is in a good area for business and is getting a fair slice of volume in its market, and if the premises and equipment appear to be well maintained, it's time to look at the business a little more closely before buying a business from a business owner, business broker, or agent.
With anything less than five or six years remaining on the lease with is held by the seller of the laundromat, the prospective buyer runs the risk of being effectively out of business before doing any better than recouping the investment. And with the exception of some old washers and dryers, along with a water heater and some miscellaneous equipment-there will be nothing to sell.
In some cases, a prospective buyer may be able to establish a good rapport in a meeting with the property owner. That would be the objective of a provision in a purchase offer that the deal can't move forward unless a new lease, or lease extension satisfactory to the buyer, can be obtained. If the existing lease is a "ticking time bomb" and the seller is "sure" that the landlord (or landlady) is willing to add options to renew, or to provide a fresh, long-term occupancy right, the buyer is advised to include a "satisfactory lease" contingency in the offer to purchase, and then meet with the property owner to find out if the seller's assurances are based in fact.
Another key contingency is the buyer's right to examine the seller's business records to verify that seller's statements regarding gross sales and profits, adjusted net income, are accurate.
At some point during due diligence - the prospective buyer's examination of business records, the seller may explain to the prospect, with a sly grin, that because this is an "all cash business," there may be some income that is not entered into the books-a statement meant to convey the idea that the seller is generating more income than can be proven, resulting in a "savings" of some income tax that should be paid. As this practice is not uncommon in all-cash enterprises, a buyer need not necessarily be frightened away from examining and moving forward to purchase the business. In other words, the idea that the seller is manipulating the truth for an extra advantage should make the buyer particularly attentive and cautious, but doesn't have to kill the deal if the buyer is otherwise interested in the business.
The taxing authorities, incidentally, are familiar with these attempts of some business owners to reduce their tax liability using various methods of "creative accounting." The IRS provides its investigators with some guidelines which also are useful for prospective buyers of coin-operated laundries.
Examining the company's water bills for the past two to four years offers information about water consumption at the business which then can be used to verify the company's level of actual revenues. Smart buyers find out from the manufacturers and sales distributors of the equipment being used, how many gallons of water are consumed by each wash (generally 21 to 28, depending on size of the machine). Once an average of gallons used per wash is established, some simple math can follow, in which the average cost per wash is multiplied by the number of washes in a defined period, as specified in the water bills. By adding in the presumed dryer income (usually 50% of income from the washers) a buyer can come up with a reasonably accurate guestimate about the revenues produced by the machines during the period of time under study. Similarly, the purchase records for soap, softener and bleach products placed in the company's vending machines for resale, will help the prospective buyer determine with reasonable accuracy, the amount of income that results from laundry product vending.
Here is a set of cost rules-of-thumb for the prospective buyer who has gotten this far investigating a laundromat business offered for sale, and wants to proceed: National averages reveal that about 25% to 30% of gross revenue in a coin laundry is spent on utilities--water, gas, electricity. Occupancy, including rent, lease expenses required by the landowner, and related costs account for another 25% to 35% of gross, depending on location. With insurance and some part-time help hired to service the machines, perhaps lock the doors at night, and related overhead at 5% to 10%, the owner should have access to at least 20% and maybe close to 30% of revenues for earnings before payment of taxes and interest on debt, and before setting funds aside, earmarked for depreciation and amortization.
A deal calling for a 1/3 down payment with seller financing for the balance, at competitive interest, will provide a buyer, paying four or five times annual cash flow, with a fairly typical return for purchase of a coin operated laundry.
As in most every business, laundromats are subject to technological improvements. The more that a seller has already incurred some costs of upgrades toward a state-of-the-art coin laundry business, the more the company's value. Some possible improvements to look for include newer (four years or less), more energy-efficient washers, dryers, and boiler (the oversized water heater used in these establishments), card-rather than coin-operated equipment and a system for putting buying power on a card, rather than just the old system--a changer that takes paper bills and "spits" out quarters. Other improvements to look for are security cameras along with an alarm system, perhaps one that is linked to a security company that is notified if any tampering is conducted at the laundry, energy efficient lighting and automatic door locks.
To the extent the seller has already paid for a "makeover" so the business is prepared for the 21st Century, he or she may be justified in asking a price at the high end of the range. These improvements contribute to a more efficient operation and save the buyer the cost of making these upgrades.
Coin operated laundries traditionally are among the most popular small businesses offered for sale. Because periods of flat performance in the U.S. economy are associated with greater consumer demand for coin laundry services, prospective buyers of a business in this industry can expect increased competition in the marketplace. And for those able to make the purchase of a laundromat business at a fair price, the next few years should be years of steady profitability.

Link to the article Buying A Coin Laundry

Click the link below if you would like to learn more about the Laundromat business and listen to a FREE call explaining how to get started in this exciting business!

Monday, April 20, 2009

Coin Laundry Business is getting Corporate Attention

It looks like the Laundry Business has a new player. City Capital Corp. is looking to get into the coin laundry business and the dry cleaner business. They are sighting the same things I've been saying for years, 25% - 50% returns and a 98% business success rate! Here is the article:

Mar 23, 2009 09:30 ET

Despite Economic Downturn, City Capital Corporation Expands Operations

KANSAS CITY, MO--(Marketwire - March 23, 2009) - City Capital Corporation (PINKSHEETS: CTCC) has completed the first acquisition for its City Laundry, LLC subsidiary. The 2,000 sq. ft./30-machine laundromat purchased in February 2009 has annual revenues of approximately $108,000. City Laundry is currently in negotiations to close on fourteen other laundromats and dry cleaners in the Kansas City, Missouri area.

City Capital CEO, Ephren W. Taylor II, describes how reviving and refurbishing failing neighborhood businesses and providing employment for local residents fulfills the company's socially conscious mission. "Even though this first acquisition is a small mom-and-pop operation, we believe that the cleaners industry is advantageous for the company. It is a fragmented industry, yet it has a proven history of weathering, even thriving in economic downturns like we see today."

The Coin Laundry Association seems to agree. The industry group counts over 35,000 coin laundries alone in the U.S. "During periods of recession, when home ownership decreases, the self-service laundry market expands as more people are unable to afford to repair, replace or purchase new washers and dryers, or as they move to apartment housing with inadequate or nonexistent laundry facilities. The market size grows proportionately to the increase in population... people always need to wash clothes." (source:

According to the U.S. Bureau of Labor, total gross revenues for the industry are nearly $20 billion annually (source: 2007 U.S. Bureau of Labor). "More importantly," Mr. Taylor points out, "according to the Small Business Administration, these businesses have a 98% success rate nationwide, and they historically provide investors from 25% to 50% returns in all economic climates. That translates into reliable cash flow for the company and a strong, stable job source within the community." ...

To read the rest of the article follow this link Market Wire Press Release

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Monday, April 06, 2009

Declaring Laundry Bankruptcy

I found this great article on the web titled, "Declaring laundry bankruptcy: How to use the laundromat to get your laundry routine under control" and thought I would share it all with you. Far too many people believe that they need to waste all day Sunday doing their laundry at the apartment or at home, when they could get it done in only a couple of hours at a Laundromat.

Click the link below if you would like to learn more about the Laundromat business and listen to a FREE call explaining how to get started in this exciting business!

Saturday, March 14, 2009

California Sales Tax Increase on April 1, 2009

Laundromat owners of California,

If you've been planning to buy some new coin laundry equipment for your Laundromat, now is the time! On April 1, 2009, the state of California will be raising the sales tax by 1%. Check out this article by the SF Examinar