CHICAGO — Over the past year, I have seen more born-again laundries than ever before. The banks are leveraging—or, should I say, overleveraging—the requirements to secure deals, making it too risky for investors looking to build a new coin laundry.
But with an existing marketplace and leasehold improvements in place, opportunity swings in favor of rehabbing an existing Laundromat. That’s not to mention lowering the risk factor and the financial demands of owning a business.
The key now is to find laundry locations that are in operating condition but in need of a facelift, or that are closed but have an upside when the competition and demographics are taken into account.
Fix It Up, Then Focus on Marketing
Once you have zeroed in on your location, make sure you do things right. Don’t get caught up in trying to rehab the laundry with all-new machines. I recommend that you fix what still has plenty of useful life, and then look to purchase rebuilt or refurbished machines. This will cut your expenditures about 50% and make for a much better ROI at the end of the year.
After your laundry has been given the makeup/facelift and its machines replaced, your focus must shift to marketing and more marketing. You can figure that for each family your campaign brings into your store to stay, they will spend about $500 per year—plus another $200 if you have over-the-counter sales, vending, and packaged goods.
This doesn’t include drop-off laundry sales, so if you have the space to fit this service into your program, it could contribute another 10-30% to your bottom-line earnings.
Enlist the Right Help
Finding the right people to help you do the deal is critical. Not to be underestimated is the value of enlisting someone with his or her finger on the pulse of the industry to ensure the best possible results for your success.
Do your homework; do business with someone who offers a full-service company to support you 24/7/365. The mindset should be that money never sleeps, and the company you decide to work with better have the same philosophy. Beware of scammers who will mislead you by telling you whatever to make a deal. Dealing with anyone who is not committed to your success is like playing with a house of cards: it will come tumbling down, no matter what.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].