SUN CITY WEST, Ariz. — There are many reasons why one might sell a laundromat. Illness, retirement, owner relocation, or even the owner’s death could be behind it. Or the seller is doing great and just wants to sell so they can buy or build a bigger mat.
If the mat is losing money, or a big, new mat has opened nearby, that could be it. These are usually cash sales at a low price. (Obviously, the less your mat earns, the smaller the sale price.)
Whatever the reason, let’s examine what you can do to make your mat ready to sell for the best price and at the least cost to you.
EARLY PLANNING MAKES FOR EASIER, MORE PROFITABLE SALE
By starting the wheels rolling at least six months in advance, you’ll have time to make improvements, find a good lawyer who specializes in small-business sales, get your books in order, and, if necessary, find a business broker.
While you always want to increase sales and profits all along, it’s even more crucial when it comes time to sell. This is because every dollar in profit usually translates into 3-5x in the sale price.
Obviously, if you want to impress buyers, fix up your mat. Laundromats should always be in great-looking condition, but many owners tend to neglect their mats.
Making improvements can range from a simple paint job or making sure all equipment is in good, functioning condition all the way to installing some new equipment.
New equipment allows you to increase your selling price and improves the odds that you’ll impress enough buyers to get your equipment investment back in proceeds from the sale. Just like you want to dazzle your everyday wash customers, you’ll want to dazzle any potential buyers as well.
Unless you draw interest from experienced mat owners looking for a rundown mat to raise from the dead, buyers aren’t impressed by a mat with old, dilapidated equipment.
That said, they are more likely to buy your mat if it has even some new equipment. How much depends on your mat, and it’s a real judgment call.
The biggest buyer complaint comes when they see a mat needing a lot of work, yet the seller is asking too much money for it. It’s very common for sellers to overprice their mat. Most of the time, buyers will know more about market prices than you will because they will have been shopping for a while. Eventually, the market humbles all.
If you’ve had your mat for less than a year, it will be harder to sell … unless you’ve really boosted its sales and profits, and made it more desirable.
Whatever you do that attracts wash customers will almost always attract mat buyers, too.
Once your employees hear you want to sell, some may quit on you. Consider their feelings and offer them a few weeks bonus if they stay with you up to the sale or beyond. This way, you won’t be scrambling to replace them while under the stress of selling the store.
Be honest about what you are selling. Don’t try to hide things or trick prospective buyers into thinking your mat is worth more than it is. Many will know what’s going on and you will have wasted a lot of your own time when they back out.
Coming in Part 2 on Tuesday: The need to hire a good lawyer, and how brokers and suppliers can fit in sales plans
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
