CHICAGO — Many investors are getting into our business without realizing that shortcuts must be avoided. A good number of brokers are scamming individuals by not fully disclosing all of the costs involved in running a self-service laundry.The purchase price is only one piece of the puzzle. If you’re thinking about adding another store or are counseling an acquaintance about a laundry investment, you need to consider the following costs:
- Attorney fees
- Closing costs/bank fees
- Landlord deposits
- Utility deposits
- Maintenance on machines
- Equipment replacement costs
- Marketing allowance
- Remodeling budget
- Filling the changers
- Supplies (soap, bags, etc.)
Do you get the picture? I get calls on a regular basis about stores going under shortly after the purchase because the owner did not receive full disclosure from the broker. Make sure the person selling you the store can provide details about the costs I’ve listed.FULL SERVICE IS A MUSTThere’s more to your success than taking all the costs into consideration. If you are purchasing a Laundromat, check out the seller! Don’t allow smoke and mirrors to send you down the road of financial disaster. This is the advice of someone who has spent more than 20 years as a full-line distributor. Know your seller. Make sure he/she is part of a full-service company. Know what financial exposure is necessary, and have the right amount of money to run the business.DISCLOSUREHas your broker covered all of the points I have raised? Some of these brokers will blame the operator for the failure. After all, shouldn’t the operator have performed the necessary due diligence? That’s a horrible way for a broker to conduct business — having no regard for people and humanity.Contact me with any questions. Don’t get run over by the “business bus” and lose your life savings. When you need a doctor, you don’t call a plumber. Always contact an expert who provides a full-service company and can provide you with the necessary parts, trucks, service technicians, etc.By any chance, are you in the middle of a business deal with the type of broker I mentioned? If so, RUN!
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].