CHICAGO — The cost of iron for new products is going up dramatically. Meanwhile, increasing utilities cost and escalating rent are eating up laundry profits.
I have been researching the best way for you to maintain your existence in this industry. When purchasing machines, you must seriously look at refurbished washers and dryers as an option.
The cost to purchase refurbished equipment is well under 50% versus buying new. The average “life cycle” for most owners to stay in this industry is three to five years. What’s the point of digging yourself into a hole you may never be able to dig yourself out of?
Now, the newer machines are more energy-efficient and offer warranties, which is important. But if the refurbished or rebuilt machines are purchased from a reputable company that stands behind the quality of its work, you will come out ahead, bottom line.
Recently, I did some consulting for an investor who decided to go 100% refurbished for his remodel. He saved about 58% of the total cost of going new, or more than $165,000.
Now, if you do the math and calculate what your monthly payment would be on the additional expense of buying new equipment, you are looking at eating right into your bank account big time.
Many laundries are closing across the United States, mainly due to high rents that need to be adjusted. If you’re just getting into the game, you’d better plan on doing some good negotiating to get your rent reduced to a level that will help keep your business going.
If you’re looking to stay in the game long term, and this is going to be your new life, then I recommend that you look at new products, especially if you’re planning on building a new Laundromat.