The Laundry BizThe Laundry Biz
Laundromat For Sale

by The Laundry Biz

You’ve been researching the laundry business now for some time. You’ve decided that the laundry business is right for you. You’re sure that you’re ready to invest in a laundromat. And now you’ve found a laundromat for sale! Well… now what?

That Laundromat For Sale… Is It A Good Deal?

Making An Offer on a Laundromat For Sale

To really find out if it is a good deal, you will have to dig deep and do proper due diligence. That of course takes time and effort. But when you see a laundromat for sale, you will need to decide quickly if it looks like a fair deal. Laundromats usually sell pretty quickly, and many never even make it to a business listing site. This means you can’t waste time. We have seen many laundromats go off the market the same day they are listed.

The simplest and most common evaluation method is to calculate the net profit multiplier. In its simplest form, this is [net profit of business] X [sector multiplier] = Value. While useful for getting an approximate value, there are many calculations and considerations necessary to get the proper numbers. This article explains all the factors that can affect this seemingly simple equation. All that being said, it is still the quickest way to get an approximate valuation.

When you find a listing for a laundromat for sale, look for the asking price and the listed net profit. This might also be listed as “gross profit” or “cash flow”. Divide the asking price by the profit to get the multiple. Laundromats generally sell for 2.5 to 4 times the annual profit, but we’ve seen them go for as much as 7X!

Other Price Considerations

There are many, many factors which will affect the value of a laundromat for sale. The quality of the location, area demographics, sales trends, age of the machines, nearby competition, and condition of the store are just an example of these factors. A new, growing store with modern equipment in a great location might fetch twice the price as an older store in a bad spot, even if the net profits are the same.

Time To Make The Offer

Laundromat Purchase HandshakeYou’ve done a quick evaluation and decided that the laundromat you are looking at is at least priced reasonably. You’re sure you want to try and buy it, so it’s time to make an offer. The next step will be to contact the owner and express your interest (and make sure it is still available).

If the seller is ready to go, you want to get the laundromat under contract as soon as you can. This initial contract is fairly informal… generally this is done with a Letter of Intent (LOI). The primary purpose is that the buyer and seller are committed to each other and that you have a reasonable due diligence period.

The due diligence is where you will collect detailed information from the owner in order to prove the income and other details about the business. If details about the income or expenses don’t match up, you will be able to come back and negotiate the price appropriately. With a proper LOI, you will be able to back out of the deal without penalty if it doesn’t meet your expectations.

Not Sure About That Laundromat For Sale?

We can help you in any stage of the buying (or selling) process. We offer store evaluation and laundromat consulting as part of our services, and even help bring buyers and sellers together. Make sure to check out our comprehensive online courses which cover all the important details about getting into the laundry business.

And if you haven’t already done so, subscribe to receive our articles and also get a free laundromat business plan template.

The Laundry Biz
About The Laundry Biz
We help people interested in learning more about the laundromat business and can answer all questions big and small about getting into the business and running a successful operation.

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Laundromat For Sale
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