IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Seth Rudin. Mr. Rudin is a senior business broker at IBA (www.ibainc.com):
Selling A Laundromat for a Premium Value in 2023
One of the most coveted businesses for sale is a laundromat or coin laundry. While fewer and fewer laundromats run on just coin laundry, laundromats are highly desired by buyers because of the consistent cash flow, opportunity for semi-absentee to full-absentee ownership and lower staffing requirements.
As an owner of a laundromat, you will want to plan ahead for your business exit. By being pro-active, you can execute on a plan of actions to prepare your laundromat(s) for sale in order to help boost your company’s valuation. IBA has helped many family owned and/or privately held laundromat owners develop an exit plan and then market the business for sale. In the past approximate year, we have sold both single location businesses and multiple location chains of laundromats at full list price. With our transactional expertise, deep knowledge of the laundromat industry and skill set, we help business owners navigate the unique considerations that pertain to valuing and selling a laundromat.
From our past experiences, these are 5 steps you can take to best position and maximize your laundromat’s valuation when ready for a sale:
- Provide Convenience to Your Customers Beyond Self-Serve Coin Laundry. Many laundromats provide unattended walk-in or self-service coin laundry. While this is an efficient means to meeting the demand for coin laundry, more and more customers are willing to pay more for the convenience of a Wash-Dry-Fold service similar to a dry cleaner. Customers are willing to pay a premium to have local laundromat attendants wash, dry and fold their laundry. Your laundromat can even offer a delivery service. Many customers who use a Wash-Dry-Fold service have access to a washer and dryer, but they value their time over the incremental cost of washing on their own. New third-party services are coming online similar to an Uber-Eats to provide the pick up and delivery for wash and fold services such as Sudshare, Happynest, etc. Laundromats can partner with these services to increase their customer base.
- Add Commercial Accounts to Your Customer List. There are many local businesses that need laundry services to support their business but do not have the bandwidth or employees to wash, dry and fold. These include medical practices, physical therapy, chiropractors, restaurants, boutique hotels, AirBnB rentals and many more. These accounts can help create a steady and repeatable cash flow as well as to fill in the slow periods during the week.
- Create Sustainable and Repeatable Processes. Develop and document processes that are easy to follow and understand. This will help you expedite the onboarding of new employees as well as increase efficiency as your laundromat services increase. Ensure you have created strong processes for counting and banking of the cash and coins. You will want to implement a point of sale, such as Square, for managing your business accounts, Wash-Dry-Fold transactions, and operating your cash till.
- Look For Ways to Increase Utilization. The ultimate business model for running a profitable laundromat is to have the laundromat operate 24 x 7 or nearly 24 x 7. This is done by maximizing walk-in users, Wash-Dry-Fold and commercial account usage. You will need to ensure your washers, dryers, and coin dispensing machines are fully operational or nearly full utilization. Successful laundromat owners conduct pro-active maintenance on their machines and put together a regular capital expenditure budget to replenish the machines at the optimal time. Maintaining a clean and friendly atmosphere will help separate your location from your competition. This may be as simple as giving your laundromat a fresh coat of paint and reminding your staff to greet everyone at the door with a smile.
- Ensure Your Financial Records are Transparent and Clean. Buyers will want to verify your financial results before finalizing any purchase of a laundromat. Owners should keep detailed logs of the movement of cash, maintain records of all utility bills – water, gas and electric and the accounting records for the Wash-Dry-Fold and commercial accounts. Owners should maintain the detailed ownership files and maintenance records for all of the equipment. Buyers who trust the financials they receive will be more likely to provide a higher offer price than those who are skeptical.
While achieving all of the above five steps will certainly be the ideal method to maximize your laundromat(s) value, owners can still accomplish one or more of these and increase their company’s valuation. Achieving all of the steps is not necessary but these aspects should be included in any long-range strategic plan.
If you have questions relating to the content of this article or the process associated with selling a laundromat business in Washington, Oregon, or Alaska, Seth Rudin would welcome the opportunity to talk with you. Mr. Rudin can be reached at (425) 454-3052 or email@example.com.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.