Owning a self-service laundry can be the “American Dream,” but it can also be the “American Nightmare” – if you don’t avoid some common mistakes.
Many times, a dream or a nightmare depends on the choices you make at the beginning – and sidestepping the four following pitfalls:
1. Failing to do your homework.
Ignorance is not bliss – ignorance could cost you a lot of money. I love this industry and believe that it can be a great business for the right person, but many potential owners don’t understand the financial and time commitment necessary to be successful. They live a fantasy world of quarters magically overflowing out of the washers and dryers like slot machines in a casino.
The Coin Laundry Association educates people about our industry. The CLA provides valuable information for current and potential laundry owners. A prospective laundry owner should join the CLA and begin networking with existing owners who more clearly understand the industry. You can sign up for a free subscription to the CLA magazine, Planet Laundry HERE.
Another source of industry education is the equipment distributor. The distributor can be a valuable resource for equipment costs, construction and development costs, operating expenses, industry trends, local market opportunities and many other issues critical to the success of a new laundry.
Contact me for more details at Ken@WashinCoinLaundry.com
2. Securing a bad location.
We’ve all heard that the key to any successful business is its location. This was never more accurate than with a self-service laundry. Securing a good location is critical to the success of a laundry. Unfortunately, we have met with many potential clients who have secured the wrong location because they had not “done their homework first.”
Bad locations can be bad for many reasons. Maybe the demographics can’t support a laundry. Perhaps the impact fees from the local municipalities are too costly or there is a zoning issue. I have a laundry in a historic area that does not allow coin laundry’s but my location was “grandfathered” in. Even though it had been closed for 5 years it was still a laundry. This means I will not have competition in that area.
There are many reasons why a location is not suitable for a laundry. The key is understanding these before you move forward on any potential laundry site.
3. Not understanding the lease before you sign it.
It’s amazing to me how many people purchase existing laundries without thoroughly analyzing the lease. If you don’t own the building, the lease is your most important asset. It’s even more important than the equipment. The terms and the length of the lease are critical to the long-term viability of your business.
Laundromats are long-term, destination businesses with steady traffic. Many landlords are tired of the turnover in tenants they have had in the last few years. Many people are starting businesses but don’t have a good plan and 6-12 months later the building is vacant again. Many landlords will agree to improvements and reduced initial rents to help you become successful and stable. But if you don’t ask, or know what to ask for, you won’t get it.
It’s critical that a lease for a new site or for an existing business be reviewed by an experienced commercial real estate professional or an attorney. The days of handshake agreements are over.
Letters Of Intent (Intent To Lease) become binding contracts if all the conditions are met so be sure to understand all the details.
4. Underestimating what it will take to turn around a bad store.
We have all heard that it’s best to buy low and sell high. With that thought in mind, new owners purchase old, rundown stores with the hopes of changing the image and rebuilding the business. We have worked with many clients to help them build successful laundries – many times increasing revenues by 100 percent to 400 percent. However, occasionally, I meet with clients who think if they put a coat of paint on the walls and a new sign on the front, the customers will flock in.
Understand that an existing laundry did not become rundown overnight and that the store has a perception within the community that must be changed. To change the perception, the new owner must make a commitment to upgrading the equipment and marketing the business.
Here are some pictures of a before and after store renovation. This was completed over a couple of months with the store being closed for only one day.
These changes combined with the right marketing have taken a store with a steady clientele to a thriving business with three employees.
With the right preparation, owning a laundry can be the “American Dream.” But, refuse to do your homework and you may wind up living the “American Nightmare.”
My Team has the experience, knowledge and resources to support you from concept to daily operation.
If you have any comments please post them below.
Ken Barrett
800-792-1941 ext 2
Ken@WashinCoinLaundry.com
P.S. If you would like information on Blog system and how to use it in your business CLICK HERE
