Planning To Sell Your Laundry In The Coming Year

Although most sellers don’t really think about it, it’s much easier to buy a laundry than it is to sell one. The buyer only needs to review the figures and verify that they are accurate and real. Then buyers can make a decision. Sellers, on the other hand need to do so much more. They have a number of decisions to make. First, how will your laundry be sold. By you, or will you use a licensed broker? When you sell yourself, there are no fees to be paid, and at first glance that seems to be very attractive. But sales by broker usually bring in a better price, and make things happen faster. Especially if it is a broker who specializes in laundry sales. A broker with laundry knowledge almost always has a following of people looking to buy a laundry. Their knowing the business gives buyers a feeling of security. They may not trust you, but they will the broker. Buyers will pay more and the broker ends up earning his fee by bringing you a better purchase total. Besides, who is it that is going to weed out the tire kickers, and the unqualified? Who will qualify potential buyers as to whether or not they are serious and well qualified to purchase any laundry, especially yours? Lots of snoopy people, like friends or relatives of your competitor, want to know the details of your laundry business, without any intention of buying it. There are even cases where IRS agents have shopped for sale-by-owner laundries, hoping to find incriminating information. Do you have either the time or the patience to meet with all of the people who may call asking for information? One of the principal jobs of the laundry broker is to bring potential buyers who are well qualified and serious. That saves one heck of a lot of time for the seller. Our suggestion is that those thinking of selling a laundry invite one or two brokers, who are professionals in our industry, to examine your individual case. Ask them to evaluate your business and give you an idea of what they could sell it for. Before inviting the brokers in, assemble the paperwork and books so you will be able to answer their questions accurately. Don’t try to play one broker off of the other to get a better deal. Decide which of them can do the better job, or do it yourself. In the old days, sellers gave buyers a wink and a nod when being asked about unreported income, because in the old days it was assumed to be all too common. Not now. Laundries today are selling for a multiplier of monthly or annual net income. Today’s smart owners report every dime of laundry income because it makes the business more salable. If one were to under report a thousand or two, it makes the laundry worth $10,000 less. That isn’t smart. As an aside to old fashioned laundry operators, change your ways. Change your mind about selling this coming year and rebuild your books to report the real story and the real income, then prepare to sell. You will run less of a risk for lawsuits, and other future legal problems. LOOK YOUR LAUNDRY OVER, PRIOR TO PUTTING IT ON THE MARKET Are there any changes in the appearance of your facility, or it’s operational techniques that you need to make before selling? Operators tend to not notice the day to day, subtle changes in their laundry’s appearance and attractiveness. Before considering the sale of your laundry, ask someone to walk through it with you to point out the little things that might not appeal to a buyer. Let’s ask our inspector to be brutally honest. Start with the laundry’s appearance from the street or out in the parking lot. They say that houses sell from the way they look from the street. Well, so do laundries. Clean windows and eliminate paper signs from the glass. Renovate dated signs, and keep the sidewalks clean. A neat and professional look from the outside really helps to sell what is on the inside. Does your laundry have an odor? You don’t think so, because odor is a subtle thing that you don’t notice because you are at the laundry every day. But many laundries may have an odor from under the machines that rises from the dampness and its affect on the detergents and accumulated gunk found under washers. That odor could be offsetting to buyers who are new to the business. Maybe you need to clean out under the washers. What does your inspector think about the over all inside appearance? You might not have noticed the paint job’s gradual fade and the lighting becoming dim. It still looks new in your eyes, but perhaps a new coat of paint would help the place sell faster. What about the washers and dryers that you bought some time ago? They probably look good to you, but does that loving feeling transfer to an expected buyer? Of course you will have all of your equipment functioning properly and if you are wise, all of it will be clean. It will shine and look as new as possible. What we are talking about here is cleaning from top to bottom, every washer, dryer, cart and counter. Do an especially good job on the washer’s coin drops or slides. Every buyer will look at those places, because that is where the money to pay you will come from. And for pete’s sake don’t forget to keep the dryer lint bins cleaned regularly. That is one place almost every buyer will want to look. And while you’re at it, how about cleaning up all of those old parts, hoses and other junk in the heater room. That should be as clean as the rest of the laundry. Also check the lavatory to see that it stays up to snuff. A dirty bathroom is seen as a sign of poor management. Your inspector won’t see what you may already know about plumbing or electrical problems that you have avoided repairing. He won’t see it, but your buyer certainly will and will look for you to repair it. So you might as well take care of those things now, rather than later. sellers make the mistake of buying new top load washers to make the laundry more salable. They feel that they can add the cost to the sales price, but it doesn’t work that way. Its almost impossible to recover the price of the washers entirely at sale. Many buyers expect a normal degree of wear and tear on equipment, even if it is almost new. They will want to discount something off of the new machines. After looking at the laundry over all, buyers will concentrate on the equipment. They don’t know anything now other than it will eventually have to be repaired. THERE ARE FAR MORE PAPERWORK SNAGS FOR SELLERS THAN BUYERS. All sellers who are lease holders need to review their lease documents to insure that they actually can sell their business and transfer the lease. Some hidden clause in the lease may give the property owners the right to refuse to transfer the lease, except for some special financial payment. Some landlords have killed sales through unwillingness to extend the property lease. Before thinking about selling, reread your premises documents to see what rights your landlord has reserved for himself. In some states the law is clear that the transfer of a lease may not be unreasonably withheld, but he can insist on a financially qualified buyer, and he judges the qualifications. The right thing to do is read the lease, have an understanding of his rights and then speak to the landlord about your thoughts about selling the laundry. It may mean that you will be on the lease for as long as it exists. That is not a good idea because you want out. You don’t want to have to worry about the buyer paying his rent on time. Try to work out an effective arrangement with the landlord before you put your laundry on the market. If any of the laundry is based on a loan for the equipment, make sure that you read the loan papers. There is a standard clause in many such contracts called an acceleration clause. Simply put, when you sell, everything you owe is due and payable, then and there. So, your lender is also someone you will need to talk with. Remember that your decision to sell affects more than just you. There are your employees, landlords, bankers, customers and family. All will be affected. The question is, who do you tell what and when do you tell them? Let the landlord in on your plans early. You will need his cooperation. Folks who work there are usually the most affected by a business selling. They are your employees so you decide when is the best time to let them know.