Based on the number of phone calls we have received on the subject, there still remains a lot of interest in getting into the laundry business. That is in spite of the current national economic situation. Somehow, would-be investors find a copy of the News and phone to pick our brains about the laundry industry. We are asked if this is a good business to be in. We always tell them that yes it is.
We do however offer them sensible steps they should follow before putting any of their own money down on a laundry. We always tell callers, “Don’t try to make a laundry purchase on your own.” It’s alright to deal with an owner directly as long as you have the back up of knowledgeable laundry people on your side. Relying only on what a seller tells you about the business could be a financially dangerous mistake.
Using an experienced, licensed laundry broker is perhaps the best way to verify cash flow, condition and age of the equipment, lease terms, etc. Brokers normally do this for free, when they are made part of the sale, and paid a commission.
If you don’t want to hire a broker for the full job, retain one as a consultant. Brokers usually do any required research on a fee basis. You hire them to work for you, and that is part of their job. Better to spend a few dollars to confirm, or deny, what the seller tells you his laundry is doing. It could save you tens, even hundreds of thousands in money losses, time spent and perhaps might even save your financial life.
If no qualified broker can be found, start talking to successful laundry operators wherever you find them. Ask questions about the business in general. Never ask a laundry owner how he is doing. It is really none of your business, and he may resent it. Ask him how his nearby competitors do and he’ll go on for hours on what they are doing right or wrong. He will also give a close estimate of the amount of business that laundry is doing, and it will probably be quite accurate.
Be careful about looking and asking for help from owners in the same area as the laundry you’re considering. When you seek their help, you may be alerting them to a bargain. Instead, look for those who are not possible buyers themselves. Look for help in another town or part of your city, where the operators you speak with won’t see you as a potential competitor.
One of the best arguments for using licensed laundry brokers, either to make the offer or just to check out the figures a seller shows, is they’re working for you. They have a license and are regulated by the state. If they screw up, you have recourse through the courts.
Even for experienced operators like yourself, buying a laundry isn’t what you do every day. The laundry broker is regularly involved in the buying details. It cuts risk of mistakes and getting hurt. Brokers may cost a little to use, but the service is well worth the expense. Buying or selling laundries is hard work for any broker plus they do run certain professional risks if the job is not done legally and correctly.
And, there are legal consequences if mistakes are made. Buyers and sellers are able to go after brokers in court for any serious mistakes they make. That idea is comforting to buyers and is the basic reason brokers charge their fees.
