It’s the American dream to be your own boss and own your very own business, but my question is: Do you have enough money to buy a coin laundry?
I have to be direct and ask you to do your due diligence before you sign on the dotted line! Let’s say that you’re buying a coin laundry that’s already up and running for $150,000, and the bank wants 30% as a down payment plus some outside collateral.
Let’s say that you have the down payment and the equity to do the deal. Be careful! There is much more involved with getting the deal done. Don’t make the mistake of not having enough capital and turning your dreams of being a business owner upside down.
Let’s make sure you are following me. The bank is only one part of the deal, and although that’s a big part of making it happen, you’ll need a lot more money to pull the deal together before you take possession. Listed below are many of the different points that will require additional cash before you get in the door.
• A rent deposit, which may include up to three months worth in some cases.
• Utility deposits — in many cases, if you have never owned a business, they can be as much as $3,000.
• Quarters for your coin changer, which typically run somewhere between $1,000 to $3,000.
• Soaps and supplies. If you’re selling over-the-counter goods, you’ll need an additional $2,000 or so.
• You should have some cash set aside for marketing, and coming out of the box, it will be about $2,000 and up.
• Most laundries don’t have security cameras, and I highly recommend you get them. That will range somewhere between $2,000 to $6,000.
• Legal fees, which typically run $2,000 to $5,000, depending on how complicated things get, and I have never seen a deal go through without some spiders.
• There will be some closing costs and/or bank fees, which will vary on each deal.
• Miscellaneous expenses, which can include mops, buckets, cleaning supplies, paint to spruce up the place, new TVs, uniforms, and more. This normally falls into the $3,000-$5,000 range.
So, if you do the math, you now have a clearer picture of what kind of money I am talking about when I ask if you have enough money to buy an existing coin laundry. I have seen hundreds of deals, and many more than you might think fall way short of having the proper amount of funds needed to do the deal right.
Do not make a deal if you are not financially sound; your dream of owning a coin laundry might turn out to be a financial nightmare. My objective here is not to steer you away, but to better arm you so that you are on a solid foundation and help you avoid the potential landmines that appear when you simply don’t know or you overextend yourself.
I have been in this industry for close to 18 years, and having done distribution both nationally and internationally, I have seen just about everything, so take my advice and don’t sign on the dotted line until you have more than the adequate amount of money that is needed to own your own business.
On the flip side, if you are ready, then welcome to the coin laundry industry. Everybody has dirty clothes!