I have been in the vended laundry business for more than 30 years, and I’m now ready to retire. My question is how to establish a fair selling price. I own the building and the business. How do I value each?
The first step is to get a bank appraisal on your property. This will help to determine the value of that property. Also, with this appraisal, it will be much easier for a potential buyer to receive a loan.
To determine the value of the laundry business, use a factor of two to five times your net income. Yes, that’s a very wide margin – but, then again, laundromats vary greatly. Be brutally honest with yourself about the condition of your facility. As a general rule, if your store is in excellent condition – with newer equipment, great parking availability, etc. – it will be worth more money because the buyer likely won’t have to inject much cash into the business for several years. In some ways, it’s like buying a used car – the less mileage, the longer you will drive it without spending money on repairs.
The best suggestion I can offer to any store owner looking to sell his or her laundry business is to hire a reputable broker. In the long run, a good broker will get you more money at the sale, and with much less aggravation.
I own a modern, well-equipped self-service laundry. However, I’m not happy with my commercial accounts business, which has reached a certain dollar amount and has sort of leveled off. I can’t seem to push past this plateau. I’ve sent out promotional mailings, hung signage in my windows and advertised in our local newspaper. What am I missing?
Perhaps, the first – and most critical – change you need to make is to your attitude toward your commercial accounts business. Maybe change your self-image and the image you have of your laundry operation. Remember, when seeking out commercial work, you’re no longer in the self-service laundry business anymore – you’re in the full-service laundry business. With a strictly self-service facility, the owner simply waits for the customers to walk through the door. With a full-service laundry business model, you must aggressively go out and attract new clients.
Visit retirement homes, smaller hotels and motels, hair salons, massage therapists, rehabilitation centers, schools and any other businesses or facilities that may require laundry services. Be sure to bring business cards, a price list and positive attitude. In other words, to build your commercial accounts business, you have to go out and get it. You’ll be surprised how much extra business is really out there.
My sister and I have a great wash-dry-fold service. However, our clients don’t typically tip the attendants who process their laundry. As a result, our employees feel unappreciated. As the owners, we compensate our attendants at above minimum wage, and we also provide bonuses a few times a year.
I’m sure that our wash-dry-fold customers tip their hair stylists, valets, etc. What about the people who wash their dirty clothes?
Allowing or encouraging your customers to tip the attendants who do their wash-dry-fold laundry is a bad idea. Most customers will feel slightly offended with regard to this process. You may create an uncomfortable situation, and your customers shouldn’t be put into that position.
In addition, this policy could backfire if certain customers don’t tip “enough” or decide not to tip at all. Then, your employee may decide to only take good care of the clients who pay big tips.
A better idea may be to compensate your employees, based on a certain percentage of your wash-dry-fold revenue. If you’re going to compensate your staff, do it out of your own money, where you have complete control over the process. The employees will take more pride in doing a great job all of the time for every customer – and you’ll essentially be turning them into salespeople for your wash-dry-fold business.
