What if I told you I had the secret to getting brand new commercial washers and dryers for your laundromat? Would you be interested?<\/p>\n
Yeah, I thought so.<\/p>\n
No, it\u2019s not a get-rich-quick scam. It\u2019s just smart business, so stay with me.<\/p>\n
Of all the crazy things I\u2019ve come across with regard to laundromat ownership, nothing takes the cake like hearing an owner say, \u201cI can\u2019t afford to buy new laundry equipment.\u201d<\/p>\n
The reason why new equipment will pay for itself is actually fairly simple and straight forward. In today\u2019s day and age, brand spanking new commercial laundry equipment nearly always pays for itself. However, way too many owners aren\u2019t aware of this fact, or simply don\u2019t believe it. Instead, they continue downloading how-to videos on YouTube to keep their 25- to 30-year-old washers turning.<\/p>\n
Wait! Before you run away, please understand that I have nothing to sell, and I get nothing out of writing this. Simply put, it\u2019s part of my obsessive mission to help raise up our industry. If you read to the end of this article, with an open mind, it could change your laundromat business, your bank account\u2026 and your life!<\/p>\n
When I entered this industry in 2010, I started with virtually no capital. We\u2019ve built our laundromat portfolio by borrowing, investing, growing, reinvesting, sweat equity\u2026 and then more reinvesting. I estimate that I\u2019ve easily spent a few million dollars on commercial laundry equipment for my four stores since getting into the business. I\u2019ve also had the pleasure of meeting hundreds \u2013 if not thousands \u2013 of other laundromat owners along the way, and what I\u2019ve learned is rather astounding.<\/p>\n
The operators with old equipment, struggling businesses and little to no income believe they \u201ccan\u2019t afford\u201d new equipment. They just scrape by \u2013 fixing their old machines and occasionally buying a few used pieces here and there.<\/p>\n
Conversely, the store owners at the top of the industry don\u2019t hesitate to invest in new equipment whenever it\u2019s needed, because they know it\u2019ll pay for itself. Whether they pay cash or use leverage is completely irrelevant. (For the sake of this column, let\u2019s assume you don\u2019t have enough cash and will require financing.)<\/p>\n
First, a few caveats:<\/p>\n
Now, with the disclaimers out of the way, let\u2019s talk! Are you ready for my Earth-shattering news?<\/p>\n
The equipment will pay for itself!<\/em><\/p>\n Wait! Come back! Before you leave, please hear me out\u2026<\/p>\n Here\u2019s what I\u2019ve done and, for that matter, what most of the leading laundromat owners in this industry do. It\u2019s also what many at the bottom end of this industry think cannot be done.<\/p>\n Since you don\u2019t have the cash on hand to buy new machines, you\u2019ll purchase the equipment with all or nearly 100 percent financing. If you have extremely bad credit, this may not work, but for the most part, it\u2019s a very common practice.<\/p>\n In nearly every case, you will receive 90 days before your first payment is due on your equipment financing note. In fact, right now you often can get interest-only payments for up to 12 months.<\/p>\n And I\u2019m not kidding when I tell you that, by then, the new equipment will have brought in enough new revenue to make the payment for you. Don\u2019t believe me? Keep reading\u2026<\/p>\n In almost all cases, buying new commercial laundry equipment for your laundromat will pay for itself in three important ways:<\/p>\n 1. Increased Gross Sales<\/strong><\/p>\n By adding new equipment, word will travel quickly that you have \u201cbrand new washers and dryers.\u201d Better yet, if you spend a little on marketing, this fact will travel even faster.<\/p>\n People will come in and check out what your store has to offer. When they see the new stuff, they\u2019ll stay and your turns per day will increase. Simply put, you\u2019ll attract new customers, which equates to additional revenue.<\/p>\n 2. Increased Vend Prices<\/strong><\/p>\n Since you\u2019re adding new machines, customers will come. And they\u2019ll also be willing to pay more for the use of your shiny, new machines with all of their modernized bells and whistles. And this will produce another significant bump to your revenue. In fact, when top laundromat owners add new equipment, they nearly always increase vend prices substantially.<\/p>\n The beauty of these first two benefits of new equipment is that they are compounded. Increased revenue will come both in the form of increased margins from your current customers, but also from your new customers as well.<\/p>\n Research has been done on this subject, and it\u2019s reasonable to justify as much as a 20 percent increase in vend prices when installing new equipment, even with machines of equal capacity.<\/p>\n Another positive factor is that new equipment can act as a market differentiator. You know that laundromat that was new 10 years ago? 3. Utility Savings<\/strong><\/p>\n As a laundromat owner, a large portion of your expenses comes in the form of utility bills \u2013 and older equipment is incredibly costly and inefficient. The older a machine is, the less efficient it will be. Even if your equipment is only 15 years old, it likely makes financial sense to retool your laundromat.<\/p>\n The manufacturers that serve the laundromat industry have made significant progress with regard to the energy efficiency of their products, especially in the last 10 to 15 years. So, by adding new equipment, not only will your revenue increase substantially, but your expenses also will decrease as a percentage of sales.<\/p>\n There are two additional advantages to reequipping your laundromat with new machines \u2013 depreciation and amortization. However, I\u2019ll leave the details of those to your accountant to explain.<\/p>\n Just know that \u2013 between write-offs, depreciation and ADA tax credits \u2013 the bonuses just keep coming. The government wants (and, therefore, incentivizes) us to reinvest in our businesses by installing new equipment.<\/p>\n In short, you not only can buy the equipment with \u201cother peoples\u2019 money\u201d if you choose to, but then you can pay back the loan with pre-tax income from your business \u2013 and you can depreciate the equipment so that a portion of your other income is tax-free.<\/p>\n At a minimum, my hope is that this causes you to think a bit differently about your laundromat business. I\u2019m hoping you\u2019ll consider retooling your store when the time is right.<\/p>\n By constantly improving and reinvesting in your laundry business, you\u2019ll be in a stronger position to serve your community and, in turn, elevate the reputation of this great industry.<\/p>\n [Editor\u2019s Note: Before making any financial decisions about your laundromat, always be sure to discuss your options with your attorney, your accountant and any other professional business consultants on your advisory team.]<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Well, Not Quite\u2026 But Here\u2019s a Not-So-Secret Formula That Will Make It Almost Seem Like Those New Washers and Dryers Came Free of Charge What if I told you I had the secret to getting brand new commercial washers and dryers for your laundromat? Would you be interested? Yeah, I thought so. No, it\u2019s not […]<\/p>\n","protected":false},"author":1261,"featured_media":10501,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":""},"categories":[98,243,244,245,9351],"tags":[],"class_list":["post-10500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured-articles","category-feature-1","category-feature-2","category-feature-3","category-highlights"],"_links":{"self":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/10500"}],"collection":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/users\/1261"}],"replies":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/comments?post=10500"}],"version-history":[{"count":1,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/10500\/revisions"}],"predecessor-version":[{"id":10502,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/10500\/revisions\/10502"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/media\/10501"}],"wp:attachment":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/media?parent=10500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/categories?post=10500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/tags?post=10500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Not-So-Secret Formula<\/h3>\n
\nWell, it\u2019s not so new anymore. In fact, it\u2019s dated and tired-looking. Add new equipment, and it\u2019ll separate your store from the rest of the pack.<\/p>\nBonus Time<\/h3>\n