At Laundromat Resource we are constantly talking about using laundromats to find financial freedom. We believe that laundromats have amazing wealth building possibilities because they target all 3 legs of the Wealth Tripod. If laundromats are such great wealth builders, why would an owner sell their laundromat?
10 Reasons Owners Sell Their Laundromats
Here are the top 10 reasons owners sell their laundromat:
- Retirement
- Aging Equipment
- Divorce
- Poor Health
- Relocation
- Burnout
- Laundromat Is Not Profitable
- Death
- Laundromat Ownership Is Not What They Expected
- Buying a Bigger Laundromat
Below is a shareable infographic with an overview of the 10 reasons laundromat owners sell their laundromat. Let’s explore these reasons a little more below the infographic.
If you are a laundromat owner that has found yourself wanting or needing to sell you laundromat, take advantage of our FREE service that helps you identify and vet knowledgeable and trustworthy brokers to work with. To find out more information about this service, visit our page that explains what we do for you and why you should take advantage of this free service.
Retirement
Many laundromat owners have owned their laundromats for many years. This industry tends to attract long term owners. After all, why sell a laundromat if it’s a high cash flow, low time commitment business?
After years of ownership, many sellers find themselves ready to retire from the semi-retired life of laundromat ownership. They may want to travel more, spend time with family, care for health concerns, or a combination of reasons. Owners who are ready to retire from the business are some of the more common sellers.
Some owners sell their laundromats off one at a time, over a period of time, and taper their involvement. Other owners will sell their portfolio as a package or all at the same time, making their exit abrupt.
Tips for Sellers
If you are looking to retire, be sure to work with a knowledgeable, trustworthy broker. Working with a great broker will ensure that you sell your business quickly and for the best price.
If you don’t know a great broker in your area, take advantage of our FREE service to help you find the best brokers in your area. We will find, thoroughly interview, and present you with 2-3 options of top-notch brokers who are knowledgeable and trustworthy. There is no obligation to use brokers that we refer to you.
Tips for Buyers
If you are looking to buy a laundromat from an owner who is retiring, one tip I would offer is asking if the seller is willing to finance part of the purchase. This can be a win for you because it allows your business to pay for itself instead of you using your money to buy the business.
This can be a win for the seller by sheltering them from a large tax burden and providing them with a monthly income stream that is secured by a business that they know well. Asking for seller financing can be a great win-win situation for both parties.
Aging Equipment
It is common for some laundromat owners to hold their businesses until their equipment nears the end of it’s useful life. Rather than reinvesting into their business, they opt to sell their laundromat, often at a discount. Equipment can be expensive. This requires a large outlay of cash or taking out a large loan that will cut into the cash flow of the business.
Many laundromats that are listed for sale fall into the aging equipment category. The difficulty in selling these laundromats is that they need work and investment. This makes them less valuable than their current income might seem to suggest.
Tips for Sellers
There are two options for an owner who wants to sell a laundromat that has aging equipment. The first option is to sell it as is. Again, this will lower the value of the laundromat, but will require less time and money up front.
The second option is to invest in new equipment and try to sell the laundromat at a premium. The downside to this is that there is no guarantee the owner will recoup their investment. This is why many owners opt to sell their laundromat with aging equipment.
Tips for Buyers
If you are thinking about buying a laundromat that has aging equipment, be realistic about the expenses you are inheriting. This information should help you make a reasonable offer and keep you from over-paying for the business.
If you’re not planning on upgrading the equipment right away, be sure to factor in the impending costs and have a plan for replacing equipment. Will you replace the equipment all at once, or will you replace it in groups over time?
If you are planning on replacing the equipment, use conservative growth projections to make sure that your laundromat income will be able to cover the new expenses. Equipment distributors may try to sell you on inflated turns-per-day projections at 5 or more turns-per-day.
My experience personally, and through speaking with many other owners, is that a 3-4.5 turns-per-day is much more common. If the business can’t support the loan payments in that range, beware.
Divorce
Unfortunately, marital divorce can wreak havoc on just about every aspect of life, including business. Divorce is one of the main causes of a laundromat being sold. As part of the terms of the divorce, owners may need to liquidate their assets to fairly divide their joint wealth. This leads to the owners listing the laundromat for sale.
Tips for Sellers
If you find yourself in this situation, the American Bar presents three options for spouses who co-own a business during a divorce. In short, the three options are to 1. One spouse buys out the other spouse, 2. Sell the business and split the proceeds of the sale, or 3. Continue to co-own the business. If you do decide to sell, take advantage of our FREE service where we will help you find and vet knowledgeable, trustworthy laundromat and business brokers to ensure you have a quick sale for the best price!
Tips for Buyers
If you’re buying a laundromat from sellers that find themselves in this unfortunate situation, know that there is a possibility that things could get messy. It would benefit you to determine if both parties agree to the sale. If one party doesn’t want to sell, it could lengthen the process and could end up falling through.
This is not necessarily a reason to not pursue purchasing the business. It will just be good information to know, both in your negotiations and also for your emotional health during the process. It could be a little bit of a roller coaster. Not all sales due to divorce are like that, but some are.
Poor Health
Laundromat ownership doesn’t require a lot of physical exertion, but it does require some. When owners experience health issues, it can keep them from being able to run the laundromat properly. This could force an owner to sell an otherwise profitable business.
Tips for Sellers
If you encounter health issues and need to sell your laundromat, it is better to sell it early. If the business declines because you can’t manage it, it will ultimately sell for less money.
Don’t be afraid to ask for help. If you have family or friends that can help you run the laundromat until you can sell it, that will benefit you and the buyer. I’ve seen sellers who didn’t want to ask for help and their business deteriorated. When they finally sold it, they didn’t get as much money as they could of if they had help with the upkeep.
If you don’t have family or friends to help, speak with a good broker. They may be able to help you, or they may know someone who can help you. Even if it costs some money, it will be more profitable in the long run to sell a healthy business.
Tips for Buyers
If you are buying the laundromat from an owner who is experiencing health concerns, it is important, as always, to do proper due diligence prior to purchase. Ensure that the business has a positive trajectory, or that your offer price reflects the drop in business.
Relocation
Relocation is one of the major reasons that people sell their laundromats. Although they can be managed remotely, it can be difficult to establish the systems necessary and expensive to hire the help necessary to run a laundromat remotely. The need to move can force an owner to sell their laundromat despite it being profitable.
Tips for Sellers
If you find yourself needing to sell your laundromat in order to relocate, there are a few considerations to make.
First, you need to establish the timeline that you need to sell your laundromat in. If you need to sell quickly, you’ll have less time to prepare it to be sold and may have to take less money to get it sold quickly. However, getting top dollar is not always the number one priority. Selling quickly to free up your time and schedule could be more valuable to you.
If you are not going to be able to close the sale before you move, begin making arrangements to hire a laundromat manager to help you run your store until you can get it sold. Often a broker may be able to help you with that. If you can’t find help managing your laundromat, let us know and we will try to help you find a manager to help you run your laundromat after you move.
Tips for Buyers
If you’re buying a laundromat from an owner who is relocating, you may have a quality business on your hand. However, it is always better to ensure that you are buying what you is advertised to you. Be sure to complete a thorough due diligence.
Also, consider including clauses in your contract to outline what will happen if the laundromat’s income is less than stated. Your broker or a business lawyer should be able to help you include the appropriate clauses in your purchase agreement.
Burnout
Although a simple business, laundromats are still work. Burnout can be particularly common when the owner has a full time job in addition to the business. The added responsibilities to everyday responsibilities can overwhelm an owner, particularly in times of stress.
Along similar lines, some owners love building up a business but get bored or overwhelmed actually running the business. Burnout or this ADHD tendency can cause an owner to sell their laundromat.
Tips for Sellers
If you’re feeling the effects of burnout and are considering selling your laundromat because of it, it may be in your best interest to explore other options to help ease your responsibilities before giving up a performing asset.
Consider hiring a laundromat manager to take care of the responsibilities of running your laundromat. This would leave you with far less to do. You would then need to check in with the manager regularly and “audit” the manager’s work, but you would not need to perform the tasks of running the laundromat.
If your laundromat is not profitable enough to support outside management or you’re determined to sell, take advantage of our FREE service to help you identify knowledgeable, trustworthy brokers to work with in your area. Working with a good broker will help you sell your laundromat faster, and for more money. We know what makes a good broker, so let us help you find one for you to work with!
Laundromat Is Not Profitable
This is a difficult situation to be in. I have personally been in this situation and it feels awful. Unfortunately, some owners find themselves in this predicament and it can be difficult to know what to do. Here is some advice if you find yourself in this situation.
Tips for Sellers
Your laundromat is not profitable. You don’t know how to increase business. You don’t know how to get out of the situation you find yourself in. Maybe it’s getting you down. It did for me when I found myself in that situation and didn’t know where to turn. Here are two things you can do.
- Sign up for a free coaching call with us. Let us know your situation and we’ll let you know some things you can try to increase your business. Sometimes and experienced, outside perspective is what you need to reinvigorate you and help you breath new life into your business. If you’re not interested in that, or if your efforts came up short, try the next option.
- If you decide you need to sell your laundromat, let us help you find a knowledgeable, trustworthy laundromat or small business broker to help you sell your laundromat. We provide this service for FREE to you! No matter where you are located, we will help you find a broker that will help you sell your business faster and for more money. We know what makes a good broker. Let us vet brokers for you and show you your best options. Again, it’s a free, no obligation service we offer.
Tips for Buyers
If you’re considering buying a laundromat that is not currently profitable, there are a couple of things to be aware of.
First, you can get a great deal on a laundromat like this. Obviously, if it’s not currently making money, it is not going to sell for very much money. Deals can be found in this category of laundromats for sale.
However, here are a couple of things to know before you decide to buy an unprofitable laundromat.
- Understand why the laundromat is not profitable. Are there enough customers? Does the laundromat need renovations? Does the laundromat need new equipment? Is there a marketing plan in place?
- Have a solid plan on how you intend to take this unprofitable laundromat profitable. From personal experience and experience coaching other laundromat owners, it’s not as simple as, “If you build it, they will come.” You will need a more substantial plan for building a customer base that already has a routine of doing their laundry somewhere else.
Death
When a laundromat owner dies, or has a family member who dies, it can leave the future of the business in question. Often family members don’t know what to do with the laundromat if the primary owner dies. Or, if a family member dies, a shift in priorities may lead an owner to sell.
If you find yourself in this situation, we’re here to help. We provide a free consultation call to help you figure out your next steps. We also provide a free service to help you find a knowledgeable, trustworthy broker to work with in your area.
Click the button below if you want help with what to do with your laundromat when a death occurs.
Laundromat Ownership Is Not What They Expected
Laundromat ownership is not for everyone. Often, new owners assume they only have to collect coins once or twice a week and that is the extent of running the business. That can be far from the truth, particularly if a new owner has acquired an aging laundromat. Realizing that laundromat ownership is not what they expected is a very common experience for new owners. That is the inspiration behind Laundromat Resource. We want to help you know what you’re getting into and how to succeed before you take the plunge.
Tips for Sellers
If you find yourself in this situation, you essentially have two options. You can either adjust your expectations to match your new reality, or you can cut your losses and sell. Either option is a legitimate option.
Before considering selling, however, consider that you own assets that can be relatively time independent. It is worth exploring if some small adjustments might ease some of the stress your asset is causing you. Sign up for a free coaching call and we can help you determine if there are some simple adjustments that might make your ownership more bearable, or even enjoyable!
If you do decide to sell, let us help you find knowledgeable, trustworthy brokers who will sell your laundromat faster and for more money. It is a free service we offer, so take advantage of it!
Tips for Buyers
If you are buying a laundromat from a seller who is motivated to sell by mismatched expectations and reality, it is important to try to determine what expectations they had and what the reality was. It can be difficult to discover this information, however, friendly, empathetic conversations with the seller may give you a feel for the situation.
In addition, it is important for you to examine your own expectations and to adjust them appropriately, as well.
Buying a Bigger Laundromat
Some owners catch the laundromat bug and see the potential in helping them achieve financial freedom! In order to accelerate their journey to financial freedom, some owners will sell their laundromats in order to purchase a larger laundromat or more laundromats. This can be a great reason to sell, both for the seller and for the buyer.
Tips for Sellers
If you are selling your laundromat in order to trade up, be sure you go through our free Value Add Checklist to make sure that your laundromat is performing optimally. This will increase the value of the laundromat and the equity built into the laundromat.
It is especially important for you to be working with a knowledgeable, trustworthy laundromat or small business broker as you are both selling and buying laundromats. Working with quality a quality broker will save you a lot of time and money over the course of your transactions.
If you don’t have a trusted broker yet, take advantage of our FREE service to vet brokers for you. As licensed business and commercial real estate agents and laundromat owners ourselves, we know what makes a knowledgeable, trustworthy broker and we are committed to helping you find the best brokers to work with in your area.
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Conclusion
There are many reasons that laundromat owners sell their laundromats. The reasons can be personal, business-related, financial, or more. Whatever is motivating a seller to sell a laundromat, there are opportunities for both the seller and the buyer to utilize the Wealth Tripod to expand their wealth!
Whether you are a buyer or a seller, or both, Laundromat Resource is here to help you find financial freedom using the vehicle of laundromats. If we can be of service to you, use our contact page to connect with us! And please, benefit from the knowledge, experience, and resources we are continually providing here!
