I’m researching getting into the Laundromat business and have quite a few quick questions.
First, I keep reading that this is a 25-30% profit business. Is this reality? Does this cover the equipment depreciation? It seems to me that this is a huge fixed asset cost business and depending on longevity of equipment I could easily see accruing of that cost eating a good chunk of the estimated profit over time.
Second, on equipment, how long do commercial machines last? I’ve seen figures from 5 years to 15 years? This could dramatically impact expected return.
Third, I’ve heard & read that many deals are suspect as it’s common in the industry that revenue figures aren’t very reliable (even with using water usage to estimate sales). I’m a little worried that I’m going to be sold a business with a 25% estimated profit at 100k/year that ends up being a 10% business with end-of-life machines and an actual revenue point of 80k/year vs 100k. Any tips or warnings?
Is it worth it to just bite the bullet and start with new machines? Are there any synergies there? Or, would you recommend just replacing existing machines as they wear out?
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