Outside of demographic data supplied by the CLA or local distributors, has any one done research using the city-data.com web site? It has a lot of information, some more useful than others. I would be curious to hear if this could be a useful tool and if there are any specific data parameters you looked at besides total population, % renters, income, racial mix, etc. As an example, they show information on the break down of employment categories for residents in the selected city. You can also pull up reports by zip code. Any one have any other sources they use?
I purchased my mat last year and am now finishing up my first tax return. My accountant has had questions about certain numbers and I'm finding I need to document my business practices better just in case I ever were audited (in a cash heavy business I would guess there is a higher potential for it). I'm really not to worried about being audited but I'm also not tying to run some Mickey Mouse operation and want to be prepared. Here are my main questions:
1. For self serve income, do you have a log book or spreadsheet detailing collection dates, deposits, etc? I do account for the self serve from the machines but I do it informally on a sheet of paper. I collect quarters, audit the hopper, refill what was taken out of the hopper, deposit bills a couple days a week, then once or twice a month, deposit excess quarters. I'm confident what I deposit is generated from the machines but have only been keeping track on a pad of paper and then discarding the sheet when it fills up.
2. Mileage. We do pick up and deliveries. Does anyone have a good system or an app I can use to best track the expenses related to that.
Any other tips, advice, or other areas to focus on to improve record keeping and accountability would be greatly appreciated.
We are in negotiations with our first laundromat. We recently received the lease which was allegedly renegotiated by the broker (who is representing both sides) when the broker was initially interested in purchasing the mat. He tells us this is an amazing lease, however there are a few concerning terms. Since we are not familiar with commercial leases in Southern California (LA County), we wanted some opinions.
I understand there is a lot of variation in leases, and we are going to have it looked at proffesionally, however we thought the more opinions, the better.
Long term 15+ years
Reasonable monthly rent
The lease is written so that we have ALL the liabilities and responsibilities as if we were the owner of the property; i.e, we are responsible for monthly lease payments plus auto increases (which, by the way are double the inflation rate)
We are responsible for the real estate property taxes, any city, county, state taxes on the real estate and the income it generates
We are also responsible for the cost of any repairs, plumbing, electrical, heating, roof, parking lot, etc
Way back in 1977, it was common throughout most of the US to raise washer prices by a quarter. Those were inflationary times ... costs were increasing ... prices had to increase as well. It was not uncommon to raise the price of at least 1 category of equipment every year.
Today's dollar has the same purchasing power that the quarter had in 1977. In other words, on average, everything costs about 4 times more than it cost in 1977 according to the Federal government. So when I raise my washer prices by a dollar coin today, it's exactly like raising my washers by a quarter in 1977. Perhaps this helps you to understand how I am able to pull off dollar price increases on virtually every washer I own time and time again over the past 8 or 9 years.
You see, a quarter price increase is a non-event. It's too small to obtain the desired effect. It goes unnoticed by customers which, on the surface, seems like a good thing but it means that even they put little value in the additional quarter they're paying you. It's not even enough to get your competitors' attention so that perhaps they'll think about increasing their prices too. Nobody should be increasing even single load washer prices by a mere quarter.
Today, more than ever, washers should be raised in dollar (or 4 quarter) increments. A dollar increase is enough to make up for a few customers who will likely float around to your competitors for a while. It's enough to increase your wage which gives you a better attitude about operating your laundromat. It's enough to make your competitors take notice and think about increasing their own prices. It's enough to start your laundromat back toward true profitability if profits were lacking.
Happy to see PL follow up on a number of profiles they have written over the years on laundromat owners who recently opened a new store. Good to learn about some of the lessons they learned. One story included an owner who ended up selling his stores once he learned what he wanted to do, and bought/built three other stores to fit his business model.
I hope that if PL ran across a story where things turned out badly for one of these profiled owners, they chose not to run it for PR purposes.
Hi everyone, I'm new to this industry and new to this board. I am currently in escrow and hope to close in a couple of weeks on my first laundromat. I am in Los Angeles, does anyone know what permits i will need? I know i will need a business license just for the pleasure of having a business and a re-sellers permit to purchase items for the vending machine and pay sales tax, but are there any other permits specific to the laundromat industry that i will need?
Also, on the subject of sales tax, am i right in assuming that while snacks and supplies form the vending machine are subject to sales tax, the washing machines and dryers themselves are not?
Good Day everyone. I am a propspective owner working on my business plan. I would like to know if anyone has an idea of how to secure accurate financials
that reflect the expense/cost of running a laundrymat? Any help would be greatly appreciated and would help me finish my research and my plan,
and take the next step. Thanks again.
I have been in escrow for a medium size mat in the San Francisco Bay area since mid December. The location has just under 5 years left on the lease. The mat is 2400 sq ft and the lease has annual 3-6% CPI increases at 1.46/sq ft nnn. I wanted to get another 10 years minimum and see about reducing the increases down to 0-3%. About 2 months ago when trying to get the broker representing the landlord to negotiate a new lease, the broker came back with an email stating "the owner wants to keep the terms the same". I wasn't sure what that actually meant so we asked again and got a bunch of stalling for weeks. Eventually after really pushing this thing the broker has come back yesterday with what he calls the owners final offer (this is actually the only thing they have given us to work with) but it states the increases stay the same and the owner wants 1.75/sq ft now but he will at least give me another 10 years. That would mean I get a five year extension on the just under 5 years left plus a five year option however it is now 1.75/sq ft nnn at 3-6% annual cpi increases. Without getting into specifics on finances, this mat has a strong customer base and I'm confident that I can cover the increase but I'm more concerned about how hard it was to get to this point in working with both the broker/landlord and the future working relationship, especially in another 10-15 years down the road. Now I've never rented anything commercial, especially near San Francisco before but I have this inner feeling that this landlord is just real greedy and trying to push the limits to what is fair with respect to a decent lease. I honestly feel like he is stiffing me. The shopping center I'm referring to is very busy and maybe he is truly getting something close to this from the others but for a first time buyer this hasn't been an easy process. It is especially hard when I've seen leases 30 minutes further away from the city going for more like 1.25/sq ft and gross leases at that. I have no way of knowing if this is the "going rate" or not but I thought I'd share this with you and see what you think.
As I was reading "Todays Coin Laundry" from the CLA last night, one of the last chapters makes some interesting points on leases. One thing that stuck out was that one out of every three coin laundries for sale is hampered by a major lease problem. It also said that over the next several years, 50% of coin laundries that close, will do so because of bad leases and uncooperative landlords.
I'm tempted for the first time to walk away from this deal and wondering if this is normal lease negotiations or maybe one of those cases I read about last night. Your thoughts?
The workman's comp insurance sure seems excessive to me. My broker tells me the rate is pretty much set by the state and there is nothing I can do about it. True or not? Can you shop for this insurance?
Just got a new quote from my insurance and it was a significant increase. It was LIG. They said that I had been "misquoted" the last two years and am now getting the "proper" quote. Just wondering who everyone currently uses so I can start calling around.
I know self serve coin laundry we do not pay taxes on sales. I know it is wishful thinking, but can we extend this include WDF sales? My accountant doesn't see how it's possible no matter how much I wish it to be true. Are we exempt with this service?
I am doing my taxes for 2013. Last year we installed new washers. The dealer took away the 5 old maytag TLs and on W124 to the junkyard and kept the money. Since we have owned the Laundromat only 2 years, these guys are only partially depreciated. How do I take them off of my balance sheet? what are the accounting entries?
I've only had my laundry for just on two years and I'd like you all to tell me if the return I'm getting is within the ball park range of what I should be expecting...
I have a small Matt with 14 dryer pockets and 12 washers.
This year has gone better than last and the turnover keeps growing as compared to the same month for the previous year.
For this current year I have had a gross turnover of just a couple of bucks short of 200k. The bottom line return (after everything including tax,deprecation and home office expenses etc) is just a touch over 50k.
We paid 230k for the business so that's around a 20% return, but it's not hands off as I do all my own money collections!and repairs! just not the daily cleaning.
We aren't 24hours and don't do WDF.
Is this inline with what you would expect...............?
A job applicant came in for an interview today. The FIRST thing she said is that she just got back on unemployment (benefits) and she will be moving out of the area soon so I might not want to hire her. Maybe it's just me but I got the distinct impression that she was not interested in working as long as she could sit at home and receive unemployment checks. I guess when the checks finally stop, she'll resume job-seeking again ... unless she starts receiving checks again.
Don't ya just love it? Anyone else have any good "Interview" stories to tell?
Mr Cucco, is a 34 year veteran of the office products industry. In 1985 (age 30) he founded CREATIVE BUSINESS SOLUTIONS which grew to $30,000,000 before selling it in 1991. In 1992 he founded IMAGE*TEC L.P. Through organic growth and several acquisitions IMAGE*TEC grew to $50,000,000 in sales by 2008. He was a finalist for the Ernst and Young Entrepreneur of the Year and twice recognized by the Better Business Bureau as winner of the Torch Award for Busi*ness Ethics (Chicago market) as well as receive numerous industry awards. During his career he has both leased and purchased dozens of commercial spaces for his various companies. At one time, he had as many as 12 locations comprising over 90,000 sq. ft.
5707 N. Central Ave, Chicago, IL 60646
So I'm in the process of negotiating another mat purchase but this purchase might need a little guidance from you guys. So the purchase is for 200k, with 130k down payment and the rest seller financing. The question is...
How does this seller financing work? The interest rate, payment terms, etc I get but logistically do I pay the seller directly or do we set up a account?
What if I pay it off early? and would I have to contact the seller for the note when I'm done with the payments?
Thanks for shedding some light
Hey everyone I'm Arthur new to the forum and new to the industry.
I've recently been in conversation with a broker about a mat for sale near me and was able to get a look at the last 2 tax returns for the place.
I know a laundromat is generally valued at 3 or 4 times the net.
And that the only net to take seriously is the one listed on the return.
The problem I'm having is that there is a 30k difference between what the seller says he makes vs. the tax return.
The broker also told me to take the return with a grain of salt. He's from Vested Business Brokers which also doesn't seem to have great reviews on this board.
I'd love to hear some of your thoughts on this one. Thanks
I received a cancellation notice from my health insurance co. today. The reason: due to Obamacare, you are no longer allowed to have your family only on your health plan without your employees being covered as well. Even if I offered to subsidize it, my employees couldn't afford it.
My insurance co. has a plan that is $300 more a month with much worse coverage! My health insurance has more than doubled in the last 4 years. Any suggestions?