It seems like insurance companies are using me for their gambling fix. Every year when our current insurance comes due we get cancelled because our current company no longer wants to insure Laundromats. We don't have any claims
I just received a PIN letter from the city with a link to where I can make business tax payments. I thought laundromats were tax exempt? I'm going to get an accountant, but for my understanding, dont we just pay personal income tax quarterly/annually?
I'd like to share with you the factors that went into my recent decision to replace my 11 year old Huebsch washers with new Huebsch washers of the same size costing about $51,000.
1. My income tax situation is such that I was anticipating a heavy tax due on April 15th. Making this purchase now alleviated that burden. Expected tax savings - $13,000.
2. I was able to buy the new washers at a very good price and installation was quick, inexpensive and uncomplicated.
3. New Huebsch washers come with the deeper coin box - a feature that I will need before too long.
4. I ordered the new washers with the best computer. That allowed me to program in my E-cycles thus eliminating 1 bath and making customers pay a dollar to get that bath if they want it.
5. I ordered the new washers with the fastest extract (200g). That produces a much better result as the old washers were 84g extract. That impresses my customers and helps me keep the old $6 vend price even though I removed that 1 rinse bath.
6. Michigan is phasing out its Personal Property Tax thus the new washers should not increase that tax obligation for very many years.
7. Only 5 of my 20 lb. washers still have the 84g extract so I am now in a position to raise dry prices while remaining competitive.
8. These high extract washers will help my dryers to keep up with future demand on those busy days.
9. I expect to sell my old washers to recover about $12,000 of the cost of this project.
10. I expect my maintenance costs over the next 10 years will be greatly reduced on this bank of washers. As I approach 65, rebuilding 40 lb. washers no longer intrigues me and these washers will relieve me of that burden.
As you can see, between the income tax reduction and selling the old washers, I expect to recover about half of my project cost right there. I'll recover the other half over time through higher vend prices, increased turns (20 minute E-cycles versus 25 minute standard cycles on the old washers), reduced maintenance and increased efficiency.
So the way I see it, it would be a mistake to NOT replace these washers at this time. These washers help to make my Laundromat stronger and more competitive. They are a warning to anyone who thinks they can come into my market and steal market share.
Lots of options out there. I cant decide if i just need a counter or spend the extra cash and get a sorter. I'm looking at the Carnation CR 180 for around $200, so its a big jump to the sorters. What are you guys using?
I formed a single member LLC to purchase my mat. I am the only employee. No WDF service. Is it worth the cost of an accountant since I haven't made any money yet since I just started? I am tracking all of my expenses.
Which form will I use for tax purposes? Form 1040 Schedule C?
I came across this clause in my current lease:
The 76th section of the original lease Landlord's Property/Equipment states The tenant acknowledges that all of the equipment, fixtures, leasehold improvements, and the like currently at the premises are the sole and exclusive property of the landlord and shall not be removed by the tenant upon termination of this lease."
I guess I didn't pay close enough attention to this point when we renegotiated the lease. I'm a little confused. So if I default on my lease the LL owns the equipment? What if I retool the entire shop and finance the machines? Isn't the equipment owned by the lender? Say if I retool my shop and finance everything with my distributor. Then I default on the lease, how is it possible the LL gets the equipment? Won't the distributor want his stuff back???
I am wondering what experieinces you laundromat owners have had with apartments above laudromats. What are the pros and cons of such a building. I have a location spotted, and and thinking of such a building for a new project. Thoughts?
I've driven over 500 miles throughout the west half of Michigan's lower peninsula this week, visiting about 25 - 30 Laundromats. Here are my observations:
1. About 5 Laundromats are no longer there - presumably killed off by the Great Recession.
2. Some of the largest Laundromats have deteriorated but remain open with an on-site dry cleaning or laundry service. This dual operation seems to be working satisfactorily for these operators.
3. Some of the small town Laundromats are running unattended but seem to be getting by okay that way.
4. All the Laundromats that I visited happened to be QO except 1 which was laundry card operated. I didn't visit any DCO or DC/Q Laundromats because they did not fit my criteria for these trips.
5. Many of the larger Laundromats were thriving operations when built 20 to 30 years ago but they look terrible today mainly because that old equipment was never updated. For example, I saw dryers with the small (12" diameter) windows and old Milnors with cutesy "I'm not feeling well today" out of service signs that were firmly attached above their loading doors. It was obvious that recovery from the "illness" was not a quick one.
6. Some Laundromats had some newer, soft-mount front loaders that obviously replaced some top loaders. Apparently, many operators are willing to spend some money upgrading the lower-cost equipment with similarly low cost equipment. Few Laundromats had newer, large front loaders or newer dryers though.
So far, I had requested the rent reduction to LL 4 times, ( every other year...) but all failed, LL said always "NO".
Do I need to continue ask them again? or just waste of time?
(LL is very big national shopping center owner company. It seems like what they said was "pay rent according to the lease agreement, no adjustment!"
Well 6 months are under our belt and, unfortunately, things are not going so well. My gross income is not meeting what my projected gross income was expected to be. Before I bought the business I audited the previous owners books and calculated what the average monthly gross income would be. In the last six months I have had a low of -6% to a high -20% below that. The six month running average is -16% below calculated Gross.
I have had some thoughts as to why this might be. I came up with the following:
The previous owner lied to me (cooked his books)
We switched to unattended hours in the morning and lost sales
Whiplash from a poor previous owner (he only owned the store for 6 months or so?)
We discontinued Val Pak in favor of direct mailings.
Poor customer service (due to some poor attendants? We had some problem attendants)
Lost commercial accounts we lost one large account and that hurt.
Competition increase (none that I know of)
I think that we are doing a much better job then the previous owner running the store. We are keeping the store spotless, replaced all of the lighting, and replaced the HVAC unit. We have not had the quality issues he had when I took it over (customer complaints).
I find it hard to believe we cannot match his claimed gross doing a much better job then him.
At this point I am not really sure what to think or do. 16% is a lot to recover from. I am curious if you guys have any comments or suggestions.
Can I just be in a cyclical low period? Have I not waited long enough to reap the benefits of our efforts yet? If not how long should I wait? I am starting to become very concerned.