Rural Laundrymats

[Thomas]

I just joined the CLA and have learned more from the package that they sent and the web site than I have in two months of my own research. The info has been well worth the price. I am in rural East Arkansas and my town and several others within 40 miles seem to be ripe for new coin laundrymats. These towns are from 2000-10000 in population and all have old, dirty, un-airconditioned or heated laundrymats with the newest machines being about 12 yrs. old and 1/4 to 1/2 are out of order. About 75% of the pop. is at or below the poverty level, and rent their homes. Do any of you have stores in rural areas and have suggestions to a newbie? To me it looks like a good area for some new, clean, well lit stores. I figure I can build small stores for about $150,000 each from the ground up and handle several unattended stores(If my banker lets me!) I guess what looking for is some reasurance that this business will work in small town. Do ya'll think they would pay for themselves in 5 years? Thanks for any insight.

[petefritz]

You might want to approach the owners of the existing l'mats and try to buy it, then remodel it and put in new equipment. that way you have no compitition, and in a small town,there might not be enough room for 2 l'mats. 20,000 should support a couple, though, but better to have 1 really nice one. Your banker might want to see almost as much cash as you ask him for, ie 50% down on spec. you might do better with an existing location on financing as well.

[Thomas]

Pete these locations are not worth buying in my opinion. Every one has equipment that is at 15 years old and broken down, the buildings are so run down I can build a new one cheaper. They really are rat traps that I wouldn't give you $5000 for, but they get used because there is nothing else within 15-20 miles. The lower income people in this part of the world don't have a choice because it is so far between towns and the next town is no better. If I build a new laundrymat in town I will get 90% of the business and will put the other guy out. I don't think most of these towns will support more than 2 stores but if I have central heat and air, hot water, a bath room, well lit, cctv, and CLEAN stores the people will pay more in vend prices because of the alternitives. I have done this with my convenience store. I TRY to be the highest in town on gas and food and the people don't mind because the other two stores are so run down. The town is too small for another $500,000 store so all they can do is go for the cheap beer and cigarette crowd, which they make a low profit margin on. The only way they hang on is because their equipment is paid for. I think the same strategy will work in a laundrymat. Everyone I have talked to about it have said they would pay twice the vend prices if the place is nice and clean. They have never had a nice place before to use before. This is my way of thinking, but who knows, I am still investigating the business and appreciate the input of the pros. That is why I joined the CLA.