View Full Version : Double Dip Recession 2010
James2011
06-25-2010, 09:37 PM
No body knows future...But someone says our economy is going to be double dip 2010...
Because of house market and unemployment rate...What do you think? are you worry about this fall and winter? Personally, I am not worry about it, but I see more and more business's revenue drops and almost all business sectors suffer too much...maybe JUDGEMENT DAY, DOOMS DAY COME SOON, 2012 or 2013(FEB)...
I believe it will, I see more and more customers put less on their cards. Also many are getting their unemployment cut off and there not giving extensions to many. I believe this is a great time to buy a laundry mat, a lot of run down stores are in need of some major rehab and the current owners are not able to do the job.
I believe even with these tough times distributors are still building stores because this business in these tough times looks attractive for many investors. Keep trying to improve your store and make your customer happy.
YoungJedi
06-26-2010, 01:06 PM
Double Dip? If you would have asked this question a few months ago, I would have been skeptical, but things have really slowed down across the board, in terms of key economic indicators. While unemployment has gotten a bit better, it still has a long way to go. Government programs for first time home owners have come to an end and we can see how that has impacted the real estate market.
I'm assuming things are going to get worse before they get better. That said, there are still lots of opportunities out there to increase your net income if you look around hard enough.
Jason
Well now that much of all of the Govt. induced false stimulus programs are over, we see how the economy really is. I believe that I would lay odds at 30/70 that we double dip. Look how far we have comeback already. These deep recessions aren't fixed in a year or two. It will probably be a year from next fall before things look better. Even then it will take time to completely come back to the level we fell from.
Tom
dirtyclothes
06-26-2010, 11:02 PM
I believe it will, I see more and more customers put less on their cards. Also many are getting their unemployment cut off and there not giving extensions to many. I believe this is a great time to buy a laundry mat, a lot of run down stores are in need of some major rehab and the current owners are not able to do the job.
I believe even with these tough times distributors are still building stores because this business in these tough times looks attractive for many investors. Keep trying to improve your store and make your customer happy.
Funny you mention this, I just did a quick visit a store for sale today. The building has been cleaned up, looks like a lot of rehab clean up work, but man the machines are so old!
I guess the real question is, is there enough business to justify the coming expense of new equipment.
dirtyclothes
06-26-2010, 11:28 PM
Does anyone have the thought that as things continue to turn down, that a mat in an area of town with a lot of folks that recieve money from the Gov is maybe a great place to own a mat?
Adamski
06-27-2010, 06:28 AM
Does anyone have the thought that as things continue to turn down, that a mat in an area of town with a lot of folks that recieve money from the Gov is maybe a great place to own a mat?
Dirtyclothes,
If this recession continues much longer, no place will be a great place for a laundromat ... or anything else.
When people have less money, they spend less money. When people spend less, business profits decrease. When profits decrease, businesses try to reduce their costs (spending) to maintain some profits. Laundromats often reduce their costs by delaying the purchase of replacement equipment.
Distributors, who are suffering from this reduction in replacement equipment sales, look for opportunities to build new stores. These new stores are almost always marketed to newbies by showing them unrealistic projected returns. The newbies plunk down a substantial down-payment and begin running their new laundromat in a market that has plenty of established competitors bent on maintaining their customer base. In a worsening recession, like we're in now, an established store can hang on for a long, long time when the owner owns the building too and has no payments to make. The new store is always at the greatest risk of failure ... often because the market didn't need another store. The existing stores were serving the market well prior to the construction of the new store. The new store was only built so the distributor could sell some new equipment ... remember?
MrMachine
06-27-2010, 10:08 AM
Dirtyclothes,
If this recession continues much longer, no place will be a great place for a laundromat ... or anything else.
When people have less money, they spend less money. When people spend less, business profits decrease. When profits decrease, businesses try to reduce their costs (spending) to maintain some profits. Laundromats often reduce their costs by delaying the purchase of replacement equipment.
Distributors, who are suffering from this reduction in replacement equipment sales, look for opportunities to build new stores. These new stores are almost always marketed to newbies by showing them unrealistic projected returns. The newbies plunk down a substantial down-payment and begin running their new laundromat in a market that has plenty of established competitors bent on maintaining their customer base. In a worsening recession, like we're in now, an established store can hang on for a long, long time when the owner owns the building too and has no payments to make. The new store is always at the greatest risk of failure ... often because the market didn't need another store. The existing stores were serving the market well prior to the construction of the new store. The new store was only built so the distributor could sell some new equipment ... remember?
Excellent analysis Larry!
Just let me add that once that newbie fails and loses most, if not all the money he invested, three possibilities happen:
1- The most common scenario: The store is sold to ANOTHER newbie who was not able to figure out that the neighborhood is oversaturated, thereby continuing the pricing pressures on all those existing laundromats. This NEW newbie knows nothing but to drop the prices even more to try to build traffic. (I have a new competitor right down the block from me who has double loaders priced at $1.50.....the price I had 24 years ago).
2- The less common scenario: The store folds and the distributor takes back the equipment, only to clean it up and sell it to another sucker.
3- When a customer loses their JOB, they will do anything to save money, such as combine their laundry from 3 machines into 2....
Or wash, but not dry, or wash at their mother's house for free, or wash their clothes in the bathtub and hang them up (the Chinese in my neighborhood do this quite frequently...they don't even use the washing machines in their apartment houses), or my personal favorite....do the "sniff test"....sniff their armpits and say " I'll wear it another day". (Hey, that rhymes!)
Jefflange
06-27-2010, 12:39 PM
During this economy there are many opportunities if you have cash. Cash is king and it always will be. I have neighbor who is crying things are bad for him now. Maybe he should not of put in a pool at his house and have his wife driving a Mercedes. The downturn in the economy will be a learning lesson for people who like to live beyond their means.
dirtyclothes
06-27-2010, 01:41 PM
Man you guys are going to convince me to move back overseas! Maybe Jim Rogers is correct that being in Asia now, is like being in London at the turn of the 19th century and or being in New York at the turn of the 20th century.
Larry is usually more upbeat.
In my opinion we would all be a lot better off if we just stop using the
terms/words/concept "recession" "double dip" etc, and try to stop thinking of it in these terms or concepts.
In my opinion if this is the way a business is being run, you need to start looking for new models. I mean if we are all waiting for a "turnaround" stick a fork in it, its over!
The best explination I have heard is RESET.
We are being reset.
Borrowed money chasing one asset class into another creating the next bubble termed as a turnaround, those days are over.
All asset classes have been overvalued/bubbled because of easy money/loans.
A) So for this industry how are sales hurt? I am just taking guesses here so please help.
1) Renters moving away due to job loss
2) Mexicans leaving an area to chase other jobs or return to Mexico (I hear this is why so many mats are for sale in the Atlanta market, the industry has been killed in the area due to this reason??).
3) Builders construction workers in from out of town no longer working on large projects.
4) People in general adjust behavior/spending to save money, don't wash as often, cram more clothes in a washer.
5) People not working so they can stretch frequency of washing clothes.
B) Where will new sources of income come from?
1) Do something different in store?
2) In saturated areas weaker stores will fail, therefore customers will move to other stores?
C) How to lower expenses or?
1) I bet commercial real estate is the biggest opportunity here, that over time as more business fail rents/leases have a better chance of being lowered/renogiated.
a) unless owned by a REIT, as some have mentioned, this will take much longer to adjust.
2) stores for sale are way overvalued based on inflated values of asset classes including equipment, real estate, and EASY MONEY.
a) People will have to return to the concept that a business is only worth an amount based on its future income stream nothing more.
Adamski
06-28-2010, 06:50 AM
...Larry is usually more upbeat...
Dirtyclothes,
It's hard to be upbeat when we're in the worst economy of my lifetime. It was easier doing business during Nixon's price controls or when we had 12% inflation in the mid 1980s.
The consumer's purse is barely open and businesses are failing for a lack of customers. The ever-present pressure to increase taxes is worrisome. The national debt is at 76% of Gross Domestic Product and rising. There's just not a lot to smile about these days.
Still, I'm managing to improve my properties and maintain my investments at a more or less satisfactory level. It's still fun to run my laundromat and the government has yet to figure out how to tax my free time and my sleeping hours. So ... here's my new motto: LIFE IS GOOD. Yes, I know ... I borrowed it from a certain South Korean TV manufacturer (LG) but it's very appropriate for me too.
James2011
06-28-2010, 10:24 AM
Larry, your're right, LG stands for Life is Good. ( but originally Lucky Gold Star: merge of "Lucky company" + " Gold Star" electronics.)
dirtyclothes
07-03-2010, 10:47 AM
Dirtyclothes,
It's hard to be upbeat when we're in the worst economy of my lifetime. It was easier doing business during Nixon's price controls or when we had 12% inflation in the mid 1980s.
The consumer's purse is barely open and businesses are failing for a lack of customers. The ever-present pressure to increase taxes is worrisome. The national debt is at 76% of Gross Domestic Product and rising. There's just not a lot to smile about these days.
Still, I'm managing to improve my properties and maintain my investments at a more or less satisfactory level. It's still fun to run my laundromat and the government has yet to figure out how to tax my free time and my sleeping hours. So ... here's my new motto: LIFE IS GOOD. Yes, I know ... I borrowed it from a certain South Korean TV manufacturer (LG) but it's very appropriate for me too.
OK and GA (maybe others that I have not heard about yet) have new taxes that come close to making it imposssible to operate amusement coin op machines.
Tanning Salons are about to start charging that 10% tax related to the "health bill."
After years of never seeing mats for sale in my area, it seems that overnight 3 mats have popped up for sale.
thinkclean
07-08-2010, 01:59 PM
could we all just raise price. where is everyone these days?
I'm at:
doubles 2.25
triples 3.50
forties 5.50
6 min dry
I do discount 25c for warm water wash and 50c for cold water wash
Laundry_Mike
07-19-2010, 10:07 AM
tops $2
doubles $3
triples $4.25
45# - $6
7 min/qtr - 30# dryers
4 min/qtr - 50# dryers
store 1:
top: $2.25
20#: $2.75
25#: $3.75
30# : $4.00
40# : $5.75
50#: $6.75
store 2:
top: $2
20#: $2.50
30#: $3.50
40#: $4.50
60#: $6.00
30#:7min/quarter
45#:5min/quarter
epic02
07-21-2010, 02:24 PM
store 1:
top: $2.25
20#: $2.75
25#: $3.75
30# : $4.00
40# : $5.75
50#: $6.75
store 2:
top: $2
20#: $2.50
30#: $3.50
40#: $4.50
60#: $6.00
30#:7min/quarter
45#:5min/quarter
Remo Is that the going rate for tops and dryer times in San Diego? It would be nice if more mats here in Los Angeles would get more in line with that kind of pricing.
James2011
08-25-2010, 02:00 PM
now, due to house sale slump, all you guys now agree we are in double deep recession, right?
Peter T
08-31-2010, 05:07 PM
We don't know if it is a double dip recession effect. Our 2 mats are trending up from last year. We think location where the rental apartment density and senori homes are giving us an edge. Our 2 mats are both within 2-3 miles to some serious senior homes.
Adamski
09-22-2010, 06:27 PM
Guys,
Your government has announced that the longest recession since the Great Depression ended in June ... of 2009!
Well, I feel so much better now knowing that whole Great Recession thing is behind us. We can all start spending again. Never mind Nevada's 14% or Michigan's 13% unemployment ... those figures don't mean anything now that we know the Great Recession ended over a year ago. Who cares if the government is drowning in red ink? Who cares if we actually had .3% Deflation last year? It doesn't matter because we are now out of recession according to the Obama Administration.
So ... HAPPY DAYS ARE HERE AGAIN ... SHOP AND CHARGE AND BORROW AGAIN ... HAPPY DAYS ARE HERE AGAIN. (Sung to the tune of "Happy Days Are Here Again)
James2011
09-22-2010, 07:58 PM
really?
Do you really feel it?
bounce again?
no, no, maybe it would take a while for us to see more customers
Adamski
09-23-2010, 08:35 AM
Hithere,
Does it feel like the Great Recession is over for you? Me neither.
Adamski
12-05-2010, 11:16 AM
Guys,
I've been thinking about this Great Recession that we are in (even though our government says it ended already). This is the worst recession in the history of laundromats. There has never been a more trying time in which to operate a laundromat. Never before have so many laundromats failed in just a couple of years. I know of 6 laundromats in my immediate area that have closed. More will close before this recession actually ends.
Businesses were never meant to operate in such a poor business environment. Laundromats are no exception. The consumer is paying down her debt and making do with less. Less spendable income means less spending which means fewer sales in the business community. Fewer sales mean tighter margins and little or no profit. It's no wonder that I see businesses of every kind closing up every month.
Laundromat owners should not be embarrassed if they have to lock the doors and walk away. Quitting business and cutting one's losses has become a fact of life today. Often it's the only choice or, at least, the best choice. It's a business decision that must be made without emotion. Certainly it's a far better choice then watching one's assets slowly erode as the laundromat plows aimlessly through a sea of negative cashflow. There comes a time when one must abandon the laundromat and save yourself. Otherwise, the laundromat will sink with all souls on board ... and that would be a true tragedy.
James2011
12-05-2010, 01:52 PM
Guys,
I've been thinking about this Great Recession that we are in (even though our government says it ended already). This is the worst recession in the history of laundromats. There has never been a more trying time in which to operate a laundromat. Never before have so many laundromats failed in just a couple of years. I know of 6 laundromats in my immediate area that have closed. More will close before this recession actually ends.
Businesses were never meant to operate in such a poor business environment. Laundromats are no exception. The consumer is paying down her debt and making do with less. Less spendable income means less spending which means fewer sales in the business community. Fewer sales mean tighter margins and little or no profit. It's no wonder that I see businesses of every kind closing up every month.
Laundromat owners should not be embarrassed if they have to lock the doors and walk away. Quitting business and cutting one's losses has become a fact of life today. Often it's the only choice or, at least, the best choice. It's a business decision that must be made without emotion. Certainly it's a far better choice then watching one's assets slowly erode as the laundromat plows aimlessly through a sea of negative cashflow. There comes a time when one must abandon the laundromat and save yourself. Otherwise, the laundromat will sink with all souls on board ... and that would be a true tragedy.
I feel so sorry to hear that, Larry, but I guess your mat suffer more than others since you are in Michigan area, how about others?