HELP

[Mdh]

Hello,
I am very interested in getting into the business. Need some help with the figures that I got?

PLEASE LOOK THIS OVER!

Here is info from the "info sheet".
Timing of the mat is 6 A.M to 10. P.M
Asking Price: $200,000
Gross: $150,000 (per year)

-Monthly expenses-
Rent: $3300
Gas: $1200
Electric: $800
Water: $900 (including trash)
Insurance/Licenses: $180
Pay roll $ 1000


Total Equipment
51 Washers
(2 X 55Lbs)
(10 X 35lbs)
(4 X 27lbs)
(27 X 21 lbs all new)
(8 X 14 lbs top loaders)

31 Dryers
(3 X 55lbs)
(28 X 30lbs)

1 Coin-changing machine
1 Soap dispenser

Lease valid till 2011 + 5 years with increase of 200 every two years. Condition on the lease that you cannot take out the machines if u beak the lease or even after the lease is over.

Here is the water analysis I did - please do your own and see what you come up with:

PLEASE advise on what you think about this mat. Any comments at all are helpful. Would you consider buying, based on what you see? I really need help, so please stop me from making a mistake if you see problems!!! I'm a TOTAL NEWBIE and have never bought a business before!!!! :-(

THANKS for your help!!!!

[petefritz]

what has your appraisor or accountant said about this deal? Without seeing more documentation, it is hard to speculate price in an unkown area. It could be a decent deal, but without knowing more...?

[SecretarytoBraveDave]

I did not see the water usage listed. The lease is bizarre, can't say I would consider such a clause at the end of the term.

51 washers should generate alot of cash, if the business is there. How many square feet? Send the water usage. Idea of area and how many competitors and info.

[Mdh]

The water bill for 4 months was 50,300 cubic feet. The area of the mat is 2600 sq feet. There one more mat after one block.

[SecretarytoBraveDave]

The water usage converts to about 100K gallons a month. With the amount of machines in this establishment, there is little use of the machines. Based on the water usuage the machines barely hit 1.5 tpd. I would suspect the break even point is somewhere in the upward of 175-185K which represents approx 10% use of the machines.

At 2600 sqft there, I'd bet its pretty darned tight in there, with little room for comfortable movement. You say there is one mat a mile away? How much business is in this area? With such little usuage is there potential to capture more business?

IS this an older mat? You'd only have about 6 years left on the lease with a clause that makes you leave the equipment? Not much of a business in there to buy you'd be buying the location and lease. Neither sounds too good.