Can I trust info from a card system when buying a mat?

[Sam987]

I am a newbie in the Coin Laundry industry, looking to purchase my first laundromat. I have been following this forum for a couple of months and have read a couple of books on the coin laundry industry.

I am in contact with a few brokers and have gone down to check out between 10 - 15 laundromats in NYC which are up for sale.

I am very weary as a new comer to purchase a store which runs on coin, even though I know the financials can be verified by looking at utility bills etc. I feel more secure with buying a laundromat which runs on a card system where I can see exactly past performance.

My question is, is it possible for a owner to cook the software in order to get the past performance to appear better than it is?

I will do my other due diligence as well, such as tax returns, full bookkeeping records, analyze utility bills etc. My question is if there is a benefit at buying a card store vs. a Coin store.

I greatly appreciate anyone's help on this subject.

[Howard]

Anything is possible. You can probably trust a card system much more than you can trust what a coin owner tells you. But it is not fool proof. Someone with a good understanding of database technology could theoretically change data in a card system. That said, it is way beyond the capability of all but a few laundromat owners. Bottom line, like anything else - trust but verify.

Check the utility bills month by month and make sure they make sense compared to the card system data. Assuming they do, then you have some great historical data that you would likely never get from a coin store.

[chad]

What type of card system is it... I know a way to know if the software was played around with but wont share it on the board.

[Xiong]

i'm sure this has been discussed on this forum, was a very long thread too

the reality is historical figures cannot gaurantee future performance, your better bet would be going thru the records on the utilities, and do your own observations by being there. if you're going to invest thousands of dollars into a laundry, better to do your homeworks thoroughly before transfering the money over....'cause you ain't getting them back for a few years

Originally Posted by Sam987

I am a newbie in the Coin Laundry industry, looking to purchase my first laundromat. I have been following this forum for a couple of months and have read a couple of books on the coin laundry industry.

I am in contact with a few brokers and have gone down to check out between 10 - 15 laundromats in NYC which are up for sale.

I am very weary as a new comer to purchase a store which runs on coin, even though I know the financials can be verified by looking at utility bills etc. I feel more secure with buying a laundromat which runs on a card system where I can see exactly past performance.

My question is, is it possible for a owner to cook the software in order to get the past performance to appear better than it is?

I will do my other due diligence as well, such as tax returns, full bookkeeping records, analyze utility bills etc. My question is if there is a benefit at buying a card store vs. a Coin store.

I greatly appreciate anyone's help on this subject.

[chad]

Originally Posted by Xiong

i'm sure this has been discussed on this forum, was a very long thread too

the reality is historical figures cannot gaurantee future performance, your better bet would be going thru the records on the utilities, and do your own observations by being there. if you're going to invest thousands of dollars into a laundry, better to do your homeworks thoroughly before transfering the money over....'cause you ain't getting them back for a few years

That wont help, Utilities dont help out anymore...

[Xiong]

Originally Posted by chad

That wont help, Utilities dont help out anymore...

then i guess flipping the coin is as good as any assessment method?

as i've mentioned before a card store owner could give out thousands of pre-valued cards before you taken over and you'll have to pay for the expenses of those cards, while he/she sold those cards for 90% off

[chad]

Originally Posted by Xiong

then i guess flipping the coin is as good as any assessment method?

as i've mentioned before a card store owner could give out thousands of pre-valued cards before you taken over and you'll have to pay for the expenses of those cards, while he/she sold those cards for 90% off

You must not have a card system I guess....

Any PRE VALUED card that an owner creates the card system not only can track them and with ease I can clear the balance of all pre valued cards in a matter of 2 minutes.

[CanCanCase]

Anyone running any payment system can cook their books any way they want. For every shady coin trick, there's an equally shady card trick.

If you were buying a restaurant that accepted cash in a cigar box, would it be any different than buying a restaurant that used a fancy Micros or Aloha point-of-sale system? If you were buying an ad agency that published yellow-book ads, would it be any different than a web design firm? Don't look at the payment method so much as what the seller is reporting on the balance sheets, whether the utilities come close to justifying that, and what the local traffic and business looks like.

Like Howard said, trust but verify.

-Case

[Sam987]

Originally Posted by chad

What type of card system is it... I know a way to know if the software was played around with but wont share it on the board.

Chad,

It's an ESD card system.

I saw your other post saying that utilities don't help anymore. Why would it be that way? Is there any other better way to verify past performance? I know it can't be trusted in itself, but shouldn't utilities be a part of the mix when doing due diligence?

Thanks all for your great help and advice.

Sam

[subati]

Look at utilities, tax returns, actual traffic, competitors, traffic at your competitors, location, location, and location.... If everything checks out, then look at the lease too.

If seller is not willing to give tax returns, walk away. It doesn't necessarily means she is lying. But with experience you have with this business, you will be seriously handicapped in making an informed decision. An experience operator may not need any of the above information.

Cheers