Do Your Homework

By Bob Eisenberg | Apr 27, 2011

Are you currently looking at a new location to build a self-service laundry? Before you sign that lease or buy that building or enter into a sales agreement with a distributor, you have homework to do. Your distributor should help you, but ultimately it’s up to you – it’s your business and your finances at stake.

After all, once you sign a tenant lease, the landlord will not let you out of it simply because you failed to do your due diligence. The following is some of that required due diligence…

First of all, you must check with the local township to ensure that you can get permits without any challenges. For example, will you require a variance or is there is some sort of ban on coin laundries? A variance might be obtained, but it will take time, and if you have to pay rent while you are obtaining the variance, it will no doubt change your financial picture, so you must prepare for it. If not, you may be opening the store undercapitalized, which is a recipe for disaster.

Utilities, utilities, utilities! Almost any location you may be looking at – unless it was previously a laundromat – does not have enough utilities; you will probably require a larger water line, a larger gas line, and more electricity and possibly sewer capacity. Your distributor or mechanical engineer can tell you exactly what you will need. Next, contact each local utility authority to be sure you can get what you need, as well as finding out about their permitting processes and costs.

Typically (but not always), the water, gas and electrical authorities will be cooperative and bring the utilities to the building for no charge or at some cost; your contractor will have to bring those utilities into your store at your cost.

Sewer is another item altogether. Many municipalities charge sewer impact fees (or EDUs). If so, it may be substantial and can greatly change the financial requirements for your project. In some cases, laundry owners have been successful in reducing or even eliminating those impact fees; there are arguments that can be made with the local townships.

If the sewer line is too small going out to the sewer in the street, this upgrade is usually done at your cost and can be expensive – sometimes requiring engineered drawings and obtaining permits; all of this being not only costly to you but time consuming. Also, be aware that, if you have to open the road, you may be required to post bonds to ensure that the road will be finished correctly.

Most likely, you will have to hire an architect and a mechanical engineer to get your permits, so prepare to interview candidates and include those costs in your project.

Of course, carefully study all of the potential competition within your marketplace, and determine how these competing businesses will affect your store’s performance. In fact, I recommend driving around your potential laundry’s neighborhood with a load of laundry – and doing that laundry at each store. This will enable you to spend some quality time in your competitors’ stores, examining their positives and negatives.

If your business plan depends on business from local apartment complexes, visit each of them to be sure there are no hookups for washers and dryers in each individual apartment. If so, that will change the dynamic of your customer base, and you need to be certain that your business plan will still work.

Lastly, remember that, just like building your home, something unexpected will probably occur. Something will go wrong. And you can’t plan for that, but you can be prepared to handle those unforeseen challenges.

Once your coin laundry is up and running – and making money – all of those challenges will be forgotten, just like the day you moved into your new home.

(Bob Eisenberg is available for one-on-one business consulting. To reach him directly, call (610) 270-2811, or e-mail bob@qualclean.com.)