I bought another laundromat

[BrandonS85]

My goal with this one is to do a lot of content specifically regards to buying underutilized property and using the internet and decent marketing techniques to significantly boost your business.

This place was making 9 to $10,000 before the last owner died. The last owner did no marketing whatsoever and just relied solely on foot traffic. I was able to get financing and everything with a paltry $15,000 down for this location. So based on a 50% margin oh, in two to three months I should recoup the entire investment.
For fun I'm doing the contest on my YouTube page to see who can guess how much money it will make on the first week.

View: https://youtu.be/_QLxjC5_uyE

 

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[BrandonS85]

So far my plan with this location is to :

• Advertise via Facebook
  
  
• SEO my Laundromat website to be #1 on Google for the area
  
  
• Provide lit signage so people actually know the purpose of the location
  
  
• Run a "Bandit sign" campaign and (legally) place around 100 signs across town concerning the laundromat
  
  
• Bring in newer equipment with higher price points to give users more options
  
  
• Bring in an ATM
  
  
• Bring in vending machines
  
  
• Place vending machines on the exterior of the building, as the street has decent traffic.
  

 

[BrandonS85]

During the month of July, between money recovered from machines (There were PLENTY of quarters stuck in machines), soda sales from our outside machine that had been running for almost a month prior to opening, rent from apartments above the laundromat (Did I mention there's apartments that pay for the mortgage, taxes and insurance?) amounted in a total revenue July of $3,651.65 - Of which $1300 was rental income, $1851.65 as income from washer/dryers/recovery, and another approx $500 in vending sales.
Costs of operations were :
* Mortgage $537
*Electric $450
*Water $220
* Taxes & Insurance $450
* Daily labor costs (Cleaning, open/closing) - $400
* Vending costs $225
*Net income - $1,369.65*
For the month of July, we're already well past the daily average rate by about 40% on washer/dryer sales then another 20% up on vending sales. My variable costs (utilities & vending products) are pretty marginal compared to my mortgage, taxes, insurance and labor costs. So as revenue goes up, net should increase greatly. My personal time commitment on this is limited to re-stocking vending machines and collecting cash, maybe 30 minutes a day if that.
For fun, I've been documenting the process on my *non-monetized* youtube channel, I thought it'd be a interesting project to show these kinds of operations from start to finish and talk about what goes on behind the scenes. The playlist that I'm updating is :

View: https://www.youtube.com/watch?v=jqAtHpEn1g8&list=PLcr-Kg1ZjBjG91Sygf1Bucj-WfVTKsdTB

 

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[BrandonS85]

Thanks for sharing! How many laundromats do you have now? Are there employees there? Do you go around and collect money and fix the machines and clean up or does someone do that for you?

Everything I do I try to automate it. So what I'm doing here is learning to do a lot of the low-level work myself and then training somebody while I learn it how they can do it as well. So as far as all of the minimal labor stuff somebody else can do. I likely will have somebody empty the change for the machines do all the cleaning things like that but for the first week of operation I will probably do about 75% of it. I have a full-time maintenance crew and a lot of people that I trust that currently work for me so finding the people to help will be relatively easy. I find that in a real General since I start to lose money when people that are underneath me do not have sufficient training. I'm really hoping for this business venture to be different

 

[AgainstAllOdds]

Following this thread.

Always excited to see someone do something new.

 

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[BrandonS85]

Today I learned that the former owner(s) never, ever, ever cleaned their coin mechanisms out.

Spent roughly a hour with a coat hanger fishing quarters out of the mechanisms. Made right about $94.

I asked my friend who owns about 100 rentals how much he'd want to make fishing quarters out of such machines with coat hangers and he said maybe $10/hr. So I felt I had a great day making ~$94/hr.

There's still more quarters in the machines, but i'm going to be more efficient tomorrow and use a shop vac.


Video!

View: https://www.youtube.com/watch?v=jqAtHpEn1g8

 

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[BrandonS85]

Here's the actual P&L from the Laundromat for August -

View: https://www.youtube.com/watch?v=I4fDSXg4lnk

 

[Ragnar_]

I really like this business idea. On a side note, I have visited several laundromats with card readers attached to the machines. All transactions are done through a 10 cent hotel room card you have to purchase for $5. (The quarter receptacle was replaced with a card reading device on some older machines.)

A lot of times when I was visiting a laundromat in a different city this was an expense I was willing to incur in order to not have to drive around to find another. I also believe an initial investment such as that increases buy-in and convenience for the customer. Once I paid that $5 for the card, I wasn't going to go anywhere else! Plus I hate having to pull out a $20 bill and then breaking it further to $5's or $10's. It gave that business a sense of superiority over its competition in my opinion.

Might be worth doing a CBA on the technology, or visiting a laundromat with that feature! I love the idea of making the first customer visit to around ~$20 per person and instituting a subscription-esque service.

 

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[BrandonS85]

We opened up blocked doors in part of the laundromat facing the street. Was told it was an abandoned stairwell.

Ends up it was a real estate office.....so I now get a free 12x12 office along with the laundromat.

View: https://www.youtube.com/watch?v=kpJWZQwnZcE

 

[lowtek]

Love it. My dad owned a laundromat / appliance repair shop. Many fond memories of cleaning the dryers and hunting for loose cash when I was young.

 

[BrandonS85]

So, has it been open or closed before you bought it?

I love that old screen door on the front.

It's kind of a complicated story - Guy died about a year ago, his mom took over the laundromat and knew almost nothing about it. I made her an offer of $50k a year-ish ago. She went with the most established investor in town who owns dozens of million dollar properties. He couldn't deal with it as he was using his maintenance crew to do all the day-to-day workings of it which didn't work. He renovated part of it (The apartments) and sold it to me with financing in place for $85k w/ $15k down.

 

[BrandonS85]

Once it's all said and done 1-2 hour a week. My goal is to make it as efficient/automated as possible, outsource all the low level work to a employee (Tasked with maintaining/running 3-5 laundromats) and then look at further scalability.

 

[Matt Hunt]

I've seen some where the owner had one employee and was clearing NET of over $300k/yr working 5 days a week (Employee was working weekends and part time through week).

They CAN be great money makers or they can be nightmares...like alot.

Shoot, at that point why not hire a full-time manager at $45k/year and make $255k working 0 days/week?!

 

[BrandonS85]

How much does it costs to start a laundromat? Are they still a good business to invest in? How much profit are you generating each month after all overhead is paid?

Between nothing and a few million - It's too hard to get a solid answer because it depends on new development vs existing, what size you need, equipment ,etc.

Brilliant idea, IMHO. But believe you'll need to keep some coin options available depending on location. This should also allow a future customer loyalty program to further lock folks in.

Yeah, too many people here are cash-only, had people come by and BEG me to to not go to cards because one of the few options in town did and now they're stuck driving 3 miles elsewhere.

Will you offer or is already offering, free drying for your customers?

No , it encourages people to come in with stuff they didn't wash here. I figure 25-50c to dry is more than worth it.

 

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[BrandonS85]

Love it. My dad owned a laundromat / appliance repair shop. Many fond memories of cleaning the dryers and hunting for loose cash when I was young.

I'm pretty excited about teardown on the machines from the 50s & 70s. I'm big into old coins and I hear that these kinds of machines are usually full of lost quarters.

Please, ask for a new username: Mr. Jefferson.

You're the 2nd or 3rd person to make mention of that.

 

[minivanman]

Love it. My dad owned a laundromat / appliance repair shop. Many fond memories of cleaning the dryers and hunting for loose cash when I was young.

The guy that works on the machines for me sometimes has his 5 year old granddaughter with him and when he takes apart a dryer she is excited for ICE CREAM money! I had my grandson take apart a dryer the other day just to give him a little experience on things like that and he found 5 house keys. I guess they were always losing their house key and thinking.... damn, where did it go now!

 

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[BrandonS85]

I've seen some where the owner had one employee and was clearing NET of over $300k/yr working 5 days a week (Employee was working weekends and part time through week).

They CAN be great money makers or they can be nightmares...like alot.

 

[Andy Black]

So far my plan with this location is to :

• Advertise via Facebook
  
  
• SEO my Laundromat website to be #1 on Google for the area
  
  
• Provide lit signage so people actually know the purpose of the location
  
  
• Run a "Bandit sign" campaign and (legally) place around 100 signs across town concerning the laundromat
  
  
• Bring in newer equipment with higher price points to give users more options
  
  
• Bring in an ATM
  
  
• Bring in vending machines
  
  
• Place vending machines on the exterior of the building, as the street has decent traffic.

I’m curious why no Google (paid search) Ads?

Nice video later on. Short, to the point, but still compelling (who doesn’t want to watch a video diary of a business starting up?).

 

[Real Deal Denver]

We opened up blocked doors in part of the laundromat facing the street. Was told it was an abandoned stairwell.

Ends up it was a real estate office.....so I now get a free 12x12 office along with the laundromat.

View: https://www.youtube.com/watch?v=kpJWZQwnZcE

Great video. I see lots of potential there.

And now a free office? You don't need an office - rent that baby out.

I think the office rent could make the payments on new machines - and then you'll really be doing great.

I think you really found a great diamond in the rough that you will make a lot of money off of.

 

[MakeItHappen]

Following this thread.

Always excited to see someone do something new.

Me too. This could become great!

Good luck

 

[Kyle T]

How many hours per week are you anticipating being focused on it?

I saw one for sale near me recently and started thinking about the potential... Interested in followijng this thread.

 

[Matt Hunt]

Many years ago I saw a laundromat for sale and thought about buying it. Didn't really have the cash, though. I just remember it said it made $72k/yr net income. I don't remember any other details.

 

[Real Deal Denver]

Many years ago I saw a laundromat for sale and thought about buying it. Didn't really have the cash, though. I just remember it said it made $72k/yr net income. I don't remember any other details.

I had no idea they were that profitable. They're on my list now!

 

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[Doug Smith]

Good luck on the project. This caught my attention because I use laundromats and find the whole process frustrating. My apartment has a single machine in the basement for 8 units. Most of the time it's adequate for my needs. Sometimes I let the loads pile up and need to do them all at once, or need to wash bedding too big for these machines.

In my local area all of the laundromats are horrible. They are dirty, the change machines don't work, and the detergent vending machines are often empty.

There is a really nice facility one town over, and while they flawlessly address all of my concerns above and do a great job with marketing... There is never a place to park.

I came very close to just buying new bedding so I didn't have to deal with it

 

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[Seamster]

Thanks for sharing! How many laundromats do you have now? Are there employees there? Do you go around and collect money and fix the machines and clean up or does someone do that for you?

 

[Jsoh]

So far my plan with this location is to :

• Advertise via Facebook
  
  
• SEO my Laundromat website to be #1 on Google for the area
  
  
• Provide lit signage so people actually know the purpose of the location
  
  
• Run a "Bandit sign" campaign and (legally) place around 100 signs across town concerning the laundromat
  
  
• Bring in newer equipment with higher price points to give users more options
  
  
• Bring in an ATM
  
  
• Bring in vending machines
  
  
• Place vending machines on the exterior of the building, as the street has decent traffic.

Congrts. Lets see what she can do! This is a good plan... SEO and Facebook should yield great reach in the area.

Excited to see some good numbers. Have fun Brandon...

 

[Twiizlar]

Let me know if you need any SEO tips. I work in SEO and get give you some feedback here if you want to post your website!

I'm interested in your journey. Good luck!

 

[Scot]

@G-Man looks like I was wrong about the whole laundromat thing!

@BrandonS85 definitely following this thread. Very interesting stuff.

 

[Ernman]

A lot of times when I was visiting a laundromat in a different city this was an expense I was willing to incur in order to not have to drive around to find another. I also believe an initial investment such as that increases buy-in and convenience for the customer. Once I paid that $5 for the card, I wasn't going to go anywhere else! Plus I hate having to pull out a $20 bill and then breaking it further to $5's or $10's. It gave that business a sense of superiority over its competition in my opinion.

Brilliant idea, IMHO. But believe you'll need to keep some coin options available depending on location. This should also allow a future customer loyalty program to further lock folks in.

 

[Ernman]

We opened up blocked doors in part of the laundromat facing the street. Was told it was an abandoned stairwell.

At the risk of stating the obvious, this drives home the importance of thorough due diligence. In this case BrandonS85 got lucky.

 

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