Is owning a laundromat one of your goals for 2018? If so, you may be faced with the question that many people have. Should I purchase an existing laundromat or should I open a brand new one? This question can be answered in various ways. However, if you are considering an existing laundromat, the most important thing to focus on at this point is how it is valued at. Below, you will find several key factors that can help you determine the value of an existing laundromat in your area. Stop searching for Electrolux dealers in North Carolina in 2018, call T & L!
- Determining how profitable a laundromat is can be tricky. There are a couple of ways you can do this. First off, you can take a look at the tax returns from previous years. However, this could be an understatement in the value of the business. Some owners choose to take a loss when filing taxes for one reason or another. This might give you an idea of how profitable the laundromat is or is not, but it won’t be your best bet.
- It’s possible that the current owner has kept a record of their profits. They may or may not use this for tax purposes. Either way, check with the owner to see if they have one and whether or not they will share it with you. This will be very helpful in determining the profitability of the laundromat.
- Take time to gather information about the laundromat, the area, and the customer base. This could take a lot of time and effort, but it will be a great way to gauge the value of this particular location. In addition, try to create a profit and loss document that will reflect the laundromat income. Then, you will begin to understand the volume and foot traffic that comes through the laundromat on a daily, weekly, and, hopefully, a monthly basis. Once you’ve created this document you can subtract expenses and figure out cash flow as well as annual profit for the business.
- If the business owner is ready to sell, they will likely be very upfront and forthcoming about profitability and the value of this laundromat. However, someone who is not motivated to sell may be a little less honest. Either way, you can use various resources to help you get the information you need.
Stop by again soon to learn more about determining the value of a laundromat!
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Visit the following posts in this series to learn more about how to determine the value of an existing laundromat: