We heard that a bunch of you want to buy a laundromat!
Now, what’s the best way to get started you might ask? I love templates, and I know you love them too. They make it easier to never get emotional with a deal.
So here’s the most important thing you have to remember: he who keeps it stupid simple wins. With that in mind, let’s dive into the key documents you need for a deal.
How to buy Laundromats
1) The Deal Calculator
This is how you figure out if a deal is good. You need to measure the business but not overcomplicate things so you don’t waste time.
2) The Letter of Intent (LOI)
This document is a fancy way of saying: “Hey Homie, I’d like to buy your business.” But this is not a marriage proposal. It’s just a date.
3) The Expenses Sheet
In laundry land, your most significant expenses are:
- The water droplet.
- The rent on the building.
It’s all about the 80/20 rule. If you control the 80%, you can handle some loss in the 20%.
4) The Laundromat Pre-Analysis
Before you buy a business, you need to do your due diligence. That means that you have to know the ins and outs of the business. This is how we (the private equity peeps) dig into deals to see if they will ROI well.
Here’s a sample of one of our sheets for analysis:
5) Verification of Collection
Sometimes business owners lie about their profits so that they can pocket more money from the deal. Shocking, right? If the tax returns don’t match the profits, you go count quarters.
6) Profit and Loss Statement
With a P&L statement, you’re answering the following questions:
- Are you getting what you paid for?
- Can you run the business?
- Can you profit from it?
All you need is a spreadsheet, and the math will answer these questions for you.
These are the most critical documents you need to buy a laundromat.
Remember – the first deal is the scariest. After you get it done, you’ll realize that deals at $100M or $100k rhyme. It won’t be easy, but it’s doable.
Co-founder, Unconventional Acquisitions
If you want to learn more about researching, analyzing and buying businesses, check out the articles below