Mindset Makeover: Overcoming Entrepreneurial Challenges In Business Acquisitions
Business buyers taking action Hey Biz-Buyers, I can think of only one good excuse why you shouldn’t pursue business ownership: You don’t…
Read More >>Unconventional Acquisitions•
January 2, 2021
Ya baby… buying a coin-operated laundromat, that’s what we’re talking about.
Here’s a breakdown of a deal my agent will run that we may buy. Just another funky business idea for non-correlated cash flow.
– $67k profit a year
– Buy w/ $0 of his own cash
– Use $100k in seller financing (using future sales to pay off owner)
– Finance Rest w/ Equipment loans
What could possibly be sexy about hundreds of thousands of pounds of dirty laundry, circling through their rinse cycle, that’s paid for in coins, when you hardly even carry cash anymore? Glad you asked, my friend. If you’re not sure if you’re ready to take the leap and buy your first laundromat, let me introduce you to my friend, Michael Nerby. He’s built a $750k+ business (with $250k in profit, might I add), just by acquiring a few of these sudsy and savvy laundromats. Not only that, but Michael was able to make it happen by only putting up $35k of his own money into his laundromat deal. Hopefully, you’re starting to see laundromats in a different light, so without further ado, here’s my list of the top reasons that we love buying laundromats:
Here’s a high level of how the balance sheet looks.
It’s about the same over the 5 year period I requested, variable from $50-70k.
They wanted $200k and would finance through seller financing $125k.
I said, that’s cute. I also want Bloomberg’s balance sheet but sadly he won’t give it to me.
So, given there are 2.5M businesses for sale and he wants a deal, we are circling around my deal which looks like this:
I negotiate down the price (bc you know the world is burning), I give him a small down payment, and structure a deal to do the rest of the payment over three years. Lots of ways to get sellers to do this that we talk about at Unconventional Acquisitions, I like structuring them so the seller wins too on the upside.
For this deal, I make about $5,583 a month as the buyer. We got a good multiple of 1.86x. Then, I am at breakeven in 3 months for my initial cash down and my Cash on Cash Return is 268%.
Read that again. WE’D MAKE IN YEAR 1: 268%.
Then again because I like to get paid on the closing AND capitalize on the business so I can hire an operator to do all the things I don’t want to do.
I get an equipment loan potentially for the $135k worth of laundry equipment and an SBA loan (they’ll do 90% of the revenue typically).
Which gives me $242k AT CLOSING on a laundromat in my bank account.
Then I start the process to go, find another one, and use those proceeds as the cash down.
There are 10 steps to buying a small business w/ seller financing or creative structuring. This is just one of them. You have to find the deals (origination), analyze them (due diligence) and on and on, but my job here is to OPEN YOUR MIND. Open it to the things us on Wall Street make billions on that YOU on Main Street, never do.
If you want to see how Private Equity heads become billionaires, don’t look to Wall Street, look to Main Street. They buy boring businesses, they turn them around and optimize them, then they cash flow off them.
This is a triple sided win. Business owner gets to retire, you get to cash flow, and employees get jobs as we optimize and grow.
This is the difference between TRADING stocks where someone has to lose for someone else to win. While building businesses, all can win.
Yours Unconventionally,
Codie Sanchez & Ryan Snow
Co-founders Unconventional Acquisitions
Business buyers taking action Hey Biz-Buyers, I can think of only one good excuse why you shouldn’t pursue business ownership: You don’t…
Read More >>June 06, 2023
Business buyers taking action Hey there, business buyers! In case you haven’t noticed, things are a little wild economically. But if…
Read More >>May 05, 2023
Business buyers taking action Good afternoon. Picture this: You're sitting at a hipster café, listening to a genre of music…
Read More >>May 05, 2023
You can learn by your own experiences or the experiences of others. We find others less costly.
You can learn by your own experiences or the experiences of others. We find others less costly.