April 15, 2022

Why We Love Buying Laundromats

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Why We Love Buying Laundromats

Unconventional Acquisitions

April 15, 2022

If you’re new around here — hi, hello. I want to share something a little controversial, a little spicy with you today. 

I know it feels like the only way to be a dealmaker these days is if you can find the diamond in the rough of the startup scene. But I promise you don’t have to wait around for the next Uber, Tesla, or another shiny investment opportunity to make your millions.

There really is a better way. That’s why I want to introduce you to the world of…LAUNDROMATS

Laundromat GIFs - Get the best GIF on GIPHY

And trust me, I get it. 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:

1. They’re ideal for someone looking for passive income

Notice how I said buying laundromats, not working in one? If you’re someone like me who is extremely busy, managing a bunch of different businesses, or just generally don’t want to have your hands in the day-to-day tasks of a business you’re buying, laundromats are for you. 

They’re ideal for people who are interested in passive income because you can hire someone else to manage the laundromat for you as an operator. That means that after you get everything set up, you’ll be enjoying the profit and cash flow that comes your way each month on autopilot. 

In some cases, your brand new laundromat may also come with an operator AND fully-trained staff. If you’re not tracking quite yet, that means that you won’t have to worry about setting up basic systems and processes like training new hires, scheduling employees, and even repairing the machines. 

2. They’re recession-resistant

If you’ve scrolled the news on your phone, gotten the Google Alerts, or just checked social media then you know…the world is kind of a mess right now. And when the world is a mess, that can bring a lot of financial uncertainty. 

You’ve probably seen gas prices rising to astronomical levels. Maybe you’ve noticed that real estate is a totally toxic buyer’s environment in your city. Heck, you might even be on the lookout for opportunities to grow your portfolio that have great ROI, stability, and security for you.

If this is you, I’d like to float a lovely little number your way. The ROI for the laundromat industry is 20-35%, according to Speed Queen Commercial

Again…(this time for the people in the back)…LAUN-DRO-MATS!!

Another reason I love buying laundromats is that demand is consistent — a weekly chore that must be done by your customers. There isn’t another alternative for them (they probably don’t have an in-unit washer and dryer) unless they decide to drive to a different laundromat.

No matter what happens in the world, people will always need to wash their dirty clothes. And if they don’t have an in-unit washer and dryer, they’ll need somewhere…like a laundromat…to get it checked off of their to-do list. 

3. The cash comes to you upfront (major win!) 

Ahhhh, cash flow. One of my favorite topics and easily one of the best benefits when buying a laundromat. If you’ve ever been curious about other business models, especially some of the other boring businesses we talk about at Unconventional Acquisitions, then you may know cash flow can sometimes be hard to come by. 

Subscription models mean your cash is stretched out into monthly recurring revenue. Not bad, but it can mean having to constantly acquire and retain clients. 

Bigger investment deals, like real estate or anything that pays out in dividends, can sometimes require a lot of upfront setups, back-and-forth negotiating, and hassle to finally close the deal. Not ideal, if you ask me. 

But with laundromats, the entire business is set up differently from the start. Your customers pay for service upfront, at the time they’re ready to wash. That means there’s no money or time wasted on things like chasing down late payments or creating a line of credit. 

4. You don’t need to have a lot of on-hand inventory

And last but not least, let’s talk about one of the other benefits of buying a laundromat: minimal inventory management! 

Unlike other popular small businesses like grocery stores, convenience stores, or even a restaurant, a laundromat won’t require you to constantly take stock of what items you have on hand. 

This can mean a few things for you as the owner and buyer. First, it leaves your cash either invested directly into the business, in somewhere like labor or marketing, or back in your pocket, instead of hanging out somewhere in between. 

Second, there’s no hassle, risk, or time spent on the actual act of managing the inventory. You and your employees won’t be stuck solving for inconsistent tracking, warehouse management, or even loss prevention.

But there are some downsides to Buying Laundromats…

As with everything, owning and operating a laundromat can come with a few downsides (it wouldn’t be a deal if it didn’t). Here’s what we see most often when it comes to laundromat ownership:

One of the ups of a laundromat is that your customers are most likely to keep visiting your business, every single week if they’re happy. But if they’re not? There’s another guy down the street who’s got the exact same business model who’s one quick Google search away. Long story short — laundromats are a dime a dozen.

This industry is hyper-competitive, and if your customer isn’t happy with their experience even one time, it’s unlikely they’ll return. That means your management and operator need to be on their A-game, every single day, to make sure they keep the facility in tip-top shape so that your customers keep coming back every week.  

The other thing that also kinda sucks is…well…you have to run a laundromat which isn’t the sexiest business model, optics wise. 

That also means you’ll have to get your hands dirty and play mechanic, plumber, electrician, marketer, janitor, and a million and one other things unless you decide to hire an operator. We outlined some of the cons for you here.

Still not sure if buying a laundromat is for you? We’ll help you figure out which type of boring business is best for you, plus how to buy and acquire small businesses (including laundromats) in this course

Yours Unconventionally,

Codie & Ryan

Co-founder- Unconventional Acquisitions

If you want to learn more about how to find and buy businesses, check out these articles 👇

  1. Is Business Buying Right For You?
  2. How to Find Your Laundromat Operator
  3. How Long Does Buying a Business Take?!

You can also register for the course here OR if you are serious about buying a small business, join our Mastermind.

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