Owning your own laundromat business is a great way to create a steady flow of revenue even in a tight economy. Rather than starting your own business from scratch, it is often a good idea to acquire an established laundromat business. This allows you to forego many of the start-up costs involved in finding a location, establishing utilities and buying equipment. Still, there are several key elements that you must address before purchasing a laundromat business. Here is what you need to consider prior to making any type of commitment.
Make sure your finances are in order. Before you begin to look for a business to purchase, make sure you qualify for financing to handle all acquisition expenses. In addition to making sure your general credit is in good shape, establish a business line of credit with a local bank. You can draw on the credit line to finance the purchase and also take care of any expenses associated with the transition of ownership.
Identify a potential business to purchase. This can take place by responding to advertisements for sale of local laundromats as well as approaching the current owners of local laundromat businesses about possibly selling their interests. Make sure the laundromat you have in mind is in a section of town that has the proper demographics to support the business for the long term.
Obtain information about the financial condition of the business. Some of this information can be obtained from public sources such as tax records filed with the local jurisdiction. For the remainder of the information, request that the current owner share details about the current monthly payables and receivables associated with the business. You also want to review the monthly activity for the last calendar year. This will give you a credible idea on any seasonal upswings or downturns that can be reasonably anticipated.
Have quality inspection conducted of the premises and equipment. The idea here is to make sure there are no electrical or plumbing issues that must be addressed in the near future. You also want the washers and dryers inspected to make sure they will not require replacement for at least a couple of years. If the inspection uncovers any issues, see if the current owner will manage the repairs prior to the sale or at least reduce the purchase price.
Review the terms of the purchase agreement with an attorney. Even if the text of the contract is a simple generic document, make sure there is nothing included that could cause a problem later on. Also include specifics about any repairs or specific actions that the owner has agreed to perform in order for the sale to take place. Sign nothing until your attorney is happy with the text.
Obtain your business license. Depending on local laws, this may require nothing more than presenting proof of ownership and paying the annual fee. Other jurisdictions may require filing a petition that must be reviewed by a town or city council. Investigate the requirements in advance so you can be ready to move quickly once the ownership of the business in transferred to you.