Buying an Old Dry Cleaning Business
Dry cleaning services are needed all year round. An old or established dry cleaning business can be a lucrative investment. Thousands of new types of garments are labeled "dry clean only," which has created an industry estimated to generate $6 billion to $7 billion a year. Furthermore, dry cleaning is a cash and carry business saving you time, hassle and money on inventory.
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Things You'll Need
- Valuation
- Employee records
- Financial statements
- Leases
- Insurance
- Client List
Instructions
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Locate a dry cleaning business for sale that is operating, well-known and respected in the community with financial records and documentation in place. Negotiate the purchase price and assets to be transferred. Provide a Letter of Intent to purchase the business with a term period of 90 days to establish that the purchase price is acceptable and to prohibit the sale to any other buyer.
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Complete a valuation on the business including real estate and assets to be included in the transaction, property taxes, and outstanding taxes or debts. Assess the condition of the equipment with warranties or guarantees. Ask for employee records. Review financial statements for the last three years, including leased equipment and property information. Analyze the cash flow statement to confirm that the business can support itself without the need for borrowed working capital. Confirm that the insurance is sufficient to cover any loss. Request a client list and ask about local competition.
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Obtain financing, if required. An established business with value-added services and no local competition will have the highest value and price compared to a start-up enterprise. Grow your business with repeat customers by increasing services with options such as wedding gown restoration, alterations, boxing, storing and delivery.
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Tips & Warnings
Older dry cleaners may be prone to environmental hazards of the use of perchloroethylene (perc), a widely used dry cleaning solvent. Perc can lead to significant hazards if inhaled or if in contact with the skin or the eyes of the machine operator. The dry cleaning operation may have water and ground contamination from seepage during operation and maintenance.
References
Resources
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