Selling a Coin Laundry-American Coin-op June Issue 2015

What evaluations should be made before a store owner puts his/her Laundromat up for sale?
There are many factors to consider when deciding to sell a coin laundry. What is your motivation? Are you looking to retire? Is there a health problem? Do you need money for another venture? Another factor to consider is timing. Is it a buyer’s market or a seller’s market? Today, it’s a seller’s market because buyers are looking to spend their savings on viable businesses with steady returns because of the low return on investment with a savings account or CD.
In your experience, what are some reasons as to why Laundromat owners sell their business?
Coin laundry owners sell their business for many reasons. Some owners are looking to retire while others would like more lucrative investments. Job transfers and health factors are other reasons why owners have sold their coin laundries.
Once the decision to sell has been made, should a store owner immediately begin the process, or is there a better time in the year to sell the business?
There is no “season” to sell a business. Typically, it takes 6 to 12 months to sell a business if it is priced properly.
Are there steps in the selling process that store owners can manage themselves? At what point should they consult with a broker or professional?
There are a couple of things to be done before selling a business. The owner must gather all of the books and records, utility bills for the past two year, tax returns, profit and loss statements, and a copy of the lease. Buyers will be requesting this information when inquiring about the business and will need to verify the information during due diligence. Gathering the information ahead of time will expedite the process and show you’re serious about selling. Also, store owners need to evaluate the cosmetic appeal of their store. Repairing broken equipment, a fresh coat of paint, new decals on washers and dryers, installing new soap dish lids, repairing broken tiles, and replacing blown light bulbs go a long way when selling a business. Laundromats with great cosmetic appeal will sell faster.
What should the business seller look for in a broker/when seeking professional counsel?
A seller should look for a broker who has a lot of experience selling coin laundries because they have a much better handle on the business. They are able to answer questions from a buyer and understand opportunities to make the business better. A broker who is also a store owner is ideal. There are brokers who specialize in selling coin laundries throughout the country. If there aren’t any in your area, I suggest contacting an experience broker who has some experience selling coin laundries.
Once professional advice has been sought, what is usually the first step in the selling process?
As a professional, the first thing is to gather the necessary documents to create an advertising information sheet. The information sheet is a summary of your business including your coin laundry income, expenses, lease information, equipment information, hours of operation, employee schedules, etc. The paperwork you provide to the broker should include utility bills for the past two year, tax returns, profit and loss statements, and a copy of the lease. The broker needs a complete understanding of your business in order to find the right buyer.
Discuss the process of evaluating the true value of a coin laundry business. How can store owners ensure they’re properly calculating this?
When assessing the store value there are many factors to consider. Consider the age of the equipment, length of the lease, condition of the store, and net profit after expenses. A coin laundry should sell between 3 to 5 times the net profit after all expenses.
When drafting a sales agreement, what are the most important items that must absolutely be included?
When drafting the sales agreement the most important things to include are the price and payback terms, if you are seller financing. I recommend hiring a professional, because the purchase agreement survives the closing.
What documents should they require before considering a candidate?
To qualify a prospect, I highly recommend providing a personal financial statement for the prospect to complete. There's no sense in spending your time with prospects who can't afford your laundry. Also, each prospect needs to sign a confidentiality agreement in order to protect your interests and keep your records confidential.
Once a buyer makes a formal offer, what aspects of the offer should the seller examine closely?
Once a buyer makes a formal offer, I recommend hiring a lawyer to review the purchase agreement.The purchase agreement survives the closing and you do not want to be held responsible for something you were not aware of.
Realistically, how many rounds of negotiations should the seller go through with prospective buyer before dropping the offer?
I recommend negotiating until you come to desired terms. Negotiations may take 1 day and can take up to 3 months, a lot depends on the personalities involved.
When an offer has been settled, how can the seller ensure that the closing process runs smoothly?
To ensure the closing process runs smoothly, have all of the books and records in order. The buyer will need this in order to verify the accuracy of the information presented. Once the buyer verifies the books and records, contact the landlord to get the lease assigned. Once the buyer has been approved by the landlord, it is time to contact an attorney to setup the closing.
What key advice would you give to store owners who are looking to sell their business?
The key piece of advice I would give to sellers is to put yourself in the buyer’s shoes. Typically buyers are looking for a lifestyle change. They want an easy to run business with a reasonable return on investment. If you can provide this, than your business will sell fast.
Any closing thoughts?
Polish the apple, nobody wants to buy a headache. If prospects are visiting your store and there is broken equipment, light bulbs out, peeling decals, chipped paint, and broken tiles, then they will not purchase your business…at any price.

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Selling a Coin Laundry - American Coin-Op - June issue