How does your market factor in to your business’ value? In our previous article, we mentioned how the market can affect your coin laundry business.
Certain aspects included:
- Public transportation
- Nearby housing or businesses
However, the market’s influence can go beyond these basic elements. The market can also include a number of financial elements, from utility bills to zoning regulations, tax laws and legal requirements.
Here is an in-depth look at how your market will affect your laundry business’ value:
Know your local expenses
The main way your market influences your coin laundry’s value is through costs. A simple example is your monthly utility bills – a store in one location could have lower water bills than a store in another location. Without taking any other factors into consideration, the location with the lower utility bills is already more valuable.
“The costs could be lower – or higher – in one location over another.”
This is especially true in the New York area. Water bills are typically higher there than in other parts of the country, which means New York-based coin laundries have to find other ways to increase value. Another example is the San Diego market. Here, sewer fees for businesses are relatively low. This means San Diego already has a leg up on other markets, especially for a sewer-reliant business like a coin laundry.
Your utility bills will vary depending on location. So, before you acquire a new coin laundry or invest in your first, make sure you know the local expenses. These costs could emphasize the right choice over the wrong one.
Know your local laws
In addition to local costs are your legal requirements. One is zoning laws, which greatly affect all types of businesses.
Zoning laws impact:
- Where you can build a business
- What you can do in that business
While you may have found a location that is perfect for a new coin laundry, the zoning law could forbid that type of business on that land. This can make it a lot more difficult to buy and open new laundries in certain locations. In many cases, it is more viable to acquire an existing business than navigate zoning laws and other legal requirements when opening a brand-new store.
Either way, though, make sure you know your legal requirements before making any significant decisions with your laundry business.
Know your impact fees
The third important consideration regarding your market is impact fees. Impact fees are defined as payments to local governments for offering new or expanded public capital improvements. In relation to laundry businesses, some of the most common “capital improvements” are sewer and water services.
Impact fees make sense from a city standpoint – they are used to offset the costs of creating new public works facilities just for your business. From your perspective, however, impact fees are something you may want to avoid. For instance, if you want to expand to a new location, but it has high impact fees, you may be better off looking for a different site.
No matter your choice, understanding how impact fees will play into your overall costs is a substantial way that the market affects your business’ value: Lower fees, and the more valuable your laundry may be to the right investor.
Make the market a top priority
Whether you are acquiring another coin laundry, starting your own business for the first time or finding a site to expand your existing operations, the market is one of the most important factors to consider.
To recap, keep in mind:
- Utility bills
- Zoning laws
- Impact fees
A city ordinance, a lack of public works, a certain fee or another cost altogether may not seem like a breaking point for a location, but these elements can sway the value of a laundry business.