Selling your laundromat rarely means the end of the road. In fact, you could be selling to get the equity you need to open a bigger, better coin laundry – or you could be selling for succession planning or any other number of reasons.
No matter your motives, though, selling a laundry business requires a careful roadmap. Your company is unique, and those quirks and perks will all factor in during this process.
So then, how do you begin? Here is what you need to know:
Get your documents in order
Naturally the big question surrounding any sale is one of price. What do you think you can sell your laundromat for?
This is why your first step should be getting all your documents in order, since these will help back up your asking price. Items you need to gather include:
- Books and records
- Utility bills
- Tax returns
- Inventory (including machines and equipment)
- Cash flow, revenue and profits
All of these are factors in your selling price – high-quality machines fetch higher prices, as does a coin laundry with excellent cash flow, for example – so the more you know, the better off you’ll be moving forward.
Clean up shop
The quality and condition of your coin laundry will also come into play before selling. With that in mind, your next step should be an assessment of your actual operations.
Machines play a big role here. You’ll want to make sure everything is in good working order, and you’ll also want to factor in overall quality when deciding on an asking price. Also on the table is the general condition of your laundromat, from the walls to the floor and ceiling.
All in all, clean up your business before selling. Not only will this increase the sales price, but it will be more attractive to potential buyers and help you sell quicker.
Broker or no broker?
The third important consideration is whether or not you need a broker to help sell your coin laundry.
This decision comes down to several factors:
- Cost – Brokers come with fees, so only use a broker if you are comfortable with the price
- Success rate – Brokers aren’t sure bets, so make sure you choose one who has a history of closing deals
- Time – Selling a business is time-consuming. Bringing in a broker will help you focus on your own business while someone else handles the details.
Sum up your business
With these foundational elements in place, you will be ready to interact with potential buyers.
“Make sure your laundromat is appealing to buyers.”
The first step now is to create a summary of your business, or an “advertisement” of sorts. Here, you’ll compile all those documents you gathered earlier, including any elements of your coin laundry that could be attractive to buyers. The goal is to have a broad overview of your business so an interested party quickly knows if the company is right for them.
As you continue working closely with potential buyers, have as much in writing as possible.
What to look for in a buyer
Finally, you’ll want to begin talking to prospective buyers. Begin by keeping an open mind – the person you think is best suited for the role may not be in reality. So, don’t customize your marketing and advertising to one specific niche. Get the word out as broad as possible, then narrow down candidates.
The most important trait of the right buyer is financial solvency. You need a buyer who can handle the costs, from buying the business to operating it. You certainly don’t want a buyer whose finances will cause the deal to fall through.
Important considerations at this time include:
- Proof of purchase
- Confidentiality agreement
- Personal financial statement
All of these elements will ensure you are working with serious buyers who can afford your laundry business – and that should the deal fall apart, the proceedings stay private. Keep these steps in mind as you work toward your closing date.
Eastern Funding can also help finance your buyer. Download our free acquisition checklist for your buyer!