Maximizing Your Coin Laundromat's Value

 Every coin laundromat owner will eventually have to decide whether moving on or pursuing other ventures. No matter what reason you have for selling your coin laundry, it could still be a valuable asset. Your business's value could be affected if your store isn't managed well, you don't have accurate financial information and you haven't planned ahead for the sale. Contrary to what you might think, you don't have to list your store for sale the day it is purchased Commercial Washer and Dryer.

You should ask yourself the following question: "What can I do now to increase the value of my Laundromat over the next two to three years?"

Here are three things you can do to increase the value of your coin laundry.

Step 1 - Calculate the Valuation of Your Laundromat

A multiple of net income is used to value businesses that make profits. In the case of the coin laundry business, this multiple is called the SVM (Store Value Multiplier). This is the sum of the store's value divided by the average monthly net earnings before debt service over a 12-month period. It is usually the latest one. The SVM must be calculated without knowing the store's value. This can be done by considering several factors, including the multiplier base, lease, equipment and competition. Also, demographics, amenities, and the overall coin laundry market. The SVM can be calculated by subtracting or adding to the multiplier base and making adjustments for other factors. SVM can be anywhere from 0 to 75. However, it is most commonly between 40 and 60.

A course I offer teaches you how calculate the store value multiplier and how to calculate how to calculate the coin laundry's value. After you have calculated your SVM, you can use it to calculate the value for the Laundromat. Simply multiply the SVM by the average monthly net income. If your SVM is 50 and your store's average monthly net income is $4,000, then your store would be worth approximately $200,000.

Step 2 - Examine the Laundromat As If You Were Going To Buy It

You went through Due Diligence as a buyer who is interested in buying a coin laundry. You went through the Due Diligence phase, where you reviewed all financial information, analysed demographics, and inspected equipment. Recall the steps taken when you purchased your business. Now, you need to look at it from a buyer's perspective. A list should be created listing everything that a buyer might find in your business. This list should contain both the positives and negatives of your store.

Ask yourself: "What makes this store better than its competitors?" You should identify potential risks that could scare buyers. These risks must be within your control and not outside of it.

After you have created your list, order it according to importance. The more detail you provide, the better you can see how potential buyers will view your business.

My course teaches you how a potential buyer can back into your income by water analysis, and how to analyze market data with a demographic analysis. It is crucial to understand how potential buyers will view your store in order to determine how you can maximize its value.

Step 3 - Increase Value and Reduce Risk

Once you have calculated your SVM take the steps to improve the criteria upon which the multiplier is based. The SVM will be affected if the lease has less than a year remaining. You can negotiate a longer, more stable lease with your Landlord and increase the multiplier by taking the time to do so. The SVM could also be improved by replacing or upgrading old equipment, as well as adding more amenities.

Once you have identified the major risks in your store, you can begin to address them. You can make a list of three things that you can do to lower a buyer's risk. You might be able to secure a maintenance contract to fix your machines and stabilize repair costs. You could also increase the ancillary income of your store. Shopping around could help you lower your insurance costs. You can also reduce your gas consumption by buying a new boiler.

Preemptive actions that reduce the buyer's risk or create value will increase your business's worth and in many cases, will put more money in your pockets each month. Even if you don't plan to sell your business in the near future, it is a good time to start your business. It's impossible to predict what life will throw at you, so being ready will ensure that your business is worth top dollar.