💥 You Don’t Make Money When You Buy. You Make Money When You Buy RIGHT.
Let me hit you with some truth right out of the gate:
You don’t typically lose money in the laundromat business because you made a bad decision after closing…
You lose it because you made a rushed or uninformed decision before the ink was dry. At least that is typically what happens in our industry.
Based on my 15 years in the industry and about 7 coaching awesome folks like you through the process, my assessment of losses is simple. One of the 2 best ways to lose money is to overpay when acquiring a laundromat.
Buying a laundromat isn’t just signing a lease and turning on the lights, it’s a complex investment with a hundred moving parts. That’s why this month’s edition of Laundromat Millionaire Insider is all about mastering your due diligence game.
Whether you’re a newbie about to buy your first store or a seasoned vet looking to expand your empire, this checklist is your blueprint.
🧠 12 Must-Hit Due Diligence Points Before Closing the Deal
1. Financial Documentation
Dig deep. Review 3–5 years of balance sheets, tax returns, and cash flow reports. Look for revenue consistency, seasonality, profit trends, and sneaky expenses that could eat your margins. This can be difficult as most laundromat operators do not keep good books. This doesn’t change how vitally important it is though.
2. Lease Agreements
Your lease is your foundation. The adage is true in the laundromat industry- Your laundromat business is only as stable and predictable as your lease. Analyze every clause—rent escalations, renewal options, exclusivity rights, and restrictions on use. Bad leases kill good businesses.
3. Equipment & Inventory
Take inventory of everything: washers, dryers, changers, vending machines, card systems, soaps, laundry bags, brooms, tools, etc. If it’s supposed to be included in the sale, it should be itemized. If it isn’t is writing, it didn’t happen! Evaluate age, condition, and maintenance records. Know what you’ll need to repair or replace—and when.
4. Customer Base & Revenue Streams
Who are your customers? What are they buying? From self-serve to wash-dry-fold, vending to drop-off, and even pickup and delivery—break down the revenue mix. Demographics matter!
5. Operational Performance
Shadow a shift or three and if you have a strong team currently in your other locations, ask your best employees to shadow a shift or two. During this time, I encourage you to look for inefficiencies but also look for clever ideas that you can implement into your operations. Watch the workflow. Are customers frustrated? Are attendants efficient? You’re buying a business, not just machines.
6. Competition Analysis
Know your battlefield. Who are the other players? What do they charge? What do they offer that this store doesn’t—or vice versa? What are the current market differentiators and how will those things change as you implement your strategy and model?
7. Regulatory Compliance
Luckily, we’re not an over-regulated industry but this is still important. Check licenses, safety permits, ADA compliance, and environmental codes. A surprise violation can cost you thousands and kill momentum.
8. Legal & Contractual Obligations
Review all legal documents: service contracts, equipment financing notes, and employee agreements. In fact, I recommend an in person meeting with each vendor they are currently using. Time consuming? Yes. Invaluable in the research phase? ABSOLUTELY! Also, check for pending lawsuits or HR landmines.
9. Marketing & Branding
What’s the brand’s reputation? Yelp reviews? Google ratings? Social media activity? A good brand is an asset. A bad one needs rehab or even a complete tear down. If you aren’t aware, Carla and I are co-owners at LaundroBoost Marketing company with our co-founder, Brett Lyon. The team at LaundroBoost is happy to assess the current situation and see where we can help.
10. Insurance Coverage
Confirm that the store has the right coverage, property, liability, workers’ comp. Look at claims history and coverage gaps. Be sure to consult experts in this field and ask them to review the current coverage. Our team at Laundromat Millionaire Insurance can help you assess this for no charge.
11. Employee Management
Who’s running the store day to day? Review job roles, turnover rates, and overall team structure. Weak management? That’s a red flag. There’s no right or wrong answers here except for the truth. Be sure to have a very clear picture of the “state of the business” so you know exactly what you’re buying.
12. Future Growth Potential
Ask the big questions: Is there room to expand? Can you add pickup/delivery? Are prices too low, allowing you to easily add to the bottom line? Are there underserved neighborhoods nearby? Success isn’t just buying what exists, it’s buying into what’s possible. At Queen City Laundry, when we acquire a new location, we are basing our valuation and purchase price on where the business stands right now. In other words, that the fair value, but WHETHER we buy the business or not, is typically based on the potential opportunities that we see in the market. Note: we don’t pay extra for those opportunities, but we are more attracted to the location, if we see more potential.
✏️ Additional Expert Tips
Consult Industry Professionals
Don’t go it alone. Partner with laundromat-specific coaches, accountants, legal pros, and consultants who know this business inside and out. A few thousand bucks up front can save you a few hundred thousand in regret.
Conduct a Site Visit
Walk the store like a customer. In fact, take your own laundry in and become a secret shopper. Check the physical condition, vibe, traffic flow, and equipment functionality. Are the lights flickering? Floors clean? Are customers happy? It’s not just about the numbers—it’s about the experience.
🤔 Final Words from Dave
I say this all the time, and I mean it more than ever:
“If you skip due diligence, or just simply go it alone, you’re not buying a business—you’re buying a box of surprises.”
So slow down. Ask the hard questions. And when in doubt? Get help. My team and I have helped hundreds of entrepreneurs do exactly this—the right way.
Stay smart, stay focused, and stay passionate. You’re building something amazing—and I’m here for every step of the journey.
If you’d like to learn more about our different one-on-one coaching programs, learn more here. https://staging3.laundromatmillionaire.com/one-on-one-personalized-coaching-2/
Please always know that Carla and I are rooting for you.
You can do it. We can help. 🙏❤️
– Dave
