The problem seems to come up in here about every other day that having a wood working business and a positive cash flow seem to be at odds with each other. I think I have found an answer to this conundrum, at least for me. I have been looking to buy a business for several years since my main money maker ( not wood working) is on a downward slide. People have said that I should focus on wood working as my livelihood because I seem to do a halfway decent job at it. Great! but doing this would take about 3 years of income out of my war chest that HOPEFULLY would produce a break even point after year 3. I’m not a gambling man. So in my search to buy a business I chanced across one that has a positive cash flow ( very positive when you consider its all cash) and requires at the most 8 hrs a week of attendance. The business is a laundry center. The net cash flow to the owner currently is easily sufficient to maintain my lifestyle which means I can concentrate on wood working and still eat and keep the lights on. This fact will sure help the “Wal-Mart Pricing problem” that woodworkers always seem to face. It may not work for everyone , but its an answer
Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
” If the women dont find you handsome, they should at least find you handy……..yessa!”
Replies
I have toyed with a similar idea ever since I visited a laundry center in Boone, IA some years back. It was set up with a large screen TV, a game area for kids, and a wash, press, and fold service. I always felt this could be further improved upon by incorporating a comfortable reading area, a small food counter dispensing snacks, light sandwiches, and ice cream and soft drinks. A friend even suggested an attached tanning salon or massage parlor (the legal kind!).
Laundry takes hours to get through sometimes and most laundromats are nothing less than torture chambers when it comes to making the patrons comfortable.
Of course, this requires someone to be on site at all times.
Rennie
PS - Quando Omni Flunkus Moratati
A man is a fool if he drinks before he reaches the age of 50, and a fool if he doesn't afterward.
Frank Lloyd Wright
Edited 8/30/2006 9:34 am by Rennie
Edited 8/30/2006 9:57 am by Rennie
If I were you I'd hop on that one, fast! I have exactly the same ideas especially the tanning booth ( who does most of the laundry??....women! who does most of the tanning??.women.......marketing 101). Im prevented from dispensing food because of the lease terms but the Wash dry and fold has very large upside potential. A little mass mailing in the area with " specials for the weeK maybe some wy-fi for those with laptops....... big screen TV's at least 2 and....comfy chairs, free coffee and dry cleaning pick up. Make the laundry experience a pleasant one. All the while im home listening to the quarters drop and the cherry chips hitting the floor because this laundry I am buying has 5 part time attendents.
" seek and ye shall find"................ Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
Dispensing food might be a no-no, but what about vending machines? Another source of income.Rennie
A man is a fool if he drinks before he reaches the age of 50, and a fool if he doesn't afterward. Frank Lloyd Wright
"All the while im home listening to the quarters drop and the cherry chips hitting the floor because this laundry I am buying has 5 part time attendents." Attendants who need supervising no doubt. And machines that break. My current business (non-WWing) is located next door to the island's laundromat. Those machines don't fix themselves, LOL.
Five part-time attendants need some overseeing, at the very least by camera, and some in-person training. I doubt that there's any business with employees that takes just a handful of hours per week of the boss' time. Sorry, I've run my own business for way too long to believe that.
forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
Edited 8/30/2006 11:57 am by forestgirl
dont recall asking you to believe anything
the current owner shows up onve a week to collect the money
Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
"dont recall asking you to believe anything" oooooo, touchy touchy.
If he just shows up 1x/week to collect the money, he may not know what % of all the money he's actually collecting. Notice I said may not know.forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
You see, this is where we differ. You seem to want to squeeze the lime for all the juice it can muster, and for good results, squeeze them again. I, on the other hand look at a business like this and say " well I know I have enough for a Marguerita here, let's drink and think about squeezing more lime juice as time goes on". Verdad?Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
"You seem to want to squeeze the lime for all the juice it can muster, and for good results, squeeze them again." No, not really. I am simply aware of how important the interaction between employees and customers is, and how many ways it can go wrong if left to chance. And also aware of how strong temptation can be with an absentee boss. With all the bells and whistles that were described in the earlier post, it's more than just a laundromat business. Sorry to rain on your imaginary parade, I'll bow out and leave you to your dreams.forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
Cherryjohn,
I have several friends that spent 30 years manageing complex organizations earning good money, working 70-80 hours per week. After being forced out they bought existing businesses. They all claim they were fools working for someone else, the work is less and the money better. Good businesses can be had, the current owners are just tired and want to retire. I hope you find one of those....if you find two let me know..lol
Actually that is exactly the situation here. The guy wants to spend more time enjoying life. Doesnt want to be a slave to a couple businesses ( he had 3 laundry centers and he sold the other 2 as well). He also owns a machine shop and he is all of 32. Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
cherryjohn,
Wow...32, he must be exhausted the poor lad...lol
I used to get a monthly mailing form these folks http://www.vernonmartincid.com/businesses.htmPS. I picture you pulling up on your motorcycle and filling up the bags with coins...and riding off into the sunset...it's a beautiful thing..
Edited 8/31/2006 9:59 am ET by BG
My brother has run two laundromats (use to have three) for the past fifteen years and I worked with him for six of those years. They're both attended, full service, drop off laundy and drycleaners. It kills me when people think you don't have to work at them and you can just drop by once a week to collect the money. Problems arise on a daily basis and if you're not there to fix the problems, then the customers will go somewhere else. You better be more of a plumber than a woodworker because the machines are constantly breaking down and you'll spend all day trying to figure out whats wrong with them. Even if you plan on buying all new equipment right off the bat, you'll only have two weeks before someone will break a machine. People don't care if they don't own it themselves.
Laundromats are going out of business all over the country because of rising energy costs. You have to pay the big three every month. Gas, Electric and Water. Each will be about $1500.00. Plus, you'll have to pay rent, salaries, supplies, parts, etc...and TAXES.. that's a lot of bills to pay from people sticking quarters in a machine....
Tell me and I'll forget, show me and I'll remember, but let me try and I will understand.
Edited 8/31/2006 10:54 am ET by mvflaim
Fantastic! Someone who has factual information about running one of these businesses. Hope Cherryjohn read your post. I had to smile when I read in his last post "[the seller] Doesnt want to be a slave to a couple businesses ( he had 3 laundry centers and he sold the other 2 as well)." That sentiment doesn't square with the idea that all you have to do is show up 1x/week to pick up the wads of money.
You mention "Laundromats are going out of business all over the country because of rising energy costs." When, in this thread, I started seeing stuff about them providing UPS and other non-related services, I thought "UhOh, cash flow must be down." That's the main reason an owner would complicate his/her life with something that's totally unrelated to their main business. Every little extra service you tack on requires separate training for employees, more troubleshooting, a separate supply chain (if it's reselling something), more complicated tax reporting, and more (and smarter) employees. The list goes on and on and on. And, it's very hard to get enough customers for those other services -- the general public doesn't connect such disparate things (tanning booth and laundry service).
As long as I'm shooting holes in things, how many people who are forced to do laundry at a laundromat (generally because they can't afford their own machines, or live in apartments that don't have hook-ups) can afford to pay for tanning, massage, etc. Or even have a laptop. Sure, they'll be glad to use your free wi-fi, but that doesn't add any money to the owner's pocket. Vending machines are a plus, but that's the only thing I've seen listed above that makes any sense at all.
Today is my last day at my own store -- sold it to a young whippersnapper who will hopefully survive the ups and downs of retail. If landromats were a gold mine, I'd be out lookin' for one yesterday, LOL!
I said earlier "I'll bow out...." I lied.
forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
I'm probably being oversensitive, but I feel I must defend my previous post....at least a little.
I have toyed with a similar idea ever since I visited a laundry center in Boone, IA some years back. It was set up with a large screen TV, a game area for kids, and a wash, press, and fold service. I always felt this could be further improved upon by incorporating a comfortable reading area, a small food counter dispensing snacks, light sandwiches, and ice cream and soft drinks. A friend even suggested an attached tanning salon or massage parlor (the legal kind!).
I thought these were all good ideas (though I was not too sure about the tanning salon/massage parlor) as they helped people pass time and none really required a great deal of additional capital or manpower to implement. True, most people who frequent Laundromats do so out of financial necessity, but not all. Even so, there is nothing in the above list that would be 'cost prohibitive'.
As for the tanning, when it was suggested to me it was because the thought was that a college town with a site close to dorms might be an ideal location. In such a case one could link the two and MAYBE make a go of it. The college town scenario would also make wifi and excellent side line, though I think a minimal charge would be in order.
All in all, although I think laundromats come pretty close to a good 'absentee' owner business, there is still much to watch, manage, fix, and pay for. "Picking up the $$ once a week" is, without a doubt, an over simplification.
Lastly, I'd leave the dry cleaning to the big guys, unless you just serve as a drop and pick point. Too many issues with hazmat and environmental concerns - huge liabilities.Rennie
A man is a fool if he drinks before he reaches the age of 50, and a fool if he doesn't afterward. Frank Lloyd Wright
Rennie, you're showing significant sensibility in the way you're thinking about that particular situation (college town and all that). Obviously, you wouldn't fall for the easy-money picture that a seller would want you to swallow. Whether or not some of the other add-ons would be worth the money and trouble......hard to say. Might not hurt to try.
My experience being in 3 different businesses over the last 20-some-odd years is that people who have never run their own totally under-estimate the work and expenses involved and over-estimate the profits made. I just couldn't help myself when the utopian outlook foisted itself into this thread. It's something that us business-owners joke about frequently with each other.forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
You see I do believe youre right when you say a laundry mat is as close to an absentee biz as you can get. However I never said it was my plan to just show up and collect the money. I said its the current owners way of doing business. Im just glad its a business that you can attend to about 3 hrs a day and do something else associated with that biz ( marketing and stategy plans seem to come to me at 60 mph on my bike) or do some woodworking if you have a client. Some of the other ventures I looked at were 12 hr days 7 days a week.
As far as laundry centers closing......ok..............but one has to wonder where all those apartment folks do their wash. I think the EPA would have a problem with them walking down to the local stream and slapping the shirts on a few bolders. Before anyone chimes in with " but apartments today all have laundry services, go to the lower rent sections of town and see how many you find. Even the high rent places have one washer for about every 10 people in the complex....when they are all working. According to my business broker pal and also a guy I know who is in the biz of selling commercial washers and dryers to Laundry centers, when these places come on the market they are gone! and not out of business gone either.
But again, if you dont want to buy one and want to do something else......go right ahead. I never , ever said this was for everyone did I?? Its a cash flow supplement for me is all i said. So my parade seems to be still dry drspite the aforementioned rain. Oh well
How about them Patriots huh!!Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
John,
I sincerely hope you do well with this and that you come back a year from now with loads of good things to say.
As for me, I'm working in a job I really like where a I am grossly overpaid and have great benefits. I think I'll stay right here for a while!
PS - I've vacationed a couple of times in your area - absolutely wonderful place.Rennie
A man is a fool if he drinks before he reaches the age of 50, and a fool if he doesn't afterward. Frank Lloyd Wright
yep, its not too bad.Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
John,
From one New Hampshire man to another, I say good luck! ...and be sure to accent your laundry mat with some of your own woodworking. Not all of the people using the laundry mat might not be able to afford what you've got, but they may be related to someone that is.
Good Luck,
Darryl
I can make inexpensive as well as not so quite so inexpensive stuff. I keep thinking about that wooden toy idea. Simple stuff out of inexpensive wood. takes no time at all to make and so what if I only get $5 or so for one? Sometimes I think I am adding this venture to my other quiver full of ventures ( We have 4 independent income generators not including this laundry center and the wood working I have only been dabbling in) because I like to look at wood working as an art as opposed to a job. One thing I have focused on in the last 10 years is not to be totally reliant on any one income stream. Makes the idea of "consolidation and downsizing" easier to live with. Before anyone chimes in with " with all those other things when will you have time to do anything"..............I work right now about , maybe 8 hrs a week............. maybe.
Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
Edited 9/1/2006 9:04 am ET by cherryjohn
"that's a lot of bills to pay from people sticking quarters in a machine...."
Not if the quarters amount to somewhere in the vacinity of 54,000 quarters each and every month and the total expenses ( verified by bills) averages only 32,000 quarters . You seem to imply that I am just going into a business totally blind. I have been running my own business now for 15, years and I do like to think that I have made it this far by not doing stupid things. Unfortunately my primary business is closely associated with a deminishing business segment in the northeast and that is paper making. So in a quest to do what I like to do and stay afloat and not be a dreamer like many in here seem to be Im looking for anything ( legal) that generates cash and also provides some time to create.Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
If the business is as good as you say it is: Why is selling it rather than hiring a kid to pick up the quarters?22,000 quarters/month is $5,500/month. $66k/year. Unless you are paying $600k he is better off keeping the business. And for $600k you are buying a job.
Id say ask him. Sometimes people just realise that enough is enough and more isnt always better. There is a big difference between being rich and being wealthy. You can work 70 hrs a weeK and make $300,000 a year or you can work 20 hrs a week and make $80,000 a year. If you make enough to cover your needs and you have time to spend on the family and the things that really make life worth living, thats rich. The guy seems to want to move from 4 seperate businesses ( after selling this he will be down to only one) and spend more time with his girl friend and just living life. Simplify, simplify....true in good engineering as well as a good life
Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
Edited 9/1/2006 9:05 am ET by cherryjohn
to cherryJohn,
Very well said
not sure how that happened
my keyboard made a mistake
dusty
Edited 9/1/2006 11:28 am ET by oldusty
Of course if all one had to do was drop by every now and then and pick up the money and make a bank deposit there would *rarely* be a reason to sell such a business. It would be like chopping down a money tree in your own back yard.
Ask to see the tax returns - income tax returns and maybe the sales tax returns. See what this guy is reporting to the taxing authorities. There's some fudge in there for sure, but you'd be a fool to pay him for it. This is where under-reporting income hurts the seller of a business, especially a cash based business.
Liquor stores or laundromats, always a great cash crop.
Oh, and I'm a cabinetmaker too.<G>
Interesting Idea! When I was a kid growing up, the next door neighbor had a couple of laundromats. About twice a week at his leisure he would interrupt his golf game long enough to go pick up the money. He lived modestly but comfortably in a very nice old brick home. He NEVER WORKED a DAY in HIS LIFE.
Cherryjohn,
Many woodworking business's have adequate cash flow without taking on more than one business to help feed the short comings of the wood shop business.
There are many different opinions on the subject , but personally I usually take a 1/3rd to 1/2 deposit on custom work . On very large or long jobs I set the contract up to allow for draws during the construction time . I have been on several jobs for over 6 months at a time .
We don't ask the customer to finance our business's so why should we finance their jobs . The deposits and draws become cash flow to a small shop .
Operating expenses are a real factor in mfg on any scale . Things break or need replacing as well as servicing , all these and more make up part of our overhead costs .
dusty
While your point is well taken, you didnt seem to grasp the idea that the other business isnt so much funding the customers jobs as it is funding me along the road to recognition. Word of mouth isnt everything in this business but my guess is its at least 75%. This recognition over time will enable me to get people in the shop who will pay a fair price and give you the deposit and subsiquent payment I need. How many talented guys do we see in here all the time that dont get to live the life they want because they start out underfunded and idylic? Thats not my plan! So like I said right from the first post....this may not be for everyone, but it sure looks good to me. You want the purist approach, wood working and only wood working..... you go right ahead. Hope you make a bundle. To me the important thing in this craft is, like ant artist, to create and hopefully get a paying wage. If not...well I still have created.and lived well.Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
I'm well aware of the starving artist syndrome , as far as word of mouth and reputation imo it is more like 95% of what makes us a success and keeps us that way .
( a typical referral )
Call this guy I know named John , he makes beautiful Chairs and Furniture beyond comparison , don't worry if his machine answers Cherrywood laundromat and woodworks , I can't come to the phone right now I'm doing some plumbing .
all kidding aside I have seen a laundromat with a UPS mailing service as well .
dusty
Edited 9/21/2006 10:29 am ET by oldusty
I like that UPS idea. The wood shop and the laundry will, of course, have different numbers. Im also thinking I might get one of those new....well, sell phones, I think they call them. Heres another idea that I had yesterday after meeting with the owner.................... wooden toys. Simple to make inexpensive materials and ties the woodworking and scrubbing bubbles all togethere dont you think?Wicked Decent Woodworks
(oldest woodworking shop in NH)
Rochester NH
" If the women dont find you handsome, they should at least find you handy........yessa!"
Honestly John , somebody with your talent and skills should stick to what you do best , if earning a living is important to you , and I think it is .
Also a wife with a good job and insurance benefits helps as well
Make the toys as donations to needy kids and such
best of luck
time to go make dust
dusty
dusty,
you make some very good points about cash flow. it's important, and there's no need for any of us to finance a customer's job, esp. long jobs or contracts.
Many businesses though will offer financing to ease the initial large amount of money, and make a tidy profit on this. A few years ago, GMAC announced it made more profits than its' manufacturer GM.
Something that maybe professional cabinetmakers might offer.
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