[This is the sixth in a series of early blog posts documenting the purchase process of our first laundry back in 2014. Enjoy.]
I’ve been waiting to write this post for months. But, frankly, I didn’t even know what I would be writing when the time finally came. Would I be explaining how the business deal fell through, and why? Or would I be an excited new business owner, telling the tale of how it all came together in the end?
First, buying a business is not for the faint of heart. During the last 14 weeks, I’ve had…night sweats, heart palpitations, stomach cramps, laughter, tears of joy, bouts of sadness and pity parties. And at times, those all came in a single 24-hour period.
Truthfully, if we had known in advance the emotional exhaustion that would come during the buying process, we may have thought twice about embarking on this adventure. But thankfully, we don’t know what lies ahead in life, and I believe that keeps us from bailing out on opportunities that, while temporarily uncomfortable, will ultimately be a blessing.
Here’s How It All Went Down…
A few years ago, my husband and I daydreamed about owning a semi-passive business while we continued to work our day jobs. Residential real estate, an online store, a laundromat and a self-storage facility were all ideas that were tossed around. And while there are certainly exceptions to the rule, for the most part, it takes money to make money.
We made good money, but we had a fairly substantial chunk of consumer debt and little to no savings.
We spent several years getting out of debt and then saving nearly 60% of our income. Fast forward to the end of 2014, and the semi-passive business idea popped up again. But this time was different. We had money!
On a fairly uneventful night in mid-November 2014, I went online looking for local businesses for sale and found www.BizBuySell.com. I clicked the link, and started looking around. Would anything meet our semi-passive criteria? I restricted my search to narrow down the results, and as I scrolled down, I saw an ad for an unattended, self-service laundromat. It was listed for $129,500. Hmmmm.
The ad didn’t provide an address, but I could hardly believe what I was seeing when I realized that the pictures in the ad were taken at the laundromat in the shopping center less than a mile from our house. Could it be?
I sent an inquiry to the Listing Broker on the ad, and he got back to me the next morning. Yes, it was still for sale. Yes, it was the one less than a mile from our house. We signed a non-disclosure agreement (this meant we couldn’t discuss the specific details of the business with anyone) and the broker sent us the information sheet.
The Art of Negotiation
I won’t go into the painful minutaie of how the deal finally all came together, but there was a LOT of negotiating. Many people are involved in the sale of a business, and they all want to make sure they not only get what’s due to them but they want to be sure their investments or assets are legally protected as well.
This involved more contracts than I can count. So we went back and forth with the landlord, the finance company, the seller, the broker, the insurance agent…you get the idea. During the entire process, we stood firm that while we wanted to purchase the business, we were not emotionally attached to it. We were very clear that we would not pay more than the business was worth, that we would only pay a fair share of the closing costs, and that at any point we could walk away without hesitation.
As a result of our negotiations, we settled on a purchase price of $105,000, which was nearly $25,000 less than asking.
We Have a Deal…Or Maybe We Don’t…Or Maybe We Do…Or…
Even the night before our close date, we weren’t sure which way this deal was going to go. There were discussions going on behind the scenes well into the night that could have derailed the whole thing at any moment.
Finally, late in the evening on Friday, February 27th 2015, we heard the news. We would be closing the following morning.
At 5am the next day, we rubbed the sleep from our eyes and met the seller at the store. He handed us the keys and went over some final ‘need-to-know’ items. At 6am, we heard the front door open. It was the first customer of the day, and as he dropped the coins into the washer, we both realized we had made our very first sale as business owners. It felt fantastic.
Technology is Super-Cool-Awesome
We’ve now owned it for a full week as of today, and as I sit in a local Panera café writing this on a sunny Saturday morning, we’re making money. When we go out to catch a movie tonight, we’ll be making money. Before we even wake up tomorrow morning, we’ll be making money. We haven’t had a single customer call, and in the first 6 days, we pulled in $2,476.
Not bad for a business that:
- Has doors that lock/unlock automatically at opening and closing
- Has an alarm system that automatically arms/disarms at opening and closing
- Has a lighting system that is turned on/off automatically at opening and closing
- Has an on-site change machine to provide change for customers
- Has equipment that is completely customer-operated
- Allows for 24-hour surveillance via any internet-enabled device
Isn’t technology amazing?
The store opens and closes completely on its own. There will certainly be times when we need to go in and do some repairs or maintenance, but for the most part, we will go in and collect money twice a week and to check on things. The store even has a janitorial service that comes in and cleans every night of the week and makes sure everything is ready for opening the next day. It’s also nice that we are paid immediately in cash, so no invoicing or billing to do.
Alright, this post is long enough, so I think I’ll save the number-crunching for next round. But I promise to show you how everything shook out at the end, how much we finally invested, what our projected incomes and profits will be, and the annual return on our investment.
I’m also looking forward to showing you the before and after pictures of what we’ve done with the place, and how inexpensive it was. Later I’ll talk about our plans for the future and how we’re going to incorporate this business into our early retirement plans.
There’s no doubt this has been a wild ride so far. But we’re excited and hopeful. Business is going great, we’re already remodeling the store, customers are excited for the changes and things are going even better than we imagined.
Until next time…