Why is the evaluation process so important for potential Buyers?

The chance to catch mistakes is before you own the business. Fundamental to any business valuation is the awareness that the current owner may value items that are unrelated to your objectives and concepts of value.

Take me through the evaluation process. The due diligence process should include:

• An experienced professional to assist in the evaluation process.
• An evaluation of the lease. A bad lease causes more problems than any other factor in the ownership of Laundromats.
• The roof and the sealant around the venting should be inspected as to its condition.
• The ceiling tile should be viewed for stains from water leaks, especially near the air coolers.
• Inspection of the equipment should be done, including the collection of serial numbers.
• Serial numbers should be used to verify equipment production dates by contacting the manufacturers.
• An experienced repairman could inspect the equipment.
• A professional inspection service should be used to verify code compliance, mold issues, and ADA compliance of the site.
• The floor should be inspected to ensure that the concrete is not lifting/sinking and the tile is not cracked, broken, or worn.
• The surrounding neighborhood (up to one mile) should be searched for other laundromats. Laundromats are routinely built, and others go out of business in most urban neighborhoods.
• Nearby apartment laundry rooms should be visited, noting vended prices and conditions.
• The local city building department should be visited to view their file on permits, certificates of occupancy, age, and construction information.
• The building department staff should know if any new laundromats are in the planning phase.
• Inspect the neighborhood around the site to find any available empty commercial space suitable for the construction of a laundromat.
• Call the broker listed on any “for lease” sign to compare current rental rates and information on upcoming competition.
• Ask the local police department for input on crime in the neighborhood.
• Three years' worth of income and expenses should be obtained from the seller.
• Demographic study is advisable.

What’s the best advice you would give a Buyer?

Learn from various sources, including books, this web, and professional advisors. You’re investing your money, so never get so excited to buy that you fail to read each document.

Anything Else You Help Me Understand?

How do you decide what to pay for a laundry? What are the keys to that process? Demographics? Store condition? Fair price to buy? Costly Mistakes? Common Mistakes? And so many more questions that I can answer for you.