How Do You Find a Reliable Laundromat Advisor?
By: “Laundromat 123”
If you’re new to the business and seeking some reliable advice on how to make a wise and profitable investment in the Laundromat industry you are likely facing a little confusion on who are the people that you can rely upon for straight up information and help.
An often chosen “helping hand” is an employee of a Laundromat equipment distributor or equipment manufacturer. There are many qualified individuals that hold these positions and can be quite reliable. The downside is that there are also many individuals who are motivated only by earning a commission on a sale of equipment regardless of the ultimate benefit you will receive. CAUTION IS ADVISED.
A second source of advice and assistance is a licensed business/real estate broker or licensed business sales agent. Again, in this instance, there are many honest, reliable sales agents who are experienced and have quality information to impart. Unfortunately, they are commission-based persons who must convince you to buy in order to earn a living by their skill in encouraging you to purchase. Unfortunately, there is no national registry of Laundromat brokers, sales persons or agents listing their history of performance or the number of times they have been named as defendants in lawsuits related to their past business dealings. CAUTION IS ADVISED.
A third source of information is found on the internet is sites such as YouTube where “influencers” have monetized their marketing skills and sell you information gathered from a variety of sources obtained from other folks or relaying a variety of analysis programs that are extremely limited in scope. There is no evidence that the vast majority of these “influencers” have actual practical experience in the Laundromat business or are limited to regional knowledge only with marginal application to any universal reality of the business. “You can make millions” are often cited and the resources provided are frequently without actual merit. EXTREME CAUTION IS ADVISED.
A fourth source of advice available is the national trade association the CLA. Membership allows access to an extensive library of information including helpful white papers on specific Laundromat topics. They also produce a monthly trade magazine named Planet Laundry. An additional magazine with reliable information is the trade magazine American Coin-Op. In house writers and skilled contributors have for decades provided helpful insights into aspects of the Laundromat business. STRONGLY RECOMMENDED.
A fifth group of people frequently cited as important to provide Laundromat investment information are lawyers, architects and CPA practitioners. These trades are skilled in their own specific fields but seldom in the laundry business; it is important that all advisors have actual experience in Laundromats. Those skilled in these fields with historical Laundromat experience are few and difficult to find in most regions of our country. It’s best to rely on these folks to provide due diligence advise only in the specific areas in which they are skilled. MILD CAUTION IS ADVISED.
A sixth group of advice is provided by paid consultants, advisors and successful owners with national experience. Their information is provided directly to the potential buyer and is not dependent on earning a commission by selling you anything. They have a range of experience and expertise and should be interviewed to determine if their skills match your information requirements. Their prices range wildly and the cost does not necessarily reflect on the merit of the advice you will receive. MILD CAUTION IS ADVISED.
In general, you should work with an advisor who has a fiduciary relationship with you. By definition, a fiduciary is an individual who is ethically bound to act in another person’s best interest. Fiduciary advisors must avoid conflicts of interest and disclose any potential conflicts of interest to clients. Full disclosure is important including all cash kickbacks or fee your advisor might receive for a recommendation to an insurance agent, loan originator, equipment company, contractor or repair person.
If the advisor you retain has not been hired as a fiduciary and pushes investment opportunities on you instead of presenting factual alternatives and both sides of an investment you should find an advisor who has your best interest in mind. Take the time to interview at least a few advisors before picking the best match for you. Determine the questions you have before interviewing your advisor to ensure they have the history, knowledge and skill to advise you on the questions important to you. Be sure to understand an advisor’s strengths and weaknesses.
It's perfectly appropriate to inquire of your potential advisor about their licenses, experience, length of time in the business, and credentials. This is not an easy process, but you’re often considering investing hundreds of thousands of dollars based on the advice provided by others. Move slowly and with caution and trust yourself. Remember, Laundromats are a business opportunity not a business profit guarantee.