You own a Laundromat, but do you have the right professionals to support your investment?
You need a team of professionals to guide you through the challenges of operating your Laundromat, (or frankly any business). The characteristics of most successful Laundromat owners are independence, resourcefulness and self-sufficiency. These successful operators were born with wrenches in their hands and think nothing of replacing drum bearings themselves. These are real individualists. But are they CPA's? Do you know all the nuances of Insurance coverage and tax law? Do they know how to maximize your profit potential? By trying to "go at it alone" can be expensive, time consuming and takes you away from your core business which is operating Laundromats and making money.
Your Professional Tool box needs to include professionals who can guide you through the obstacles of operating and running your own business. These professionals are there to help you achieve your financial goals with the least amount of hassle and litigation. Your Toolbox contains various tools to performing a specific task. For example a Philips Head Screw Driver is only used for driving in screws. It is very useful and the proper tool for that task but you would not use the screw drive to tighten a bolt. Your Professional Toolbox has some expensive tools and also some tools that are Free. But choosing the quality of your tools (or Professionals) is not the area to skimp and save a few dollars. You get what you pay for...If you want the best advice and guidance, pay a few extra bucks and get a seasoned professional who can help you with the correct information. Good professional advice is always money well spent.
You Professional Toolbox should contain the following:
- Insurance Broker,
- Financial Planner,
- Commercial Real Estate Broker,
- Laundry Equipment Distributor.
A lawyer is especially important in this litigious (sue everything) society. Everything we do with our business could lead to a potential law suit. Lawyers are an excellent resource for reviewing leases and performing lease negotiations. Lawyers are necessary in the purchasing of real estate and purchasing additional Laundromats. The job of a lawyer is to keep you out of trouble and to minimize any potential liability.
Accountants are the guys who help you keep what you earn. The classic line is "it is Not what you earn, but what you Keep". The accountants are watching your back and making sure you can keep as much of your earnings as possible. The financial "books" for a Laundromat are incredible easy, but there are lots of ways to save money in taxes too. Your accountant is an expert in ADA deductions, Bonus Deprecation and the Section 179 (just to name a few) which allows you to keep more of your hard earned money. Do I use my accountant for everything? No. But I talk to him at least couple of times during the year and we have a big sit down meeting in December to plan our tax reduction strategy for the past and upcoming year. Every time I am thinking about a new Laundromat or investment, one of my call is to my accountant to see how best to structure the deal to maximize my profits and minimize my tax obligation.
Your Insurance Broker can be your greatest resource or your biggest liability. You need to have insurance coverage just in case bad things happen; and they usually do. My insurance broker has a law degree and has been in the insurance industry for the last 35+ years. Bob is a tremendous resource that helps me with all sorts of questions from workman's compensation claims to my attendant who operates her own business in my Laundromat (and whether we need additional coverage for this person). On the other side of the coin, I know of a Laundromat owner whose brother-in-law was his insurance agent. The brother-in-law forgot to secure workman's comp insurance and there was an accident with his attendant. So far the Laundromat owner has spent over $75k in cash on expenses is in big time trouble with the state and now he has to sue his brother-in-law to try to get his money back.
Your financial Planner is the guy who looks at the big picture, while your accountant is the guy who keeps an eye on your money from year to year. The financial planner is instrumental in making sure you have a will, a health proxy, and a living will. You financial planner is also the guy who makes the strategic calls for your long term financial well being. He is the secession planner and the person responsible in making sure that you will be able to pass your wealth on to your kids. Having a good financial planner helps achieve your future financial goals.
Commercial Real Estate Broker
A commercial Real Estate Broker is essential if you plan to sell or purchase or lease more Laundromats. This is the professional who can keep an eye out for your next Laundromat location. Usually all it takes is a luncheon meeting to let them know what your ideal Laundromat location looks like and an ideal geographical area. Even if the broker has nothing available, this is a long term relationship that can be a great wealth of information and costs you very little. The Real Estate professional is familiar with the current market trends and the comparables values within a specific area. This is a Free resource that intimately knows the commercial real estate market and this is an important tool for your toolbox.
In the old days I remember my father walking into the County Trust bank and asking the manager for a $100k loan and being approved on the spot. Now a day you need a "Relationship Manager" and not a bank manager. I was informed by my Relationship Manager and the "store" (my local bank) is good for "retail" (meaning small) transactions but if I needed anything special to please call him on his cell phone and my Relationship Manager would personally help me out. I have personally found that the local bank manager has less and less responsibility and is more of a supervisor of the tellers than anything else. Welcome to the new reality in banking. Building a Credit Line and educating a Relationship Manager takes time. HK spent 6 months working through the forms, the process, and the underwriters, but now we have a significant line of credit and have started to work on paying off our high interest loans with lower interest bank loans. You can always get credit when you don't need it. Now is the time to start to establish a line of credit for your company. That way when your competitor decides he wants to sell his Laundromat(s), you already have the financing established and in place.
Laundry Equipment Distributor
You laundry equipment distributor is probable the least used resource. You remember your equipment distributor when you purchased and set up your Laundromat but when was the last time you talked to them? Why is my distributor important to me? Below are some of the reasons to contact your local (bricks and mortar) laundry equipment distributor.
- Free Resource
- Industry Professional
- Knows the Laundromat market and the industry
- Can assist you with site location and site analysis
- Assist you in financing
- Provide Demographics & Analysis
- Assist in Laundromat Layout & Design
- Provide Technical details and specification of the equipment & their requirements.
- Provide Service & Repairs (when you are on vacation or over your head)
- Provide Energy Savings Analysis (what would the new washers save me?)
- Provide discounted Genuine Replacement Parts
- Industry "go to resource"
Give us (distributors) a call and buy us a cup of coffee and let us talk Laundromats. We are the local experts and I for one, am passionate and love to talk about Laundromats. Distributors visit Laundromats every day of the week and we see the "good the bad and the ugly". If you want to know how to run your store better or more efficiently, ask the experts. If you have a problem with insurance or don't know how to handle a specific situation, give us a call. We probable have seen or experienced the same problem before and can let you know what others have done. Distributors are a valuable resource that is not used just in buying a new washer. We are the manufactures representative and many times have inside knowledge about a particular problem. Building Laundromats has changed in the last 10 years and what was standard a decade ago is history now-a-days. We are always improving and evolving in how we build stores and operate our Laundromats. We span the information divide between the manufacturer, yourself and other Laundromat owners. Don't forget to put us in your Professional Toolbox too.
If you don't have a full set of Tools in your Professional Tool box, go out and find them. The easiest way to find good professionals is to ask other successful businessmen. Ask a fellow Laundromat owner if they could recommend a good accountant or lawyer. Ask your local business group who they can recommend for commercial real estate? By asking a successful businessman in your area you are savings all the initial leg work. Once you have a couple of names, call them and ask them what they would recommend if you were their client. Interview them about their strategy on how aggressive they are with tax code interpretation and make sure that they match your level of risk.
When I look to build my professional toolbox, I do not want to be the smartest one in the room. I want intelligent professionals who are experts in their field and I want people who will tell me "how it is".