Jordan Berry [00:00:00]:
Do you want to lose money, waste time, and regret buying a laundromat? Just make any one of these five mistakes that we’re about to talk about. Because every struggling laundromat owner I’ve ever met has made at least one of them, myself included. Here’s the good news. These mistakes are avoidable if you know what to look for. Let’s dive into the five biggest mistakes that will guarantee that your laundromat loses money. And stick around to the end, because I’ll show you how to avoid all five without losing thousands of dollars, tens of thousands dollars, or, like me, six figures. Mistake number one, buying based on the broker’s pro forma. Look, brokers aren’t bad people.

Jordan Berry [00:00:41]:
In fact, I am a broker in California here, so I feel like I can say this with all honesty. Brokers are salespeople. That means those numbers that you’re staring at on that pro forma, they’re not facts. They’re fictional futures written to make the deal look shiny. Pro farmers are what could happen if everything goes perfect. But the question you need to ask is, what’s actually happening? And to determine that, we utilize what we call the four pillars of due diligence. Now, here’s what the four pillars are. Number one is determine the laundromat’s income.

Jordan Berry [00:01:17]:
No big surprises there. You got to know how much money is coming into the business. Number two, you need to determine the laundromat’s expenses. If you know how much money is coming into the laundromat, you need to know how much money is going out of the Laundromat. And the difference between those two is going to be the net operating income. And that’s the number that we’re going to utilize to determine the value of the laundromat. Pillar number three, you need to know the trajectory of the Laundromat both from the past up into the present, and also from the present going forward. And pillar number four, we want to have an idea of what we’re going to do with this business after we take over and begin operating it.

Jordan Berry [00:01:57]:
So we’re looking for opportunities to add value. Now, verifying all of this stuff can be easier said than done when it comes to a Laundromat, especially if it’s one of the many, many cash businesses where the books don’t match up with tax returns or bank statements or the PNLs. Like this is pretty common in this business. But here’s a principle to kind of keep in mind. It’s not verifiable. It’s not valuable. Let’s jump into mistake number two, overestimating the fixability of a laundromat. You walk into a beat up laundromat and think, this just needs a little love.

Jordan Berry [00:02:32]:
Maybe it’s close to your house and you get excited about it. No, probably. It needs a lot of cash, a general contractor, and a full tech stack rebuild. I’ve seen buyers spend $300,000 plus to fix up a laundromat that didn’t have the right bones in the first place. Because here’s the truth. You can fix machines, but you can’t fix a bad location. Don’t fall in love with the before and after fantasy. Fall in love with the cash flow and foot traffic of the business.

Jordan Berry [00:03:00]:
All right, mistake number three. Ignoring utility efficiency. This one kills your margin slowly. If you’re buying older machines and you haven’t factored in how much water, gas and electricity they burn, you might be leaking hundreds or thousands of dollars a month. Here’s a stat. In a utility heavy business like laundromats, utilities can eat up to 25 or 30% of gross revenue. We like to keep them around 15 to 20% or less, obviously. But if your machines are dinosaurs, you’re not running a laundromat.

Jordan Berry [00:03:30]:
You’re running a public water park with no entry fee. Know your machine efficiency. Know your utility bills. Know how to control them, or they will control your bottom line. Utilities are one of the three largest expenses of your laundromat. So you definitely need to have a plan to manage that expense. All right, mistake number four. No plan for management.

Jordan Berry [00:03:52]:
I’ll just manage it myself. This is classic, and there’s nothing wrong with that. And maybe that’s even fine for you for a while. But what happens when you want to go on vacation? You get sick, you buy your 2nd, 3rd, 4th, 5th location. Most laundromats that lose money aren’t broken, they’re unmanaged. That’s what we call a zombie mat. The trash piles up, the machines stay broken, and the customers stop coming. They don’t want to gamble their quarters away in your machines playing washing machine roulette to see if the machine will start when they put their money in or not.

Jordan Berry [00:04:27]:
You need a plan. Either be the manager or hire and train someone to do it right. Without a real plan, the business will run itself straight into the ground. We’ve systematized how to optimize your laundromat business and set it up to be able to scale that portfolio. If that’s something that you’re looking to do. If you want to learn more about that, check out laundromatresource.com playbook. Okay, let’s jump into mistake number five. Doing it alone.

Jordan Berry [00:04:56]:
This honestly is the biggest mistake, and it’s the most expensive mistake. Trying to figure it out all on your own is the slowest, riskiest, and most painful way to run a laundromat. You’ll waste money on the wrong equipment. You’ll negotiate terrible leases. You’ll hire the wrong contractor, pick the wrong tech and pay double for repairs you could have avoided. When you got people in your corner, people who’ve been there, you shortcut years of mistakes and save tens of thousands of dollars. I heard it said once, borrow someone else’s, borrow other people’s 10,000 hours to shortcut your way to success. That’s why created the Laundromat resource community.

Jordan Berry [00:05:34]:
You can join for free and get access to some of our tools and checklists, due diligence guides, and connect with people who’ve done what you’re trying to do. So listen, if you want to avoid the five mistakes that almost guarantee your Laundromat will lose money, go to laundromatresource.com join. And don’t go it alone. You don’t have to. We’ve got your back. We’ve set up the community, set up the tools and resources you need to succeed. All you got to do is go over there and join laundromatresource.com join. Come be a part of the community.

Jordan Berry [00:06:08]:
Become a Laundromat pro today.