Laundromat Resource › Forums › Laundromats › Fair Valuation/Multiplier when Buying › Reply To: Fair Valuation/Multiplier when Buying
This is a complicated question with no easy answer. When I try and value a laundromat I look at a net income multiplier. So if net income after all expenses is $50k, you multiply that anywhere from 1 to 6 depending on the overall condition of the business. Is the lease good? Is the real estate included? If the real estate is available, the business has one value and the real estate has another value. Are the machines old and in need of repair or replacement? How are the demographics? Is new competition being built nearby? Can you increase revenue by making improvements?
Getting to the true net income is another issue. Most owners will take out payroll when they put together a P&L. Or they take out or underestimate repairs.
You need to value each location separately. One could be great while the other not so much.
