February 22, 2021 at 9:40 pm #4256EmersonParticipant
Curious if a store in a small town can be a steady Eddie, steady earner or if the potential down side is too much to risk. Meaning all the same potential expenses and work as a higher populated area store but with less potential in sales.
Anyone have experience or knowledge of small town stores ?
Population listed around 3,000 rural area, also has seasonal field work labor come in for part of the year.
On the surface the population alone makes it sound horrible, but the place has a grocery store, Dollar Store, Liquor store and others in the same complex.
Other Dollar stores right down the street as well.
February 23, 2021 at 6:49 am #4259Jeff MarnerParticipant
I just purchased a building, laundromat included in a town of 2400. Previous owners boasted $40k revenue annual. It seems fairly accurate though I’ve only been averaging $100/day so far. As the arrangement currently stands this laundromat may be underperforming it building. If I had to pay a lease I may not break even. But the store has also been neglected and almost half of machines don’t operate.
It probably would not be wise to buy such a place but I’ve seen the place succeed in the past and I know there are a number of way the facilities can be improved and attract customers. One major way I project to increase business is through offering wdf. We have manufacturing that employees about 3000 people and I intend to tap into people’s desire to not have to visit their local laundry after they get home from work.
All that to say, mine is underperforming based on laundromat standards, underperforming based on sustaining a standard that would profit if it had to pay a lease, and underperforming its own historical performance. It is however over performing the return I was getting on the money invested.
I believe a laundromat can succeed in most any town but the circumstances required may be impossible to find. I’ve scouted laundromats in the two surrounding towns that have them as well. The towns are similar size, largest may be 3000 and those both look nicer than mine so I assume they are doing ok.
February 23, 2021 at 10:22 pm #4308EmersonParticipant
Jeff thanks for the response.
I recall reading your post from when you were considering buying the place. Sounds like a great move.
I asked an owner about a place and he has responded with what seems to be a 4.5 to 5 X multiple per his numbers.
However, in such a small town and so far based on “counting cars” in the parking spots I can’t see the level of business to support the price / suggested return cited.
For the numbers cited I would estimate gross would need to be between 160k to 170k which seems tough in a town the size I mentioned.
Thanks again and it sounds like you scored getting property and cash flow.
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