Verifying pro forma

[Brandon Nappi]

Is it common to ask for business tax returns to verify pro forma data? If not, how do you verify the seller/broker is being truthful? Thanks!

[Brandon Nappi]

Just found the answer to my own question:

https://www.laundromatresource.com/verifying-laundromat-income-with-a-coin-count/

Jordan – Thanks so much for all that you’re doing to assist with the laundromat business! Love your website and podcasts

[Jason Dodge]

Business taxes are something you would ask for as part of your offer to purchase and use them to ASSIST in verifying gross sales and expenses. Another way is through utilities. A newer laundromat would have utilities (gas, electric and water) around 12% to 15% of gross washer and dryer sales. A older laundromat could have utilities as high as 25% to 35% of gross washer and dryer sales. So if sales of the washer and dryers are $100,000 annually, a newer location could have $12,000 to $15,000 in utility expense. A older location could have $25,000 to $35,000 in utility expense. An obvious issue would be a laundromat with 20 year old machines and utilities are $10,000 on a reported $100,000 in gross washer dryer sales.

There are other factors to consider, and this is just one way to look at it. The coin count, the taxes, the quality of collection records, deposit slips, visits to the location, and overall book keeping are other considerations. It’s a little bit of guess work but you want an educated guess.

[Author]

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