160. From Full Time Teacher to Full Time Laundromat Owner with Nicholas Constantinou

Welcome back to Laundromat Resource! In today’s episode, we have an inspiring and insightful conversation with Nicholas Constantinou, a former full-time teacher who transitioned to owning and operating multiple laundromats. Join our host, Jordan Berry, as he delves into Nicholas’s entrepreneurial journey from seizing opportunities during the pandemic to establishing a thriving business in Queens, New York.

Nicholas shares his innovative strategies, from starting a pickup and delivery service to balancing operations between two laundromats located just two miles apart. We discuss crucial lessons in managing customer satisfaction, pricing strategies, and the continuous need for learning and personal development. You’ll hear about the challenges and rewards of being fully committed to the laundromat industry, the importance of treating employees with respect, and the profound realization that putting people first can lead to long-term business success.

Tune in to discover how Nicholas turned initial setbacks into opportunities for growth, the pivotal role of cleanliness in running a successful laundromat, and his unique approach to creating a welcoming customer experience. Plus, get valuable tips for aspiring and current laundromat owners alike. This episode is packed with actionable insights, from leveraging industry events for networking to the necessity of understanding your business numbers. Don’t miss this remarkable story of resilience, innovation, and passion for the laundry industry!

Watch The Podcast Here

Episode Transcript

Jordan Berry [00:00:00]:
Hey. Hey. What’s up, guys? It’s Jordan with the laundromat Resource Podcast. This is show 148, and I’m pumped you’re here today because today we have a part 2 of a talk I gave in, Spokane. Huge shout out to Steve Casetto and that whole team, up there in Spokane, Washington for bringing me up and let me, have a chat with your customers and clients. I had a really great time and hopefully this episode will be tons of full. I mean, I know it’s tons of value, packed in here for you. So hopefully you get something good out of it and, and really enjoy it.

Jordan Berry [00:00:38]:
Real quick before we jump into that, I wanna give a huge shout out to Armin who closed on his laundromat and sent me out this sweet swag. Tom’s laundromats. Alright. Congratulations on closing that deal, Armin. Super proud of you and, can’t wait to hear how it goes and, Hey, have you on the podcast. How about that? Awesome. Today’s episode, again, we’re going to be talking about how to make more money through preparing your laundromat properly to sell it way before you even are, are planning on selling it. And also I’ve got some great, I think, insights into how to scale your laundromat portfolio, if that is your goal.

Jordan Berry [00:01:20]:
So a lot of good stuff in here that I think you’re gonna really enjoy. So, but let me know. Head over to the forums, Resource, and let me know what you think about this episode and maybe a good takeaway for you. Let’s jump into it.

Jordan Berry [00:01:37]:
I think it’s kinda jacked up to do a giveaway and then make me come up here and do a talk. It’s kinda messed up. Yeah. I’m giving away more Breeze time for free. Everybody! You get an hour, you get an hour. You get an hour. No, okay. I’m gonna make it I’m gonna make it good but I’m gonna make it quick because I know you guys have been here a long time.

Jordan Berry [00:02:02]:
We’ve been talking laundromats, but again, feel free to be interactive, share your suggestions and questions and all that stuff. I want to continue the theme of making money, but I want to think more kind of long, long term now. So we talked about, like, how do we make money now? And now I wanna talk about how do we make money later, and that’s gonna be through selling or scaling. So I wanna give some thoughts on that. Again, I’m giving sort of the big picture view of what I’m seeing and how people are optimizing their exit strategies or their scaling strategies so they’re making the most money they can from their laundromats. Cool. Cool. And I just want to say too, like I know some of you guys don’t have laundromats yet or some of you guys aren’t at a place where you’re ready to sell or you’re not really trying to scale, and that’s okay.

Jordan Berry [00:02:51]:
But I think everybody who buys a laundromat or who owns a laundromat should be thinking about selling and that exit strategy. Even if it’s going to be years down the line, you should be thinking about that now and setting your business up appropriately to be able to recoup the most value for your business, both now and on the back end when you decide to sell. And also if you’re selling, let me know because I’m buying all over the place, everywhere. Let’s talk now before I tell you how to optimize your value. No, just kidding. So let’s talk about selling real quick. And again, this is something that you should be thinking about now, because not only is it gonna optimize your value on the back end, but also it’s gonna help you run a better business on the front end. Okay? Number 1, you probably know that the value of your laundromat’s based on the net income, right? So the best thing you can do to sell at the maximum value is maximize your net income.

Jordan Berry [00:03:48]:
Okay, so I wanna tell you some some things that I see about how people are maximizing their net income in order to increase the value of their loan maximum. Number 1, start now. Right? We all wanna maximize our income. This is the number one thing. When I analyze laundromats, I analyze laundromats all across the country all the time, all week long with people doing consulting and all that stuff. So I’m looking at deals all the time. The number one thing I look at when I buy a laundromat is how much can I raise prices when I take over? And it’s usually a how much, not if I can raise prices, it’s almost always by how much can I raise prices, because we as an industry, kind of almost across the board are pretty terrible at pricing? Your biggest win, whether you’re buying your first one or when you’re taking an honest look at your laundromat now is, can I raise prices right now from where I’m at? So that’s something that you should be analyzing. And in order to kind of determine that, you should have some kind of understanding about how much per pound it costs you to do laundry.

Jordan Berry [00:04:56]:
And that’s something, again, I don’t see a lot of people digging into that at all. I mean, does anybody know how much per pound it costs them to do laundry? Right. So that’s not atypical, but think about it. If you have an idea of, okay, it costs me whatever, you know, x amount, it costs me a quarter per pound to do laundry, then you can set your pricing, that’s probably high, but you could set your pricing structure accordingly and you can build in how much margin you want to make based on the cost that it costs you to do that much laundry, Right? So your £20, you’ll be able to price them appropriately by saying, okay, it costs me this much money. I wanna make a 30, 40, 50 percent margin on that. And so here’s what my price point needs to be. Right? And then you can, you know, going back to our last talk, then you can work on, okay, how do I provide enough value? How do I provide a service that’s worth that price point? A lot of us, almost all of us, take whatever we get in terms of margin. We set our price points and we price what we think we can, and sometimes we raise prices, we’re gonna upset our customers or what.

Jordan Berry [00:06:13]:
And we see our utility bills going up and labor costs going up and rents going up, and we hesitate to raise prices. But the number one thing you can do to get a quick win is assess your pricing and make sure your your price point is priced appropriately. You got modifiers. You got a lot of different, but even even before that I would say is just make sure your baseline price is high enough. And for most laundromats, it’s not high enough. And again, I’m looking at laundromats all over the place, so make sure it’s high enough. And then you can look at modifiers like hot water, extra rinse.

Jordan Berry [00:06:49]:
Real quick, I’m going to interject here in the middle of this talk because this was, there was a lot of discussion happening in here and a lot of it I just cut out, but a couple of them I want to, I wanted to keep in there. So I’m just going to tell you what the question was because we didn’t mic up people who were asking the questions. So the basic question here was, should we post price increases before we actually do, the price increases? So that’s it. That’s the question I’m going to be talking about right now.

Jordan Berry [00:07:17]:
I’ll I’ll share my thoughts on that, but I I I bet there’s multiple thoughts on that because I see like on Facebook and, you know, stuff like that, forums and stuff, all kinds of different opinions. My opinion is, sometimes it makes sense to post ahead of time, like, Hey listen, if it’s a big jump or something like that, like, Hey look, utilities went like, we in California in January of last year, utilities went up like 40, gas went up like 40% in a month. That some of our bills like almost doubled, and it was brutal. And so like in that case, it makes sense I’d say to say, hey look, Gas prices doubled. We don’t wanna do this, but this is this is what it is. We’ll bring it back down if we can if if prices go down. But with that, the other side to that is what other businesses are posting, like gas go to the gas station, right? They change prices daily, right? Are they ever warning us that gas prices are going? Well, the news maybe does. But you know what I mean? Like there’s no other businesses that do that.

Jordan Berry [00:08:20]:
So I mean, I think it’s part of the cost of doing business, but I think where it gets a little like, should I tell people or not, is because many of us have not raised prices in over a year or 5 years or more than that. And if you’re thinking about, like, hey. I haven’t raised prices in 2 years, and I need to raise prices. And I’m, like, a dollar awash behind? Yeah. That gets a little awkward to just jump it up like that. Right? So, but I think if we’re a little and kind of what I recommend, this is my maybe I shouldn’t say recommend. This is how I practice it, is I have a set schedule that I plan on raising prices. And then I also have a quarterly assessment where I’m looking at, did any of my costs jump significantly over the last quarter? Like, for example, when the gas prices went up a lot, and do I need to adjust accordingly? And most of the time, it’s no.

Jordan Berry [00:09:20]:
But every now and then, something happens where I’m like, I feel like I need to raise my wash prices or my dry prices, a little bit this quarter, even though it’s not the normal kinda set schedule. So I have sort of like a set schedule and a quarterly assessment. But again, that’s just kind of my perspective on it. It’s more important now, I think, than it’s been in a long, I’ve been in, not as long as many people, but I’ve been in this industry for a decade. It’s more important now to have a strategy, whatever the strategy is to have a strategy for your pricing than ever before. I mean, as we’ve seen inflation go up, guess what? Inflation hits our bottom line. If you’re not raising your prices with inflation, you’re eating the inflation. You’re losing money in your business.

Jordan Berry [00:10:06]:
And so it’s it’s more important now than ever before to kind of stay on top of that pricing. Have some sort of strategy and be proactive. And a lot of what we’re talking about today has to do with being proactive about our business and not being reactive and and dealing with what comes to us, but actually going out and getting what we want. And that’s why I say, hey, if you can figure out about how much it costs you per pound of laundry, then you can say, okay, this is my baseline cost. I want to make a 40% margin on it. So now I know what I need to price each of my washers in order to make that 40% margin. Right? And that’s being proactive and that’s taking control of our businesses instead of letting our businesses control us. That make sense? Okay.

Jordan Berry [00:10:56]:
So we got raised prices. Number 2 is consider a retool. I do a webinar every single week on how to buy your first Laundromat, right? The four numbers you need to know to determine the value of a Laundromat is the net income, and then you’re gonna apply a multiple to that net income. And the multiples determine by and large by three numbers. It’s the age and condition of the equipment, the length of the lease, and the rent amount as a percentage of the gross income. If you have those four numbers, you can determine the value of a laundromat. And guess what? Age and condition of the machine is one of the big ones that’s going to determine the multiples. So if you have newer machines, you have nicer machines, you have a higher quality machines, you have easier to use machines, you have machines that give you more data, that’s gonna bump that multiple up and make your laundromat worth more money.

Jordan Berry [00:11:47]:
So that’s why I think, come into something like this where you can actually get up close and personal with these newer touchscreen systems and a digital payment system like LaundraWorks or Sense, or your number one competitor, or whoever it is, right, and see the kinds of data you can get and stuff like that. That not only is gonna help you run a better business, tighter ship now, but it’s also gonna make your laundromat worth more money on the back end of it too. Okay. And then number 3, right, net income is your total income minus your expenses. So if you can lean out expenses, then you’re gonna optimize the value of your laundromats. So if you know, hey, in the next couple years I’m thinking about selling my laundromats, you should be going about the process of optimizing your income and leaning out expenses as much as possible. Part of that could be a retool where you’re getting the efficiency you know, from the machines, you know, on the utility side and that kind of thing. But part of that could be taking a look at your staff.

Jordan Berry [00:12:48]:
Am I overstaffed? I see a lot of laundromats that are overstaffed. They have way too many employees. Do you have too many employees? More so I see them on the other side where there’s not enough employees, but sometimes I see where there’s too many. So looking for ways to cut the expenses to increase your net income because the value of your laundromat and the equity in your laundromat is going to be largely determined by that net income.

Jordan Berry [00:13:10]:
Okay. Another quick interjection here. The question was, how much should we pay for rent, or how do we know what a good rent amount is? That’s what I’m addressing right now.

Jordan Berry [00:13:19]:
So the way that I like to look at it is your rent amount as a percentage of the gross income. Okay? Sort of the magic number in there is is 25% or less 25% gross.

Jordan Berry [00:13:31]:
Of of the gross

Jordan Berry [00:13:32]:
income gross monthly income, or less. And if you go above not that you can’t go above that. You can go above that. But as you go above that, that starts to bring that multiple down, from that point. So 25% of gross income is what I’m looking for, which is another great opportunity to increase the value of your laundromat. If you have that long term lease that does add real value to the laundromat. If you’ve got 6 years on a lease, that puts a buyer in a tough spot and they’re trying to negotiate more options or a new lease or something like that. It’s a tough spot to be in, but if you go in beforehand and you negotiate 15, 20, 25 years on that lease and you have that, and it’s a good rent amount and good terms, that’s gonna make your laundromat more valuable in the long run.

Jordan Berry [00:14:21]:
And it’ll help you to run a better business now too. The lease was the second thing I wanted to talk about. So again, that 25% and having long term, I’d say at least you’re getting ready to sell, try to have lined up at least 15 years on that lease. That’s going to maximize the value. Anything below that, again, you put that buyer in a situation where they’re having to sort of negotiate with that. And if they’re having to do that, then they’re not gonna pay you the premium for that. The third thing is make your laundromat financeable. Okay? Now this is interesting because a lot of laundromats are not financeable.

Jordan Berry [00:14:56]:
And what I mean by that is it’s it’s very difficult to get financing for a lot of laundromats. So a few things you can do. Number 1, keep at least 2 years of clean books if you can. I mean, I think, you know, and you know, we mentioned it earlier, but I think you should always have clean books. I think it benefits you and there’s really there’s enough tax benefits in this business that you don’t really need to run under the table stuff, but you know, to use their own. But if you keep 2 years of clean books, that’s gonna make it more financeable. What I mean by clean books is you’re reporting all your income and you’re not maximizing your expenses or running through all the expenses possible. You maximize that net income on your taxes and your bank deposit statements are approximately matching what you’re saying is coming into your into your business.

Jordan Berry [00:15:46]:
If you do those things and especially if you can show you know, if you have a system like LaundryWorks, super easy to do. They’ll just run a report for you. But if it’s coin, if you can show collection amounts over time, that will also kinda help things be more financeable. And when things are financeable, they command a higher premium. Right? I was in Belize, not too long ago and I was like, oh man, Belize. It’s pretty sweet. It’s Unbelievable. That’s unbelievable.

Jordan Berry [00:16:20]:
I know. And I was like, well, maybe I should look about buying, buying something here. Right? And, and I was like surprised at how relatively inexpensive it was to get a house on the beach in Belize. And I was like, but the reason for it is there’s no financing in Belize. And, you know, we look at our housing, you know, situation that we have here. Well, part of why we have so much value in in our real estate is because it’s our real estate financing is very good. We have long term financing and so it it helps drive value for our businesses, there. So if you make your laundromat financeable, you make it worth more money.

Jordan Berry [00:16:59]:
Okay. Okay. One final question here is as a seller, should you offer seller financing, which I think is a great question. We talk about seller financing a lot from a buyer’s perspective, not as much from a seller’s perspective. So that’s what

Jordan Berry [00:17:12]:
I’m gonna hit right now. Yeah. Like so carrying a note for it for seller financing. Yeah. I think there’s a lot of perks as a seller. I mean, obviously, a lot of buyers are looking for seller financing. If you don’t know what that is, it’s basically lending a buyer your money to buy your laundromat from you. You become the bank.

Jordan Berry [00:17:29]:
Yeah. The seller becomes a bank. And there’s a lot of perks to for a seller to doing that. So it kinda depends on what you want. If you need a chunk of change for you wanna go buy a sailboat and sail to South Pacific or wherever you believe, then maybe you need the money, you know, for that or something. Or if you’re deploying it somewhere else, maybe you need the big chunk. If you don’t need the big chunk, I think there’s a lot of benefits. I mean, obviously, tax wise, you’re gonna pay.

Jordan Berry [00:17:57]:
You spread that income out over time. You pay less taxes. Typically, you’re gonna have a UCC filing which secures your loan by the business. So if they default, you just take the business back and go sell it again. But the downside to it is it it ties you to that laundromat longer. So there’s a lot of perks to it. You can get a higher price and I mean buyers almost always prefer it because they trust, but also because it’s way easier. It’s way easier.

Jordan Berry [00:18:27]:
Before, embrace technology. Again, we kind of talked about a lot of that stuff, but payment options, data collection, anything that makes it easier for an owner to come in and manage the business is going to command more value for sure. And then also just having a solid online Resource. What that looks like is a website. It looks like a Google business profile, maybe social media profiles, that kind of stuff. And then lastly, just having a clear business plan, like having your employees in place, having clear roles defined for those employees. Again, anything that makes it easier for a new owner to come in and just take it over, think turnkey. Anything that makes it more turnkey is gonna make it more valuable.

Jordan Berry [00:19:08]:
Cool. And then the last couple of things I wanna just hit real quick is on the scaling side. So selling is one one option. Scaling is another. That’s buying more more laundromats. Right? So a couple of things I just wanna share. I’ve been thinking about the concept of scaling for a little bit in this industry, which these guys are doing pretty well. What’s interesting, we were talking, we’re kind of joking.

Jordan Berry [00:19:35]:
So so Brandon Understall, who’s was born with the the 5 gallon buckets of quarters. Right? We We were joking about how he doesn’t really do anything anymore. He just kind of looks for deals and pretends like he’s working hard. But there’s here’s what I think is really happening. Okay? So there’s 4 there’s 4 levels here that you need to operate a business. Okay? You’ve got your technician, not like your technician, but like your technician the one who’s actually doing the work. Right? It’s probably an attendant. Maybe it’s you for a little while early on.

Jordan Berry [00:20:07]:
You got your technician. Then you’ve got your manager, right, the one who’s overseeing those people. Then you’ve got your CEO. And then you’ve got your, what do you call, architect. K? The one who’s dreaming up the vision for the business. Right? And a lot of a lot of people who try to scale kinda work their way up. Maybe they start as a technician, and then they go to, you know, manager, and maybe they’re managing. And then if you get far enough ahead, you know, you can hire managers and, and become the CEO.

Jordan Berry [00:20:40]:
And then if you get to a big enough scale, you hire a CEO. And then Brandon becomes the architect, the one who’s actually designing and building this business, which is really interesting. Right? There’s not a lot of architects in our industry right now. But again, things are shifting. Things are changing. Right? And if you can flip that mindset a little bit and get to, how can I get to become an architect sooner? That can help you scale your business quicker. So for example, I’ve got a I’ve got 2 buddies that I’m meeting here not here here but in Spokane on Sunday who are flying here because we’re we’re gonna go buy some, 3 portfolios of laundromats. Right? The way we’re approaching it is we’re gonna hire a CEO day 1.

Jordan Berry [00:21:34]:
And then that CEO’s role and responsibility is gonna be to hire regional managers whose role and responsibility will be to hire the local people or to vet the local people that are already in place. Right? And flipping that on on its head and thinking, how can I be the architect of this situation and and hire that? So now you don’t always have to The the problem that immediately came to my mind, when I was thinking about this is, like, alright. How do I hire a CEO? Right? What if they don’t have a bucket of money, you know, sitting around to hire a CEO? Right. And there’s lots of different ways you can do it. You can partner with the CEO and give equity. There’s lots of different ways to do it. Right. But the point of it is, is if if if your goal is to scale and I did a poll at one point in time with with the laundromat Resource kind of audience.

Jordan Berry [00:22:22]:
I was like, how many laundromats do you want to own? I was like, 1 to 2, you know, like 3 to 5 or like 10 plus or whatever. And like overwhelming majority of people I talked to or I polled were, I wanna own 10 plus laundromats. And I’m like, cool. That’s awesome. If you don’t own 1, let’s get you one first. But that’s what a lot of these people say. I wanna get 10 plus laundromats. And if that’s the goal, then you’re you can’t think the same way as if your goal is gonna be, you know, 1 laundromat, you know, or just a handful of laundromats.

Jordan Berry [00:22:57]:
You have to think differently. And you’ve got to get to a point where you have space to think about your business and to design that business. So, you know, anybody who’s interested in sort of scaling, just be thinking about this this, sort of extra role that gets kind of neglected. It’s so easy. A lot of you guys own Laundromat, right? So it’s so easy to get caught up in the day to day mundane of dealing with issues with machines, dealing with problem customers, filling in for employees that don’t show up, dealing with the homeless issue in your life. Like so many things, right? It can get easy, get overwhelmed, but you’ve gotta find that space to have that architect role to think about your business a little bit differently than most people are thinking about the business. And then the last thing I’ll just say about scaling is in order to scale, you have to have 2 things in place, 2 main things in place. Okay? You’ve gotta utilize technology.

Jordan Berry [00:23:56]:
Things like Laundromat. I don’t think you guys are be at 15 Laundromat if you had to go collect quarters at every store. Gotta utilize technology to be able to scale. And you’ve gotta have good people. That’s the other key factor. And that is something that Brandon, brags about a lot. We’ve been talking about it a lot. You guys have a killer team.

Jordan Berry [00:24:20]:
You know, you’re part of the killer team. You guys have a killer team Laundromat has allowed you to scale. So and, you know, we were talking, you know, at lunch too about how you got a really good, employee that that just came in and just took a huge load off of your plate. Right? And you’re like, oh, this is like a breath of fresh air. This is great. Right? And that’s what it comes down to. You’ve gotta utilize technology, and there’s more available than ever before, like we talked about, and it’s cheaper than ever Resource, but then you have to build a good solid team. And that’s a different skill set than running a laundromat.

Jordan Berry [00:24:58]:
That’s a different skillset even than managing a laundromat. You’ve got to either have the skillset of like a CEO type, where you’re thinking that way, of hiring and training employees and keeping the cadence of accountability and making sure everybody knows exactly what they should be doing, or you’ve got to hire that, find somebody else who can, who can do that role if you don’t have that skill set. So I wanted to mention that again, because by and large, most people I talk to, whether it’s, they are committed to it, or they just think in their head it’d be awesome to own 10 plus Laundromat, by and large, most people are like, I want to own a 1,000 laundromats. Like, okay, but here’s the difference between owning 1, 2, 3 laundromats and owning 10, 20, 30, 50, a 100, 300, 500, a 1000 laundromats. You cannot approach it the same way. You’ve gotta think a little bit differently. But I wanted to talk about that and about selling a little bit. Even though most of you guys are probably not at a point where you’re selling, you’re probably not at a point where you’re ready to go to like 10 plus laundromats, although some of you might be.

Jordan Berry [00:26:05]:
But the seeds need to be planted now. That’s not the thing that just happens overnight and you don’t recoup the most amount of money when you sell just by saying, maybe next month I’ll put my laundromat on the market. If you want to optimize the value of your laundromat, you plant the seeds now for optimizing the value of that laundromat in a year or 2 years and and get that business optimized and stabilized so that you reap the rewards of all the hard work. I mean, you put so much blood, sweat, and tears into the laundromats, right? It makes sense to do it in a way that’s gonna let you optimize the value when you go to sell. So that’s all I had for you guys. Appreciate you guys hanging tough till the end. On behalf of you guys well, first of all, thank you for inviting me, to come out. And also just, you know, make this is a solid team.

Jordan Berry [00:26:59]:
I see a lot of distributors. I go to a lot of distributor shows and stuff. This is this might be my favorite team. I don’t know. Might be my favorite team. You guys are rock stars. You got a a players in every talk about building a team. It’s probably your only positive quality is building a great team.

Jordan Berry [00:27:20]:
No. But seriously, good you’re in good hands here and you should feel grateful for that. And make sure you’re pinging these guys as you’re making moves in this industry. So appreciate you guys. Yeah. And I’ll let you close it out. Thanks Corey.

Jordan Berry [00:27:37]:
Alright. I hope you actually liked this episode. Again, this is a little bit different than what I normally do, but I just Thought that there was a lot of really good stuff in there that I think would help a lot of people make more money with your laundromats. That’s what we’re all about. That’s what we’re doing here. So, again, let me know, Resource. Let me know what you thought about that, or maybe your one big takeaway or moment and let’s get a discussion going. Alright.

Jordan Berry [00:28:04]:
Take some action this week. That’s what’s gonna get you to success and we’ll see you next week. Peace.

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