hey what’s up guys it’s jordan with the
laundromat resource podcast this is show
82
and i’m pumped you’re here today because
today seriously is one of the most
incredible episodes we’ve had on this
show and the reason for that is we have
mark stern back on the show he is
the chief lending officer and executive
vp at eastern funding and we hit some
heavy topics there is a lot
going on in the world right now and a
lot going on in our industry right now
and we hit some heavy
heavy topics
all of which
have serious implications on us as small
business owners and us in the laundromat
industry in particular so this is a do
not miss episode if you have anything to
do or want anything to do with this
industry so
i look forward to that i want to take a
couple seconds i’m not going to take a
whole lot of time in the front end
because i you i want you to stick around
for the rest of this episode seriously
uh but i do want to acknowledge first of
all welcome to all the new people to all
the new members
laundryresource.com and a huge thank you
and welcome to the new pro members who
signed up in the last week since we made
our first big upgrade to the pro
membership
again we’re continuing to build every
week for eight straight weeks this is
week
two
i have
uh some cool stuff coming out there’s
some cool resources for pro members that
are out right now just coming out when
this episode is coming out uh so we have
some
very cool downloadables for free we have
a sample letter of intent that you can
take both to purchase a laundromat and
to give to a landlord as an intent to
rent or lease a space
we have both of those there we have a
coin collection sheet a lot of you guys
have been asking for that
um so we have a coin collection
spreadsheet that you can download
and keep and use and it helps you
collect the coins it tells you how many
turns per day
all that stuff is calculated for you how
much you’re earning per day all that
stuff
very cool spreadsheet i personally use
it uh with my coin stores
uh so that’ll be there on the pro
membership sample business plan is
coming up in here and also i threw in
some sample contingencies those you guys
who are making offers on
uh on laundromat deals either without
the use of a broker or who just want to
kind of make sure your broker is doing
the right stuff uh sample contingency
list
there so that when you make your offer
you’re you’re not putting yourself at
risk
by making that offer uh with unverified
numbers and no way out okay so those are
all getting added this week i uh
i have another tool that we’ve been
working on i thought it was going to be
ready this week but i got to postpone it
at least one more week hopefully we’ll
have it by next week because i’m super
excited if you’re in the how to buy uh
your first laundromat webinar this week
then you got a sneak peek of it and it
is a very cool tool i’m again i’m really
genuinely excited about i think it’s
really cool and i’ve never seen anything
like it in our industry uh so stay tuned
for that that’s gonna be in the pro
membership and you’ll also be able to
get to use it for a limited number of
times um just to try it out uh before
you become a pro member okay uh i’ll
talk about that more later okay so we’ve
got some sweet downloads coming letter
of intent all the all the things i just
said i don’t want to take anymore that
time
um speaking of webinars real quick i
just want to highlight two webinars
number one is next a week if you’re
listening to this when this comes out
that’s january 20th and look up the date
january 20th 2022 uh
a very unique webinar that we’re doing
i’m having a buddy of mine who’s a
a lender a home lender
come on and talk about
how you can get a um a home how you can
qualify for a home loan as a business
owner i know that was tricky for me when
i was buying uh the house that i’m in
now
as a as a business owner and for a lot
of small business owners that feels very
unrealistic it feels very frustrating on
how you can qualify for a home loan
however or a second home loan uh also
however my buddy’s got some very cool
ways that he can help you
either now or whenever you’re ready to
get into a home as a
as a small business owner so uh
i highly recommend you come join us for
that i’m super excited the guys work
miracles for me and continues to do so
and i’ve actually uh recommended to a
lot of people who’ve ended up using he
knows his stuff uh super good guy okay
his name is joe soto uh and again that’s
january 20th 2022. uh it’s gonna be 4
p.m
uh pacific time 7 p.m eastern time and
you can sign up for that
uh on the website lotterysource.com or
on the events page london resource.com
events come join us for that if you’re
at all either now or in the future
thinking about buying a home or a second
home and he’ll also do some q a along
with some of the information he wants to
provide okay cool i’m excited about that
one the second webinar that i’m like
really excited about also has to do with
today’s
what uh today’s podcast episode so mark
stern and i after we did this episode we
were both very impressed with ourselves
uh but seriously we were very impressed
with the conversation that we’re having
and all the things going on we just feel
like this episode
is going to give a lot of information
and give some answers but i think it’s
going to bring up a lot of questions too
so what we thought we would do
after we recorded this is get together
and pull together some top-notch owners
none of whom have appeared by the way on
this podcast you haven’t been introduced
to them through this platform yet
and we’re all going to get together and
talk about some of these issues in a
webinar now as of right now when this is
coming out
we haven’t been able to nail down the
date but i’m hoping it’s going to be
within the next
couple of weeks so
a couple things you can do number one go
to laundromat resource dot com events
and i’m gonna have a link on there where
you can sign up to get an email as soon
as we have the information um on that um
and we’ll also be sending out emails if
you’re on our email list for anything
else we’ll send out an email as soon as
we have that information to everybody
and let you know where that’s at so you
can get in on this webinar i think 100
of the people who are listening to this
needs to be on that webinar and i’ve
never said that before of course i
always want you guys to join me on the
webinars but this one
there’s just so many implications to
everything that’s going on right now
you’ve got to be on it and anybody you
know that is in this industry you’ve got
to share it with them and get them on
this webinar because it’s going to be uh
the stuff we’re talking about is just
huge for all of us okay so again sorry
for not having the dates we’re trying to
coordinate with uh just a bunch of us
and uh we just didn’t get our act
together but uh go to lotterysource.com
events and sign up to get the email for
when that’s ready on the event page and
uh or if you’re just on our email list
i’ll send out an email about that too
okay i just want to make sure you knew
about those two webinars come join us
you know the home buying one i i know
it’s a little bit different from what we
normally do but it is
a it’s a serious issue it’s really
difficult sometimes to qualify for a
loan as a business owner because of the
way
that we run our businesses and file
taxes and all that stuff so
uh come to that and joe’s got some great
tips for you and then obviously you have
got to be on this other webinar that
mark stern and i are putting together uh
for
um for you to talk about what 22 has in
store for us and how
we can end the year
much further ahead than we are right now
when i think a lot of people are
actually gonna fall behind um this year
so
all right that was a lot more than i was
anticipating but uh all super important
stuff thank you again for all of you
guys who signed up for the pro
membership the more people who join us
the better it’s going to be uh so come
join us laundromat resource.com join and
sign up for the pro membership if uh
you’re at all interested enter at uh
that point in your
journey of
laundromats all right all right let’s
jump into it with mark because again
incredible episode you’re gonna love it
see on the other side
all right mark thank you for coming back
on the show this is i mean times right
now are so crazy and when you and i were
having a discussion about you know
what’s coming up in 2022 i said you know
we need to do this on the podcast
because i think people are interested
there’s
so many things going on and i’m excited
to talk with you about all these
different things and what that might
mean for us but thanks for coming on the
show how are you
great doing great jordan appreciate the
invite again enjoy doing it the first
time and i think we’ll have a really
good conversation this go around i hope
you and your family are all doing well
and
looking forward to 2022 going to be an
interesting year
yes it is and thank you family is doing
well everybody’s healthy and safe hope
likewise for you and everybody listening
to your heart
yeah good yeah it’s definitely poised to
be an interesting year um i mean i have
well we’ve kind of put together sort of
a
you know a bullet point list of some
things to hit on uh but you know kind of
highlight let’s start high level and
kind of work our way down uh i like you
know the phrase used as headwinds for
2022 and i think that’s
really just an apt term because
it kind of does feel like the winds are
blowing us in some interesting
directions right now and uh maybe we can
just kind of talk a little bit of
overview what are
you know some of the the things that are
going on you know right now and that
we’re anticipating for this year this
2022 and uh and then we can get a little
more granular for each one sure sure
well i want to start by saying
being in this industry for 30 plus years
this is the first time i’ve seen some of
these things and i think they’re major
headwinds that we’re all going to be
confronted with and we’ve got to figure
out how best we can navigate them and
get through the year and have a good
prosperous year uh considering that 2021
pandemic aside was a pretty damn good
year for most people
especially for this industry so
the topics that i see
blowing in the wind and blowing right
into us at maybe 50 miles an hour or
better are
equipment price increases
uh delivery times
uh construction cost
interest rates
and possibly value of stores i think
those are pretty
hefty topics that um
are going to be
front and center as we get into this
upcoming year
yeah i think kind of two maybe we can
touch on kind of weaving all throughout
all of those things is this uh inflation
that’s absolutely getting out of control
right now and uh everybody’s kind of
trying to figure out
you know what does that mean for
for everybody i mean whether it’s just
your personal finances or your business
finances or whatever um and but in
particular what does that mean for you
know owners or people trying to get into
this industry
uh you know here so let’s i mean that’s
a
right i think yeah i think inflation’s
where we got to start because inflation
slash part of the pandemic has caused a
lot of this stuff
and i think you know inflation sitting
at
reported six and a half percent but i
think it’s really
higher than that
is the highest in about 30 years
so
we haven’t really seen it your
generation certainly hadn’t seen it my
generation hadn’t seen it for a long
long time so
this is something that’s going to affect
all of us it affects everything from
food on the table gas in the cars to
equipment pricing build out
it’s just everything is is affected by
it the fed initially said this is going
to be a short-term thing now they
backtracked on it and they said nope i
think it’s going to be here for a while
so
we have to deal with it
yeah and i mean inflation’s always been
kind of an interesting topic for me
because i i always kind of think
inflation is higher than reported and a
big part of the reason that i think that
and and i do want to chat too you know
i’ll just kind of tease this i want to
talk about we’re going to talk about all
these things affecting all of us
but i want to kind of wrap things up
at the end and talk about where’s the
opportunity because wherever stuff like
this is going on wherever there’s big
changes there’s opportunity wealth is
transferred you know absolutely these
and so
i do want to hit on that but you know
going back to the inflation thing you
know i
i always am uh you know keeping an eye
on inflation and what it’s doing and the
big part of the reason for that is
because of our our national debt right
and inflation is good for people who
have loans inflation is good for debtors
because it makes it easier and easier to
pay off
that that money that you owe right and
there’s no bigger debtor than the united
states government that i know of and so
it makes sense for the government to
want inflation now you know they they do
with through the fed they do try to
control the amount of inflation and you
know right now as it’s accelerated uh
you know it’s it’s kind of throwing
people for a loop because i think for
like you said a long time the fed’s done
a pretty good job of raining in that
inflation in that two to three percent
uh you know rate right it’s
significantly above that now
yeah that’s their benchmark was two
percent
and now looking at six or six and a half
or even higher it’s it’s it’s pretty
much out of control so
the fed you know they’ve been buying
back they’ve accelerated their buy-back
of bonds so that they can raise interest
rates um originally they talked about
ending that program in june now they’re
talking about ending it in march so this
kind of goes into one of the headwinds
i’m i hate to say it because i’m a
lender but i think we’re going to see
increased interest rates in 2022
probably starting in the first quarter
at the end of the first quarter and if i
had to guess
i would think you’re probably going to
see
maybe anywhere from
a half to a full point
increase in the prime rate by the uh by
the end of the year still not bad
because the prime rate is sitting at
three and a quarter which is pretty much
uh
an all-time low for many many years at
least so if you’re at four and a quarter
it’s still manageable
not terrible uh but higher than it’s
where it’s been for the for the past
couple of years
yeah and just i want to just make sure
that we’re not losing anybody because
we’re going to talk about some
interesting things here and there’s a
lot of implications in a lot of
different directions but just so we
don’t lose anybody
you know the fed uses interest rates to
try to regulate
uh the inflation amount right and so
you know over you know the great
recession all that the interest rates
dropped in order to stimulate the
economy when when interest rates drop
people borrow money and if people i i
teach this to uh
to
laundromat owners who are
thinking about selling their laundry
right if you can make your laundromat
financial you can charge a premium for
it because
people can if people can get a loan for
it they’re willing to pay more for it
right so when the fed drops an interest
rate it makes money easier to borrow to
go out and buy you know assets and that
stimulates the economy
and you know gets things moving right
keeps inflation where it needs to be
well if inflation goes high then you
raise uh you raise the interest rates
and it makes assets
more difficult to buy so that kind of
lowers that inflation so that’s kind of
how they try to manipulate the
very simplistic version of how they try
to manipulate uh the uh the inflation
rate so i think that’s why you’re
thinking there’s going to be interest
rate hikes
yeah i mean they they have to do it in
order to control
the
inflation otherwise it’ll get out of
control
in the early 80s
inflation was sitting in double digits
you could get if you had your money in
the bank you could get 18 19
but you were paying 20 on interest so it
kind of washed itself out so they’re not
going to allow a flight inflation to get
that much out of control and that’s why
they’re going to raise these interest
rates uh during the next year
yeah and so i mean i think the natural
tendency if you know if i’m somebody
who’s looking to buy a business or who’s
looking to buy some assets for my
business my natural tendency would be
well i got to get out there and try to
lock in some interest rates or or if i’m
going to buy a house for that matter
right like i want to go out there and
and lock up some of that debt at the
lower interest rates but there’s a lot
of other complicating factors that you
kind of make right headwinds
too so what’s uh what what are some of
the implications of these uh rising
interest rates
well i think you hit on it is that as
interest rates rise and the cost of
money or cost of borrowing money rises
that could curtail
um borrowing and you know what do you
borrow for you borrow to buy a business
you borrow to replace equipment in your
business in our industry so that could
have a negative implication but i don’t
think it’s going to be too terrible
like i said even if the rates go up one
point
that’s not an outrageous rate that we’re
looking at
you know in today we just got used to
having this very low rate and people
will just have to adjust things now what
happens if it costs more money to put
new equipment in your store or to buy a
store
obviously it trickles down and
laundry owners are gonna have to raise
prices
uh you’ll have no choice but to do that
it’s just like if your utility bills go
up the gasoline i know i was in
california uh last month gasoline was
six bucks a gallon for premium and i
live in new york it’s not quite that
high but it’s right at five so this is
something that affects us go to the
grocery store a gallon of milk is
probably 20
more than it was a year ago there’s a
cream cheese shortage
we just had in our in new york because
you know bagels and cream cheese there
was a whole thing on television on the
news that there’s a cream cheese
shortage so what are these bagel guys
doing they’re raising their prices
because they’re paying more to get the
cream cheese so it’s it’s a trickle-down
effect um but i think we all need to be
aware that it’s out there
and along with that are
the price increases that we’ve seen
on the equipment that in our industry i
mean it’s not only our industry all you
know price of lumber is up
we also finance tow trucks in our
business price of tow trucks that are up
everything is
up because of
partly because of this supply chain
crisis that we we’ve seen
yeah huge yeah
there’s a lot to talk about for the to
kick this year off man uh i want to i
want to take it down a level though of
what yours or go i guess go one level
further right of what you’re saying
because you are saying hey look we’re
all being affected gas prices are
ridiculous grocery prices are ridiculous
i just saw something about um some uh uh
like uh fruits and vegetable shortages
uh because you know there’s the labor
issue and you know on my trash isn’t
getting picked up today because there’s
a labor like there’s lots of stuff going
on today you know these days and
you know when when
the cost of us to do our business
increases like you said we have to raise
prices
but we also need to think down a level
two because
the
our customers
are you know obviously that’s trickling
down to the customers and they’re seeing
those
prices increase across the board too for
all the things they’re using they’re
using the same gasoline buying the same
groceries they’re doing their laundry at
our laundromats
and
you know it’s
it’s i would say it’s more important
now than i’ve ever
maybe i’m just paying more attention now
but it’s more important i think now than
ever that we’re paying attention to
wages wage growth versus the inflation
growth because you know a lot of us who
have laundromats in lower income areas
which is a lot of laundromat owners
those are the people who are getting
squeezed the most right and so when
we’re looking to buy new stores or ex or
build new stores or expand
uh stores we need to be considering
not just how much it’s costing us
but as we pass down
you know the the cost of all of these
things we need to have some kind of
understanding of how that’s affecting
our customer base um in the grand scheme
of everything else that’s going on
because inflation is rising faster than
wages and has been for
decades i think
i don’t know if that makes sense yeah
that yeah no that’s a true statement um
i think we’re fortunate to a certain
extent the laundry owners are in that
this is a necessity of life
you can skip this week
washing your clothes but unless you’re
going out and buying a bunch of new
clothes next week you’re going to have
to come to the laundromat
and so
you will get the business and but i
think you know we are a customer based
business and i think it’s important for
all laundry owners to convey to their
customers the reason that they’ve had to
raise their prices you know and i think
if you tell the customer that
that the customer and i know because
i’ve had feedback the customer will
understand because as you said jordan
they’re putting paying more to put gas
in their car they’re paying more to put
food on their table this is another one
of those necessities unfortunately if
you’ve had to raise your prices
it is what it is
um we all have to survive with it so
no one likes to do it it’s a little bit
uncomfortable but in the long run you
have to do it and that’s the way you
know this is a trickle-down economy
always has been
and the last guy on the on the plank
seems to always take a bit of the brunt
but in this case
you as the store owner you’re paying
more for all these things so you have no
choice unfortunately
yeah absolutely absolutely and i think
too you know we are
uh you know i i just hear more and more
conversations about owners raising their
prices and feeling like i think that’s
been kind of a weakness for our industry
for a long time and the people who it
has been yeah the people who don’t raise
prices are the people who can’t reinvest
in their business and end up with
laundry right zombie maps yeah in their
possession right that’s exactly right
that has been a long-standing issue in
this business but i will tell you over
the past 10 years we’ve gotten different
a different breed of owner
and these are more
people these people are more
business-like they’re interested in
making money they’re not afraid to pass
on price increases so it’s much better
today than it was 25 years ago i’ll tell
you that for sure
yeah absolutely and i think too i i
couldn’t agree more and i think too even
more recently even in the last maybe
four or five years it’s kind of
ramping up even more i think there’s
more
out there and there’s more conversations
happening between owners and i think
that you know a lot of
the uh you know the breed who you know
would keep their machines for 40 years
and that’s a source of pride and that’s
fine that’s one and would be there all
day that’s one way of running the
business but a newer kind of breed is
coming in here where yeah you’re not
trying to be there all day or they’re
trying to run a legitimate business not
a self-employment job basically right
and technology has helped you know
the social media you know it’s just it’s
an open book now to a certain extent so
you’re right it’s definitely it’s been
going
in that direction for at least 10 years
and it’s escalated for sure over the
last three to five years and it’s good
for the industry because we get more
business savvy people in this business
it’s good for everybody
so
we’re going off script a little here but
out of curiosity does that
does that
slow down due to all of these
headwinds coming in does that keep
people from
you know keep business savvy people from
coming into our industry or building
newer better bigger stores or
well you know that’s a good question um
i think for the
laundry owner that this is their sole
business and they work it
day in day out you know it’s not
something that’s kind of a part-time
thing i think those people are going to
continue to invest and reinvest in their
business because that’s the only way
they can make the business grow i think
people who want to get into this
business
um
they
maybe prices of existing stores might
escalate a little bit
uh but if they really want to get into
the business i think they’re going to do
it so it could have some negative effect
on certain parts of the industry but
overall i think the people who are
involved in the business
know they have to
you have to reinvest to keep your
business growing
and if you’re in the business and you
want to buy another store or you need to
retool i think you’re going to do it uh
you may try to put it off a little bit
but
i i think it will be done
yeah
okay let’s go uh i mean we kind of hit
on inflation and we hit on interest
rates anything else you want to say on
interest rates before we no i think we
they’ll speak for themselves everybody
will know it because you’ll hear it from
the fed you’ll read it in the paper um
it will be out there so yeah i don’t i
think we’ve kind of covered that pretty
well yeah and i’ve got i’ve got a i’m
just going to throw a quick plug out
there i’ve got a video uh it’s a couple
months old now but it’s on i i did a
video on youtube on why
i think you should consider buying new
equipment right now and i think it’s
more relevant now than it was a couple
months ago even when i put it out so i’m
going to link to that for anybody who’s
interested um and in the very
end of that i talk a little bit more
about inflation and why it’s good to
kind of lock in some of that
that debt right longer term debt right
now because of it yeah do it now
absolutely do it now
yeah okay well let’s jump to um
equipment pricing and we’re at there
because i know that’s a i mean obviously
that’s the lifeblood of our
of our business right is that equipment
right and as we’ve been seeing
over the last year or two prices have
been going up and i think it’s gonna
continue in 2022
well i think it will be it was it’s
you know for many many years in this
industry the manufacturers had maybe one
price increase a year it was usually two
or three percent and it was absorbed by
the
vendor and the vendor passed it on to
the to the owner to the uh laundromat
owner so
um that’s what it was but this past year
because of the supply chain crisis
because of the chip crisis
um
many of these vendors or many of these
manufacturers had multiple price
increases that’s the first time i’ve
ever seen it and
you know the
industry passed it on and
the industry accepted it they had no
choice but to accept it and the
manufacturers had no choice but to pass
it on
the pro you know as you know a couple of
the manufacturers import equipment from
europe and from china
i was told that you know and i know that
uh cost of
impor of bringing a container over was
maybe three or four thousand dollars now
it’s twenty thousand dollars i mean
that’s just an incredible increase and
as you know living in california and i
know living in new york look out in the
harbor and you see all these
boats sitting out there they can’t even
get them get them unloaded and they
can’t get them to shore so
that’s a big that’s a big issue and
unfortunately the manufacturers were
faced with price increases and it just
was passed on down the line so it’s
there it’s being dealt with it was dealt
with throughout the year because some
manufacturers had multiple price
increases during this year
and it’s just going to be the way it is
hopefully next year maybe they’ll only
have one
or two instead of
three or four
uh but we’ll we’ll see but it’s it’s a
fact unfortunately
yeah we will see be in and man i mean
listen i don’t
i don’t see at least as of right now i
don’t see any indication that things are
going to be different you know things
obviously can change uh over the year
but i think in the in the short term
first half of the year i don’t see any
indication that that’s yeah
i agree first
i agree i mean the the outlook is not
too rosy to begin the year as far as the
supply chain getting straightened out
and as a matter of fact today in the
wall street journal they had an article
about it and most of the
experts whoever’s in that considers
themselves an expert feel like it’s
going to persist for most of 2022 and
will start to ease itself out in 2023
yeah well brings the mind to me the old
saying you walk 10 miles into the forest
if you want to get out you got to walk
10 miles to get out right you can’t just
right if it’s
kind of backed us up over the last year
or two it’s going to take us at least
that long you know to get things
situated uh for us and to get get back
in on track to where we’re right if we
can ever
um and we will
yeah we will it’s just going to take
some time yeah and i don’t i don’t
anticipate
prices going backwards ever no
you know on anything that’s yeah on
anything yeah
that’s true the only thing that seems to
be somewhat volatile and goes back and
forth at gas prices yeah because that
that is such an open market that you see
what’s going on with opec and the local
and the domestic uh suppliers that you
kind of can see what’s going on but in
in hard goods like this very seldom do
prices go down once they go up that’s
where they are
yeah yeah i would say the one
possible caveat to that and probably not
in our particular industry but
technology does tend to have
deflationary
aspects as
you know technology gets
big you know faster smaller better
uh prices tend to decrease but i don’t
think there’s enough
our equipment’s not technological enough
to really be impacted too much by those
visionary pressures so i would tend to
agree what we can hope
is that
into the future maybe there won’t be as
many and maybe they’ll skip a year or
two without having to raise prices as
things start to settle down
but i don’t think you’re going to see
any of these manufacturers come out and
reduce their prices
yeah well just like probably none of us
are going to reduce our prices no you’re
not you know you’re not going to you
have a laundry you have a price you’re
not going to go back on your price not
unless there’s a major recession or
something yeah well i mean pricing is
one thing but here’s the deal is that
right now
if you know if i want to go buy new
equipment not only is it going to cost
me more than it would have at the
beginning of the year but it’s going to
take me sometimes 4 5
9 10 months to get that equipment so
delivery times are extending out too
which i think has a lot of maybe even
more ripple effects
yeah nice increases yeah i agree because
if you can’t get the equipment it’s one
thing if you have an existing laundry
and you’re retooling it and your
equipment is still working well you can
wait you know you may not want to wait
but you can wait to get that equipment
but if you’re building a laundry
and if you’ve signed a lease and for
argument’s sake let’s say you have six
months free rent
and usually that’s plenty of time to get
your store built get the equipment
installed and be up and running but if
your equipment is not coming for nine
months
that’s a problem
and you don’t want to be paying rent for
three months
when you don’t even have the equipment
in your store so
delivery times are going to be crucial
hopefully the
manufacturers will be able to catch up
as we get into the year but right now
you know i’m hearing delivery times as
as far out as 11 months on some
equipment
so
that’s that’s definitely i don’t know
how you’d
address that there’s nothing you can do
about it if the manufacturer can’t make
it because
they can’t get the
the uh
resources to build it or the goods the
supplies to build it it’s going to be
tough to
to fix it so
we’re just going to have to i think
everybody in the industry just has to
pay attention to it and
just monitor it as close as you can and
when you’re buying equipment with your
local vendor just push them apart to get
it as quickly as you can get it but you
have to also remember there at the mercy
of the manufacturer and if the
manufacturer can’t make it it’s going to
be kind of hard to to deliver it so
that’s something that we have never seen
or i’ve never seen in this industry not
extended delivery times like this
but we just all have to deal with it
yeah and i will say kind of going on the
other side i mean not only do you need
to kind of try to push that distributor
to get the equipment quicker i mean
you’re also having to push on the
landlord side to try to write some of
you know some of some free rent or half
rent or or whatever right and i
through just the negotiations i’ve been
doing lately
you know some landlords are willing to
do some of that but there’s not very
many that i’ve encountered that are
willing to go
nine months or a year free rent yeah and
you know even
you know even some of the bigger markets
in la and new york some of the florida
markets some of the texas market chicago
area landlords that i’ve talked with
uh even even six months is really
pushing it for a lot of these guys
because they feel like
they can kind of turn over um which is a
little bit surprising to me actually uh
coming off of the
uh you know the whole
epidemic thing well i think you know you
raised you mentioned something earlier
what some of the opportunities the
opportunities are in
in renting
uh because there are a lot of vacancies
a lot of landlords lost tenants that
didn’t reopen
and so i think they’re a little more
amenable today than they were
pre-pandemic
and so
that is a discussion that if you know
your equipment is going to be delayed
out eight seven six seven eight nine
months when you’re negotiating your
lease you have to bring that to the
landlord’s attention and see if he’ll
work with you on it because
it’s going to be tough
if you got to start paying rent and you
don’t have equipment in the store and
obviously can’t open your store so but i
do think
a landlord’s
it depends on who it is obviously you
know these huge landlords they don’t
give a damn
but a smaller landlord and we talk to
landlords all the time i spoke to two
today as a matter of fact for a couple
of customers that i’m working with
one of them was very amenable understood
what we were talking about and wanted
that tenant
he wanted the laundry as a tenant
because he knew the laundry would stay
open no matter what he knows that this
particular
uh
tenant prospective tenant has other
stores he’s seen them he knows they’re
good they’ll be a good tenant so it just
depends on who you’re speaking to but
it’s for sure something
when you’re negotiating a lease and if
you know that your delivery times on
your equipment is going to be delayed or
could be delayed i would
bring that out during those lease
negotiations and see how the landlord
will assist you if you don’t get the
equipment in a timely fashion
yeah and i would say too just based on
my experience talking with landlords
it’s good to have that conversation
earlier oh yeah then later and just kind
of lay your cards on the table and say
hey here’s what here’s the situation i’m
dealing with
is you know supplies you know
it’s backed up the delivery times are
backed up and costs are all up through
the roof and you know so have that
conversation early and and just you know
put your cards on the table because
those landlords you know like you said
some of them are going to understand and
work with you and some of them
aren’t uh right better to know early for
you and for them uh if they’re going to
work with you or not you hate to invest
a lot of time and money and then
just to realize that they’re really not
going to work yeah
that’s very really good advice bring it
out early tell them exactly what’s going
on and see if you can make a deal with
them
yeah
uh okay i mean
and just you know just kind of to
mention this the delivery
time issue is across the board right
it’s for
all the manufacturers are dealing with
it’s not like one or two of them it’s
all of them they’re
dealing with it to varying degrees um
but
all of them are are dealing with those
those things too so it’s not like you
can say hey one is got long delivery
times and the other one is shorter and
i’ll just go with them
it’s all of them are dealing with that
issue so i just wanted to make that
point anything else on delivery times
no i think we covered it
all right well i mean listen if the
cards weren’t stacked enough with rising
inflation and
you know interest rates going up
equipment prices increasing and delivery
times being extended out we also have
the cost of construction going up and
kind of along with that is the rising
cost of labor uh both on the
construction side and also on our
employee side of things
let’s talk about cost of construction
how that’s affecting things right now
well you know we’ve
we heard from different
laundry owners that we do business with
that construction costs have gone up
anywhere from 25 to 50 percent
depending on
what you’re doing and where you’re doing
it you know in california new york
chicago the big cities it’s gone up
tremendously not only has the cost gone
up but the time to build the store has
been extended because of the supply
chain issue i mean i i get i’ll relay a
personal issue i’m doing a small
addition on my house
and
so the other day
i see a load of lumber come and i called
the contractor and i said are you coming
to tomorrow to start framing out and he
said no he said
they back ordered half the lumber
and i’m saying like what the hell i mean
what does that mean he said well
hopefully it’ll be here in a couple of
days but i can’t come do the job until i
get all the material so that is going on
with everybody
and so you have higher construction cost
you have material deliveries just like
we’re talking about deliveries of the
laundry equipment’s the same thing for
materials needed to for construction
i’ve also heard in certain parts
particularly in your backyard permit and
getting permits has been a nightmare
yeah and taking twice as long to get
permits as it usually does so all of
these things are you know you just have
to understand what you’re getting into
when you start to build
uh either a ground up if you’re doing a
ground up thing or if you’re going to
rent and you’re rehabbing a space you
just have to get all these timelines in
your
in your
mind and then and in your project so you
know
how how you can deal with it so
again i don’t think there’s much
you can do with it other than know it up
front and pin your contractor down as
best you can as to what is the time
frame to get the permits to get this
thing built make sure all the supplies
and materials that the contractor needs
that he can get or he’s already ordered
so that you’re not faced with some
unreasonable amount of time to finish
the project
yeah and i mean the other thing to kind
of consider with all that and all that
isn’t insanely true i mean
i i mean kind of famously the lumber
prices were were super high and they
came back down a little bit i think a
little bit well they’ve kind of
oscillated back and forth a little bit
but they’re not quite as high as they
were i don’t think but i mean
it’s not just lumber it’s it’s
everything and you know on top of that
you know with the supply chain issues
that are slowing things down at least
here and i know in other big metros and
i think kind of all across
you know
it’s it’s been difficult for
you know general contractors to find
subcontractors to work and to find you
know labor to do especially you know
most laundromats are smaller projects
even the million dollar laundry mats
that’s a that’s a relatively small
project
and so
you know finding labor that is in excess
of doing maybe some larger more
profitable project for a construction
worker to to take the time away from
those to come do
a relatively smaller project has just
been is difficult too you know and that
on top of the permit
and all that so there’s i mean it
there’s a lot that is stacked up on
there and i just want to kind of mention
you know we’ve been talking about the
you know the supply chain delays and you
know the permitting delays and the
construction delays and you know all
this stuff and
one of the things i think it it does
that we don’t consider very often in
this industry that maybe they do more uh
more intentionally in real estate
investing circles but i don’t hear
really talked about in laundromat
circles because it really hasn’t been
that big of an issue is holding costs
right the longer it takes
to if you’re doing ground up or a
remodel rehab the longer it takes to get
that done
you’re still you still have expenses to
be paying right and so you need to
factor those in
uh you know into these longer timelines
that you’re dealing with because it’s
gonna end up costing you a little bit
more money and the worst thing to happen
would be for you to not budget in those
holding costs right to abort before you
get to the end of the line there yeah
that’s a disaster
that is a disaster and you know you’ve
probably all of us have probably seen it
you see a house being built and then all
of a sudden construction stops well i’ll
bet 90 of the time or 80 of the time
they ran out of money or they didn’t do
exactly what you’re suggesting uh
figuring a contingency and holding costs
because almost no project runs true to
form
so and especially now so uh you def
that’s good advice
definitely need to consider that yeah i
don’t think there really is a form now
they can’t run
amorphous right now i don’t know
everything’s kind of in flux
that we’ve been talking about i mean
we’ve hit
a lot of things and you know to be
honest
you know listening to all of this stuff
i mean i could see how this could feel
to anybody listening kind of
disheartening and a little bit
discouraging or you know whether you’re
an owner or you’re trying to get into
the industry
uh you know and i think especially a lot
of people who are trying to get in
you know on by kind of on the lower
inside where they’re trying to come in
and rehab a zombie mat or something like
that it can get a little bit
discouraging i think to hear
yeah stuff
but i think you know there is a a
shining light here
and the shining light is
that this industry
is a necessity of life this industry
during the pandemic was ruled in a
essential business that had to stay open
we did not see a lot of laundries go out
of business because of the pandemic
in fact a lot of them got a little
stronger as things started to improve
so it’s still a very good industry
um yes we have hit headwinds but i can
tell you every business today has
headwinds we’re not unique it’s not like
what we’re seeing is unique to the
laundry business it’s not it’s every
industry is got some kind of headwinds
going into this to the 2022. but
as i said i think you know that for the
for the people that really want to be in
the business and are already in the
business there’s some good opportunities
out there and you know someone else’s
loss always turns into somebody else’s
game and that’s what you’re going to see
in 2022.
so i wouldn’t say to anybody who’s in
this business sell your laundry and get
out i’m not saying that at all i’m just
saying we’ve got some
things to deal with and anybody who
wants to get into the business it could
be a good time to get into the business
especially if you find one of those
zombie mats that you can pick up at a
right good price and then you stay with
it for a little while and then you start
to retool it and put in new equipment
and you’ve signed a new long-term lease
with a landlord who’s given you really
good rent because you can get good rent
now
compared to pre pandemic so
there’s some good things there you just
gotta
be careful as we get into 2022 and make
sure that you’ve taken into
consideration everything that’s going on
today
yeah yeah and you mentioned already the
rent is is one of those opportunities
let’s let’s kind of segment this out and
maybe we can kind of give some
practical advice
uh to people so let’s talk for a second
to someone who’s maybe looking to buy
their first
laundromat pro
tips
what
what are the opportunities for somebody
trying to get into this industry going
into 2022 you know with the knowledge of
all these headwinds here you know okay
so we have you know i’ll throw in the
you know the opportunity to get a good
long-term rent i mean i think that’s an
opportunity there for somebody to get in
this business are there any other
opportunities people should be looking
for
uh during yeah i think i think rent is a
big is a big thing
i think that if you um
can buy
as we refer to them these zombie mats um
possibly you can get it at a good price
um then you have to consider
when and if you have to retool the store
what’s that going to cost
i also think that the manufacturers and
vendors um
realize because of the price increases
and the um
delivery times they they still need to
sell equipment
so
while equipment may be higher and
delivery times longer i think you know
you can still make a good deal with some
with the local vendor because they they
need to move the metal one way or
another can’t sit in the manufacturer’s
warehouse and it can’t sit in their
warehouse so there’s some up there’s an
opportunity there and again
i think for those that are in the
business and want to
retool
i think generally when you do do a
retool you generally raise your prices
so
you know you might have to raise them a
little more than you would have
otherwise because of some of these
headwinds but
again i think because the business
is an essential business it’s a
repetitive business the customer doesn’t
come in just once and wash their clothes
you know they’re going to come in on a
weekly basis or bi-weekly basis so there
there’s just some good it’s just a good
industry to stay in i certainly wouldn’t
want to see and i don’t think we’re
going to see a mass exodus from this
industry i think people will stay in it
we just have to deal with some of these
things that are a little bit out of the
ordinary
yeah and i think that’s i think those
are all just really good pieces of
advice i want to say too i think
that
a huge opportunity for
uh four current owners right now or if
you’re gonna buy one you know in this
year in 2022
i think a huge opportunity is
to
be
more on the aggressive side of raising
your prices and
not
not for the sake of necessarily taking
more profit but for the sake of
reinvesting in your business during this
time because i think a lot of businesses
aren’t going to do that and
when laundromats especially you know
kind of in your area are not reinvesting
in their business and things tend to
deteriorate if you’re able to provide
the kind of value that’s going to allow
you to charge a little bit more for your
wash but that’s going to allow you to
reinvest in your business that’s going
to be a virtuous cycle
that is going to serve your business
well and i think that’s a huge
opportunity
right now as people are
tightening the purse strings
trying to you know
figure out how what’s going on and how
to best navigate this i think if if you
can
figure out ways to serve your customers
better during this time and as a result
raise your prices a little and as a
result reinvest some of that back into
your business to serve your customers
better to raise your prices more and on
and on and on i think it’s going to
serve you well and i think it’s going to
be a huge opportunity coming out the
back side of all this for a lot of
owners that is exactly right and i have
a customer who for years has always
raised his prices but every year he did
something in his laundry he improved it
he may have bought equipment he may have
painted the place put in a new ceiling
put in a new floor every year he did it
because he showed his customer he was
reinvented he was reinvesting in his
business and when you do that the
customer appreciates it and they
understand why you’ve had to raise your
prices
so that’s great advice jordan and i
think uh you’re right
the people that do that are gonna
see the
you know the pluses on the back side
yeah absolutely absolutely well hey i
mean this i think
that we are poised one way or another
for an unprecedented year i don’t know
about you but i’m actually pretty
excited about this year despite the
headwinds and a lot of it’s your
perspective right you can write them as
headwinds because you know there’s some
obstacles to be overcome there or you
can see them for the opportunities that
are there and i think the people who are
able to kind of shift that perspective
and not get frustrated with the long
wait times and the rising prices but be
able to get a little more creative about
how you’re gonna run your business be a
little more strategic about how you’re
gonna plan things out for your business
and it actually
there’s a lot of opportunity being
presented right now during this
transition and it’s an opportunity for
you to come out on the other side of
this thing in a much better
shape than you’re in right now even
right yeah i agree i think it’s going to
be a very interesting year
i think in spite of what we’ve talked
about here there’s still a lot of pluses
to this industry people who are already
in it know it and people who want to get
in it will find out when they get in but
it’s it’s a great industry and we’re
going to weather these storms and and we
will survive and and like you said it
it’ll come out on the other side as a
plus
yeah yeah and i am seeing you know
another kind of plus for our industry uh
is i am seeing more and more
people taking notice of this industry
and seeing the value in this industry
and seeing the opportunity in this
industry and i think that’s led to some
of the more
sophisticated business owners that we’ve
been seeing too right um in this in our
in our industry right now and so i think
that there’s a lot more interest i think
that’s going to continue as people are
looking for
stable places to put their investment
money um when there’s a lot of unknowns
going on right now so
man
mark thank this has been
incredible i never thought i’d be like
so excited to talk about
nation and interest rates and
all this stuff but man i’m like i’m
really jazzed for this year for 2022. i
hope that everybody here listening is
you know taking away the opportunity
here and is getting excited for this
business or for this for business this
year and i just want to
encourage you
hey none of this really means anything
to you
unless you put it into action right
you’ve got to take action on this stuff
this is not the kind of thing where you
sit and wait
and and things just kind of work out
like we said prices aren’t going back
down timelines at least in the short
term are not getting any shorter so you
got to start being a little more
proactive taking action and that’s when
you’re going to see the big gains coming
out the other side so mark thank you
agreed agreed
appreciate the time
2022 let’s get them always a pleasure
thanks man and all right hey make sure
you join mark and i and uh and our crew
on our webinar that we got coming up
details are in the link in the
description and in the show notes
because we’re going to dig into this
stuff a little bit more and get real
practical boots on the ground uh talking
with a few different people about this
stuff so get excited about that too all
right mark appreciate it all right you
thank you take care
okay i don’t know if you’re freaked out
because of that episode or if you’re
excited and pumped i hope you’re coming
out of this episode pumped up because
things are changing and stuff is
happening but that’s when fortunes are
made and lost okay
and again i just want to encourage i
think 100 percent of the people watching
this listening to this needs to be
on that webinar
uh that’s coming up uh because we’re
gonna continue to explore some of this
stuff the implications of this stuff and
how we can all end up further ahead than
we are now and not further behind so
again go to laundromat resource dot com
events
sign up to get the email for when that
webinar is going to take place i will
make sure that you get it and that
you’re in on all of that okay
all right guys this was awesome again
i normally say hey
you know pick something to put into
action from this episode there’s plenty
you can take but the one thing i think
you should be doing is go sign up for
this webinar uh again i think it’s a
huge huge deal and it’s gonna be uh just
value-packed for you to really i think
it’s gonna make you money that’s that’s
what i genuinely think so
uh it’ll be free and all that so come
join us no reason not to all right
see you guys next week jordan for the
laundromat resource podcast peace
[Music]
