First time buying a business

[corius]

A very promising opportunity has landed in my lap.

I have been lurking around in the forum for months now and I know I haven't added much value ( mostly because I have felt that I lack experience to add any). This post is being created because an opportunity has come up.

The only laundromat in my small town has come up for sale. After looking at the C.E.N.T.S it all looks almost perfect. Being very strong in control because, I will own the building and not being bound by a lease. The weakest will be scale until I have enough capital to explore business opportunities

Because of it being about 80 to 90 percent passive it will allow me to leave still have my day job so almost all the capital will be reinvested in the business or put towards other ventures

I have researched buying businesses online allot and I do have tons of questions for the seller when I meet this weekend. While Google has given me a lot of information, I realize that there are just way to much to look for and I will be stuck for years trying to read all of it.

My question is what are details that I need to look for?
What kind of hidden this has bitten people in the but?
What easily overlooked "little things" has caused bigger problems later on?

 

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[ljean]

I'd hardly call a laundromat passive. Someone has to collect the quarters, maintain the machines, mop the floor, refill the vending machines, etc. You can hire it out but it would be very hard to trust someone with the money part.

 

[FeaRxUnLeAsHeD]

What's the cost?
What are they doing for revenue?
What's the profit margin?
How long have they been in business?
What do you get with the purchase of the business?
What are the leasing fees / other monthly fees?
Fully staffed / turn-key, or do you need to hire out etc?
What are the logistics of running the company? (who picks up detergent, who does drying / folding, delivery services, pick up, keeps machines running, etc)
Are machines warrantied?
What's the cost of a machine?
What's their CAC / LTV of a customer?

Make them show you their cash flow statements, balance sheets, income statement.

Report back with your findings and we'll go from there.

 

[corius]

Thank you chrisjharrington

Sent from my C811 4G using Tapatalk

 

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[Longinus]

It can be a fun experience.

Some guys in my country started a laundromat and installed a bar, so people could drink and chat while their laundry was getting done. It was an instant success and could start the same formula in other cities. After a few years, they sold their company.