This Is The Poster Child of Rundown Laundromats. Did I Mention We Bought It?

UPDATE – We now have a NEW website, Laundromats101.com!
This blog, MyShinyNickels.com, will remain a personal finance website, while all laundromat-related goodies, including this blog post, have been moved to Laundromats101.com.
Click HERE to read this post on the new site…

I think it’s pretty fair to say that laundromats are not the darlings of the small business world.  They don’t have the best of reputations, and truthfully, for good reason.  Far too often they really are dilapidated, run-down eyesores. Sadly, our second store was one of them.

But I’ve always enjoyed a great before/after makeover story.  I’ll take them in any form…houses, cars, animals, humans.  I love seeing the transformation from ugly duckling to swan.  And our second store certainly qualified as an ugly duckling, both inside and out.

It’s become clear over the seven or so months we’ve owned it that the elderly owner before us just hung on. Far.  Too.  Long.  Occasionally we still find that a washer was “fixed” with a paper clip and a piece of bubblegum.  Okay, I’m exaggerating with the bubble gum. (But not the paper clip.)  He was proud that he “did his own maintenance”, but I imagine that his tool kit consisted of a cardboard box full of paper clips and several varieties of duct tape.

It’s frustrating, but a very likely reality when you buy an old rundown store.

But for the right price, a store like this can be a diamond-in-the-rough.  This second store was originally listed for $50k, then lowered to $40k, and then finally sold to us for $28k.  (And even that price was a bit generous.)

We saw this store as an opportunity for a few reasons; the first was that it was, um, cheap.  It meant expanding our laundromat “empire” for very little cash.

The second reason is that it was only a few miles from our first store.   Some may argue that we’re competing with ourselves (our other store), but we see it differently.  We’d rather buy out a competitor and avoid the risk that a savvy buyer nabs it instead and makes it amazing.  Then we’d really have some competition on our hands.

Plus, we like the idea that we corner more of the market share in this area of the city.  Having two stores within 5 miles of each other means they are just close enough to make it convenient,  but just far away enough that the customer base doesn’t overlap very much.  They are located in two completely different neighborhoods.  So our radius has expanded that much farther.

We don’t have plans to pick up any more stores at this point, but I won’t deny that I daydream about it on occasion.  Randy says I have a soft spot for sad little laundromats.  I guess you could call me the “Patron Saint of Orphan Laundromats”.  (I know there’s a t-shirt opportunity somewhere in there.)

Each time we drive by a decaying laundromat, I immediately want to buy it and make it nice again.  I guess nothing is safe from my intense love of good ol’ makeover stories.

So when we bought our second store, we knew we had our work cut out for us.

Below is the rendering of our exterior makeover plans.  On the left is basically what it looked like when we purchased it (except for the logo decals on the door; we had already added those when the photo was taken.)   The right “photo” is the same view, but it’s my “artist rendering” of what it will look like once the paint and other exterior signage and lighting is complete.

At this point, we’ve already installed the large sign in front, and applied the window and door decals.  We still have to get it painted white with the green trim/accents, install the additional signage on the right wall and add the accent lighting that will highlight the sign at night.

And the interior was just as bad as the outside, unfortunately.   There was (still is) a long list of remodeling items for the inside, but we’re tackling them one-by-one, and it already looks so much better than it used to.

One major item was to refurbish every single washing machine in the store.  They are over 30 years old, but our technician said they were some of the best machines made and will continue to run for a while longer.  But they looked like they were on their last leg, and that’s all customers saw.  If they look like they don’t run, customers will just go somewhere else where the machines look more reliable.

Below is a before picture of the washing machines.  This is what they all looked like before I got my grubby hands on them.  Instruction labels were peeling off, brown paint was chipping everywhere, grime-covered temperature knobs and beautiful Halloween-orange front panels.  Oh, and I can’t fail to mention the previous owner’s finishing touch…machine numbers written with black Sharpie.  Let’s hear it for machine #7!!!

I’m sure folks ooohed and aaahed when these babies first rolled off the production line in 1982, but they were in desperate need of a facelift (there’s that makeover instinct again).

So before we even closed escrow, I had already finished designing a new label that was the exact dimensions of the existing brown, peeling one, but in a medium grey color.  I even found the Wascomat logo online and applied it in the upper left corner.

I submitted the file to our sign company and ordered one for every washer in our store (27), at $12 a pop.

When the new labels arrived a week later, I was ecstatic.  They were gorgeous, and looked professional, just like we’d hoped.

After I finished drooling over my new instruction labels and had completed my happy dance in the family room, I headed to the laundromat to start my refurb work.  Over the course of many weeks, one-by-one, I scrubbed each washer down, covered the brown instruction panel with black appliance paint, applied the new instruction label, cleaned the temperature dial until it looked like new, and painted the orange panel with heavy-duty white appliance paint.  Below is an actual side-by-side of a refurbished and an, ahem, original.

We spent $60 on appliance paint and $324 for custom printed labels, for a total of $384 to make our washers go from this…

…to THIS…

Numerous customers have told us they’re excited about the “brand new washers.”  Sometimes we ‘fess up and admit they were refurbished, and other times we just say “thank you” and bask in the glow of our accomplishment.

And as you likely noticed, we also painted the walls our “Thrifty Wash Blue/Grey” color, added new signage to the walls, refinished the benches in a dark blue and replaced the ugly green bulkheads and folding tables with new white countertops from Ikea.

Because I love before/after pictures, here’s another set.

We’re currently in “capital reinvestment” mode for this store, meaning that any profits we get we’re pretty much just rolling back into improvements.  We’ve also ordered all new dryers for this location (cost = $50k), since the current ones really are on their last leg, and breaking down on a regular basis.

Once we’re done with the remodeling stage, we’ll start ramping up advertising and really get this store booming.  Because so far, we purposely haven’t done any advertising at all for this location.

Why? The truth is that you usually get just one shot with new customers.  If they walk in for the first time, and then turn right back around again in disgust, it is much harder to get them to give you a second chance, even after significant remodeling.

With this customer psychology in mind, we don’t really want much attention yet.  At least not until we’re prepared to knock their socks off.   Literally.  I want to knock their socks off right into a nearby washer.

So now you’re thinking…”that’s a nice story, why are you showing us this again?”

My point is that while purchasing a run-down store can be a gold mine, it comes with a lot of hard work and the reality that cash flow will likely be minimal or nonexistent until you can get the improvements completed.  So if you need to rely on cash flow for living expenses, this type of store is not for you.  And if you’re a first-time laundry buyer, I’d be careful as well.  It’s not impossible, but know your limitations.

On the other hand, I want to make it clear how much improvement can be made with just cosmetic changes alone.  Had any other buyers looked at those old washers and even considered refurbishing them as we did?  Probably not.  They saw ugly, peeling, old orange washing machines and rejected them at face value.  Even our service technician was blown away at what we’d done with those old washers and he’s been in the business for 30 years.

All that to say that creativity in business can serve you very well.  Think outside the box.  Don’t reject an opportunity simply because it’s seen better days. With your specific strengths in mind, look for areas where you can improve that no one else would think of.  

There are diamonds-in-the-rough out there; find them, buy them for next to nothing, and then get to work overhauling them.  Create your own ugly-duckling-to-swan success story.  The customers (and the profits) will follow.

Until next time…