The Pollinatrix second business idea is very progessive and cutting edge;
"Green Suds Laundromat."
Taos, where she lives, is a tourist town.
The good thing about that is that tourists have dirty clothes and no way to wash them unless, I'd suppose, their hotel offers a laundry service.
On top of that, there's only one other laundry mat in town which is quite inconvenient.
People, Susan told me, will actually drive a whole hour just to go to this particular laundry mat.
But the real deal maker is not only is there an apparent demand for a laundry service, this is not just any run of the mill, business as usual, laundry mat.
As hinted at in the name, "Green Suds" is exactly that.
Green.
You could not do better than being green right now.
Without breaking the business down in such detail as I did in my last post,
let me say more succinctly what I believe the pros and cons of
Green Suds are.
There's a demand (in Toas) and it's relevant.
But after running the numbers I find that owning only one location could prove more time consuming than it's worth; especially given the fact that her other business, Illuminated Manuscripts
is generating cash flow and has such a big potential.
One of not only Entrepreneur Chick's faults, but a fault of entrepreneurs in general is this:
Entrepreneurs incorrectly will spend eighty percent of their time to make ten percent of their money!
We can't even shake a stick at how often I have fallen into this sandtrap.
The carrot on the stick always seems to be, oooooh! But this is NEW.
Oooooh, but I think I can make this work!
Ooooh, it's worked a little, maybe I can make it work A LOT.
Ooooh, no one is doing this like I'm going to do it!
A business associate of mine said once, "Don't worry about being the first. The first settlers were the ones who took all the arrows."
Susan will also need an investor for this. That's a business partner.
Rule of thumb.
Do you know what's good about having a business partner?
Not having one.
It's a joke among entrepreneurs.
Things can get very sticky and legally screwed up with a quickness when another person is involved.
Those of you that have read me for awhile might notice that overall, I'm a very positive, enthusiastic person- which is true.
I, however, become very un-positive and un-enthusiastic when someone is screwing up the business and screwing up my cash flow!
Then I am positively enthusiastic about kicking your ass- so I suppose I'm still positive.
Tony, being my business partner, has my best interest at heart. I know he does.
But there's been extremely heated times, especially in the first few years of owning our businesses, that I not only didn't agree with him, I wanted to rip him a new one!
And I love the guy with all my heart but could, at the very least, kick him in the shins; he made me so mad.
An excellent book, "Let's go Into Business Together" by Azriela Jaffe is an invaluable read for those who are considering that approach.
While there certainly are successful business partnerings and much has been accomplished in the way of invention and commerce, it's true- Entrepreneur Chick's suspicion that far more of these parterings fail than thrive.
High Start Up Costs
Start up costs for a laundry mat and leasing issues are also dicey, making me leery.
Let me give you two examples of business owners that I know personally, who sadly, have fallen on the sword.
The first is an indoor bounce facility who unjudiciously located itself in a retail location.
Bad, bad, idea.
I knew at their ribbon cutting they were'nt going to make it- and I wonder even more about what sort of doofy bank would loan money on a venture like that.
Retail locations are reliant on customers coming in all day long and making purchases.
The bounce house business had over ninety percent of its customers coming in
on weekends only.
Their rent ate their lunch, and in short order- not even making it to their year anniversary.
The other business I'm thinking of bought a franchise, so, theoritically you'd think that they'd last longer and be successful because of the tried and true, proven method.
But no.
These former corporate America employees did not have the business experience to see what needed to be corrected within their establishment, fix it, and generate positive cash flow.
That and a huge road construction project, making the area a nighmare for motorists, took them down.
Did these former business owners just say to themselves, "Oh well. We'll just get right over this and go on"?
While they might have, the sad reality is that those leasing demands to the tune of probably six thousand a month still have to be satisfied.
Let me ask you, if these owners businesses are a wash, where are they going to come up with that kind of cash to pay back that bank loan?
They aren't.
Bankruptcy. Yep. It's unavoidable.
This is again, why I favor a business that has overhead that's so dog gone low, especially if you are a novice, that you can make an awful lot of mistakes and still turn a profit and not go under.
Projected Profits
After some research, here is what a niece said of her uncle's laundromat business:
Earnings of a Laundromat Owner
"I was looking for the answer myself and do not own a laundromat myself but, my research shows that an average laundromat which would cost you roughly $150,000 makes a profit of between 25 and 40 thousand dollars annually. Of course you would have to subtract the payments on the loan that you take out to pay for it. But after the loan is paid, I think you can expect to make about 25 to 40 grand and you actually only have to do about 15 hours of work per week if you want it that way.
My uncle owns 4 laundry mats in the town i live in. It is a very small town. I am positive he makes more then 25 to 40 grand annually. If you want to build a new one you could save thousands in the long run if you knew how to do electrian work and plumbing. I am not sure his exact figure but I can give you an idea how good a life you will have if it is a succesful laundry mat business. He lives on the lake in an over 1million $ house. He drives a Yukon just because he doesn't give a crap about cars. My cousin which is his daughter drives a new 2007 BMW. Recently he bought a brand new Mastercraft x30 paid in cash on the spot. So if you had a succesful one you could make alot of money."
Okay, the neice is not the best communicator, but her point is valid.
Did you notice her uncle owns FOUR laundromats?
Though I understand this is to be a green business, the numbers overall will be roughly the same as a traditional laundromat- start up costs for a green laundromat could be even higher due to more specialized equipment, but by the same token, profits could be even higher due to the savings on electricity over the long haul.
After researching laundromats for sale, those numbers do weigh themselves out.
The asking price of a traditional laundromat is usually $150.000.00 to $200.000.00 and yet the gross generated profit is only about fifteen to thirty grand!
You'd honestly have to own more than one to really make any real money.
Bringing this back to Susan- I believe she can do far better and make far more with her current business, especially if she starts hiring staff as she becomes too busy.
Let's recap.
Pros:
Green
Relevant
Cons:
Business partner
High start up costs
Low profitability
Loan to be paid back
Though I love the idea of Green Suds, from its forward thinking, progressive, enviromentally friendly vibe and groovy atmosphere- the cons tell me that this could be a cautionary tale and to carefully weigh how badly I want it relative to how much I expect to extract.
Entrepreneur Chick's take on all this is simply,
if you really want it, proceed with extreme caution.
P.S. I've told Susan this, and interestingly enough- Entrepreneur Chick's parents also owned a laundromat! My mother created a store from the room on the side and called it, "The Snack Shack", with the characters from the Peanuts Gang on the windows painted by a professional artist. Children would walk home from school and stop by for their candy and sodas. Customers could by snacks as they waited for their wash to finish.
My parents sold the laundromat mostly because of a major highway that was going to cut right in front of their business. Today it's an "Indian Trading Post" in Oklahoma City, Oklahoma.
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