When you think of dry cleaning, you probably initially think of a niche business. However, the dry cleaning business is extremely competitive. According to the US Securities and Exchange Commission, there are approximately 40,000 dry cleaning businesses in the United States. Still, if you are considering purchasing a dry cleaning business, there are a few things that you should keep in mind.
Here are eight things that you need to consider if you are thinking about purchasing a dry cleaning business :
- Do Your market research to get an idea of the business’s revenue.
- Find out why the current owner wants to sell the business.
- Determine what the operating expenses are for the business.
- Find out if the building is in good shape.
- Ask if the real estate is included in the purchase.
- Determine if the location of the business is to your liking.
- Ask if the equipment is included in the purchase.
- Find out how the employees operate and if they will stay.
What Is the Business’ Revenue?
When you purchase any kind of business, including a dry cleaning business, the first thing you need to do is to find out what kind of money that business is making. In other words, what is the revenue like? Many people believe that they have the ability and the business-savvy to turn a failing business into a success. However, it can be considered a significant risk to buy a business that does not bring in an adequate amount of revenue. You can find out how much money a business makes per quarter by pulling up their 10-Q report, according to Biz Fluent.
Why Does the Current Owner Want to Sell the Business?
This question goes hand-in-hand with the first question, regarding the business’s revenue. If the revenue intake of the dry cleaning business seems to be good, ask the current owner why they would want to sell a successful business in its prime. If the revenue is less than adequate, it should be self-explanatory as to the reasons why the current owner wants to sell their dry cleaning business. This could potentially be your livelihood at stake. You need to be informed. Whatever the case, don’t be afraid to ask questions about why the current owner wants to sell the business.
What Are the Operating Expenses of the Business?
Now that you know what kind of revenue the dry cleaning business makes, and why the current owner wants to sell their business, you need to find out what the operating expenses are for the dry cleaning business. Operating expenses are defined as the ongoing costs associated with running a business. This will help you to make an informed decision when purchasing the dry cleaning business because you will have an idea of what kind of profit the business makes by knowing the amount of revenue it takes in, and the operating expenses.
Is the Building In Good Shape?
Once you have determined how much the rent or mortgage is for the dry cleaning business you are considering purchasing, you need to conduct a thorough investigation of the building to determine whether or not it is in good shape. If the building is found to be in bad repair, you need to also find out if you are going to be responsible for any repairs that have to be made to the building. A building that is in bad shape has the potential to end up eating most of your profits. I would strongly suggest having a professional contractor inspect the building in which your dry cleaning business will be located.
Will the Real Estate Be Included In the Sale?
This one is relatively simple. When you are considering purchasing a dry cleaning business, one of the most important questions that you need to ask is whether or not the real estate will be included with the sale. Of course, this will probably be discussed when you are determining the operating expenses of your future dry cleaning business. At that point, you will have found out whether or not the current owner rents, or is paying a mortgage on the building.
How Do You Like the Location of the Business?
I know that many of you are familiar with the old saying that the key to a successful business is location, location, location. This saying holds far more times than it does not. If you think about any successful business that may immediately come to your mind, chances are that its location plays a vital role in the successful operation of that business. Having your business in an optimal location can be the difference between a successful business and a failing business.
Is the Equipment Included In the Sale?
This one is a key factor in determining whether or not you will purchase a dry cleaning business. Dry cleaning equipment can be fairly expensive, and you probably don’t want to purchase a business that will require you to have to buy all new equipment. Even if you plan on remodeling the business, it’s nice to know that you have equipment that will help you get started until you can have the opportunity to remodel. However, most dry cleaning businesses will include the equipment when you buy the operation.
Key items you need to start a dry cleaning business.
Will the Employees Stay and How Do They Operate?
When you purchase a business, one of the major concerns you will have is whether or not the current employees will remain with the business once you take over. Some employees are incredibly loyal to the people they have worked for for a long time. On the other hand, some employees may choose to stay and give you a chance once you take over the dry cleaning business. It’s always best if you can retain as many employees as possible, as they are familiar with the customers and the daily operations of the business.
In conclusion, purchasing a dry cleaning business can be a great investment opportunity for you. However, as you would with purchasing any other business, there are many things that you need to consider before making that decision. First, you need to do your research to determine what kind of revenue that business makes. Next, you need to find out why the current owner wants to sell the business. Third, you should inquire about the operating expenses of the dry cleaning business.
Next, you need to see what kind of shape the building is in and if the real estate is included in the acquisition of the business. You should also make sure that you like the location of the business. Next, you will need to find out if the equipment is included in the dry cleaning business. Finally, you should find out if the employees plan to stay once you have purchased the business, and how they operate. Once you have found out all of these things, you will be ready to buy your dry cleaning business.
What are the main operating expenses associated with owning a business? Operating expenses are the cost of running a business, to put it simply. Several operating expenses are associated with owning any type of business. These expenses include rent, equipment, inventory costs, marketing, payroll, insurance, step costs, and funds allocated for research and development.
How much does it cost to start a dry cleaning business? The answer to this question depends entirely on the type of equipment you choose to put in your dry cleaning business. Some pieces of high-end equipment can cost anywhere between $40,000 and $50,000 each. However, you can start a dry cleaning business for as little as $2,000, but that does not include the purchase of any high-end equipment you may want for your business.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
To learn more about how to start your own cleaning business check out my course and eBook here.
About the author. Entrepreneur and Cleaning Business Fan.
Hi! I am Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online cleaning business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a cleaning business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Cleaning Business Boss: I want to help cleaning business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.