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How Many Laundromats Do You ACTUALLY Need to Retire (The Real Number) — Transcript

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0:00You've heard the hype, everyone's saying
0:02boring businesses and specifically
0:04laundromats are the key to retiring
0:07early, getting that financial
0:08independence. And look, I am not going
0:11to argue that because I've literally
0:13built my life around helping people do
0:16exactly that. But I want to be honest
0:17with you for a second. With today's
0:19prices, today's competition, today's
0:21operating costs, what does the math
0:23[music] actually look like? Does it
0:26still work today? And that's exactly
0:28[music]
0:29the question I want to answer in today's
0:30video. By the end of this video, you're
0:32going to know the real number of
0:34laundromats that you need to retire or
0:36to hit financial freedom based on your
0:38life, not someone else's Instagram life,
0:41not the guru with seven stores telling
0:43you need all seven stores. Your numbers,
0:46your life. So, if you're new here, I'm
0:48Jordan and I run laundromatresource.com.
0:50At Laundromat Resource, I host
0:51Laundromat Resource Podcast, currently
0:53top 1 and 1/2% of podcasts globally, all
0:56about little laundromats. Interviewed
0:58hundreds of operators, I work with
0:59buyers and existing owners every single
1:02week. I've done over 1,500 consulting
1:04calls now in this industry specifically,
1:06and I've seen what the numbers actually
1:08look like across hundreds, not even
1:10thousands of real laundromats. So, I'm
1:12not pulling this out of thin air. Let's
1:14get into it and you can know exactly
1:17what you need to hit your number.
1:20So, here's a mistake I see all the time.
1:22Somebody discovers laundromats, they get
1:24excited and rightfully so, and the next
1:26thing you know, they're saying things
1:28like, "I want to own 20 laundromats." In
1:30fact, I did a poll one time on YouTube,
1:33and I think it was like 96% of people
1:35said they want to own 10 or more
1:37laundromats. And I always ask the
1:38question back when I talk to somebody
1:40who says that, "Why 10? Why 20? Why that
1:43number of laundromat?" And there's never
1:44a really a good answer for that. It's
1:46just It's a number that sounds
1:48impressive. It's a number that somebody
1:49said on YouTube. tied to anything real
1:52about their actual life. It's uh Listen,
1:54you want an an and I get that, but you
1:56don't necessarily need an empire to hit
1:59that financial freedom, at least
2:01initially. I mean, you can scale beyond,
2:03but initially, you don't need that. So,
2:05here's the problem with throwing out a
2:07number like 10, 20 laundromats. If you
2:09don't know your number, you'll just keep
2:12buying, and you'll buy your fifth store,
2:14your sixth store, your 10th store, not
2:16because you need to, but because you
2:18don't know when you need to stop. And
2:20again, for some people, building the
2:22empire is in that journey, that is the
2:25goal. But, if your goal is to leave your
2:279-to-5 or financial independence, you
2:29may not need as many as you think, and
2:31that's what we're going to talk about
2:32today. What you're building, though, if
2:34you continue to build, is not freedom,
2:36it's a second job a lot of times. It's
2:39bigger, more stressful job than the one
2:41you were trying to escape, which is not
2:43what you know, if you're here now, that
2:46may not be what you're trying to do.
2:47You're trying to get that freedom part,
2:49uh financial freedom. Before we talk
2:51about how many laundromats, we've got to
2:53talk about what are you actually trying
2:55to fund? What are you trying to do? What
2:57do you want your life to look like? Your
2:59number of laundromats depends on the
3:01life that you want, not on just a number
3:04you're pulling out of thin air that
3:05somebody else picked for you. So, let's
3:08define this thing. Your financial
3:09independence number or FI number, FI
3:12financial independence number, is just
3:14the income you need every year from your
3:16laundromats to cover your personal
3:18expenses. That's it. That's what
3:20financial independence is. It's the
3:22whole concept. It's not a net worth
3:24target. It's not how much money you need
3:26to have in the bank. It's how much do I
3:27spend in a year, and how much income do
3:30I need coming in to cover that. And
3:32they're basically, we'll talk about it
3:34in this framework. There's basically
3:35three levels of financial independence
3:37that you can shoot for. The first one
3:39we'll talk about is called lean FI.
3:41That's the bare-bones. Your mortgage or
3:43rent, food, utilities, insurance, the
3:46basics. The lights are on, the family's
3:48fed, nothing is fancy. This is your I
3:51really never have to work again if I
3:53don't want to number, but you're also
3:55probably not flying to Europe every
3:57summer and you're not living it up big.
4:00So, that's your lean FI. Second number
4:03is just normal FI, financial
4:05independence. This is your current
4:07lifestyle and I will I'll say that, you
4:09know, it might feel like, "Hey, why even
4:12have a lean FI? Why not get to normal
4:14FI?" Well, I've got clients who their
4:16number one goal is to get out of their
4:18job as quickly as possible and they're
4:21willing to make a sacrifice on the
4:23income level at least initially in order
4:25to do that. And that might be you right
4:27now and lean FI might be the step that
4:29you need to be able to take that leap
4:31and leave your job or to leave that job
4:35for a part-time job or a job that's more
4:37fun that maybe doesn't pay as much or a
4:40passion project, something like that.
4:41Okay? So, that's where lean FI comes in.
4:43But, here's your normal kind of
4:45financial independence. This is your
4:47current lifestyle. Whatever you spend
4:49now to live the way you live now, that's
4:51what a laundromat income needs to cover
4:53to have financial independence. And the
4:55third is what we call fat FI, fat
4:58financial independence and that's the
5:00version with the cushion. You probably
5:03can travel, have hobbies, that boat I've
5:05been begging my wife to buy, the second
5:08house, eating out without checking the
5:10bill. You know, I heard I think Secrets
5:13of a Millionaire Mind, the author said,
5:15you know, a lot of people read by
5:17looking at the right side of the menu.
5:18That's what That's how they decide what
5:20to order. That's where the prices are,
5:21right? We want to look at the left side
5:23of the menu and order based on what we
5:25want to eat, not how much it costs,
5:26right? This is the version that most
5:29people actually mean when they say
5:31retire. They want to live a good life,
5:33right? They want to have, you know, take
5:35that financial pressure off. That's
5:36really what most of us are trying to do.
5:38So, these are three different lives,
5:40three different numbers and you can't
5:42just pick how many laundromats you need
5:44until you pick which number you're
5:46shooting for and and what that number
5:48is. So, let's get into some actual
5:51examples here and give you some real
5:53numbers just to kind of make it real and
5:55to make it practical and tangible for
5:58you. Okay. Here's some numbers for you.
6:02We're going to just use this
6:04illustration, but let's do a starting
6:06point of around $50,000
6:10is your lean FI number. Now,
6:13real quick, these numbers can vary
6:15wildly, but let's just use
6:18$50,000 for now. You can plug in your
6:21own number for a lean FI. So, that's a
6:23lean financial independence. And
6:26financial independence or normal, we'll
6:28use $100,000.
6:32And for fat
6:34FI, we'll use $150,000.
6:37So, this is for our examples, but again,
6:39maybe pause your video here and take a
6:42second and think about what are the
6:44numbers that you need to hit to hit
6:46these different levels. If you're in
6:48Manhattan or you're in Orange County,
6:51California where I am or Hawaii where I
6:53also live, uh those numbers might be low
6:56for you.
6:57Uh if, however, you're in Tulsa,
6:59Oklahoma or Nebraska, maybe those
7:02numbers are high. I don't know. Um
7:04that's the whole point. You get to plug
7:06in your life, your numbers and what you
7:08need. We're going to use these ones as
7:10an example,
7:11um but maybe really do pause the video
7:14and come up with those numbers for you.
7:17And uh you know, maybe even take the
7:19step to pull up your bank statements,
7:21your credit card statements, whatever
7:23you have and figure out what you're
7:25actually spending, maybe your tax
7:27returns, I don't know, what you're
7:28actually spending in a year, add a
7:30little buffer and then that's your real
7:32kind of normal financial independence
7:34number. All right. Now, once you have
7:35it, come back to the video and the rest
7:38of this video is going to do a lot more
7:40for you once you have that number. Now,
7:42real quick, before we jump into the
7:44numbers, I wanted to just talk about a
7:46quick concept here. I saw this I
7:49apologize whoever I saw this from,
7:50probably on a YouTube video or
7:51something, but it's a concept that I
7:54want you to get comfortable with called
7:55the income floor. Think of it like this,
7:57if you own a rental property, for
7:59example, the rent that comes in every
8:01month is your floor. If you own dividend
8:04stocks, the dividend is your floor. It's
8:06the money [snorts] that shows up whether
8:09you go into work that day or not,
8:12whether you go on that boat that you
8:13bought or not, right? So, laundromat,
8:16same thing. The net income from your
8:19store, and we're going to talk about net
8:20income here a lot. The net income from
8:22your store, once everything is running,
8:24is your floor. It's the money that comes
8:26in regardless of whether you're at the
8:28gym, on a flight, hiking with your kids,
8:31whatever. The floor is what funds
8:33retirement. That floor is what gets you
8:35to financial independence. So,
8:37everything we're about to calculate is
8:39just figuring out how high does that
8:42floor need to be, and how many
8:44laundromats is it going to take to build
8:46that floor. Okay, so now we need to talk
8:49about the formula. This is the one that
8:52I want you to just tattoo onto your
8:54brain if you're serious about this
8:56business. It's called the net operating
8:58income or NOI. And if you're like
9:00browsing around on BizBuySell or
9:02BizQuest or Biz
9:04whatever jungle, I don't know, all the
9:07Biz sites or whatever, you might see net
9:09income, you might see cash flow, you
9:11might see EBITDA. They're all different
9:13numbers, but they often get used
9:15interchangeably as the net income on
9:18those sites. So, not always, but just,
9:20you know, so you're aware. Net income is
9:22what we're looking at. And here's what
9:23the net income is. You take all of the
9:26income that the store brings in from the
9:28washers, the dryers, vending, wash and
9:30fold, pick up and delivery, whatever the
9:32income sources are, and you add it all
9:34up. That's your top line number right
9:36there. Then, you're going to subtract
9:39every single operating expense,
9:41utilities, rent, staff, supplies,
9:43maintenance, insurance, management fees
9:45if you have any, all that stuff. And
9:47what's left is your net operating
9:49income. So, money in minus money out.
9:52But, it's important that you notice that
9:55net operating income or the NOI is
9:57calculated before debt. So, if you take
9:59out a loan, which we'll talk about,
10:01don't worry, we're going to talk about
10:01that, too. If you take out a loan, we
10:03don't subtract the loan payments yet
10:06from the net operating income. And the
10:08reason is is that the NOI tells you what
10:11the business actually produces. Two
10:14people could buy the exact same
10:16laundromat, one pays cash, one borrows
10:1880% a loan, right, to buy and puts 20%
10:22down, then NOI or the net operating
10:24income is identical for both of those
10:27situations. However, the cash flow will
10:29be wildly different between those two
10:32scenarios. So, we want to start with the
10:33NOI because it's the truth about the
10:36laundromat, the truth of how it's
10:38actually performing. And once you know
10:40the NOI, you can figure out everything
10:42else. Here's where it all comes together
10:44for you. This is the math that you
10:46actually came to this video for. This is
10:48the best way to think about this.
10:50Laundromats are valued on a multiple of
10:53the net operating income, okay? So,
10:55today, the average multiple you can
10:58expect to pay is about four and a half
11:00to five and a half times the NOI. So,
11:03let's say we're working with the five
11:04five x five times multiple just to keep
11:06it simple for my simple mind here. And
11:09we already know what our financial
11:11independence numbers are. Remember, you
11:13paused the video and you came up with
11:14your financial independence number. So,
11:16let's say you need to be able to get to
11:18lean fi, you need, you know,
11:21that way you can quit your 9-5 or work
11:23part-time or whatever. And let's call
11:25that our lean fi number for this
11:27example, $50,000.
11:30Now, here's the formula to calculate
11:32exactly how many laundromats you need to
11:34reach that financial independence
11:36number, that $50,000, okay? So, we're
11:39going to take, in our case, a $50,000,
11:43and we're going to multiply that by our
11:46multiple. So, in our case, that's going
11:47to be five, and that's going to equal
11:50the value of the laundromats you need to
11:52reach financial independence. So, for
11:54our example, we need $250,000
11:58of laundromats in order to reach that
12:00financial independence number. That's
12:01it.
12:02That's the math. That's the formula. So,
12:04we've got our financial independence
12:07number
12:08times our multiple
12:12and that equals the value
12:15of the laundromats.
12:18Okay? Oh, that cut off a little, but you
12:20get the idea. So, in our case, we need
12:23either one laundromat worth $250,000
12:26or multiple laundromats whose values add
12:29up to $250,000 to reach that financial
12:32independence number. For our fat
12:34financial independence, our fat FI
12:35number of $150,000 a year, we're going
12:38to need $750,000
12:41of laundromats. That's $150,000
12:43times our 5x multiple to reach that fat
12:46FI number. So, in most cases,
12:49that particular scenario is going to be
12:51between one and three laundromats total.
12:55And I want you to sit with that for a
12:56second, cuz notice what we didn't say.
12:59We didn't say 20, we didn't say 50, we
13:02didn't even say 10. For most people who
13:04actually do the math, the number is way
13:07smaller than they thought to be able to
13:09reach even a a fat FI number. A handful
13:12of well-bought, well-run laundromats can
13:15fund a really good life. And listen, I
13:18grew up in my investing journey here on
13:22BiggerPockets and calculating the number
13:24of doors that I needed to be able to
13:25retire. I invest in real estate. I love
13:27investing in real estate. However, when
13:29it comes to cash flow, when it comes to
13:32financial independence,
13:34real estate can't touch the average real
13:36estate deal can't touch the average base
13:38hit laundromat deal when it comes to
13:40that reaching financial independence.
13:42You're going to get there much quicker
13:44and with much less capital
13:46by buying a one of these {quote} unquote
13:49boring businesses like a laundromat. But
13:51listen, we made some assumptions here
13:53like the multiple for example, I said
13:55let's just take a flat five just for my
13:57simple mind so I could give you some
13:59examples here. But if you're not sure
14:01how to calculate the exact value of a
14:03laundromat, I did put together a free
14:06course. It's on laundromatresource.com.
14:08It's absolutely free and that will give
14:10you the confidence you need to move
14:12forward on buying that first laundromat.
14:14It's based on like I said over 1,500
14:17consulting calls, people asking the same
14:19questions over and over. I answer most
14:21of them in that course. It's short. It's
14:24three lessons long. It's about an hour
14:26total and it will be totally worth your
14:28time if you are looking to buy your
14:30first laundromat. The elephant in the
14:32room here before anybody puts in the
14:34comments, Jordan, what about loan
14:36payments? Let's talk about that cuz that
14:38is going to affect the amount of
14:40laundromats that you need to hit that
14:42financial independent. Now, obviously if
14:45you're, you know, strapped with cash,
14:47you got 250K in the bank and you need
14:5050K, you could probably go out and buy
14:52one laundromat all cash, you hit your
14:5350K and go, you know, go
14:57surfing or whatever you want to do, play
14:59golf or whatever that you want to do
15:00with your life. But if you're not,
15:03you know, strapped with cash over there,
15:04flushed with cash and ready to throw it
15:06all around and you do need to use some
15:08debt or your number is a lot higher,
15:10then you're probably going to need to
15:12use debt. And most people do by the way.
15:14You'll hear brokers saying you got to
15:16have cash. You don't have to have cash.
15:18We work with clients every single day
15:20who use loans to buy laundromats. So
15:22don't get discouraged by that. But, your
15:23actual cash flow number is your NOI
15:27minus your loan payments, which means if
15:29your store produces $50,000 of NOI, but
15:33you have loan payments of $25,000
15:37a year, you're only walking away with
15:39$25,000 in real cash flow. Now, I say
15:41only, that's nothing to sneeze at, but
15:44you're not hitting that lean FI number
15:46of $50,000 if you've got loans with it.
15:49So, if you're highly leveraged, you're
15:51going to need more stores to hit the
15:53same income floor, or you're going to
15:56need to add value to the laundromat, and
15:58that might be by managing the place more
16:00professionally, doing some marketing,
16:02raising prices, adding a drop-off or
16:05pick-up delivery services. There's lots
16:06of different ways to add more value in a
16:09store once you own it, or you might need
16:13to buy more laundromats, or you might
16:15need to wait a little bit until you pay
16:16off the loans. Cuz if you're paid down
16:19or paid off, you need fewer laundromats,
16:21obviously. I think about this in two
16:23phases.
16:24Phase one is you're building, right?
16:27You're building your wealth, you're
16:28building your floor, if you will, and
16:31this is where you use leverage on
16:32purpose, uh because you can buy more
16:36value with less money by using leverage.
16:39That's the That's the strength of using
16:42a loan, right? Not just because you
16:44can't afford uh all cash, but cuz you
16:46can buy more than you could if you're
16:48just using all cash, right? So, you're
16:49buying stores, you're scaling, you're
16:52using other people's money or OPM to
16:55grow faster than you could with just
16:57your own cash. Cash flow is tighter if
16:59you use a loan, but you're stacking
17:01assets, and actually your return on
17:03investment usually is higher because
17:05even though your cash flow is lower, the
17:07cash you put into it is also lower.
17:10Okay, so that's when you're building,
17:12you're in that building phase where
17:13you're you're stacking assets. Phase
17:16two, however, is the harvester phase.
17:19This is where you slow down the buying,
17:22you pay down the debt, you maybe pay off
17:24a store or two, maybe use a the debt
17:28snowball that Dave Ramsey loves or
17:30something to just start paying off your
17:32stores, and then cash flow starts to go
17:34way up, the stress goes way down, that
17:37pressure that we feel to provide
17:39financially starts to go down as we
17:42start to harvest some of the value you
17:45that we've created in our businesses.
17:47And this is the version that actually
17:49starts to feel like retirement. This is
17:51what we're striving for. But like I
17:54said, unless you've got the cash up
17:56front, it's something we need to work
17:58towards. It's something we need to move
17:59towards. It's still going to take some
18:01time and some effort and some energy,
18:03but a whole lot less time, effort, and
18:04energy than working that 9-5 or even
18:07doing something like investing in real
18:10estate. So, [snorts]
18:11here's what I want to say though. When I
18:12was explaining the numbers before, I
18:14spoke about how many laundromats you
18:16need in terms of how much value you need
18:19in the laundromat. I said something like
18:21you need $250,000
18:24worth of laundromats. So, that's true
18:26whether you use leverage or not. So, for
18:28example, if you buy a laundromat for
18:30$250,000
18:31and you put down $100,000 and you got a
18:34loan for the rest, you own $100,000
18:37worth of laundromats. And you need
18:40$150,000 more worth of value of
18:43laundromats to hit that lean fi number.
18:45And you can hit that by growing the
18:47business, you can hit that by paying
18:49down the loan, you can hit that by
18:50buying another location. You can do all
18:53of those combined to do that, but
18:56that $250,000 worth of laundromats that
18:59you own is the target to hit that
19:01financial independence number of $50,000
19:04in the example case, right? Again, put
19:06in your own numbers. Most people who
19:09burn out in this business burn out
19:11because they stay in builder mode too
19:13long and you never flip to the harvest
19:16mode. Don't do this. I see this happen
19:18over and over and over again. People
19:20work a lot longer than they need to work
19:22at their jobs. People build a lot more
19:25than they need to build and sometimes
19:27build themselves right out of the
19:29business. Um so, you know, again, if you
19:32know those numbers, those financial
19:34independence numbers beforehand, you can
19:36set up a stop here. Like, "Hey, we can
19:39stop we own $250,000 or $750,000,
19:43whatever your number is, of laundromats,
19:46we can stop now." Now, I need to talk a
19:49little bit cuz this is a question I get
19:51all the time about, you know, different
19:54markets just for a second. I walked you
19:56through all these really easy numbers.
19:585x multiple, $50,000 of cash flow.
20:02Super clean, super simple, super easy.
20:04We all know that the real world is not
20:06that clean, it's not that simple, it's
20:08not that easy. Utilities are going to go
20:10up, minimum wage is going up all over
20:12the place in most states, insurance is
20:14getting crazy across the board, you
20:16know, we're starting to add things like
20:18card payment systems, they take a little
20:20bit of a percentage of each transaction,
20:22equipment pairs repairs are getting, you
20:25know,
20:26old, you know, they're getting more
20:27expensive when your machines age,
20:29there's more and more of them. So, all
20:31these things we got to factor in. Rents
20:33reset or continue to raise. So, when you
20:36run your math, use the current numbers,
20:39don't use as a pro forma from 2019, for
20:42example. Don't necessarily just trust
20:44the seller's spreadsheet at face value.
20:46Get the actual utility bills, actual
20:48rent escalations from the lease, the
20:50actual repair history if they even have
20:52it, and build in a buffer. If a store
20:54does 50,000 in NOI today,
20:57what is it going to do if utilities go
20:58up 20% next year? Now, it's a little bit
21:01of a trick question because you also
21:03should be raising your prices, but
21:04traditionally our industry has not been
21:06good at that. But, these are the kind of
21:08pressure tests that you want to do on a
21:10business. It tells you whether your
21:12retirement number actually is going to
21:13hold up or whether it falls apart the
21:16first time something changes. The
21:18formula is the same. The inputs have to
21:21be real. Okay? They got to be real. And
21:24if this is something that you're like
21:25you're having anxiety about, um number
21:27one, go listen to the first podcast
21:30episode I I ever put out. I tell my
21:32story how I bought my first laundromat,
21:34made some very expensive mistakes, six
21:37figures worth of mistakes, and it took
21:39me years to recover from that and get
21:42the first laundromat I ever bought up to
21:44profitability. And I tell you all about
21:46that in the gory details. So, go check
21:48out Laundromat Resource Podcast episode
21:50one to hear that if you want. But, if
21:52that's something that you're worried
21:53about, something that you're afraid
21:55might happen to you, you might invest
21:57your life savings in a business and lose
21:59it all like I almost did. Not a sales
22:02pitch here, but I'm going to put a link
22:04uh in the description or if you're
22:05listening to the podcast episode, it'll
22:07be at laundromatresource.com/show249.
22:11I'll put a link there. You can book a
22:12call and I can walk you through no
22:14pressure, no sales pressure, anything
22:16like that, but I can walk you through
22:17some scenarios, some uh options that we
22:20have that we help clients walk through
22:22that process and make sure that you
22:26value every laundromat you're looking at
22:28correctly, that you craft a compelling
22:30offer, and that you go through that due
22:32diligence phase, you're asking all the
22:34right questions. We're looking for
22:36anything, any red flags. Uh we're
22:38getting all the information we need to
22:40verify all that stuff so that you can
22:42have peace of mind that you have a clear
22:44picture of what you're buying before you
22:46buy it. We've got some options where
22:48we'll walk through that with you with a
22:49one-on-one coach um through that
22:51acquisition process. And we have some We
22:53have an option where we'll actually go
22:55out and look for laundromats for you and
22:57then walk you through that. So, we've
22:59got some options there. Check it out.
23:00That's something you're interested in if
23:01you're starting to get serious about
23:03this business. I started to mention
23:05different markets and I get asked this
23:07question all the time and I got
23:08sidetracked, sorry. But I get asked this
23:10question all the time,
23:12"What if I live in a high-cost area
23:14where, you know, everything is more
23:16expensive? For example, I'm in Hawaii
23:18and California. We've got clients in New
23:20York, New Jersey, you know, some of
23:23these more expensive markets." And I get
23:25it. Rents get more expensive, the
23:27numbers can get brutal, there can be
23:29some of these bigger market kids,
23:30there's a lot of competition and
23:32everything's more expensive, but prices
23:33are actually a little bit lower than
23:35maybe in the Midwest sometimes. So, I
23:37get asked that question all the time and
23:39a lot of times people associate it with
23:41how they think of houses buying houses,
23:44right? So, if you're in Orange County,
23:45California, you know, your median, you
23:48know, home might be over a million
23:50dollars, depending on where you're at in
23:52the area. And if you're in the Midwest
23:54somewhere, it might be $200,000, right?
23:57And I just want to give a little bit of
23:58context to that because
24:00yes, assets and laundromats included in
24:04these higher-priced markets do tend to
24:06be a little bit more expensive than some
24:08of the other markets, but only a little
24:09bit. Again, remember the laundromat's
24:11valued on a multiple of the net
24:13operating income. So, instead of a 5x
24:16multiple in a laundromat in Birmingham,
24:19Alabama, you know, a Manhattan
24:21laundromat might have a 5.5 multiple,
24:24right? The same identical laundromat.
24:26So, it will be a little more money, but
24:29not the same on the same par as real
24:31estate uh would be or like a home would
24:33be. So, I wanted to say that. And then
24:35the other question I get asked is if I
24:37do live in one of these markets or I
24:38can't find one for sale in my market,
24:41can I own remotely? And the answer to
24:43that is yes, you can and there are more
24:45and more people doing that. You need two
24:47main ingredients to make that happen.
24:50Number one, you need the right
24:51technology and the right tech stack,
24:53which is available now in our industry.
24:55It hasn't always been. It But recently,
24:57we've got the right tech stack available
24:59to you be able to do that. But more
25:01importantly than that and more difficult
25:03than that is you got to have the right
25:04people involved with you, right? So
25:06you've got to have somebody who can
25:08manage that laundromat if you're not
25:10going to be boots on the ground in that
25:12area. So something to keep in mind
25:14again, feel free if that's something
25:16that you're trying to do. I definitely
25:18would not recommend going that route on
25:20your own especially for the first one.
25:22Um find somebody who can help you.
25:24Obviously we provide that service but in
25:27addition, you know, you can find
25:29somebody else another consultant.
25:30There's some other consultants out there
25:32or another owner who might be able to
25:34help you with that. Okay, one other
25:36question that I get asked a lot has to
25:38do with scaling. Should we go with fewer
25:41big stores or more small ones? And
25:43honestly, the answer for most people is
25:46fewer larger more efficient stores.
25:49Bigger stores spread your fixed costs
25:51over more revenue. They're easier to
25:53manage per dollar income. They attract a
25:56better staff. I personally would rather
25:59own three really strong stores than
26:01eight mediocre ones every single time.
26:04So
26:05you know, again, it's going to depend on
26:07the market you're in and your budget and
26:08and all that. But if you have the
26:10option, it's the same amount of work to
26:12run a larger store than a smaller store
26:15more or less and generally those larger
26:17stores do better. Okay.
26:20This is a really important point I want
26:21to make sure I hit. The question that
26:23everybody asks, are laundromats really
26:26passive?
26:27I'm just going to give it to you
26:28straight and I'm going to give you some
26:29context on it. The straight answer is
26:31no, they're not passive. They're not
26:33fully passive. There's no such thing as
26:35a fully passive business unless you've
26:38graduated out of uh that you're able to
26:41hire out all the management. You can
26:43hire a CEO to actually run the business
26:45for you. There's really no such thing as
26:48a passive business and most investments
26:50are not passive either. And anybody
26:52telling you otherwise is selling you
26:54something. and And I just want to shoot
26:56straight with you because I don't want
26:57you to walk into it get blindsided.
26:59However, here's how I do like to think
27:01of it. There's a scale of passivity from
27:04totally hands-on to totally hands-off.
27:07And if you want to, you can skew
27:10laundromats to be
27:13pretty skewed heavily on that mostly
27:15hands-off side of the spectrum. You can
27:18also be totally hands-on if you want.
27:20It's kind of the beauty of the
27:21laundromats is you can kind of navigate
27:23that. Now, are you going to have to do
27:25some stuff? Absolutely. Whenever you
27:27have people and whenever you have
27:28machines, you're going to have problems
27:30and laundromats have a bunch of both.
27:31So, there's problems that are going to
27:32come up you're going to have to
27:33navigate. However,
27:36you can put systems in place, you can
27:38utilize technology, and you can be
27:40business savvy enough to be able to skew
27:43it relatively heavy after not that long.
27:45But, here's the comparison that matters,
27:47right? Compare it to a 40, 50, 60-hour a
27:50week W-2 job. Compare it to commuting,
27:52compare it to having a boss who decides
27:54whether you get to take your kids to the
27:56beach on a Tuesday. Compare it to a few
27:58hours a week of laundromat work to fund
28:01your life. That's freedom. That's what
28:03we're talking about here. And it's a
28:05totally different experience than having
28:07a job. So, the honest answer is
28:10laundromats are passive enough.
28:12And I like to think of it as time
28:14flexible. They're passive enough to help
28:17you or to allow you to build the life
28:19that you actually want. Okay.
28:22We went through a lot today. Here's what
28:24I want you to actually do. Number one,
28:26step one, figure out your real annual
28:28spending. I'm serious about this. Come
28:31up with that number. Make it as
28:32realistic as you can. If you can, go
28:35through all your actual expenses,
28:37pull the bank statements and the credit
28:40card bills and all that stuff, and add
28:42the buffer, and that's your financial
28:43independence number. Step two, decide
28:46which version of financial independence
28:48you're shooting for, lean, normal, fat.
28:51And be honest with yourself, and maybe
28:52you only need to be lean FI at least
28:54initially. Maybe you're like, "Hey, I'm
28:56going to work until I am fat FI and I
28:58don't have to anymore." Uh but determine
29:00that for yourself. And step three, use
29:03your financial independence number to
29:04determine what value of laundromats you
29:07need to achieve that number in cash
29:09flow. And if you want help running the
29:11actual numbers, we've got a ton of
29:13resources over at
29:14laundromatresource.com/resources
29:16that can help you with all of that. Link
29:19will be in the description. Plug in your
29:21numbers, see what shakes out. In the
29:23next video, I'm going to show you how to
29:25do a back-of-the-napkin analysis of a
29:28laundromat deal. It's just It's simple
29:30math you can do literally on the back of
29:32a napkin to know in 5 minutes whether a
29:35store is worth pursuing or not. So, make
29:37sure you subscribe for that one. And uh
29:39it's the natural next step from this
29:41conversation. So, lastly, again, I
29:44mentioned if you're getting serious
29:45buying a laundromat and want to avoid
29:47the easy-to-make mistakes that could
29:49jeopardize your investment, your you
29:52know, your your life savings that you're
29:54going to put into this bit buying this
29:56business, schedule that free strategy
29:57call. I'll show you exactly how we help
30:00people, and we could help you avoid
30:03those costly mistakes that I made early
30:05on in the process that can keep you from
30:07hitting that financial independence. And
30:10uh listen, the link will be in the
30:12pinned comment down below or
30:13laundromatresource.com/249.
30:18Okay, hey, listen. Thank you for hanging
30:20out with me on this one. I know we went
30:22through a whole lot of stuff. And if
30:23you're still here, it means
30:25maybe you're serious about this
30:26laundromat thing. And if you got
30:28something out of it, I'd love for you to
30:30drop your financial independence number
30:32in the comments or a question that you
30:35have or where you're stuck. And I read
30:37them, and a lot of times those comments
30:39turn into our next video. So, hit
30:41subscribe, if you want this kind of
30:44content, real numbers, real strategy, no
30:47fluff, and I'll see you in the next one.

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