Laundromat Value Calculator
Estimate the market value of your laundromat business by entering its annual profit and key operational factors.
Enter the Annual Net Operating Income (NOI) and then adjust the sliders to reflect the unique characteristics of your business. The calculator uses an industry-standard multiplier approach to provide a valuation range.
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Understanding Laundromat Valuation
How is a Laundromat Valued?
The most common method for valuing a small business like a laundromat is the Seller's Discretionary Earnings (SDE) Multiplier Method. For laundromats, the Net Operating Income (NOI) is a very close proxy for SDE. The formula is simple:
NOI × Multiplier = Business Value
Net Operating Income (NOI): This is the total annual revenue minus all operating expenses (rent, utilities, repairs, supplies, etc.). It represents the business's pure profit before accounting for owner's salary, debt payments, and taxes. It's the most critical number in a valuation.
The Multiplier: This number reflects the risk and potential of the business. A "perfect" laundromat in a great location with new machines and a long lease might get a high multiplier (e.g., 5.0x or more). A risky business with old equipment and a short lease will get a much lower multiplier (e.g., 3.0x or less). This calculator determines a multiplier based on the factors you select.
Valuation Examples
Click on an example to see how different factors affect the final valuation.
Example 1: The Average Laundromat
Scenario: A standard, stable laundromat.
1. Inputs: NOI $60,000, Machines 5-10 yrs, Lease 3-10 yrs, Avg Competition, Avg Location, No Ancillary.
2. Multiplier Calculation: Base multiplier of 4.0x with no adjustments.
3. Formula: $60,000 (NOI) × 4.0 (Multiplier)
4. Result: Estimated Value = $240,000
Example 2: The Gold Standard
Scenario: A highly desirable, low-risk laundromat.
1. Inputs: NOI $100,000, New Machines, Long Lease, Low Competition, Excellent Location, Has Ancillary.
2. Multiplier Calculation: 4.0 (Base) + 0.5 (Machines) + 0.5 (Lease) + 0.25 (Competition) + 0.5 (Location) + 0.25 (Ancillary) = 6.0x
3. Formula: $100,000 (NOI) × 6.0 (Multiplier)
4. Result: Estimated Value = $600,000
Example 3: The Ticking Time Bomb (Short Lease)
Scenario: A profitable mat with a major lease risk.
1. Inputs: NOI $75,000, New Machines, Short Lease (< 3 yrs), Low Competition, Excellent Location.
2. Multiplier Calculation: 4.0 + 0.5 (Machines) - 0.75 (Lease) + 0.25 (Competition) + 0.5 (Location) = 4.5x
3. Formula: $75,000 (NOI) × 4.5 (Multiplier)
4. Result: Estimated Value = $337,500. The short lease significantly reduces the value.
Example 4: Diamond in the Rough (High Risk)
Scenario: A business with low profit and significant risks needing investment.
1. Inputs: NOI $40,000, Old Machines, Short Lease, Avg Competition, Avg Location.
2. Multiplier Calculation: 4.0 - 0.5 (Machines) - 0.75 (Lease) = 2.75x
3. Formula: $40,000 (NOI) × 2.75 (Multiplier)
4. Result: Estimated Value = $110,000
Example 5: Location is Everything (Poorly)
Scenario: An otherwise good laundromat in a bad location.
1. Inputs: NOI $50,000, New Machines, Long Lease, Low Competition, Poor Location.
2. Multiplier Calculation: 4.0 + 0.5 (Machines) + 0.5 (Lease) + 0.25 (Competition) - 0.5 (Location) = 4.75x
3. Formula: $50,000 (NOI) × 4.75 (Multiplier)
4. Result: Estimated Value = $237,500
Example 6: A Modern, Turnkey Operation
Scenario: A well-run business with modern equipment and extra income.
1. Inputs: NOI $85,000, New Machines, Long Lease, Avg Competition, Avg Location, Has Ancillary.
2. Multiplier Calculation: 4.0 + 0.5 (Machines) + 0.5 (Lease) + 0.25 (Ancillary) = 5.25x
3. Formula: $85,000 (NOI) × 5.25 (Multiplier)
4. Result: Estimated Value = $446,250
Example 7: Squeezed by Competition
Scenario: A nice facility but in a very competitive area.
1. Inputs: NOI $65,000, New Machines, Long Lease, High Competition, Excellent Location.
2. Multiplier Calculation: 4.0 + 0.5 (Machines) + 0.5 (Lease) - 0.25 (Competition) + 0.5 (Location) = 5.25x
3. Formula: $65,000 (NOI) × 5.25 (Multiplier)
4. Result: Estimated Value = $341,250
Example 8: Small Town, Stable Performer
Scenario: A smaller but very safe and stable business.
1. Inputs: NOI $35,000, Machines 5-10 yrs, Long Lease, Low Competition, Avg Location, No Ancillary.
2. Multiplier Calculation: 4.0 + 0.5 (Lease) + 0.25 (Competition) = 4.75x
3. Formula: $35,000 (NOI) × 4.75 (Multiplier)
4. Result: Estimated Value = $166,250
Example 9: Old but Highly Profitable
Scenario: A cash cow with aging equipment.
1. Inputs: NOI $90,000, Old Machines, Long Lease, Low Competition, Excellent Location.
2. Multiplier Calculation: 4.0 - 0.5 (Machines) + 0.5 (Lease) + 0.25 (Competition) + 0.5 (Location) = 4.75x
3. Formula: $90,000 (NOI) × 4.75 (Multiplier)
4. Result: Estimated Value = $427,500. A buyer will pay for the high profit but will factor in upcoming replacement costs.
Example 10: The Ancillary Income Boost
Scenario: An average laundromat with diversified income streams.
1. Inputs: NOI $55,000, Machines 5-10 yrs, Lease 3-10 yrs, Avg Competition, Avg Location, Has Ancillary.
2. Multiplier Calculation: 4.0 + 0.25 (Ancillary) = 4.25x
3. Formula: $55,000 (NOI) × 4.25 (Multiplier)
4. Result: Estimated Value = $233,750
Frequently Asked Questions (FAQs)
1. What is Net Operating Income (NOI)?
NOI is your laundromat's total annual income (from machines, wash-and-fold, vending, etc.) minus all of its operating expenses (rent, utilities, maintenance, supplies, insurance, etc.). It's the pure profit of the business before taxes and debt service (loan payments).
2. Is this calculated value a guaranteed sale price?
No. This calculator provides an estimated valuation for educational and planning purposes. The final sale price can be influenced by many other factors, including negotiation, market conditions, quality of financial records, and the specific motivations of the buyer and seller.
3. Why does a short lease (< 3 years) have such a large negative impact?
The lease is one of the most critical assets of a laundromat. A short lease represents a significant risk to a new owner, as there's no guarantee the landlord will renew it, or they may demand a much higher rent. This uncertainty drastically reduces the business's value.
4. How do I accurately determine my laundromat's NOI?
You need to review your financial statements, specifically the Profit & Loss (P&L) statement, for the last 12-24 months. Sum up all revenue and subtract all operating expenses. Do not subtract income tax or payments on business loans. Consult with an accountant for the most accurate figures.
5. Why aren't my loan payments included in the expenses for NOI?
A business's value is typically calculated independent of its financing. A buyer will secure their own loan, so the seller's debt is not relevant to the business's operational profitability. Including loan payments would unfairly penalize a business that was purchased with debt.
6. What other factors, not in the calculator, can affect the value?
Several factors are too subjective for a simple calculator, such as: the condition of the physical store (flooring, lighting, paint), the presence of a dedicated attendant, local economic trends, the potential for a rent increase, and the quality of the business's online reputation (e.g., Google reviews).
7. What is considered "Ancillary Income"?
Ancillary income is revenue from sources other than the self-service washing machines and dryers. This includes vending machines (soap, snacks, drinks), wash-and-fold services, dry cleaning drop-off, lottery ticket sales, or income from arcade games.
8. Can I use this calculator for a laundromat I want to build from scratch?
No, this tool is designed for valuing existing, operating laundromats that have a proven history of income and expenses (an established NOI). Valuing a new build involves different metrics, like build-out costs and projected income.
9. How can I increase my laundromat's value?
Based on this calculator's logic, you can increase value by: 1) Increasing your NOI (by raising prices or cutting costs), 2) Renegotiating a longer lease with your landlord, 3) Investing in new, efficient machines, 4) Adding sources of ancillary income, and 5) Improving your marketing to stand out from local competition.
10. What is a typical multiplier for a laundromat?
Laundromat multipliers generally range from 3.0x to 5.0x of the annual Net Operating Income. The exact figure depends heavily on the risk factors assessed by this calculator, such as machine age, lease security, and competition.
