How to Verify a Laundromat's Revenue Before You Buy

To verify a laundromat's revenue, reconcile the seller's stated income against water usage, tax returns, and collection records. Water is the strongest independent check, because washers consume a predictable amount per cycle and the water bill is hard to manipulate. If the three sources do not line up, trust the documents, not the pitch.

Contents

• Why water usage is the key check
• Documents to request
• How to cross-check the numbers
• Red flags in reported revenue

Why water usage is the key check

Each wash cycle uses a fairly consistent amount of water. If you know the store's machines and the water consumed over a period, you can estimate the number of turns, and from there a sanity-check on revenue. A seller can overstate collections, but the utility cannot easily be faked because it is billed by a third party. This is why experienced buyers ask for water bills first.

Documents to request

Ask for, at minimum:

• Two to three years of water and sewer bills
• Two to three years of tax returns and profit and loss statements
• Bank deposit records showing cash and card deposits
• Card or app system reports, if the store is not pure coin

For card and app stores, the payment processor's reports give you clean digital revenue history. See coin vs card vs app payment systems for why this matters.

How to cross-check the numbers

Line up three views of revenue: what the seller claims, what the tax returns report, and what the water usage implies. They will not match to the dollar, but they should be in the same range. Large gaps need an explanation you can verify. Reported income on the IRS tax return is a particularly useful anchor, since owners have little incentive to overstate income to the tax authority.

Red flags in reported revenue

Be cautious when a seller reports much higher revenue than the tax returns, cannot produce water bills, claims large unrecorded cash income, or offers only a hand-written summary. None of these automatically kills a deal, but each one shifts the burden of proof onto the seller. Fold these checks into your full due diligence checklist, and once the numbers hold up, value the store with the calculators.