Man Who Bought Laundromat off Craigslist is Now a Millionaire
Published Originally on Business Insider
Dave Menz was working at a telephone company when he decided to invest in his first laundromat in 2010.
In an interview with Insider, he broke down how buying one laundromat off Craigslist turned into a four-location million-dollar business.
See more stories on Insider’s business page.
Dave Menz is 44 years old and has a net worth of $1.9 million thanks to his investments in Ohio laundromats.
His story starts from humble beginnings. For the first decade-or-so of his life, Menz told Insider he lived in “pretty extreme poverty” in Flint, Michigan.
When Menz was around 11, his dad got a job as a computer programmer at a hospital in Cincinnati, Ohio, and moved the family there.
“We went from being pretty poor to probably lower middle class to maybe even middle class,” he said.
Menz went on to grow up in Cincinnati, and eventually, make his fortune there.
In an interview with Insider he explained how went from working a 9 to 5 to support his family to building a laundromat empire that grossed over $1 million in sales in 2019.
“When we got into the business, when we bought that first store, our net worth was roughly $50,000. Eleven years later, it’s close to $2 million,” he said.
The first laundromat
In 1995 at the age of 19, Menz took a job at a local telephone company called Cincinnati Bell. He spent 17 years there, starting off as a 411 operator and ending as a lineman.
Menz told Insider that he realized early on in his career that he wanted to be his own boss. To turn that dream into a reality, he knew he needed to buy something. So at 29, he and his wife, Carla, started to save up for an investment, unsure of exactly what type of business they wanted to own.
“For the next four or five years,” he explained, “we lived well below our means and saved a lot of money.”
In early 2010, the stars aligned and Queen City Laundry was born.
While browsing the internet, Menz saw a listing on Craigslist for a rundown laundromat in Amelia, Ohio, a suburb just two miles away from his home at the time and around 20 miles from Cincinnati. He had roughly $30,000 saved by that point, so using a small business loan and some cash, he bought the place for $85,000.
As soon he bought it, Menz used the savings to renovate it, which included things like painting, opening the floor plan, and adding a video surveillance system.
“The three main components to really any business, but especially a laundromat, are clean, safe, and bright,” he said.
A few months later, he took out an equipment loan to buy new washers and dryers.
Seven months after the purchase, the laundromat was bringing in around $14,000 a month. After expenses, Menz was profiting roughly $1,500, which he reinvested into business.
While the income wasn’t much, Menz told Insider that it was expected, and why he kept his full-time job. Not only did he have loans to pay back, but he also had to cover expenses like utilities (water, sewer, gas, and electric) and a monthly mortgage.
Growing the business
In late 2010, Menz came across a laundromat in a Cincinnati strip mall that had been abandoned by the lessee.
He told Insider that he knew the area well, and that a functioning laundromat there would be profitable because there was no competition.
“I knew I had a mess on my hands, but it was a great location,” he said.
The landlords were so eager to get the place up and running again, they offered Menz the lease for around $1,100 a month, which he explained was on the lower end. They also gave him a few thousand dollars to fix the place up and three months of free rent once it opened.
Because there weren’t many laundromats in the area, when the doors opened in January 2011, business took off.
“Within about three weeks it was profitable,” he said, and added that it was bringing in around $3,000 a month.
Chipping away at debt and quitting corporate
For the next two years, Menz and his wife continued to improve both laundromats and pay off the loans they took out to purchase and revamp them.
By early 2014, the businesses were bringing in a $7,000 monthly profit, collectively.
Not long after, Menz came across a third location, in Anderson Township, a small village around 12 miles from Cincinnati. While negotiating a deal with the owner of the laundromat, which is the only store in the building, he was presented with the opportunity to buy the building by the property owners.
“They wanted out. They did not want to own it,” he said.
So he bought the laundromat business for $75,000 and the building for $170,000.
Once the store was revamped, which was around 8 months later, it began profiting $3,000 to $4,000 a month.
Business boomed from there.
By the fall of 2014, Menz quit his job at Cincinnati Bell because the laundromats were bringing in around $8,000 to $9,000 a month in profit. Menz used the income to replace his roughly $70,000 salary and then reinvested the rest into the business.
It’s not just about acquiring more stores
Menz’s strategy isn’t all about growing his portfolio. He told Insider that a key factor to his success is the constant improvements he makes to the laundromats he already owned.
From 2015 to 2016, he focused on adding a wash, dry, and fold service to all three locations. While it cost time and money in the beginning to implement, it ended up creating another revenue stream.
In 2016, Menz bought a fourth laundromat for about $35,000. In that store, he started a pick-up and drop-off delivery service, called Happy Nest. There are currently has three trucks on the road that serve the entire greater Cincinnati area and northern Kentucky.
Today, Menz and his wife have a net worth of $1.9 million. In 2019, the four laundromats generated over $1 million in gross sales, and the pick-up and delivery business generated just under $462,000 in gross sales.
There are a total of 40 employees across all four locations, with 17 to 20 of them working for Happy Nest.
Last year, Menz and his family upgraded their living quarters to a six-bedroom home that stretches over 6,000 square feet in a neighborhood just 15 minutes from downtown Cincinnati. The move, Menz said, was a tribute to their found success.
Eager to share his expertise and passion for the laundromat industry, Menz also offers consulting and coaching for those eager to grow in the laundromat industry.
“I’m very passionate about anything I do,” he said. “During this entire evolution I’m telling you about, I’m digging and learning every little detail of the business.”
Seven months after the purchase, the laundromat was bringing in around $14,000 a month. After expenses, Menz was profiting roughly $1,500, which he reinvested into business.
While the income wasn’t much, Menz told Insider that it was expected, and why he kept his full-time job. Not only did he have loans to pay back, but he also had to cover expenses like utilities (water, sewer, gas, and electric) and a monthly mortgage.
Are you curious what your business is worth? Take this brief survey and we will provide you with a complimentary valuation with insights on how you can grow the value going forward. Whether you are planning to sell soon or years from now, we will give you insights from the market that will help you better understand:
- What your business is worth
- What key value drivers have the greatest impact on the business valuation
- What you can do to maximize your return on this all important investment
Each day you are making decisions that impact your future and these insights can help get the most from your business. Click here to take the Value Builder Survey.
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Does Your Business Have a Vision? Does it Need One?
By: Matt Carle – Main Ascent Business Brokers and Advisors
As a business owner, you’re the leader. You need to decide what your business will do, how it must do it, and where it will go next. An owner without a vision for where the business is going is going to have a tough time building anything stable or sustainable.
When you try to move forward without a long-term vision, you and your team are left jumping blindly from one item to the next—unsure of where your focus should be or where the business is heading. But creating a vision can feel intimidating. It’s hard work, and there are so many pieces to consider – where do you start, how do you come up with impactful answers, and how do you package it so that other people can understand it.
There are a few keys that help our business owners create something that is effective and meaningful. They make your vision actionable, because this should be a document you use day to day, to remember where you’re going and help guide your decisions. If you’re struggling to create a compelling vision, start by asking yourself these questions.
- What will the business look like?
Can you imagine walking into your business four years from now? Consider each detail of your facility and office space. What do they look like? Where is your office? What hangs on the walls? What unique or memorable reference points exist to remind you where you’re headed?
Consider your employees’ point of view: How do they see the operation, and which parts do they view as most important? What do they need to see each day that encourages them to do their best?
Painting a detailed picture of how the business will look can serve as an inspiration for where you want the business to go. It’s also a great place to start because it gets you thinking in concrete terms about the future of the business.
- How will my business act?
Next, consider how your business will behave and how work will get done. Envision the role that you want to play as the owner—are you involved daily, or is someone else in charge of operations? How do decisions get made? What type of work are you doing? You might choose to step away from the business, either to sell it or to let it run itself; in that case, ask yourself what needs to happen inside the business to make that possible.
Be sure to think about how your staff interacts with your customers and with each other. What message do you want them to convey with their actions?
Get specific about how the business will act when it’s working the way you want it to work. This is where you can start to identify the systems that are missing in your business. You don’t have to create all of them now, but including those systems as goals within the vision helps create a sense of priorities and focus for doing the work. Creating a strong framework helps you build toward the business that you want to own and make decisions that move you closer to where you want to go.
- How will people feel?
More specifically, how do you want people to feel when they engage with your business? Being deliberate about the emotional impact your business will have goes a long way toward achieving your vision in the long-term.
Be deliberate about how you want people to feel after they deal with your company; this could mean customers, employees, or even vendors. Then, look for ways to impart that feeling throughout the business. Why are your employees excited to come to work each day? How can you help foster that excitement and bring it to your customers as well? Why do your customers choose to do business with you? What kind of service should people expect from your company? How do they feel when they walk in the door? The answers to these questions will help color the picture of what you’re working to create.
People make choices based on feeling and emotion, and then our brains find reasons to rationalize those choices. That means that addressing feelings first can put you at an advantage. Be deliberate with the choices you make about the emotions you want to generate, and your entire business will benefit.
- How will my business perform?
Many people find it challenging to set firm goals for the performance of their business. Putting specific numbers on things like revenues, profits or expansion opportunities might seem daunting, but it’s key to achieving your long-term business goals. If it helps, break it down into smaller details and questions.
Ask yourself how your personal goals align with the business goals. How much will you earn as the owner of the business? What will your profit margins be? What will you do with the profits? What other performance measures are important for your company? Do you foresee expanding to new locations? Your answers to these questions will set the benchmarks for the future of the company, so it’s important to set goals that are both realistic and challenging—they should require you to grow beyond where you’re at right now in order to achieve them.
Setting performance goals and putting them in writing makes it much more likely that you’ll achieve them. You’ll be able to measure your progress toward these goals throughout your business, and they’ll give you plenty of vital feedback along the way. And even if you fall short of some goals doesn’t mean that you’ve failed; each result you get is another data point that you can use to make decisions, make adjustments, and continue to grow.
As you work toward the business that you want to own, think of your vision document as your north star: the constant presence that you use to set your course. Focusing on these four keys will give you a rich, detailed picture of where you’re going and make it much more likely that you’ll get there. Take the time to get them right, and you’ll have clear daily guidance to withstand the inevitable storms—and the confidence that comes from knowing your destination.
Are you curious what your business is worth? Take this brief survey and we will provide you with a complimentary valuation with insights on how you can grow the value going forward. Whether you are planning to sell soon or years from now, we will give you insights from the market that will help you better understand:
- What your business is worth
- What key value drivers have the greatest impact on the business valuation
- What you can do to maximize your return on this all important investment
Each day you are making decisions that impact your future and these insights can help get the most from your business. Click here to take the Value Builder Survey.
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Should You Sell Your Business in 2021?
Published in Inc. – April 28, 2021 – By: Bob House from BizBuySell.com
Buyer Demand Remains Strong, The Economy is Recovering, Should You Sell Your Business
As the pandemic weakens its footprint, the U.S. economy is already showing signs of recovery. People are becoming vaccinated, restrictions are being lifted, and consumer spending is surging as an increasing number of businesses are re-opening and welcome Spring shoppers.
Over the past year, many owners have been focused on keeping their business afloat and navigating public health orders, rather than planning their exit strategy. Now that that things are turning around, should you start looking for a buyer? Well, that depending on a few factors.
Here are 3 things you should consider before deciding to sell (or not sell) your business in 2021:
Buyers Demand Has Been Strong and Is Expected to Continue. Since Q2 2020, buyers have been actively seeking opportunities. In fact, BizBuySell.com site traffic has been exceeding pre-pandemic levels, as buyers flock to high performing, pandemic-resistant businesses levels. According to BizBuySell’s Insight Report, the median revenue and cash flow of businesses sold in Q1 ’21 were both up 15% and 7%, respectively. As a result, buyers have been paying premium prices for these businesses, with the median selling price up 30% year-over-year. If your business has been over-performing during the pandemic, now may be your change to get out on top. If your business has been struggling, it may be better to recover value first.
Buyers Are Shifting Focus to Battle-Tested Pandemic Survivors. While high performing businesses have been the hot commodity to date, many buyers are not interested in paying the associated premium. According to an April BizBuySell survey, most buyers (54%) say they are looking for businesses only maintaining pre-pandemic performance and 52% would even prefer the discount associated with an impacted business versus seeking one exceeding pre-pandemic levels (37%). Depending on where you fit in this range, you may have some flexibility to extend or expedite your exit.
Business for Sale Inventory is Expected to Grow and Diversify. While demand has been high during the pandemic, supply has been limited due to many depressed businesses waiting on the sidelines. As more businesses re-open and benefit from pent up consumer demand, more owners will regain value and enter the market. This is especially true for Baby Boomers who make up a large majority of business owners preparing to retire and exit their businesses. If you are ready to sell now and can receive a suitable price, it may be best to enter the market before competition increases.
While things are looking brighter in 2021, there are many market variables to consider when selling a business. In addition, you need to have a good sense of your business value and a plan for what you will do after you exit. As every market is different, as is every business, your best move is to contact a professional business broker who can advise you based on your unique circumstances. You don’t have to sell your business, but you will feel better knowing if you could.
Are you curious what your business is worth? Take this brief survey and we will provide you with a complimentary valuation with insights on how you can grow the value going forward. Whether you are planning to sell soon or years from now, we will give you insights from the market that will help you better understand:
- What your business is worth
- What key value drivers have the greatest impact on the business valuation
- What you can do to maximize your return on this all important investment
Each day you are making decisions that impact your future and these insights can help get the most from your business. Click here to take the Value Builder Survey.
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Are you a “Baby Boomer” Business Owner?
What is so special about “Baby Boomer” business owners? Well, there are a lot of them. It is estimated 52 percent of businesses are owned by people between 50 and 88 years of age. This equates to 9 million businesses in the United States. Put it another way, a business owner is turning 65 every 57 seconds.
So, why is this important? Typical of most business owners, the value of their business amounts to 50 to 75 percent of their net worth (if not more); the remainder in personal real estate and financial investments. Ordinarily, the business owner has only one chance to monetize his or her largest asset through the sale of the business.
It is estimated that 11,000 people are turning 65 years old every day, with this trend continuing for the next 18 years. Being that many of these Baby Boomers are also business owners, one would suspect that every year for the next two decades more and more business owners will be wanting to sell their businesses to cash out and fund their retirements. These businesses amount to some $10 trillion worth of assets.
Yet while more and more businesses go up for sale, the audience of buyers is decreasing. Today, the highest segment of business buyers is the same Baby Boomers in the age range of 55 to 64 years old. The 80 million millennials in the U.S. make up a larger demographic, though their abilities to purchase these businesses are quite low.
Applying the law of supply and demand, there is going to be a growing inventory of businesses for sale each year, while the number of qualified buyers is decreasing each of those years. The law of supply and demand would suggest there will be pricing pressure on these businesses. In addition, overall only 1 out of 4 businesses actually sell after being put on the market; however, the success rate increases to 1 in 3 for businesses with sales of $10 million, and the sale success rate grows to 1 in 2 for businesses with sales greater than $10 million.
Now What?
The PriceWaterhouseCoopers accounting firm estimates more than 75 percent of business owners have done little planning for their single biggest financial asset. It is sad to say, but business owners spend more time planning their next vacation than planning for their exit into retirement.
Business owners should start the exit planning process today. Serious consideration should be given to creating a timeframe to place the business in the best position to be sold at the highest possible valuation.
Fortunately, the window of opportunity is quite good. Current conditions of rock bottom interest rates, low inflation, historically low capital gain taxes and overall high business valuations make this an ideal time to sell a business. In real estate it is all about “location, location, location,” whereas in business it is all about “timing, timing, timing.” Now is the time to cash in.
Exit planning, however, is a process that requires a significant amount of work. Most important, business owners need to assemble a team of professional advisors to assist them in this process. The team may consist of all or some of these professionals: a business intermediary firm, CPA/accountant, business attorney, financial planner, investment advisor, insurance advisor, valuation specialist, investment banker, banker and business consultant.
Using the analogy of an actual roadmap, this process can be broken down into five exits:
Exit 1: Making the Decision to Sell
Exit 2: Exit Planning Process
Exit 3: Maximizing Business Value
Exit 4: Preparing the Business for Sale
Exit 5: The Deal Process
The actual Planning Process often includes the following seven steps:
1. Identify Exit Objectives
2. Quantify Business & Personal Financial Resources
3. Maximize & Protect Business Value
4. Ownership Transfer to Third Parties
5. Ownership Transfer to Insiders
6. Business Continuity
7. Personal Wealth & Estate Planning
There is no time better than right now to start planning an exit, whether that is tomorrow, next month, next year or the next decade. Just be careful not to miss your EXIT…else you will hear your GPS (or significant other) say, “when possible turnaround” or as my GPS would say, “you idiot, you missed your exit…proceed on this road for another 20 miles.”
This article appeared in the November 2015 edition of Traverse City Business News.
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