How do you verify a laundromat's real revenue before you buy?
Most small businesses are hard to verify. You ask for tax returns, you ask for POS exports, and you hope the seller cooperates. A laundromat is different, and it's the single best thing about buying one: every wash cycle consumes water, and the utility keeps the receipt.
The method, step by step
1. Get 12 to 36 months of water bills
Ask for actual utility statements, not a summary the seller typed up. Bills are typically denominated in HCF (hundred cubic feet). One HCF equals 748 gallons. Thirty-six months is better than twelve because it shows seasonality and trend, but twelve is enough to run the check.
2. Count the machines and get their specs
Walk the store. Count top-loaders and front-loaders separately, and note the actual makes and models. Water consumption differs enormously between machine types:
| Machine type | Typical gallons per cycle |
|---|---|
| Top-loader | ~28 gallons |
| Front-loader | ~80 gallons |
Verify against manufacturer specs for the specific models on site rather than relying on these averages. Owners can and do adjust water settings, which changes the math.
3. Calculate the implied cycle count
Weighted avg gallons/cycle = ((top-loaders × 28) + (front-loaders × 80)) ÷ total washers
Estimated annual cycles = Total annual gallons ÷ Weighted avg gallons/cycle
4. Convert cycles to revenue
Dryer revenue ≈ Washer revenue × 0.40 (25–50% is the normal range; use the store's own split if known)
Vending revenue ≈ Stated vending wholesale cost × 2
Estimated total revenue = Washer + Dryer + Vending
A real worked example
A store with 46 top-loaders and 10 front-loaders, 4,340 HCF of annual water usage, average price of $1.86 per cycle. The seller stated approximately $288,000 in annual revenue.
Running the math: 4,340 HCF × 748 = 3,246,320 gallons. Weighted average of 37.3 gallons per cycle across that machine mix. That implies roughly 87,000 wash cycles a year, or about $162,000 in washer revenue. Add 40% for dryers and the independent estimate lands near $227,000.
That's a 21% gap against the seller's claim. Not a rounding difference. On a business valued at a multiple of earnings, a 21% revenue overstatement can mean paying tens of thousands of dollars for income that was never there.
A second check that costs you nothing but time
Sit in the store. Not for ten minutes, for real blocks of time across at least two weekdays and one weekend day. Count customers per hour and cycles per customer. Multiply out to an annual figure using the store's actual operating hours, weighting weekdays and weekends separately.
When the water-bill estimate and the in-store observation land within 10–15% of each other and both sit meaningfully below what the seller claims, believe your own two methods. Do not split the difference toward the seller's number.
What else this method reveals
- Machine utilization. Divide estimated annual cycles by 365 and by the number of washers to get turns per day. The industry norm is around 5. Materially below that means either genuine underperformance or an inflated revenue claim.
- Equipment age risk. A store still running mostly top-loaders is carrying deferred capex. Modern stores run roughly 85% front-loaders, and commercial machines last 10–15 years. Replacement runs $100,000–$300,000.
- Whether the rent works. Compare estimated revenue against annual rent. Below roughly 3x revenue-to-rent is a warning sign, and it's a very different picture if the revenue figure you're dividing by turns out to be 20% lower than advertised.
Where this fits in a full underwrite
Revenue verification is the first gate, not the whole diligence. A laundromat that survives the water-bill check still has to clear lease runway (look for 10 years firm plus options, not the 18 months a seller may be quietly running out), a cash coverage cushion sufficient to absorb machine replacement on top of debt service, and a return that justifies the capital.
DealStamp runs all of it automatically on every laundromat listing that reaches our desk, including this water-bill calculation, and stamps the deal PURSUE, INVESTIGATE, or PASS with the reasons attached.
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Further reading
For a book-length treatment of laundromat acquisition and valuation, The Laundromat Handbook by Chris Price is a useful resource covering research and valuation of stores for sale. We're not affiliated with it; the methods on this page come from our own underwriting rules and operating experience.