Revenue Verification Guide for Laundromat Buyers

The seller says the laundromat makes $15,000/month. But how do you know it's true?

Revenue verification is the most critical step in laundromat due diligence. Industry experts estimate 15-30% of listings inflate revenue claims. Unlike most businesses, laundromats have a secret weapon: water bills. Here's how to use them—and other methods—to verify what a business actually earns.

Method 1: The Water Usage Method

Every wash uses water. By working backward from water consumption, you can estimate revenue independently of what the seller claims.

The Formula

Step-by-Step

1. Get 24 months of water bills (request actual bills, not summaries)
2. Calculate average monthly gallons used
3. Estimate gallons per wash cycle:
   • Top-load washers: 35-50 gallons
   • Front-load washers: 15-25 gallons
   • Use 35 gallons as a conservative average for mixed fleets
4. Multiply by average vend price

Example Calculation

Note on high-efficiency machines: If machines are 2018+, use 20-25 gallons per wash instead of 35.

🚩 Red Flags

• Seller claims $40,000/month but water shows $25,000 capacity
• Water bills are "unavailable" or only summaries provided
• Dramatic swings in water usage with no explanation

Method 2: The Bank Deposit Method

Cross-reference reported revenue with actual bank deposits.

How to Do It

1. Get 24 months of bank statements (all accounts used for the business)
2. Total all deposits each month
3. Subtract non-revenue items:
   • Loan proceeds
   • Owner contributions
   • Refunds or chargebacks
   • Transfers between accounts
4. Compare to reported revenue

What to Look For

• Deposits should match or slightly exceed reported revenue
• Consistent deposit patterns (laundromats are predictable)
• No unexplained large deposits before listing

Method 3: The Machine Turn Method

Calculate theoretical maximum revenue based on equipment.

The Formula

Industry Benchmarks

Example

• 20 washers averaging 5 turns/day at $4.00 = $12,000/month
• 20 dryers averaging 6 turns/day at $3.50 = $12,600/month
• Total: ~$24,600/month

If seller claims $35,000/month, the math doesn't work unless machines are running 8+ turns daily.

Method 4: Card Payment Verification

If the laundromat has card/app payments, this is your most reliable data source.

What to Request

• 24 months of payment processor statements
• App provider reports (Speed Queen, Dexter, CSC Go, etc.)
• Credit card merchant statements

Why It Matters

• Card transactions are timestamped and verified
• Shows actual usage patterns by time of day
• Reveals seasonal trends
• Can't be easily manipulated

Cash vs. Card Mix

• Many laundromats still run 60-70% cash (especially unattended stores)
• Newer card-heavy stores may be 50-60% card
• High cash percentage (80%+) = harder to verify
• If card revenue is $10,000 and seller claims 50/50 split, total should be ~$20,000

Wash & Fold Revenue (Often Overlooked)

If the laundromat offers drop-off wash & fold (WDF) service, this revenue doesn't correlate with water usage and needs separate verification.

How to Verify WDF

• Request POS system reports showing WDF transactions
• Count bags processed per day (multiply by avg price ~$1.50/lb)
• Cross-reference supply orders (detergent, bags) as a proxy
• WDF can be 20-40% of total revenue in service-heavy stores

Triangulation: Putting It All Together

Never rely on one method. Compare all sources:

Seasonal Note: Laundromats have 10-20% seasonal swings. Always compare same months year-over-year, not consecutive months.

Questions to Ask the Seller

1. "Can I get the actual utility bills, not summaries?"
2. "Which bank accounts are used for business deposits?"
3. "What's your card vs. cash split?"
4. "Have there been any equipment changes in the last 2 years that affected revenue?"
5. "Can I see your payment processor login to verify transactions?"

Verification Summary