How Do You Use Water Bills to Verify Laundromat Revenue?

By Jason Taken, business broker · HedgeStone Business Advisors · Updated 2026-09-04 · 6 min read

The Short Answer

Metered gallons, minus non-machine use, divided by gallons per cycle for the machines actually installed, produces a range of cycles the store could have run. Compare that range against what the claimed revenue requires.

The Steps

1. Get 24 to 36 months of original bills. Not a summary. If the seller has not retained them, the utility can usually produce archived copies — expect a fee and a wait of weeks.

2. Build the machine schedule. Make, model, and capacity for every washer, from the data plates.

3. Get per-cycle water usage for those exact models from the manufacturer's published figures. Different capacities and different generations use materially different amounts, and high-efficiency models differ again — ENERGY STAR reports certified commercial washers use about 45% less water than standard models on average (Source: ENERGY STAR).

4. Estimate non-machine use. Restrooms, mop sinks, any hose bibs, irrigation if applicable, and losses. Also account separately for wash-and-fold volume if the store has a service business, since those cycles consume water without producing vended revenue.

5. Derive the implied cycle range. Use a range of assumptions — different cycle selections, different load patterns — rather than one point estimate.

6. Compare against claimed revenue. Claimed vended revenue divided by average vend price gives a required cycle count. Does it sit inside the implied range?

Why a Range Rather Than a Ratio?

Because a single water-to-revenue ratio does not exist, and anyone offering one is offering a rule of thumb.

Sources of variation:

Each of those widens the band. A responsible check produces a range and asks whether the claim sits inside it — not a precise reconciliation.

What the Check Actually Catches

Overstated revenue. The main use. If consumption implies substantially fewer cycles than the claimed revenue requires, the revenue figure is questionable, and that is a transaction-changing finding rather than a pricing one.

A leak. Consumption well above what the cycle count justifies, with no service business to explain it. Free to confirm: read the meter with every machine off and the store closed.

A misunderstood utility ratio. A store at 27% utilities against the 20% surveyed median (Source: Coin Laundry Association, 2024 Laundry Industry Survey) has either high costs or a small revenue denominator. The water check tells you which — and those lead to opposite conclusions.

Undisclosed service volume. Consumption above vended cycles with no leak may indicate wash-and-fold volume the seller has not described.

What It Cannot Do

It cannot prove revenue. A store could theoretically run the water and not collect, or collect and not report, and the meter would not distinguish.

It is corroboration within a stack of evidence, and the stack is what establishes revenue:

1. Filed tax returns
2. Bank deposits
3. Payment-processor settlements
4. Machine-level payment-system exports
5. Dated coin collection logs
6. A theoretical rebuild from machine count, capacity, vend price, and observed turns
7. The water consumption cross-check

A structured diligence framework covers all of them (Source: Coin Laundry Association, Best Practices for Due Diligence in Laundromat Acquisitions). When six or seven agree, the revenue is established. When two disagree materially, you have found the most important thing in the file.

For Sellers

The check works in your favor if you prepare for it.

Retain original bills for 24 to 36 months. It costs nothing and it removes the largest single diligence objection.

Run the check yourself before marketing. If it reconciles, you have an evidence asset. If it does not, you want to know why before a buyer asks — and the answer is frequently a leak, which is cheap to fix and improves earnings immediately.

Never offer a summary instead. It is the one document a buyer cannot verify, and offering it raises a question about every other figure you have presented.

Against a median $250,000 reported sale price and a 3.50x median earnings multiple (Source: BizBuySell, 2021-2025), removing a buyer's doubt about the revenue is worth considerably more than the afternoon it takes.

What Does This Check Not Do?

It produces a range, not a figure, and being clear about that prevents both over-reliance and dismissal.

The range is wide enough that it will not distinguish a store earning $95,000 from one earning $105,000. What it reliably catches is overstatement large enough to matter — and that is the failure mode worth catching, because a modest overstatement costs a modest amount while a large one is the difference between a good purchase and a bad one.

It also cannot tell you why a discrepancy exists. Implied revenue above reported revenue frequently means a leak rather than under-declaring. Implied revenue below reported revenue is the finding that should slow a purchase down, because it is the one consistent with an overstated income claim.

Treat it as one of six sources rather than as a verdict. Any single measurement can be explained away; six independent measurements agreeing cannot, and that agreement is what you are actually buying when you spend money on diligence.

Summary

Take metered consumption from original bills, subtract non-machine and service-side use, divide by per-cycle usage for the actual installed machines, and produce a range of implied cycles to compare against the volume claimed revenue requires. Use a range rather than a ratio, treat the result as corroboration rather than proof, and run it alongside returns, deposits, settlements, system exports, and collection logs — because the agreement of several independent sources is what actually establishes revenue.

The Next Step

This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.