Ask HN: How to invest in brick and mortar businesses?

https://news.ycombinator.com/item?id=33566633

by dizzydes • 4 years ago

4 4 4 years ago

news.ycombinator.com

Has anyone invested their savings into a brick and mortar business (eg laundromat)? Would love to hear stories/tips on how you went about it.

I figured it could be a nice way to make more back than SPY and a lot of areas are crying out for even the slightest bit of digitisation... I have laundry on my mind as I've seen some cool ones where the machines are centrally controlled by a touch screen with card payment etc.

I'm thinking it might be easier to buy and existing one, look at their numbers and look for areas to improve. The sites I see for buying businesses are sparse at best, though.

relaunched• 4 years ago

Be really careful with these types of businesses. It's not that they don't or can't make good money - it's that they do require a decent amount of work, especially at the beginning and if you are trying to turn them around. Machine failures are sorta frequent (and if you can't or won't do the repairs yourself, it gets very expensive), the stores have to be stocked / cleaned / maintained and theft is a real issue.

Most businesses are easy in theory, that's why people invest in them. The reality is much different.

yuppie_scum• 4 years ago

I would go to the library and pull out some books about franchises. Seems like a good way to go for brick and mortar.

There’s also a lot of breweries that require upfront investment.

adamsiem• 4 years ago

B+M is human versus computer powered. To operate, you need to manage people versus software.

Sounds stupid, but your question seems to bypass that primary concern.

tacostakohashi• 4 years ago

How does digitization, touch screens and card payment help a laundry?

Are people willing to pay more per load for that? Does it make them have more dirty laundry to do each visit? Will it attract people from further afield, who currently go to other laundries?

Most businesses are constrained by location, rent, demand, customer acquisition, etc., don't make the mistake of thinking that improved operating efficiencies will help much (I learnt this the hard way. more than once.)

In comparison to SPY, any brick and mortar type business will require a bunch of actual hands on work, dealing with emergencies, hiring people, finding vendors, etc, etc, and is also not diversified at all. It is totally exposed to a single location, neighborhood, industry, etc., so it could win big, or also get totally wiped out. It's high risk, high reward.

Ask HN: How to invest in brick and mortar businesses?

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