Average Expenses

[glenn]

I am learning about the coin laundry business and hope to open or purchase my first store soon. I would like to know where I can go to find what the average expenses are of a coin laundromat. Example Utilities average 25% of gross revenues. Ultimately I am looking for the net profit of a store before owners salary/draw, depreciation/amortization expenses and debt service. Can anyone tell me were I could find this information. Thanks

[Weston]

Here is a link to a typical laundromat Operating Statement showing expenses as percent of gross. This from SBA and IRS site.
http://www.sba.gov/SCORE/ca/busser.html

Hope this helps.

Vasto

[Howard]

That income statement is not worth the electrons used to send it.

[Weston]

Hey Howard,

The IRS figures that we should only net 3.6%. Other than that, what expense in particular do you find out of line?

Vasto

[glenn]

Howard,

I'm interested to know from your experience what type of income I could expect. And does a large facility do better or worse than a smaller mat? I'm interested in a larger facility. I would agree that the SBA's figures reflecting a return of 3.6% is meager at best, and even adding back in depreciation and interest it still only comes to approx 21%. This makes purchasing or developing a larger facility very difficult to justify.

[Howard]

20% to 50% is probably the norm, as they say your actual milage may vary. All kidding aside, many many factors determine return. Are you talking about attended vs unattended, do you have large WDF or DC. Do you own or rent, what is your rent cost if you rent - it can run from pennies to dollars per sqft per month. As you can see there are many factors that will impact return.

As far as big versus small there are advantagous either way. Large has economies of scale, but can also be more risky. Do your homework, and then come back with more specific questions.

[Howard]

The following is an income statement that was posted on another board by someone that was considering the purchase of this laundromat. It is an existing location that has equipment that is about 15yrs old. I cannot swear that the numbers are correct, but they don't seem very far out of line, with the exception of rent which seems quite low. Hope this is of some value to you.

Income
Washer/dryer $151,000
WDF $ 33,000
DC $ 4,000
Vending $ 12,000

Gross $200,000

Expenses
Rent $ 22,000 11.0%
Vending &
Store Supply $ 12,000 6.0%
Insurance $ 2,500 1.3%
Wages $ 37,000 18.5%
Taxes $ 11,000 5.5%
Utilities $ 40,000 20.0%
WDF Expense $ 12,000 6.0%
DC outsource $ 3,000 1.5%
Advertising $ 6,000 3.0%
Maintenance $ 3,000 1.5%
Misc. $ 2,500 1.3%
$151,000

Net $ 49,000 24.5%

[SecretarytoBraveDave]

If I was to look at these particular numbers I would be wary. 15 year old equipment and 3000 is their maintenance? Utilities? last years prices? Apples to apples, ours ran about 10000 more than what apppears on that particular P&L. As a bookeeper, I would be wanting a much better break down of expenses. These are a little vague? Taxes? Does this include property tax, sales tax and business liscence taxes? Insurance, is this workmans comp and business liability? Vending income? 12000? It should be broken down from coke machine, soap machine candy machines and video? If someone were to look at our books they'd be immpressed! We spell it out!
I wish that for the gross sales we saw 24. something % profit. And our rent is less than half of what is stated there. Where's cost of goods sold? Good luck!

[Howard]

As I said, I don't know if these numbers are correct. I think the expenses for repairs are very low too. However, rent all depends where you are - mine is twice what is listed there. Taxes did not make much sense to me either. But the return on gross is not crazy, mine is actually much higher closer to 35-40%. All depends on other things such as vend prices and other costs.

This was just put up as an example for the guy that asked for it, and I think this is much closer to reality than the one that someone reference on a web page that showed return at 2 or 3% of gross.