New Laundry

[stewartpb]

Looking to open a new store in and area with the following 1 mile demographics.

Population 5,127
Renters 46%
White 80%
Black 15%
Households 2,131
Household income < $25K = 38% (1990 data)
Household income < $35K = 54% (1990 data)
1990 median household income = $32,489

The location I'm looking at is within 200 yards of two large apartment complexes - probably 700 apartments total, most equipped with W/D connections. Physically between a Dollar General and a Family Dollar store. If I do this, I'll partner with a dry cleaner friend who will offer wash and fold using my machines, but his staff. Looking at a 1,200 or a 2,400 square foot space.

I ran some figures based on a formula I found further down the board and those results looked promising, but I'm still cautious.

I'd really appreciate some experienced insight into this location. Also, any other advice would be greatly appreciated.

Thanks in advance.

Billy

[RWSmith]

Billy,
Demographics are a nice tool to use if there are no coin laundries in the area.
If there are laundries in the area I like to look at the total dollar volume in your trading area.
For example: There are four laundries in your trading area doing $800,000 in volume.
Store 1 is doing $300,000
Store 2 is doing $200,000
Store 3 is doing $200,000
Store 4 is doing $100,000
You should estimate what % of revenue you are going to take away from the existing coin laundries by building a fifth store.
Most coin laundries do not create new customers they take customers away from existing laundries.
There are other variables such as size of store and location.
Good Luck,
Reynolds

[SecretarytoBraveDave]

Hi Reynolds,

I thouhgt your statement was absolutley true, except for the fact I do not know how we had gained 53% increase in business after a 20x20 addition was added in 2001. When we were contemplating the addition, we needed the space. The original space was around 2500 sqft and was over capacity. However, when we added the space, we were unsure about spreading the current customers into a bigger area, or actually seeing an increase in revenue. Most of the "pie" was ours anyway....so we figured the revenue would be similiar to what we had been doing. As I said we saw a 53% increase within the 1st 6 mos and it has stayed this way since. The addition added this equip. 8 35's 2 50's and 2 80's and about the dryers to accomodate this amount. So, how can you determine where it is we got our customers?

Kitty

[stewartpb]

... that there is one store about 1 mile away (as the crow flies) and that is the only other store within a 5 mile radius. It offers wash/dry/fold and a dry cleaning drop off as well. Not sure if the owner would share info as my store would be the only direct competition it faced.

Would this impact your opinion? If so, how?

Thanks

Billy

[SecretarytoBraveDave]

What is the capacity of this laundry? Is there constant wait time of the clientelle and what is the water usage versus equipment mix of the comp? You must know this in order to make a decent assessment of the location

[aromaz]

I'd check the 2000 demographics to see what if anything has changed. Also the 2 dollar stores will mean almost no soap vending so just get the minimum sized machine.

[johndubahu]

Reynolds,

Your method of analysis is very intersting to me. How does one get volume data on competitors?

Thanks,

John

[RWSmith]

I use annual water consumption and compare it to my laundries. Water consumption records are public records in most areas. It's not perfect but it gives you an idea of the dollar volume in your trading area.
A local map with the laundries and there respective 1,2, and 3 mile radius plotted is also useful.