Utilities at 13% of gross

[jacob_7]

I am looking into the purchase of a laundry and on the summary sheet they are listing utility expenses (gas, sewer/water, electric, and trash pick-up) as approximately 13% of monthly gross. Machine mix is 12 toploaders, 20 SQ18#, 10 SQ40#, 12 SQ50#, and 24 SQ stack dryers. Based on my research this utility figure seems way off. Anyone else have any thoughts on this?

[Duane]

Jacob,

You are on the right track. I would guess the amount to be up to twice the percentage that they are reporting. Maybe in the low 20% range. 13% is not unheard of, mine are running around 15-17%, but I have very reasonable utility rates along with 30 Maytag Neptunes.

Unless of course their vend prices are much higher than the going market rate. This would mean more income for the same amount of utilities. Thats if they have customers to pay the higher prices.

Do your due diligence and only make an offer on what you feel the business is worth.

All they can do is say no to your offer.

Duane.

www.LMARIES.com (http://www.LMARIES.com)

[RWSmith]

CLA's 2002 survey showed 7% of coin laundries utilities were between 10% and 14%. The median was 24%.

Some of the reasons the utility rates might be low.
Some of the early SQ stack dryers were set at 62,000 BTU's
The rinses and pre wash on the front loaders might have been eliminated.
The SQ tops are set on low water.
The water heater might be undersized.
The water and sewer rates might be low. Our rates are $5.50 to $8.60 per 1000 gallons.
The laundry might be doing a lot of Wash, Dry, and Fold.
The revenue could be overstated.
Good-Luck