A well-thought-out business plan for your self-service laundry is now more important that ever, especially when it comes to landing the financing you’ll need.
Last time, we discussed five of the 10 most important questions your business plan must answer. Here are 6 through 10:
6. How are you going to operate your business?
This section deals with your specific coin laundry facility. Do you own the property or will you be a tenant? How big is your store going to be? What equipment do you need to put into this store?
Along with that, you need to address the subject of your proposed hours of operation, as well as whether you plan to have your business attended or unattended.
7. What are you going to do about personnel?
If your store is going to be fully or semi-attended, what's your plan? How much are you going to pay them? How many hours are they going to work?
8. What revenues, expenses and net profits are you expecting during your first few years of operation?
This is the financial pro forma, and it’s obviously a crucial section of your plan.
Revenues can be tough to determine. However, you should already know what kind of equipment your store will feature from answering Question No. 6. And from your competitive market analysis (Question No. 3), you also have a handle on what your vend pricing needs to be.
Hopefully, because of the demographic analysis (Question No. 2), you have figured out approximately what share of the market you’re going to be able to capture. From this, you ought to be able to project approximately how many pounds of clothing your store will be washing and drying per week.
Therefore, from all of this information, you should be in the ballpark in regard to your revenue.
Operating expenses are a bit easier to figure out, and your distributor can help you by determining your approximate utility costs. Some distributors will be able to break it down for you between your electric bill, your natural gas costs, and your water and sewer fees. Others may just provide you with an overall percentage of what you can expect to pay.
The second major item in this category is your occupancy cost. And, typically, the third is labor.
Obviously, anyone who is not experienced in writing business plans and dealing with financial analysis should seek the assistance of an accountant with this portion of the plan.
When you’re finished, you will want to wind up with three years of pro forma financial statements; at least the first year should be broken down month by month.
9. How much capital will you require?
How much money are you putting up? How much do you expect to borrow? Also, what are you going to do with that capital? How much money is going toward equipment? How much is going toward outfitting the interior of the building?
10. Who are you?
What's your background? What's your business experience? What can you say about yourself that would indicate you will be successful?
No matter how good the rest of your business plan looks, banks will dwell heavily on your personal and business credit history. They want to see whether or not you've paid your bills on time and what kind of personal net worth you have.
One of the primary reasons for business failure is undercapitalization and a lack of experience, thus explaining why your personal information is key to the success of your plan.
Answer these 10 questions in your business plan and you’re well on your way to becoming a coin laundry owner.