Gross Revenue / SqFt

[Anonymous]

Let's try a different measure and see if it give a better idea of mat revenue. Take your total annual gross from all sources (coin, wdf, d/c, soda, video, etc...) and divide it by your total Square footage. This is a common method of looking at retail stores.

Hopefully I have guessed the ranges correctly.

If you have more than one store you can enter multiple answers ( but only if they are different).

[Gary C]

Do you mean total sq ft leased/owned or sq ft floor space avaliable to customers?

Gary

[Anonymous]

Total square feet that you are paying for is what the ratio is normally based on. Thus, you would include utility closets, bathrooms, dead space behind dryers, etc...

[Gary C]

just wanted to make sure we where talking about the same thing.

Gary

[Duane]

This poll is better, but it still doesn't paint a good picture. I have 3250 square feet, but I bet my lease is lower than most 1500 sqf stores.


How about a poll that is based on total pounds. Divide all income generated from your store by the total capacity of washer pounds.

What does everyone think?

[Anonymous]

Duane I guess it all depends on what one is trying to get at. This poll trys to get at how much revenue you generate per square foot of space - it has nothing to do with costs or net. An analysis based on pounds of washer capacity might make sense but only if you include wash/dry revenue only. What about a place that has a lot of WDF or D/C or other things like vending, etc...

[Gary C]

I think net per sq ft ( before taxes ) gives the most info. That is the true measure of profitabilite

Gary

[Duane]

So just because I have a large store with more room than most laundromats I am less profitable? I don't think so......

You could take my equipment and place it in a store half my size, pay the same amount of rent, but their net per square foot would be twice as mine.

Would you want a 5000 sqf store that made $75 per foot or a 1500 sqf store that made $150 per foot?

I don't think net per square foot really has any value.

At least net per pound shows what a store generates with the equipment that is installed. This would also include W/D/F (same equipment?) and any vending revenue since vending revenue is generated by your customers that are also using your washers.

[mike]

I think that the poll as set up is good,
(I probably would not have included drinks or video ?)

I have a hard time getting my head around $ 235. / square foot !

This store must have a large WDF component.

Does this store include dry cleaning ?

My stores are at the bottom end of the scale :-(

[pete f]

I think these numbers are very high. In the CLA report I have only 8% had store with greater than $100 SQ ft. 56% were at $50-$59 and under, 12% did not know, 14% from 60 to 99

The greatest number of stores had $50 -$59 sq, followed by stores at $30-39, number 3 was at $20 to $29 (must be the super stores)

Also, my highest per SQ ft store is also my lowest net return on investment store, and my lowest revenue store. And it is also my smallest store...840 SQ ft. Makes the most per SQ Ft but is not that profitable to run.

[Anonymous]

Duanne, you are 100% right, and 100% wrong. The problem is that different regions have different norms and cost. In a given area with a given square foot cost you would want to have a higher gross per square foot. So, if I had the same gross as you in 1/2 the space then I would have a much more efficient operation. However, you may have double the space and half the rental cost due to geographic issues, so it makes it tough to compare on a cost basis. This is a good way to compare when rental costs are similar, but rent can range greatly across this country.

[Anonymous]

Pete, I guess I blew the ranges, just like you did originally - it all has to do with regional issues. I only put the numbers under $100 to try to accomodate as in my neck of the woods if you did less than that you would be out of business. I guess we cannot accurately compare stores across these geographic regions.

[Gary C]

Gross per sq ft really means nothing.
example

1500 sq ft store
55 gross - costs 55 net A big fat $0


850 sq ft store
Gross 45 - costs 35 net $10.00 a sq

I will take the 850 any day. So I really think that gross from one store to another does not have much bearing on anything unless it's so low it's not holding it's own.

Gary

[Anonymous]

Gross per square foot is one of the best measures of retail operations - in a given local. Maybe it does not work so well when you compare disparate regions. In a given area, labor and utility and rents are all relatively close. Thus, most expenses will be fairly similar and gross per square foot is a very good comparative measure.

[Gary C]

I do agree with the regional issue. How ever that still does not tell you if a place is profitable. I know that was not the point of the poll. I just wanted to throw that in for people that did not make that connection. Some people will think that big gross will mean big income and we know that's not the case. Most people that think that way have not been in business before.

Gary

[Fred50]

Gary,

I'll further your comments with the line, "We lose money on every sale, but we make it up on volume".

In very competitive industries (like ours) some larger players may try to predatorily price their product to drive others out of business. It is rarely successful long-term.

[Anonymous]

Gary you are right, NET is what you are after. But, if you don't have access to net numbers then gross per square ft is a good way to compare stores in a similar area - not perfect but a good first start.

I think the point here is that no matter what measure one uses, someone else will think there is a better measure - and neither person is right nor wrong.

[dzender]

I'll throw another wrench into the works .... card vs. coin .... is "float" taken into account in this poll into gross income?

Card store owners are always so happy to gloat about their "float" ... in a net income situation with a true cash accounting method, "float" would become a liability and not an asset, thus reducing revenue per square foot.

Is this taken into account anywhere?

[Fred50]

I don't "gloat about float". It is just a fact of life in a card store.

It is a short-term liability, but the long-term float is definitely income. Don't forget that that short-term liability is offset by cash in the bank.

I for one don't include float in my income figures unless the card has not been used for at least 6 months.

In addition, I never have a negative float on a day to day basis so the figure is always rising. People move or lose cards on a regular basis. The cost of the cards is greatly offset by the average card balance.

[pete f]

This poll is outdated. Perhaps we need a new one, then compare it to this one to see how prices have changed over 4 years.

[Anonymous]

I either did the math incorrectly or there's something somewhat misleading with this comparison... I calculate approx. $65/sqft revenue from my small mat, and am pretty confident no one is exactly green with envy from my ALMOST $6k annual net haha

James

[pete f]

I either did the math incorrectly or there's something somewhat misleading with this comparison... I calculate approx. $65/sqft revenue from my small mat, and am pretty confident no one is exactly green with envy from my ALMOST $6k annual net haha

James

The poll is almost useless. The rev per sq ft vary widley from population density to size of mat and rent cost. I have 4 stores within 7 miles of each other, one has rev per sq ft almost double what another does, yet they all make good money ROI. The better rule of thumb is rev per sq ft be at least 4 x rent per sq ft

[Anonymous]

I guess what just matters were all makeing lots of money and happy with our dream business.