Why don't we react like gas stations?

[Anonymous]

Why don't more laundromat owners react to costs by raising prices like gas station owners? And better yet, when we do why don't we collude on pricing like they do???

This morning I went to get gas. I pulled into the gas station which is across the street from another station. Both stations had the same price for regular gas $1.599. Neither had a tanker truck filling them and they were different brands. This was at about 10:30am. As my tank was filling I look across the street and see the guy with a big stick changing the price to $1.639. I make a comment to the guy in the booth and he shows me a post-it note and says this is what our prices will be as soon as I get a chance to change them. Guess what his new price for regular was going to be in 5 minutes? You got it $1.639. Very interesting if you ask me.

[BWJR]

Kirby,

You couldn't be more right. The funny thing is I was thinking the exact same thing about 10am this morning. That's scary, I guess great minds think alike. I have not raised my fifty #'ers and my 35#'ers for almost six years, fool that I am. I told my wife this morning that come Sept 1st they are going up .50c each. Now this isn't to hurt my customers, but the price of everything else is going up so I must keep pace. I travel about 300 miles a week, which granted isn't much, but over the last 2 months the gasoline price has gone up about .30%. without going into detail its going to cost my us about $1000.00 more a year to run both cars. From yesterday to today all the stations went up between .05-.07c. You can only hold the line so long. This is whats going to happen, the price will continue to climb through the middle of Sept. and then the President will make a speech that the price fixing is going to be investigated and the the price will start coming back down. It's nothing but a big dishonest game, and we all suffer.


BWJR

[MSKLAUNDRY.]

Had to fill up the tank this morning and I was surprised to see 1.99 for reg at a local gas station over here in Manhattan.
Sure glad I am not driving an SUV!!!

Thank you BUSH

[MichaelCa]

ahhhh.... its so nostalgic to hear ppl discuss $ 1.59 for gas....

Yesterday, almost every station had it at $ 2.39 !!
My "discount" no-brand station was $ 2.18


BWJR, you've inspired me with the idea to write off (most?) gasoline receipts for travel to the Mat - this may be the subject for another thread, but has your CPA ever questioned that ?


Kirby, the reason 'price-collusion' wont occur with us, is that the actual figures on natural gas pricing isn't a mass-media item (nor is it public and visible everywhere) and so therefore our customers aren't directly thinking about it - despite their vague awareness of it once a month.
Consequently, they do not directly tie in to our increasing costs.

What i'm trying to say here, is that it is NOT a "no-brainer" for them to see our prices rise in correlation to our higher costs.

[mike]

MichaelCa,

In Canada the good news is that gas is only 89¢,
the bad news is that it's per LITER !! (I can't do a conversion)


The idea of writing off the gas cost for income taxes,

My accountant told me that car and gas expenses can only be done if you have more than one location.
(I think the theory being, that you would have to get to and from work for a salaried job anyway, and that's not tax deductible.)

[BWJR]

The IRS gives you an allowance each tax year that you can use for mileage to write of the gasoline expense and such. Each year it been going up. I am sure this year it will be way up.

BWJR

[Duane]

I have a home office that I write off each year. All deliveries for the mat come to my home office. I also do all the book work and video recording in my home office for the mat.

Therefore since I drive from the office to the mat it is fully deductable.

Now my trip from the my kitchen to my home office is not tax deductable.

[pete f]

Duane I stay away from that home office deal, the rule was were do you meet most of your customers? I think they relaxed it some a year or two ago, but not enough for me. Car expense, no problem, just don't be a pig and take it all. Call "x" percent personal, the rest biz. You have to go for parts, supplies, etc. You get called on the emergencies. I have 2 cars 1 90% biz, 1 100% personal. Now, my 1st mat is 1 1/2 blocks away, so stopping there and going to others, well you see how it works, and why owning a mat near you is better.

I was out in my boat today, took some friends for a ride. I get about 1 mile per gallon. We use gallons per hour as a rule.
Wonder how all those giant SUV's and hummers do? I guess if you got 70k for a truck you don't care about gas. $200 for a tank of gas

here is a tidbit.. you see all these SUV's because they can be written off. If a lawyer or doctor buys a Jag or Caddy, there is a limit on the amount that can be written off. If the same person buys a Hummer for 70k it is all deductible. The reason is it is considered a farm vehicle. A few years ago the tax laws made the luxury car pay and excluded trucks over a certain GVW for the farmers.. so now any small business man or woman can buy a hummer and deduct the whole damn thing over 5 years, where if they bought the X-7 jag or Caddy the deduction is limited to a certain amount.. 35k? I am not sure. I just know why the big luxury SUV's are so popular. This is why trucks have turned into what you see, and partly why gas is so high. Demand.

We took about a 15 mile trip, and a good part was hull speed, or fast idle, so I burned up about what a Hummer would for a trip to Tampa and back.. 15 mile ea way..

[Anonymous]

With the new section 179 rules any business can write-off upto $100K of that truck over 6000 lbs GVW all in the first year, forget about 5 years!

[Duane]

Pete F,

I have had a home office for several years as a consultant and have never had one customer at my home. At times when I had two vechicles I would write one off 100% as business (of which I only used for business) and the other was private. Currently I have 1 vehicle and write it off 30% business and 70% private. Right now I am looking for a van that will be 100% business (side logos and everything). My accountant told me that if you only have one vehicle then it would be stupid to write it 100% off since you would obvisouly be using it for personal use.

[mike]

PeteF,
very illuminating, I hope someone in the energy department reads this !
Kirby,
In one year !?
Prepare my American citizenship papers, and order my hummer !

[pete f]

Duane, sounds like your accountant is thinking. I still do not like the home deduction thing,,maybe it is all the paperwork.

mike.. you still need to "feed" the hummer @ 1.64 gal every 7 miles...sorry can't convert to CD$,, but it is MORE!!



ok, here is another thought about the original question.
My water will be going up 100% in 5 years, that is 20% per year. My sewer went up 35% a couple years ago after no increase for 5 years. (7%) My insurance must go up at least 10% per year. The gas is 45% higher than last year. My rent is the only thing that is CPI friendly.. I should jack my prices at least 10% per year to keep up with the escalating expenses, which would be 3 times CPI. Of course that is "to much"... in reality it is. The drug companies, and oil companies can get away with it but when your local mat tries to keep the same paycheck you are in trouble, nobody will follow to support the hike. I still increase prices, but not really enough to offset our inflation, not CPI. It seems we have to take a lessor ROI then before, which sort of goes back to an earlier thread about new investors and what they would be happy with as opposed to what investments are available. In other words, our mats are commodities that cash flows are somewhat dictated by investment grades, not by our unique inflation standards alone.
Wonder if they point this out at those get rich by owning an absentee l'mat seminars..
In the total of things, everything becomes normal and average. We may be at the bottom part because of things mentioned above, maybe in a few years we will be on the top end of the curve. We have raised prices over time, utility prices fall, ins rates go down, rent is stable. Poof. wake up.

[Anonymous]

You may get by operating that way, but up North we don't. We are in the business of reselling water, sewer, gas, electric, rent, insurance, and labor. When it goes up we just pass along the increases, remember we try to not be a not for profit business. That is why I always try to inform the customers what component has gone up and why they are paying more. When I raised prices a week ago I explains that the 8% increase in sewer cost was responsible for the 1.5% increase in washer cost and that the increase was not going to my pocket rather it was all going directly to the town. If you explain things to people they usually understand.

[Kitty]

Why wouldn't that be a good thing if you are allowed to take a deduction for car and mileage if you travel to your store? If your store is significantly far from your home wouldn't this be an ideal situation in order to utilize the deduction on your taxes?

Having a home office you are entitled to a portion of the electricity/space deduction as well.

[Kitty]

Kirby,

In theory your way of doing business is cetainly a better wayand if every business could lead the market and charge the most they would. However, there are many many markets that are price sensitive, and if the stores within the market have created their own monsters than it is difficult for one/two of the stores to lead while the rest lag behind. We have found that as stupid as it is, many customers have traveled many miles past the comp in order to come to the mat that is less expensive.

[Anonymous]

Even the oil co.'s have gotten together.We don't have a chance of setting prices until owners ALL get together.We have a free dry war going on here and no one will budge.Unfortunately we need the cooperation of all to make price fixing work.I firmly believe that its about time.I've found thru my involvement in the CLA and this site that people like ourselves,the involved people,are your successful types that persue all possible ways of promoting our business'.Think of the mind set of some of your competitors,do you really see them becoming involved in any way to work together?I guess the only way to survive is to push forward as the trend setter and see who will follow and those who don't hopefully will fade away or "wash"away.