accurate revenue vs water bill

[jamie]

For the number crunchers please.
I am evaluateing a 1 year old store trying to prove revenue.
Water use for washers obtained from company websites.
8 Maytag neptune 23 gallons @ $1.75
10 Dexter T400 39 gallons @ $3.25
3 Dexter T900 69 gallons @ $4.50
10 Dexter stack dryer (20) pockets 8 minutes @ $.25
7 month average water bill 55,000 gallons
Seller claiming annual revenue of $94,000.00 @ $1,800.00 a week.
There is no Wash & Fold, no attendant and no vending other than 6 col. soap.
18 YR lease @ $1,800.00 month,utilities approx. $750.00 a month, asking $195,000.00.
Thanks in advance.

[anonymous]

I have 48 FLs, all Dexter.

22 - T300 $2.00 (Morning special @ $1.25)
13 - T400 $3.00
9 - T600 $4.00
4 - T900 $6.00

39 dryer pockets... 30 stack drums @ 8 min./$.25 and 9 75lb. drums @ 5 min./$.25.

Gross: 3.25 times the store you're looking at.

Water Usage: 4.09 times the store you're looking at.

I have w/d/f, two 8-column soap vendors, drink vendor (both cans and bottles), and a good-size snack machine. We also sell some misc. items over the counter: nylon laundry bags, lint rollers, etc.

That must be one heck of a busy store. I'm only running at about 60% capacity.

Interesting spread between gross and water usage, though. I wouldn't think those 8 Neptunes would make THAT much of a difference.

P.S. My utilites average about $3,250 per month (Water, Sewer, Gas, and Electricity). Trash collection is another $110 per month.

[CharlieS]

OK, here's some fun numbers.

Projecting out some turns and gallonages, 55,000 gallons a month, at the rate you quoted, should produce about $70K a year in gross income.

Conversely, taking Bubbles numbers, figure about 3.75 turns, add in some wdf, vending, and sales, and you get a gross about 3.25 times the reported income on this prop. Those turns will take about 226,000 gallons, which is only slightly more than 4.09 times this prop.

However, Bubbles has higher pricing. Putting her pricing on the subject, would get you up to about 78K.

Even at these numbers, you should be able to make about $1K per month, if you own it outright. If the market would enable you to increase your turns, this could be a good deal. If its really well run already, I'd walk. However, if their is good potential to make it more attractive, it may be OK.

Ok , that is, if you could get it for about $60K. For $195K, just get a cashiers check and send it to me. You'll still lose your money, but it will be over a lot quicker and you can move on.

ON the other hand, if its using about 78,000 gallons a month, you would be grossing 94K, and the value might be more like 100K.

Lots of numbers to crunch and not enough info. Put together your own spreadsheets and try to get them to fit.

Charlie

Charlie

Tough call, lots of work to do. Good Luck.

[vohraajay]

A real quick and dirty calculation is : water - 10% of gross. electric and gas is 15% of gross. Ofcourse there are other ways, more realistic, but if you want do a quick rough estimate this would work. I tested these percentages many time over in many different size laundromats. To all of you owners, how do these percentage calculate against your income?

Example:
gross = $100/month
gas/electric = 100*15% = $15
water = 100*10% = $10.

Other rule is, they say: if you spend 1 week of your gross on expense, second week on rent, third and fourth week in your pocket - that's a good business.

Ajay

[pete f]

Ajay has valid point. If the utilities are 750 then the gross may be 4 or 5 x that, (20-25% of gross) putting the gross rev around $45k a year. Also, from the prices charged, the profit per gallon is more like 8.5 cents, not the 10.25 Charlie came up with. But Charlie has the right idea, just send the money to one of us and get over the loss quickly..

Another new upside down laundromat. What a great investment.

[Rondo]

I just did a quick check y2date for 2 stores combined % to income:

Electric 2.4%
Gas 6.3%

Water 7.2%
Sewer 5.6%

Total 21.5 %

This kind of suprised me because I have installed 14 new energy saving washers. Last year my % was 20% of income. Could it be the hotter summer and last year we had a very mild fall?

[kyle mcpeck]

I just checked my utilitiy bills year to date

Electric 3.3%
Gas 8.4%
Water and Sewer 2.1%

13.8%

My water is cheap! They are raising the sewer 25% next year.

No biggie...

[pete f]

Rondo-- Your water costs more than sewer??

Mine is at least double, probably triple water vs sewer. costs more to get rid of than make:))

Still you 'specing out about the same...

[Rondo]

Pete, one store has a very good sewer rate, one store very bad, I guess they equal out. I'm very jealous of Kyle though. He's more that likely on a city run or small independant co. water system that the big corps. hasn't bought out yet. You'de better hope it stays that way.

[kyle mcpeck]

Both of my laundromats are on municipality water and sewer.

I also have a sneaking suspicion that my one mat has been getting away with murder somehow on water bills. We have to use more than we pay for. I never really thought about it until I started seeing the numbers here on water usage. Also, there are times my home water (in another city) is cheaper than my mat water.

[CharlieS]

Two Laundries, different systems

Rural -

Water/Sewer 6.1% Water twice the sewer
Gas 7.5 % (LP Bottled)
Electric

[CharlieS]

Two Laundries, different systems

Rural -

Water/Sewer 6.1% Water twice the sewer
Gas 7.5 % (LP Bottled)
Electric 7.45%
Total Utilities 21.05%

City - New Mat
Water/Sewer 7% Water twice the sewer
Gas 5.2%
Elec 4.5 %

Total Utilities 16.7%

I just replaced 12 toploaders in the rural mat with Maytag Neptunes. The toploaders were the heaviest used machines, so I'm curious to see the next bill.

When I purchased the rural mat two years ago, it had all 12 year old SQ Tops. I replaced them with a mix of Maytag tops, Neptunes, and fronts. The interesting thing is that my electric bill went down significantly. The demand portion had been as high as 35 KW, and has never exceeded 25 since then, even though my business has quintupled. Even with this much more business, my total electric bill is up only about 80%.

The new mat, all with 3-phase machines, is also an efficient user of electric.

The lesson is that the motors on newer machines can be significantly more efficient than on the older.

Charlie

[anonymous]

Here's last year's Utility bills to gross for my one mat, and this year should end up pretty much the same:


Gas and Electric: 8.8%

Water/Sewer: 5.3%
--------

Total 14.1%

Relative to the natural gas bill, my electric bill is very small so I don't break it out seperately.

Sewer is about 3 times water (I'm in a town 30 miles north of Seattle, but our sewer rates are higher than Seattle's... go figure.)

I forgot to do this at the end of last year after my price increases had been in effect for 12 months. Thanks for the reminder!!!