Revenue Growth???

[broker]

I'm new to this business and in the process of developing a business case. Is there an average that I can use for growth or is it really dependent on so many variables that it's impossible to define. I'd like any business to grow at least 5%/yr, but I haven't seen any numbers concerning growth in this business.

[Howard]

WOW, talk about variables!!!

Nevertheless, there are a few things to consider when projecting growth that are constant.

1. You will seldom if ever generate growth yourself. It isn't possible to get people to wash their clothes more often.

2. Growth comes through population growth (assuming your area stays the same demographically), price increases, and beating out the competition.

3. Then, there are things like your attendant personalities, seasonal fluctuations, adding vending equipment, providing other services, reduced advertising costs once you are established, replacing inefficient equipment, and on and on.

I would suggest that your business plan should not assume future year(s) growth in excess of projected population growth.

[CharlieS]

The laundromat business is not like a retail or internet business. Howard is correct. You are running a very local business. The population is usually steady, or even declining if in the city. People only need so much laundry done. So how can you create growth for your 'mat?

1) by keeping up on your pricing. Maintain high pricing by being the best mat.

2) By taking greater market share. This can be very effective if your mat is shabby, and your competitors are also shabby. Of course, it can work against you when your competitors upgrade and you don't, or a new mat opens.

3) By adding new services, W&F, dry cleaning dropoff. However, beyond these two, there is not much, except maybe alterations.

Plan minimal growth or even flat growth. Always be conservative in your plan, high on expenses and lower on income. If the plan still works, it will probably work in the real world. If you have to stretch and fudge the numbers, adding unrealistic expectations, you probably will fail if you push it through.

Then if you get growth, its all a bonus!!!

Charlie

[broker]

Thanks for the information - it helps.

[Mungo Spike]

In addition to the comments provided by others, I do a pickup and delivery service for WDF and drycleaning. The delivery service brings in business from outside my laundromat's normal area, which helps to overcome the localization limit on business that most laundromats have.

On a smaller scale (in terms of revenue), I sell large sizes of detergent, bleach, and softeners; good quality nylon and polycotton laundry bags; and pre-paid telephone cards.

Obviously, you have to have an attended laundromat to do all these things ...

Cheers...rick