Profits

[Anonymous]

My Laundromat has been in business for 5 months and I am far from breaking even. As a matter of fact, I need to double my business just to break even. The coin wash is doing OK, but the WFD business is not what I expected. I plan on doing more advertising within the next month to help build up the business. Can anyone please reply on how long it took to breakeven with your laundromat? Also, is it true that the summer is the slow time of the year?

[fluffy]

Seasonality depends of course on your demographics and location.

Your breakeven also depends upon your purchase price and specific costs. Don't know what to say there, I think it's a rather straightforward rewarding business.

[Anonymous]

Where in NJ are you located?

[anonymous]

Are you in an overbuilt area? How many competitors do you have and how do their operations compare to yours? How big is the store, what is near it? In my neck of the woods summer is usually slightly better than winter.

[Anonymous]

My Laundromat has been in business for 5 months and I am far from breaking even. As a matter of fact, I need to double my business just to break even. The coin wash is doing OK, but the WFD business is not what I expected. I plan on doing more advertising within the next month to help build up the business. Can anyone please reply on how long it took to breakeven with your laundromat? Also, is it true that the summer is the slow time of the year?

My Laundromat is located in Bergen County, NJ in a town that is low to mid income. There are two other laundromats within 1 square mile that are small and somwhat inconvenient for customers because there's no parking. There are several apartment buildings in the town and several more in surrounding towns, however, the surrounding towns are saturated w/Laundromats. My prices are very competitive and are much lower than the competition.

[Fred50]

Did you build a new mat? Were you expecting to steal enough business from the existing mats to make a profit?

Is there even enough business in the surrounding area to make it?

Did you do a detailed demographic analysis before starting this venture?
What were the results?

Keep in mind that everyone is doing laundry somewhere now. The trick is getting those that need a laundry to go to yours. It can be a tough habit to break.

If your market was already saturated-meaning that people weren't out the doors on the other mats on Sunday-you may have a tough time making a go of it no matter how much advertising you do or how low your prices are.

Too much capacity in any business is a bad thing. If drives prices down, sometimes below cost, and it can drive weaker, lower capitalized businesses out of business.

Now for the good news. It can take a year or more in some cases to break even. Best of luck to you.

[anonymous]

Assuming the location is good, there is no reason that your prices should be lower. Raise them - NOW! If you are the nicest with new equipment and better parking you should be getting a premium price not giving stuff out for a discount. Hirer prices will help your margins and probably not hurt your volume. Remember that if you raise your prices by 25% you can stand to loose over 30% of your volume and still be ahead!

What have you done in terms of advertising or other promotions to get people to walk through your doors? Here you might want to try a BRIEF price reduction. Perhaps vend your smallest machines for 25 cent or 75 cents (or you pick a low price point) for a very finite time like a week or 10 days. Advertise this that for the week of August "X" you will be offering this special intro special. That will bring people in. Then it is up to you to keep them coming.

Why do you think people are not coming, or put another way why do you think they are doing their wash where they are doing it? That can be a retorical question or you can post a reply - but once you know that answer you will have a better idea of what to do.

[pete f]

My Laundromat has been in business for 5 months and I am far from breaking even. As a matter of fact, I need to double my business just to break even. The coin wash is doing OK, but the WFD business is not what I expected. I plan on doing more advertising within the next month to help build up the business. Can anyone please reply on how long it took to breakeven with your laundromat? Also, is it true that the summer is the slow time of the year?


My guess is you built to big of a mat for your market. I opened a brand new mat in April 05, by May'05 it not only turned profit but was at min ROI projected. Why? The area needed a mat, I did not build one much bigger than normal mats, I searched locations for years, I have over 10 years in this biz. If you want to make more money quickly raise your prices.
If it is any consolation, summer is slower for me, and you have about 3-4 more months than you will be topped out, ie, at a level that will not go up much more. other than general inflation. I do not do w/d/f, but many here do and make good money at it. Spend a few hours a day propectiing for small comercial accounts.

[Silent Roo]

Advertising WDF can work but generally the WDF that make money have long term accounts set up. This means knocking doors and looking for work.

WDF tends to not drop into your lap. I had a Laudry that made more in WDF than in coin. It was because we went out and got 4-5 great accounts. The big companies tried to take them away but they liked being with the local guy who they see every week.

Yes you will get some but if you store is Situated to do Great in the Coin Laundry Business you probabaly will not have great WDF....

with out work

[Anonymous]

Thanks silent Roo. What kind of accounts do you have? Restaurant? Hair Salon?

[CharlieS]

Ditto on the rates. Prices are too hard to raise. If you are the newest and the best, why not be the price leader. You are just giving away your profit.

I took about 9 months to break even when I opened my new mat. I had projected about a $5K advertising budget and had to spend about $15K to get there.

The best advertising for me is always the freebee community papers. As a customer once told me "We don't have money to buy newspapers". Find your best venue and advertise regularly. I used a coupon early on in my advertising to identify which was working. I gave away a free laundry bag (custom printed, about $2.50 cost each) with each coupon. This also helped to drive people into the store.

Never give away or discount your services.

Charlie

Charlie

[JimG]

i think alot of the ground on maximizing your walk-in coin revenue has been covered (price-ups!), so I won't try to address. that's the "low-hanging" fruit and should be your first priority.

if that doesn't get you where you need to be, the next step is WD&F. WD&F breaks down into two categories: walk-in (consumer) and pick-up (commercial).

Here's my experience on commercial accounts:
1. develop your own mailing list of commercial accounts. target the headings in the yellow pages that are typical takers: day spas, medical practices, chiropractors, motels, hair dressers, etc.
2. develop a cheap, but attractive flyer. i print (actually xerox) mine 3-up on a 8-1/2 x 11 sheet of paper. fits perfectly into a business envelope.
3. mail quarterly to your list.
4. every response to your flyer is potential gold. do not let your attendants do anything but take a message, for you to return. never, ever, let them quote rates over the phone.
5. even tho many callers will be rate shopping and will want you to quote on the spot, try to set up an appointment at their business before quoting rates. if they won't see you, (even if they do), try to weasel out of them either what they're currently paying, or what others have quoted them. always, before quoting, emphasize the benefits of doing business with you, which might be: scheduled or ad hoc pickup, free pickup and delivery, monthly invoicing, quality of your laundering process, doing business direct with the owner (you), provision of laundry bags, etc.
6. obviously, per #5, you need to be prepared to put a vehicle on the road for pickup and delivery. don't be afraid to accept business that might seem too far away. once you have your first account in that distant location, it becomes easier (from a profit standpoint) to add others in that same area.
7. get a listing in the Yellow Pages under commercial laundries. it's a good source of calls. #1-#5 apply here as well.

That's pretty much all i know! hope it helps.

[Kitty]

People do business where they feel comfortable and of course the needs must be met as well as convenience. If you do not have a top WDF attendant, trained in excellent communication skills as well as great laundry talents then your business will suffer for it. Be sure you have a perfect fit of an employee which should be an extension of you and your philosophies for your customers.

[Winston]

How did you calculate your break even numbers? The way I look at it, profit or loss (cash flow) is computed this way:

Gross minus expenses minus calculated salary for you if you work in the mat (if you work as an attendant calculate an attendant's salary for the hours you worked). If you own the property deduct fair market rent as an expense. Do not deduct depreciation, amortization or debt service. Some people consider debt service as an expense, but how you pay for the laundromat has nothing to do with whether or not it's making a profit.

[Anonymous]

What type of equipment do you have? Do you have all tops in a frontload market? How big is your store? What are you charging for machines? Are you coin or card?
The more info you provide the more sugestions we can make.