Demographics & potential earnings "?"

[Breeze]

I'm still in process of working the deal on my first mat(waitn' on lease), in the meantime I've been gathering all the info I can about the business so I can make a good plan to upgrade the equipment. One of the equipment sales reps did a demographic report for me on this address to give me an idea of earnings potential. Using their formula: 1 mile radius , 1/3 of rented units x $11 per unit per week gives a potential laundromat revenue stream of $355K per year gross sales for myself and my 2 competitors to pull from. All of us are a little over 1 mile apart from eachother as the crow flies, so the overlap is minimal. Yes, I actually took the time to draw circles with different color highlighters in my road atlas to see how much there was. SO, on with my "?" : Does one consider projected numbers like this to be a potential of just coin drop business, or does it take into account having WDF business as well?

[Jack]

Hi Breeze, I'm still learning about Laundries myself. Its my understanding that potential earnings are normally considered for the self serve laundry and WDF would be an additional income.
Hope this helps.

Jack

[William]

Overlap is minimal with all of you within 1 mile? I'm skeptical, but I'll take your word for it. Every rental unit will spend $11? I guess personal washer and dryers are outlawed in your town, so you can count on everyone in town to use the laundromat?

So, if you are going to get 1/3 of the business, then you have about $120,000 per year to work with. Subtract rent, equipment payment, payroll, utilities, insurance, etc. and get back to us on the "bottom line". I am willing to bet it is a negative number...

Best advice ever - buy an existing store as your first mat.

Second best advice - the distributor makes money selling new equipment, not running laundromats. Tell them to build it, run it for a year, and then you'll pay between 3 - 5 times net for it.

Good luck!

[ajay]

I'm still in process of working the deal on my first mat(waitn' on lease), in the meantime I've been gathering all the info I can about the business so I can make a good plan to upgrade the equipment. One of the equipment sales reps did a demographic report for me on this address to give me an idea of earnings potential. Using their formula: 1 mile radius , 1/3 of rented units x $11 per unit per week gives a potential laundromat revenue stream of $355K per year gross sales for myself and my 2 competitors to pull from. All of us are a little over 1 mile apart from eachother as the crow flies, so the overlap is minimal. Yes, I actually took the time to draw circles with different color highlighters in my road atlas to see how much there was. SO, on with my "?" : Does one consider projected numbers like this to be a potential of just coin drop business, or does it take into account having WDF business as well?

1) checkout the existing locations to see if they are for sale or in best or poorer condition. Expect a little customer turnover if the places are tip top shape and fully atttendant.

2) check with the town to see if you can water usages from existing stores. Some municipalities give out that information. Also, see if the water/gas meters are outside, then do some reverse calculations.

3)check out how much wash fold business existing stores have - base your on that.

I have demographics and real numbers for a lot of stores in my area; Not one is doing numbers according to the demographics.

aj

[fishmanz]

Hi Breeze. I'm afraid I have to agree with William and ajay on this one. Rarley do you pull your demographic projections, particularly right from the start in the first year.

Does it seem like your 2 existing competitors are doing 177.000 in recipts?

Ask them both if they ever would consider selling.

[pete f]

I'm still in process of working the deal on my first mat(waitn' on lease), in the meantime I've been gathering all the info I can about the business so I can make a good plan to upgrade the equipment. One of the equipment sales reps did a demographic report for me on this address to give me an idea of earnings potential. Using their formula: 1 mile radius , 1/3 of rented units x $11 per unit per week gives a potential laundromat revenue stream of $355K per year gross sales for myself and my 2 competitors to pull from. All of us are a little over 1 mile apart from eachother as the crow flies, so the overlap is minimal. Yes, I actually took the time to draw circles with different color highlighters in my road atlas to see how much there was. SO, on with my "?" : Does one consider projected numbers like this to be a potential of just coin drop business, or does it take into account having WDF business as well?

Maybe I am reading wrong, but I take this as you are buying an existing mat and try to figure upgrades? >>>>so I can make a good plan to upgrade the equipment<<<< The last couple posts have thought it was a new store, not to blame them it happens so much.. Run the store for a few months, get to know the regulars, ask them what they would like. You will know by collections which machines are being used, most likely the bigger ones have the coin. As far as the demo's, I really can not say what the magic numbers are, mats are like restaurants in a way, some just get hot and stay hot, others just hang on and never turn up for what ever reasons. You need the right combo for your market place to make it work. I do not know what that is, but I know you will need it.

[fishmanz]

I guess I read it wrong. Sorry about that.

[William]

Agreed. I see "demographics" and I think you are building a new store.

Why would you need demographics for an equipment upgrade? If you can afford it, do it.

[Breeze]

Ok, to clarify, I am buying an existing mat. Hopefully this will all be completed and signed for within the next week or 2, after the conversation I had with the landlord today all seems to be well.

Pete f. : advice well taken. You are correct in saying the larger machines are the most used.



I now have serious writers block....perhaps i'll edit tomorrow.

Thanks everyone

[bgrossnickle]

I have seen the following three formulas to determine Monthly Gross for an area. First you get a demographic report and decide if you are going to pull from .5, 1 mile, 1.5 mile, or more. Then after you calculate the formula, look at the competition within that radius to determine your share.

((Num of Household income < 15k * 0.5) +
(Num of Household income 15k - 25k * 0.2)) * $32 = Monthly Gross

(Occupied Rental Housing Units * 0.3) * $32 = Monthly Gross

(Total Population * 0.15) / Number of People Per Household * $32 = Monthly Gross