Welcome back to our series on evaluating the worth of your laundromat. Whether you are looking to buy or sell a laundromat, knowing how the value of these properties is calculated can influence your decisions. In our previous post, we looked at the factors that impact the value of a laundromat. However, there are more numbers that you should know that can help you determine the profitability of a laundromat. By comparing the profitability of your laundromat to other coin-ops in your area you'll be able to ascertain the value of your business. If you need reliable Continental Girbau dealers in South Carolina, trust in T & L to help you. Call now to see why we're the best in the industry.
In order to accurately evaluate your business, you'll need to ensure that your business records are accurate and up to date. Understanding where your business is making and losing money is crucial for evaluating its profitability and overall worth to a potential buyer.
The most important operations number, and the least commonly used number, to give value to your business is the Utilities as a Percentage of Gross (UPG). Using this number helps you keep up with the cost of your most volatile expense. Knowing this number allows you to set your machine prices so that your business is profitable. Utility costs tend to increase, so knowing your UPG can help you adjust ahead of large utility expenses to keep your machines making money.
Turns per day allows you to determine how busy your laundromat is and whether there is room to grow your business or if it's time to scale back. For a full breakdown on how to calculate this important number, see our previous post. Knowing your turns per day can also tell you which machines your customers are using most often. When it comes time to replace equipment, this number can help dictate what type of machine you want to buy.
Another important number that should be considered for the value of your laundromat is your weekly gross income. Potential buyers usually ask for this number first. The weekly gross income of your store illustrates how busy your store is. Accurate accounting of your expenses and your revenue is crucial for determining this number.
Sector by sector profitability is another key metric in your business. Knowing what areas of your business are making money is crucial. If your wash, dry, fold service isn't making you any money, it doesn't make sense to continue to offer this to your customers. Setting your vend prices too low in comparison to your utility costs makes your biggest source of potential income unprofitable. Regularly checking this number can help you know decide which services to keep and which ones to dump.
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Knowing your numbers can help you understand the true value of your business. When it comes time to sell, having an accurate picture of the potential worth of your business is essential. Thinking about upgrading your existing equipment before you sell? Does your recently purchased laundromat need new equipment? T & L Laundry Equipment can help you get the right equipment for your facility and create a layout your customers will love! Call or come by the showroom today to learn more about our exciting product offerings and how we can help you grow your business in 2018!
