4 Important Finances To Look At Before Buying A Laundromat
You need to think about several factors before you buy a given laundromat. This article discusses four important figures that you should pay attention to when deciding whether to a buy a particular Laundromat.
The Gross Weekly Income
As you look at the records of the Laundromat you want to buy, pay attention to the gross income it makes every week. This number is very important because it gives you a critical clue into how busy that business is. If the number is very low, the Laundromat may not be as profitable as you would want it to be since profits come from keeping the machines busy at work. If the figure is high, the business may be worth considering.
The Duration Of The Lease
Location is a very important factor for any business, including Laundromats. It is for this reason that you should inquire into how much time is still left on the lease of that Laundromat you would like to buy. The longer the lease (for instance, 20 years) the more attractive that business is. Do not buy a Laundromat whose lease is about to expire since you may end up being stuck with equipment that you must get space for.
What Fraction Of Gross Earnings Goes To Utilities
Utilities like water and electricity are the biggest expense of a Laundromat, so this figure is very important when you are evaluating the profitability of the Laundromat you want to buy. If the percentage of this cost is high, for instance close to 50 per cent, then that business may not be very profitable. If you buy a business with a high percentage of the gross earnings going to utilities, then you may have to raise what you charge customers in order to improve profitability.
Turns Per Day For Each Machine
This figure gives you a very clear idea of which machines in the Laundromat are very busy and which ones are not doing much work. This information will help you to know whether you need to install bigger machines in the Laundromat or get rid of the big machines if they are not doing a lot of work. The data on turns per day can also help you to decide when it is time to expand the business.
If you keep the figures above in mind as you evaluate different Laundromats, you will choose the most profitable one and the investment will give you a very good return.