The Importance of Turns Per Day (Conclusion)

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Howard Scott |

Get close to but never reach maximum capacity for shot at maximum profit

PEMBROKE, Mass. — You’ve heard the term “turns,” right? You know it has to do with the number of times your machines are used every day. You probably even know how to roughly figure out your turns, by adding total machine cycles (top loader, front loader or dryer) per week, dividing by the total number of machines in that category, then dividing that result by 7. If you combine the turns for every equipment category and divide by 3, that is the store’s turns per day.

A good turn rate conveys a busy operation. Is your business an active facility, where there are bunches of people there much of the time? Are odd times—evenings, early mornings—being utilized, perhaps because prime time is so busy? When filled, does your store exude a feeling of familiarity, a whiff of conviviality, a pleasure in the comfort in numbers?

Walk into any Trader Joe’s grocery around the country, and there’s always a crowd, always a bustling atmosphere, always people meeting and greeting each other, which makes people want to shop there. This good cheer exists even though shopping is a pedestrian, less-exciting-than-watching-TV kind of activity. It is this commercial good cheer in numbers that a Laundromat generating a high number of turns per day will achieve.

Every customer will realize that this is a safe place, that they will interact with others doing their laundry, and that they might even meet someone they know. And quite possibly, for many of these customers, this might be the only time of the week that they experience this kind of community feeling. Let me say that any Laundromat generating 5 turns per day or more will approach this state of grace.

Another aspect of turns is that they show how efficiently your equipment is used. Achieve 3.5 turns and you are doing OK. Achieve 4.5 turns and you are doing well. At an average price of $3.50 for a front loader, 3.5 turns would achieve an annual revenue stream of $4,410 for that machine ($3.50 times 3.5 equals $12.25/day, $12.25/day times 360 equals $4,410).

Clearly, this is sufficient to recover the cost of the machine, perhaps $1,500, in a year. But by getting 4.5 turns at the same price, the revenue stream grows to $5,670 for a front loader ($3.50 times 4.5 equals $15.75/day, $15.75 times 360 equals $5,670). A daily turn rate of 3.5 gives you a shot at profitability. A rate of 5 almost ensures your profitability.

Turns per day shows investment needs. If your rate is low, say 3, then you don’t need as many machines, and your investment should be less. If your rate is high, say 5, then you might need to purchase more equipment or replace your current machines with more efficient ones. At minimum, though, your turns per day can be evaluated over time to show how much investment is needed at different levels of activity.

A high number of turns per day approximates maximum capacity. Approaching maximum capacity is always your goal. How many customers can you accommodate before people get in each other’s way, before there is confusion, before equipment starts to break down? By getting close to but never reaching maximum capacity, you get into the maximum profit range.

To look at another industry, a factory can make profit running on one shift. But if the same factory were to run a three-shift operation 24 hours a day, five days a week, it would really maximize its resource use. Johnson & Johnson, the pharmaceutical giant, runs most of its plants on this basis.

Finally, your turn rate shows how well you manage your flows. Are you tying everything together so that people and equipment are run at maximum efficiency? Are you maximizing your resources, getting full use without overstraining? Are you in control of every aspect of your operation, so that it works like a Swiss watch?

Pay attention to your turns per day. It’s an important profit factor.

About the author

Howard Scott

Industry Writer and Drycleaning Consultant

Howard Scott is a former business owner, longtime industry writer and drycleaning consultant. He welcomes questions and comments and can be reached by writing Howard Scott, Dancing Hill, Pembroke, MA 02359; by calling 781-293-9027; or via e-mail at dancinghill@gmail.com.

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