You are here

Key Store Financials & Market Metrics (Conclusion)

Not using them to take action? Then they’re just numbers

CHICAGO — Writing for American Coin-Op several years ago, now-retired small-business columnist Howard Scott left little doubt about how important he thought knowing certain store financials and market metrics was for a self-service laundry owner: “Your Laundromat’s operating numbers should be as easy for you to recite as your Social Security number.”

Indeed, there are certain markers and measures that can signal a laundry’s health and potential for growth. In Part 1, we examined demographics, profit/loss and customer retention. Let’s conclude with a look at some others:

Turns Per Day — This relates to the number of times a laundry’s machines are used every day. It’s not difficult to calculate: Add your total machine cycles (by top loader, front loader or dryer) per week, divide by the total number of machines in that category, then divide that result by seven.

If you combine the turns for all equipment categories and divide that number by three, that is your store’s total turns per day. A good turn rate, according to Scott, conveys a busy operation.

Let’s say your front loaders run a combined 500 cycles a week, and you have 20 front-load washers. You divide 500 by 20, which equals 25. You divide that figure by seven days and your daily front-load turns equals roughly 3.6.

The average turns per day for front loaders among respondents in the 2019-20 “State of the Industry Survey” report was 3.6, so based on the example, you now know your throughput for that machine category meets the current industry average.

But you don’t have to stop there. Beyond the visuals of how many people can be seen in your store at a given time, turns per day can truly show your store’s ebbs and flows. But you’ll need to be able to identify cycles by date and time of day to develop a true picture of when your machines are busy and when they are not.

Calculating turns per day can show how efficiently your equipment is being used, your investment needs, and if you’re approaching maximum capacity.

Maintenance and Repairs — Paul Russo, a retired store owner of 40-plus years and also an American Coin-Op columnist, favors keeping a maintenance logbook and recording every repair requiring a part. By doing this, you’ll be able to spot trends and maintain a more efficient parts inventory.

Russo used a marker to write directly on parts the date they were installed and from which company he bought it. Different parts suppliers offer different versions of the same part, some better than others, and tracking sources will help you identify who sold you a bad part.

By pairing a machine’s maintenance and repair record with its age and level of use (turns per day), you’ll be able to track its useful life and can prepare for its eventual replacement.

Competing Businesses — This is trickier than determining your own numbers but still worth doing, even if you’re only able to come up with estimates.

While there’s something to be said for being proactive instead of reactive in business, it would be foolish to completely ignore what other businesses competing for laundry service customers in your area are doing.

In the case of another self-service laundry, visit the store at different times and days to gauge activity. Take note of the equipment mix, vend pricing, store capacity, age of machines and the wash-to-dry ratio. Be curious and ask questions of staff.

ONCE ARMED WITH INFO, TAKE ACTION

There’s valuable information out there to be had but it won’t collect itself. It’ll require a commitment of time, resources and patience to gather intelligence that’s truly meaningful.

You’ll want to track any data long enough to experience naturally occurring ebbs and flows, and to account for or eliminate variables that could color your analysis.

Once you’ve collected the numbers, whatever they may be, use them to take action. Without it, they’re just numbers.

If you can get into a routine of regularly looking at markers like your revenue, turns per days, utilities and competitor pricing, you’ll ensure your operation continues to measure up favorably.

Miss Part 1? You can read it HERE.