How Much Does the Average Laundromat Make In a Day?
I often get asked some variation of the question, “How much do laundromats make in a day?” Of course, the answer is a resounding, “It depends.” However, here’s my assessment of how much the average laundromat makes in a day.
The average laundromat makes between $450-$500 per day. This includes revenue from the washers, dryers, and other secondary income streams such as vending revenue. The range of daily income from self service laundry is around $100 per day to $1,500 per day.
You might be thinking, that’s a huge range! How can I tell how much money a laundromat is making per day if I’m interested in buying it? There are two main ways to do this. The first way involves expressing interest in a laundromat that is already for sale. The second way is a quick estimation technique that you can use to estimate how much money a laundromat is making per day even if it is not for sale. Intrigued? I’ll show you the magic!
How to Estimate a Particular Laundromat’s Daily Income
If the average laundromat makes between $450-$500 per day, how can I tell how much a particular laundromat’s average daily income? Great question! There are two ways that you can do this to get a good estimation of how much a laundromat makes in a day.
The first is by referencing the pro forma of a laundromat that is for sale. This way will be the most accurate way of determining a laundromat’s income. The numbers on a pro forma, however, are self-reported by the owner and must be verified before a purchase is made on a laundromat.
The second way to estimate a laundromat’s daily income is by doing some simple math. I’ll break down exactly how to do the math for you below. This method is not as precise as referencing a pro forma, but it will get you close, especially when you don’t have access to a pro forma.
The Pro Forma
When a laundromat is listed for sale, the broker who is listing it will gather all of the relevant data on the laundromat from the owner. The broker will then compile this information into a form called a pro forma. The pro forma is a sort of highlight reel for the business.
On the pro forma will be the name and address of the laundromat, the number and kinds of machines in the coin laundry, and tables with the laundromat’s income and expenses. The pro forma usually breaks down income by revenue from washers, revenue from dryers, and revenue from other streams of income such as vending, ATMs, etc.The pro forma will also break down expenses by category.
By expressing interest in purchasing a laundromat for sale, a broker may give you a copy of the pro forma for you to look at. With that pro forma in hand, you will be able to see how much money that laundromat makes.
The income and expenses in a pro forma are expressed in monthly terms, however. So, if you want to know how much money a laundromat makes in a day by using information from a pro forma, you will need to divide the income amount by 30, or 30.3 to give a slightly more precise estimation. This will give you the average amount of money that the laundromat makes in a day.
In order to use this method, however, the laundromat must already be for sale and you must express interest in purchasing the laundromat. Sometimes a broker will request proof that you are capable of purchasing the laundromat before handing over the pro forma. They also may require you to sign a non-disclosure agreement. Often, business owners don’t want just anyone looking at their businesses financial information. This makes sense and is reasonable.
So what if you don’t want to express interest in a laundromat that is for sale but you still want to know how much money it makes in a day? Or, what if you’re interested in trying to purchase a laundromat that is not for sale currently? That’s where the simple math estimation method comes in!
The Simple Math Estimation
When doing your initial analysis of a laundromat’s performance, you might want to use this quick method to determine if a laundromat is worth pursuing. Or, if you’re just curious about how much a laundromat makes, use this method to spy on them!
First, let’s talk about one of the key performance indicators (KPIs) of laundromats. You will need to use this number in your calculation so I’ll explain it briefly so we’re all on the same page.
Laundromat performance is measured in “turns per day.” One “turn per day” is equal to a single use of a single washing machine. So, when someone uses a washing machine to wash their clothes, that’s a “turn.” When we talk about “turns per day,” we are calculating the average number of times each washing machine is used every day.
Armed with this knowledge we’re ready to make the calculations to determine how much money the laundromat makes in a day.
The first step is intel gathering. Laundromats typically consist of various size machines at different price ranges. Make a list of each size machine, how many of each size there are, and what the vend price is. Here is an entirely fictitious example:
Once you have this information, the math is pretty simple. Multiply the number of each type of machine by the vend price. This is the amount that set of machines makes every day from 1 turn. Do this for each size machine.
9 (40lb washers) x $4.50 (vend price) = $40.50 per turn of the 40 lb washers
Here’s a table of what that looks like:
The simplest method of estimating the income is to then add the totals of each size of washer and multiply that number by the average number of turns-per-day.
$31.50 (Top Load Washers) + $40.50 (40 lb washers) + $54 (60 lb washers) = $126/turn
This number is then multiplied by the number of turns per day. The average laundromat does about 3 turns per day. Some more, some less, but 3 is a good average. Certain size machines tend to do more or less than others, but for our purposes using an average of 3 will get us close enough to our number. Continuing the example, here’s the math on the washing machines:
$126/turn x 3 turns/day = $378/ day
You can generally estimate dryer revenue to equal about half of wash revenue (unless it is a free dry store). This means our dryer revenue estimate is:
$378 / 2 = $189
Total store revenue is the sum of the washer revenue and the dryer revenue:
$378 + $189 = $567/day
There will likely be other revenue streams such as vending, and you can calculate those number, too, but the wash and dry revenue will be the bulk of the income. Not bad for our fictitious store!
Ok, now that you’ve learned the math, just like in school, you don’t actually have to do it in real life! I created a tool that will do all the math for you. It’s an Excel document (also opens in Google Sheets). You just enter the number of each type of machine, the vend price, and the number of turns per day you want to calculate.
This sheet makes it very easy to play around with trying out 3.2 turns per day, or dreaming about 8 turns per day to see how much the laundromat would make! It also makes it easy to see how the revenue would change if you increased or decreased the vend prices. Play around with it!
To use it, navigate to the “Pro Forma Calculator” tab at the bottom of the sheet and just fill in the green squares! Easy peasy! The button below will directly download the sheet for you! Happy calculating!