Whether you own a laundromat or you’re interested in owning one, it’s essential to learn how to calculate a laundromat’s profits and income. That way, you can estimate how much you made or how much you will make in the future.
But how can you do that? Here’s a simple guide!
1. First, find the total of all the fixed expenses associated with the laundromat. These may include, but aren’t limited to, the following:
- Business loans
- Rash services
- Paid employees
- Cable television
For instance, if you spend $1,500 on rent, $1,000 on loans, $300 on maintenance, and $800 on other services, the total is $3,600. Note that expenses like equipment or commercial laundry parts from places like Laundry Replacement Parts aren’t included on this list.
2. Now, add variable expenses to your total fixed expenses. These are expenses like water, sewer, gas, and electricity. Such expenses would vary depending on how much of them you used.
If you aren’t aware of the costs, you may estimate them by multiplying your business’ gross income by 16-25%. So, if you have a gross income of $15,000 and the variable expenses are about 18% of your gross income, multiple $15,000 by 0.18, so you’ll get variable expenses of $2,700.
Let’s go back to the $3,600 from step 1. Add $2,700 and $3,600, then you’ll get $6,300.
3. Next up, add the total income your laundromat produces so you can calculate the gross income. For instance, if you collect about $9,000 a month from washing machines and vending machines, along with an extra $1,500 a month from ironing and folding services, the gross income is $10,500.
4. Finally, subtract the total costs from your gross income, and you’ll be able to calculate the profit. So, $10,500 minus $6,300, and you’ll get a $4,200 profit a month! You can also refer to this simple formula, not just every month but on a weekly, quarterly, and yearly basis, whichever you need and works best for you!
Tips and Warnings
With that in mind, you should note a few things.
The example used would calculate the laundromat’s core business profit, excluding expenses unrelated to the core operations like depreciation, interest, and income taxes. You may subtract those expenses from business profit to calculate the laundromat’s net profit after taxes for that year.
Furthermore, this example would only calculate the business profits for internal use. You might have to use another formula for state and federal income taxes or other situations.
There are many other factors to consider as you calculate your profits, but this is a start. You’ll also need to take into account any surprise expenses such as repairs, dexter laundry parts to replace broken items, poor revenue for the month, and the like.
Wrapping It Up
Keep this calculation in mind during the times you need to identify your business’ profits. Make sure you do this regularly to know the status of your laundromat and what you can improve on.