Monday, July 18, 2011

Why Laundromat Income Can Decline In The Summer: Buyers And Investors Need To Know

Potential investors and Laundromat purchasers are usually unaware of the up-and-down nature of Laundromat income.  Income goes up and down like waves in the ocean.  If you buy your store in December - despite all the analysis and due diligence you do - it’s possible you may miss the fact that when the summer months come around, your newly purchased Laundromat will produce lower income levels.
Marta wears fewer clothes in July
If the best months of income production for your Laundromat are November, December, and January, the worst months will normally be June, July, and August.  Laundromats in the summertime can have a decline in income of ten to twenty-five percent.

My friend Marta comes from a family of twelve that regularly uses a Laundromat. Mom, Dad, five brothers, and four sisters are in her family. Her mom needs about eight to ten 20-LB washers to clean one week’s worth of her families clothes in December. The Ortez family uses the Laundromat every week and produces a very good income for the owner.
Why does income decline in so many Laundromats in the summer?  I knew the answer was easy, and I've heard it said a dozen times, but it just wasn't sinking in clearly in my brain.

The light bulb of understanding came on one day when I was visiting Marta and saw her coming down the steps from her upstairs bedroom.  It hit me right between the eyes!  Short shorts, halter tops, and bathing suits can fit into fewer Laundromat washers than long sleeve shirts, long pants, and hoodies.

In the summer, Marta’s family can fit their dirty laundry into six to eight 20-LB washers because her family wears fewer clothes in the summer months:  that's the simple answer.  Laundromats don't lose customers, they lose pounds of clothes to process.

Marta’s mom also doesn’t care if her boys wear their jeans for a few extra days - or it their T-shirts are worn an extra day or two.  During the school year, Marta’s mom ensures her boys go to school with clean clothes everyday – in the summer, not so much.

Marta's sister Maria in summer attire
If Marta’s family is typical – and I believe it is - the Laundromat owner receives about twenty percent less income from the same customer base. So now you know why I believe Laundromats make less income in the summertime.
It’s why I always explain the income cycle to anyone wanting to invest in the Laundromat business.  I want them all to view the income for an entire year.  If you believe that a picture is worth a thousand words, you know that Marta's picture clearly explains this phenomenon of Laundromat ownership.

There is, of course, always the exception to the rule.  Less income in the summertime may not happen to Laundromats that are located in resort areas or near the Beach.  In fact, the summertime can often be the best income months for a Laundromat owner.  Tourists can bring dollars to resort and beach businesses, including Laundromats.
                                       The Latina Laundromat Advisor

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