How to boost your laundry profit margin.
“How can I boost my laundry profit margin?”
If you operate a laundromat, multi-family housing facility with a laundry room, or a hotel with a commercial laundry room, then you are no stranger to the pros and cons of owning a laundry room, but it is always helpful to think through additional ways to expand your laundry business profit. If you are investigating jumping into the laundry business (and we can’t blame you), then you too might benefit from a dive into some additional ways to move that laundry profit margin figure in your business plan.
Let’s look at laundry business profit expansion ideas one market segment at a time.
Multi-family laundry income considerations
We’ll start by looking at a few things that you multi-family laundry owners (or prospective ones) may not have considered that can boost your laundry profit margin.
Does laundry revenue increase my property value?
Yes, laundry business profit can definitely figure into your property valuation. Forbes explains that when it comes to property value figures,
“Other income” is sometimes a category both brokers and investors don’t really think about very much. It’s usually a catch-all for laundry, application fees, or bounced check fees. Many times landlords don’t even itemize entries in this category. Other income is too often considered just the gravy on top of the income from rent. The reality, though, is that if your building’s value is determined by a cap rate, other income can have a dramatic upward effect on how much your property is worth.
Forbes goes on to unpack that a bit, breaking down the fact that a) multifamily laundry room income is considered “other income” in property valuation, and b) “other income” can definitely raise the property values.
Forbes concludes “other income can significantly boost your property’s value. If your building is valued at a 7% cap rate, $50,000 in additional other income adds more than $700,000 in value to your property.” That laundry room can help your profit margin!
3 ways to boost laundromat income
Laundromat owners, there are great ways to boost your laundry business profits as well. If you own your building, for example, then you may reap the same property value rewards we listed above. But no matter if you rent or own your space, here are three ways to expand the average laundromat income:
Improve your physical space
Studies show that laundromats that maintain their space, keeping everything clean, safe, well-lit, and inviting, have a bigger laundry profit margin. As Entrepreneur explains, “No longer dingy, unsafe, boring places that customers must endure on a weekly basis, laundromats are becoming fun and attractive multiservice centers that customers may even enjoy visiting.” Meeting that expectation will help keep you in the black.
Upgrade your equipment
If your equipment is old, broken, or inefficient, then you are eating into your laundry business profit. Beyond encouraging new and returning customers, an equipment upgrade might:
Provide new payment options like credit cards or kiosks
Decrease utility bills with more efficient machines
Decrease overall downtime of each machine
Self-Owned equipment
If you are renting machines from a service, you may consider self-ownership of your equipment to maximize your laundry business profit margin. As we have discussed before on our blog, “you may be able to increase your laundry revenue stream 80% by leaving your route operator and moving to a self-operated laundry solution--while still enjoying the benefits that a route operator promises.”
On-Premises laundry business profit
And finally, for those of you who operate on-premises commercial laundries in hotels (or elsewhere), there are ways for you to crank up your laundry profit margins as well. While much of the above applies to you as well like:
Upgrading equipment to battle efficiency and utilities
Looking into the impact of your laundry profits as a part of your property valuation
Cutting out the laundry middleman with self-ownership
You may also want to think about ways to expand your laundry profit margin with passive income.
Laundry passive income
Even if your business has a commercial laundry facility, adding a self-service laundry room can generate passive income for you. Since a laundry room can be open around the clock and can be largely unattended, then your guests can use your laundry facility whenever they want, and all you’ll need to do is calculate the laundry profits for your business.
Our website features a number of tools and resources to better understand the revenue potential for your business, from our Blog, to our Value Proposition page, to our unique Laundry Business Revenue Calculator.
If you are ready to see how elevating your laundry game can truly boost your profit margins, contact SelfOp Laundry today!