My rent payment is killing me. Is there some type of calculation as to what percentage of gross the rent should be?
Ideally, your rent should be between 15 percent and 25 percent of your gross volume. When you venture into that 25 percent range, have debt service on equipment and are fully attended, I consider you as being in a vulnerable position. And, unless you have substantial volume, you could be headed for financial problems.
For instance, let’s say your gross is $125,000 annually. Your rent at 25 percent will be approximately $31,000. Labor will be about $45,000, and utilities will be around $33,000. Insurance, parts, garbage, supplies and miscellaneous expenses will be between $8,000 and $12,000. Rounding off that figure, you come up with about $121,000. If you have debt service, you’re going to be losing money.
If you doubled your volume and are paying rent at 25 percent, you’ll have approximately $50,000 to $65,000 additional funds for the debt service or profit.
The old rule of thumb is that your rent and debt service should not exceed 25 percent to 35 percent, if you want to make money. If it does, you will need substantial volume to support your vended laundry.
I’m trying to figure out the pricing structure in order for me to put in a bid on doing the laundry for a new hotel that will be opening near my store. Of course, I want to be competitive, but I want to make money, too. Is there a way to figure what it costs per pound to do sheets, towels, bedspreads, shower curtains and so on?
First of all, you have find out what materials these items are made from – then you can decided what has to be pressed, what doesn’t have to be pressed, what has to be mangled, etc. So, you have to do a little bit of homework in the beginning to come to an actual cost per pound.
Your cost and, in turn, your subsequent pricing will strongly depend upon how much pressing and ironing is required, as well as how much and what type of packaging is expected by the client. These are some of the basic questions you’ll have to get answered before you can fully develop a legitimate pricing structure to submit with your bid for this hotel account.
However, in general, the cost on laundering items of this nature is anywhere between 9 cents and 13 cents per pound.
I have a customer who brings in oily rags that are used to clean popcorn machines. And the buttered oil is wreaking havoc with my equipment. After this customer uses the washer, there is a slightly greasy film left over, which we have to wipe out immediately. Unfortunately, my laundry is only partially attended, and this customer typically washes these items when no one is on duty.
The rags also are leaving grease marks in the dryers, and we suspect this residue in the drums has damaged some of our other customers’ clothes. I’d like to know if there are any products and washing methods I can suggest to our “popcorn maker,” other than just blacklisting him from the store.
You should recommend any di-limonene-based detergent. These products are perfectly safe and eco-friendly. And they will neutralize a lot of the oils that standard detergents simply can’t handle.
In addition, this also should take care of your dryer situation. After all, if all of the oil is flushed out in the washing cycle, you won’t have a transfer of that oil to the dryers.
Perhaps call your local distributor and find out what types of di-limonene-based liquid detergents he carries.
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