How\u2019s business these days?<\/p>\n
Pretty good? Flat? Booming? Maybe improving a little since the pandemic?<\/p>\n
If you\u2019re not really quite sure how to definitively answer that question, maybe you\u2019re not as in tune with your laundry business as you should be.<\/p>\n
Successful operators set specific business objectives, and they know how to track their progress toward achieving them. Unfortunately, looking at things like revenue and profit on the balance sheet or in your accounting software can only take you so far. You should continually seek more tangible ways to measure your progress.<\/p>\n
Key performance indicators, or KPIs, are some of the best business measurement tools available. Tracking relevant KPIs can assist in decision-making, help you set strategic objectives, and allow you to evaluate your business process in real time.<\/p>\n
Of course, there are various types of business metrics and performance indicators to study. And they\u2019re all different. You need to be sure that the KPIs you monitor fall in line with your specific business.<\/p>\n
You need to come up with your own set of numbers and statistics to meet your goals. After all, the goals of one laundromat can vary drastically from those of another. You have some free reign in crafting your laundromat\u2019s KPIs, but according to QuickBooks, you should make sure they meet the following four criteria:<\/p>\n
Given that, what specific numbers, statistics and KPIs should typically be considered when reviewing a laundry business \u2013 and why are these so critical to helping owners better understand and run their operations?<\/p>\n
\u201cUnderstanding your laundry business\u2019 key performance indicators means understanding all debts, costs and revenue, and the elemental detail that is practical and available,\u201d said Joel Jorgensen, vice president of sales for Girbau North America. \u201cAlthough this may sound quite fundamental, a surprising number of laundromat owners don\u2019t monitor these critical elements of their businesses until there\u2019s a problem \u2013 such as flat or declining sales, a silent partner, etc. \u2013 or an opportunity for expansion that requires financing, or a sale in which documented verification is required.<\/p>\n
\u201cBy monitoring key performance indicators and keeping an eye on debt service, laundromat owners can maximize the profitability and productivity of their businesses.\u201d<\/p>\n
According to Jorgensen, here are some laundromat KPIs to know and monitor:<\/p>\n
\u201cOwners should look at daily, weekly and monthly revenue \u2013 daily to see what days are the busiest, but also to pinpoint the slowest days so that you can rectify that situation,\u201d suggested King Lee, regional sales manager for Dexter Laundry. \u201cLooking at weekly and monthly revenue will enable you to better gauge your overall revenue, as this takes into account your slow days and your peak-performance periods.\u201d<\/p>\n
Jorgensen also stressed keeping a profit-and-loss balance sheet and suggested monitoring the following KPIs to help take action on improved profits:<\/p>\n
Lee concurred that utility bills and equipment maintenance records are great indicators of business performance.<\/p>\n
\u201cThe percentage of utility charges should be in line with your revenue,\u201d he said. \u201cIf there is a spike in your water bill one quarter, and your revenue doesn\u2019t show an increase, this could indicate a problem with how your water usage is being calculated or a plumbing issue within your infrastructure. Monitoring your utilities is also a way to keep vend pricing in line with your operating costs.<\/p>\n
\u201cAnother key statistic to consider is how many times a particular machine is out of order \u2013 and the associated costs not only to repair that piece of equipment, but also the revenue lost while that machine is down.\u201d<\/p>\n
Eric Meyers, general manager of laundromat and OPL segments for Alliance Laundry Systems, pointed to turns per day as a metric all laundromat owners should be keeping an eye on.<\/p>\n
\u201cA key number is turns per day \u2013 shooting for a conservative figure of three turns per day,\u201d Meyers stated. \u201cOwners should be monitoring turns per day weekly and monthly, and should be looking for trends in the data. Identifying the ebbs and flows of your business \u2013 in terms of turns \u2013 helps you become active in tapping marketing and other tools to drive better consistency, with fewer steep peaks and valleys.\u201d<\/p>\n
As far as frequency, most KPIs should be monitored on a monthly basis, as that\u2019s the typical debt service, rent and utility billing schedule, according to Jorgensen. Machine audits should tie in to collection frequency for coin-operated laundromats, while hybrid and card-operated stores most likely offer audit and revenue reporting and management automation.<\/p>\n
Lee noted that some key indicators should be tracked quarterly.<\/p>\n
\u201cLooking at numbers too closely and too often can lead to \u2018numbers paralysis,\u2019\u201d he explained. \u201cToo many new owners have a tendency to monitor their revenue daily, and then they wring their hands over a bad day or a less-than-stellar week.\u201d<\/p>\n
No doubt, the collection of business stats and laundry metrics has become a lot simpler and more prevalent as the industry\u2019s technology has evolved and become more sophisticated.<\/p>\n
One KPI that has become easier to track with the advent of new technology is the number of unique customers to a location, Lee pointed out.<\/p>\n
\u201cThink of it in the same way websites view their internet traffic \u2013 clicks versus unique visitors,\u201d he explained. \u201cIf a laundromat relies on a few large commercial clients, for instance, it is at risk of losing a big chunk of business should something happen to one or two of those huge customers. This is akin to having too many eggs in one basket. With a card system or mobile payment technology, owners can track the usage not only of their self-service customers, but also of their wash-dry-fold and commercial clients.\u201d<\/p>\n
The majority of laundry equipment these days features built-in audit capabilities that detail the number of overall cycles, by machine capacity and individual unit. By monitoring turns and revenue by machine, owners can better determine which cycles, machines and locations are most and least popular. They also can determine if there\u2019s price acceptance or pushback on multi-level vending or other options being offered.<\/p>\n
\u201cTied against fixed and variable costs, you can gauge and document profitability,\u201d Jorgensen said. \u201cBetter yet, this KPI best practice will enable you to identify and react to opportunities or issues much more quickly than you otherwise might.\u201d<\/p>\n
\u201cWith a rapid increase of new stores being networked, laundromat owners can monitor their locations remotely to see which capacity of machines are more productive and then perhaps alter their equipment mixes to include more of those popular machines,\u201d Lee added. \u201cOwners also can receive alerts regarding machine malfunctions and error codes, thus minimizing down time.\u201d<\/p>\n
Of course, technology also can help with marketing, by showing which promotions are working based on the number of electronic coupons or codes redeemed.<\/p>\n
In all, technology provides information that laundry owners can use to better understand and run their business.<\/p>\n
\u201cTechnology has taken turns and other KPIs from guesswork to factual data, from which to make sound business decisions,\u201d Meyers said. \u201cThe information is now at owners\u2019 fingertips. No longer do you have to be in your store to see how it\u2019s doing.<\/p>\n
\u201cIt\u2019s all about trends,\u201d he continued. \u201cThe better you are as an owner at spotting trends, the more quickly you can deploy marketing strategies in response to power increased turns and, ultimately, profitability.\u201d<\/p>\n
In Part 2, some of the leading laundromat operators across the U.S. will share the specific numbers and statistics they regularly rely upon to assure their operations are on track with their business goals.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" A Look at Some of the Operational Metrics and Key Data Owners Should Be Monitoring to Keep Their Laundromats on Track for Success How\u2019s business these days? Pretty good? Flat? Booming? Maybe improving a little since the pandemic? If you\u2019re not really quite sure how to definitively answer that question, maybe you\u2019re not as in […]<\/p>\n","protected":false},"author":1230,"featured_media":10991,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":""},"categories":[98,243,244,245,9351],"tags":[],"class_list":["post-10990","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured-articles","category-feature-1","category-feature-2","category-feature-3","category-highlights"],"_links":{"self":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/10990"}],"collection":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/users\/1230"}],"replies":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/comments?post=10990"}],"version-history":[{"count":1,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/10990\/revisions"}],"predecessor-version":[{"id":10992,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/10990\/revisions\/10992"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/media\/10991"}],"wp:attachment":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/media?parent=10990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/categories?post=10990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/tags?post=10990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}