A coin laundry, or laundromat, is a business in a retail location in which customers wash and dry their laundry using self-service laundry equipment. Owning a coin laundry requires limited experience and can be less complex than other types of businesses. Because washing laundry is a necessity for customers, a coin laundry can potentially provide steady income. If you own a laundromat or are considering one as an investment, you can calculate its business profits to measure its performance. A coin laundry's business profits consist of its income minus its expenses from the core operations of the business.
Determine the amounts a coin laundry's various types of income generate in a year. A coin laundry typically generates its main income from its coin-operated laundry equipment and generates other income from vending machines and other services, such as a laundry folding service. For example, assume a laundromat generated £325,000 from its washing and drying equipment, £6,500 from vending machines and £23,400 from its laundry folding service.
Calculate the sum of the coin laundry's various types of income to determine the business's gross income. In the example, calculate the sum of £325,000, £6,500 and £23,400 to get £354,900 in gross income.
Determine the expenses the coin laundry incurred during the year. Typical expenses include utilities, employee wages, maintenance costs, insurance, supplies, lease payments and personal property taxes. In the example, assume the laundromat incurred £65,000 in utilities expenses, £48,750 in wages, £52,000 in maintenance, £16,250 in insurance, £26,000 in supplies, £19,500 in lease payments and £13,000 in property taxes.
Calculate the sum of the laundromat's expenses to determine its total expenses. In the example, calculate the sum of £65,000, £48,750, £52,000, £16,250, £26,000, £19,500 and £13,000 to get £240,500.
Subtract the coin laundry's total expenses from its gross income. A positive result represents a business profit, while a negative result represents a loss. In the example, subtract £240,500 from £354,900 to get £114,400 in business profit for the year.
This example calculates the coin laundry's core business profit and excludes expenses unrelated to its core operations, such as interest expenses, depreciation expenses and income taxes. You can subtract these expenses from its business profit to calculate the coin laundry's net profit after taxes for the year.
This example calculates business profits for your internal use. You may be required to use a different calculation of profit for state and federal income taxes.