I'm looking to open a new store. This will be my first. The distributor I'm working with has provided me with a Proforma. My question is from your past expirences how accurate is the Proforma.
Ed, why not share the proforma, of course the good stuff you can black out, name address.
But, due remember, a proforma is only as good as the individual who wrote it. I have scene good ones and bad ones, due remember what the cla claims as national average for turns per day. Than look at your proforma, not sure the cla catalogues population with turns per day, it would seem to me that, i would wanna be able to coralate the 2 statistics together. As someone with 15k people in 1 mile, might throw off a buisness plan of someone with 5k people in 1 mile. Just sayin
Show us the proforma
Here you go Ben. I'm interested in what you think.
I'd be a bit weary of said pro forma / studies. If you are new to the business industry I would suggest you perform additional due diligence.
This business is peppered with lots of new stores with lost dreams.
Good luck sir.
I'm not new to running and promoting a business, I have done it for years (it was not a laundry). I have done my due diligence with the surrounding stores. What I really wanted to know is, does the proforma accurately represent what a store could produce if run properly. Going by the demographis provided. I'm just a little unsure about the figures. After all they are given to you by a salesman.
first thing you should do, is check local stores, and vend prices, do they match this proforma, nearest 2 stores from this location, scale down if the proforma is a little high, dont forget the dryer revune also
rent, for 36 washer store, over 5k??? WOW, we all know that number is only going up!
dry clean at net 2k a month, well thats a well greased buisness, you will need to see if the "market" is right for it, and then you will need to build it,. not unlikley, but not easy, not always attanable
4k a month in WDF, not hard, again, if the market needs it, if this is in the ghetto, probably not, depends on the market tho,
thier labor rate is kinda high per hour, unless thats the rate by you???? you in ca or NY?
this is a proforma, besides the items above, the paper you have is for a exsisting buisness, what COULD happen, as others have stated, many dreams and bank accounts have been destroyed, from bad decissions. their are 4 stores within 2 miles, and 5 within 5 miles, and thats JUST a simple google search, some stores arent even on those search engines, makes sure, their are no other stores, if you need this NEW store for revune to pay the commercial loan, and also pay hard costs, you better make sure you know what your doing!
i am just curious, what kind of investment dollar amount is this?
First thing that jumps out at me is how they are framing the pro forma in terms of turns per day -- they show you a range from 3 - 7, but check that small footnote that shows the national averages for top loaders and front loaders between 3 - 4. So unless the store is currently doing well above 4, I wouldn't put a lot of stock into those outsized projections (or I certainly wouldn't pay based on a multiple of anything more than what is shown in the 3-4 range).
As others have mentioned, check the pricing assumptions vs. other competition in the area to see if it is realistic.
The utilities assumptions look okay, assuming you have all brand new equipment and boiler/water heater.
On labor, it is assuming ~425 labor hours per month (the monthly cost divided by $12 per hour rate). That comes out to ~14 hours per day. Does that align to how you will run your store? That assumption makes it look like you will be unattended for some portion of your opening hours (which is fine, but you need to be comfortable with it). It also assumes you can produce the $4K in drop-off service + your normal janitorial with that amount of hours. Feels okay but will depend on your pricing and turnaround times.
On the other cost line items: $100 per month for advertising is bare minimum. If you are planning to do anything more that Google/Facebook ads, you need a larger budget. Other costs to consider are local permits/licenses and unsecured property taxes. Also need to understand terms of your lease to know if it is gross or net. If net, need additional expense items to cover things such as CAM. Repair and maintenance looks conservative if brand new machines -- your monthly expenses should be quite low, especially if you have a warranty from your distributor/manufacturer.
Hello Roy,Check your PMThank you
Wednesday 14, 2019 12:20 Greenwich Mean Time (GMT) Central Time
Check your PM