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Salary for an Owner of a Laundromat
The owners of successful laundromat businesses have the potential to make large profits. However, how much profit they can make and what salary they pay themselves depends on the circumstances of each business and the choices each owner makes. However, an analysis of the industry and the factors that determine a laundromat owner's salary provides useful estimates on how much a laundromat owner can expect to make.
Employee Salary Vs. Owner Salary
Although business owners may assign themselves a salary, this is different to the salary paid to employees. Business managers determine the salary of an employee based on the value of the employee to the business and the worker's skills and experience. However, an owner's salary will depend on how profitable the laundromat business is and the financial needs of the owner. For instance, some laundromat owners may choose to assign themselves small salaries when they start a new business to reduce expenses and increase the money they can reinvest into the business. Other owners may choose to cash out most or all of the business profits as a salary.
Laundromat businesses had the reputation for being dingy and unsafe places, but according to a February 2008 "Entrepreneur" article, the industry is changing. Laundromats now provide new services and are increasing the quality and convenience they offer clients. According to the Coin Laundry Association, there are around 35,000 coin laundries in the United States, most of which are owner-operated. According to the same report, the industry as a whole generates nearly $5 billion a year in gross revenue.
The profits you can expect to generate from a laundromat vary depending on the size, efficiency and popularity of each business. According to the Coin Laundry Association, cash flow from a laundromat may vary from $15,000 to $200,000. Laundromats require few, if any, employees. This reduces running expenses considerably, especially if the owner, as is usually the case, also operates the business. However, the startup costs of a laundromat are high. According to "Entrepreneur" magazine, building or purchasing the average laundromat business will cost you $200,000 to $500,000.
The salary of a laundromat owner is, to a large extent, up to each owner because owners can choose what percentage of the business' net income they want to pay themselves as a salary. According to "Entrepreneur," efficient one-person businesses should determine the size of the owner's salary as a percentage of revenue. The magazine says owners should be able to pay themselves 40 percent of their top line revenue, or gross sales. For example, a laundromat owner-operator with $100,000 in gross sales, should be able to pay himself a $40,000 salary.
Andrew Latham has worked as a professional copywriter since 2005 and is the owner of LanguageVox, a Spanish and English language services provider. His work has been published in "Property News" and on the San Francisco Chronicle's website, SFGate. Latham holds a Bachelor of Science in English and a diploma in linguistics from Open University.