What Percent of Laundromat Revenue Goes to Utilities?
Utilities take a median 20% of laundromat gross revenue and a mean 21%, among 377 owner-operators reporting 2023 results to the Coin Laundry Association. Utilities were also the single most-cited operator problem in that survey, selected by 53% of respondents. On a $335,000 median store, 20% is roughly $67,000 a year.
Key takeaways
- Median 20%, mean 21% of gross revenue (Source: CLA 2024 Laundry Industry Survey).
- Most-cited operator problem at 53%, ahead of labor availability (42%) and labor cost (37%).
- Above 25% has a cause. Six candidates, and they have different implications.
- A high ratio can mean the revenue is overstated, not just that costs are high.
- Compute it from original bills, with periods actually aligned.
The Benchmark and Its Limits
Twenty percent median, 21% mean, from a voluntary trade survey of 377 owner-operators describing 2023 operations. That population skews toward engaged operators, so treat it as a comparison rather than a target.
For context alongside it: rent ran a median 18% of revenue, payroll a median 20% among stores that have payroll, and operating profit before tax, debt service, and owner compensation a median 27%.
Diagnosing a High Ratio
A store at 28% instead of 20% on $300,000 of revenue is $24,000 a year — roughly $84,000 of value at a 3.5x multiple. Finding the cause is worth real money.
| Cause | How to test | Fixable? |
|---|---|---|
| Leak or running fixture | Read the meter with every machine off | Yes, cheaply |
| Water heater or boiler cycling continuously | Model, age, recovery rate, observed behavior | Yes, at capital cost |
| Softener regenerating excessively | Regeneration settings and salt consumption | Yes, cheaply |
| Top-loader-heavy machine mix | Count machines by type and capacity | Only at retool |
| Low extraction speed raising dryer time | Compare dryer minutes sold to washer cycles | Only at retool |
| Unfavorable rate structure or sewer multiplier | Read the utility's rate schedule | No — it is the cost of that location |
| Revenue lower than represented | Water-consumption cross-check against claimed cycles | Reprice or walk |
Work them in that order. The first three are cheap and fast, and buyers who leap to the last one without checking a running toilet make accusations they cannot withdraw.
The Denominator Problem
The ratio has two sides, and buyers focus on the wrong one.
If utilities look high as a percentage of revenue, either the numerator is large or the denominator is small. A store claiming $300,000 of revenue with utilities consistent with $230,000 of volume has a revenue problem, not a utility problem.
The check that separates them: compare metered water consumption against manufacturer per-cycle usage for the actual installed machines, producing a range of implied cycles. See water bill analysis.
Why State Averages Do Not Help
Electricity has a published state benchmark — the EIA reports all-sector average retail prices by state, with a 12.94 cents/kWh U.S. figure for 2024.
Water and sewer do not. They are set by the serving utility, and two stores ten miles apart can face different rate structures, different meter charges, different volumetric blocks, and different sewer calculations. Many utilities bill sewer as a multiple of metered water, which frequently makes sewer the largest single utility line in a laundromat.
There is no substitute for pulling the actual rate schedule for the specific address.
Can Efficiency Move It?
Partly, and less automatically than equipment marketing implies. ENERGY STAR reports that certified commercial washers are on average 9% more energy efficient and use about 45% less water than standard models — applicable to qualifying models, and to be modeled from a store's own cycle volume and tariffs rather than applied as a blanket percentage.
The order that produces results: find leaks, fix the water heater, check the softener, and only then consider equipment. The first three are cheap; the fourth is a capital decision that usually belongs to whoever will own the store for the next decade.
What to Do Next
Pull 24-36 months of original bills, compute the ratio yourself against aligned revenue periods, and if it is above 25%, work the six causes in order. If you are buying, ask for the bills in your first document request — they answer a cost question and a revenue question at the same time.
The Next Step
Frequently Asked Questions
What is the benchmark?
A median 20% and a mean 21% of gross revenue, among 377 owner-operators reporting 2023 results to the Coin Laundry Association. Utilities were also the most-cited operator problem in that survey, selected by 53% of respondents, ahead of labor availability at 42% and labor cost at 37%.
What does a ratio above 25% mean?
Something specific and worth finding: a leak or running fixture, an inefficient or oversized water heater, a softener regenerating excessively, a top-loader-heavy machine mix, an unfavorable local rate structure, or revenue lower than represented. The first three are cheaply fixable; the last two are reasons to reprice.
Can a low ratio be a bad sign?
Occasionally. A very low utility ratio can mean genuine efficiency, or it can mean the revenue denominator includes wash-dry-fold and commercial work processed elsewhere, or that machines have been sitting idle. Check it against turns and machine count rather than treating a low number as automatically good.
How do I compute it correctly?
Total water, sewer, gas, and electric from original bills over twelve months, divided by gross revenue over the same twelve months. Use the bills rather than a seller's summary, and make sure the periods actually align — utility billing cycles rarely match calendar months.
Sources
- Coin Laundry Association, 2024 Laundry Industry Survey (377 owner respondents, 2023 operations) — https://member.laundryassociation.org/hubfs/IndustrySurvey24.pdf
- U.S. Energy Information Administration, State Electricity Profiles 2024 — https://www.eia.gov/electricity/state/
- ENERGY STAR, Commercial Clothes Washers — https://www.energystar.gov/products/commercial_clothes_washers
- BizBuySell, Laundromat and Coin Laundry Valuation Benchmarks, 2021-2025 closed sales — https://www.bizbuysell.com/learning-center/valuation-benchmarks/laundromats-coin-laundry/
This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.