Laundry Cost Analyst
June 13, 2008 10:06 AM Subscribe
Please help me find a way to easily figure out a cost analyst for a specialty linen business...
I am starting a specialty linen laundry, but I am stuck on trying to find out what my total cost per pound cleaned is. My math came out to $0.41 cents per LB, which was done with nothing but a pen and paper, using rates from City Utilities, & the information of the machines. I am looking for a program that has fields to fill in, i.e.-idiot proof. (in case I forgot something), that will tell me the total cost per LB. Freeware-Shareware is preferred, since this program will hopefully only be used once, but if a program is rated high enough-I'd give them $$$. This is also my first question-please be nice, and appreciate it hive-mind.
I am starting a specialty linen laundry, but I am stuck on trying to find out what my total cost per pound cleaned is. My math came out to $0.41 cents per LB, which was done with nothing but a pen and paper, using rates from City Utilities, & the information of the machines. I am looking for a program that has fields to fill in, i.e.-idiot proof. (in case I forgot something), that will tell me the total cost per LB. Freeware-Shareware is preferred, since this program will hopefully only be used once, but if a program is rated high enough-I'd give them $$$. This is also my first question-please be nice, and appreciate it hive-mind.
It seems unlikely to me that there would be software of this bent. So what I would recommend is that you call another businessman in another state and ask them what the think about when it comes to decreasing their cost per LB. I think getting the insight of another business owner would be enlightening and you don't even have to call anyone in you own state. The yellow pages probably has several.
posted by Rubbstone at 1:07 PM on June 13, 2008
posted by Rubbstone at 1:07 PM on June 13, 2008
You might look into a free copy of The Laundry Cost Calculator. You might also get some good ideas from the Hospital Textile Cost Calculator, although it is targeted at hospital administrators considering outsourcing linen services. That said, it would really be worth your time and money to meet with a CPA about your start up, to review your cost assumptions, and general business planning, prior to laying out real money in a start up venture. For a relatively minor amount of money, you'd likely get some solid advice about your plans, and pointers to good resources in your area, for business planning advice. Might also be good to talk to experienced business volunteer consultants, such as the people in your local area from SCORE.
posted by paulsc at 1:15 PM on June 13, 2008
posted by paulsc at 1:15 PM on June 13, 2008
Yup, the software definitely isn't the issue -- Excel or any regular spreadsheet will be more than adequate. Heck, your pen and paper approach works too, but a spreadsheat is easier to tweak.
What will take some thinking is making sure you include all the appropriate costs:
(1) Frequently, little things that add up get left out. What they are depends on your business and where you work (licenses, taxes, local wages, etc.). Also, are you including a cost of capital (i.e., the cost to borrow money for your business or the cost of interest you're not getting because you've taken money out of other investments)?
(2) You'll evaluate costs in different ways for different purposes. In general for cost accounting your capital expenditures (e.g., the cost of machines) is spread out (amortized) over time (since one machine works for many years), but when you're looking at cashflow you apply it for the exact point at which the money will go out of your account.
For #1 you're probably in the best position to figure that out, since you know your business and your area. For #2, either get a basic accounting textbook or somebody who knows a little about accounting.
I haven't read it, but I've heard good things about "Retail Business Kit for Dummies" -- apparently it covers fundamentals of accounting, so that might help you.
Best of luck with your new venture.
posted by CruiseSavvy at 1:16 PM on June 13, 2008
What will take some thinking is making sure you include all the appropriate costs:
(1) Frequently, little things that add up get left out. What they are depends on your business and where you work (licenses, taxes, local wages, etc.). Also, are you including a cost of capital (i.e., the cost to borrow money for your business or the cost of interest you're not getting because you've taken money out of other investments)?
(2) You'll evaluate costs in different ways for different purposes. In general for cost accounting your capital expenditures (e.g., the cost of machines) is spread out (amortized) over time (since one machine works for many years), but when you're looking at cashflow you apply it for the exact point at which the money will go out of your account.
For #1 you're probably in the best position to figure that out, since you know your business and your area. For #2, either get a basic accounting textbook or somebody who knows a little about accounting.
I haven't read it, but I've heard good things about "Retail Business Kit for Dummies" -- apparently it covers fundamentals of accounting, so that might help you.
Best of luck with your new venture.
posted by CruiseSavvy at 1:16 PM on June 13, 2008
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Finding someone with this level of skill in excel should be very easy.
posted by milqman at 12:29 PM on June 13, 2008