Play Meter

LONDON: We have never broken it down that
way. We have the input to do it, but I have never
found the need to worry about what service per
machine costs down to the penny. When we get to
profitability of a particular machine, though, we do
try to put a weekly service cost to it. But it's done in
a more general sense. In other words, you have a
piece of equipment and you can find out what is
your minimum, what you must get out of this piece
of equipment. And with that we'll come up with a
cost of ten, twenty, thirty dollars a week. And the
labor is already apportioned in, but it's all done on
an individual basis. Also, our specific knowledge
enters into it; for instance, a pool table requires a
certain amount of labor, and we crank in so many
changes of cloth per year at a certain price. How
many service stops are we making at that location?
That's also a factor. And there are other
considerations; are collections made at this location
weekly or every two weeks? That way I come up
with minimums on my routes, and I follow that
through further with data processing to produce
productivity reports on every location. By putting
our minimum figures on every piece we have on the
route, we can get back in productivity reports on
how every machine in every location is doing. Then
if a location has six pieces of equipment in it, we can
add up those minimums, and compare it to the
actual six-week average we just generated, and we
can see if the average is over or under. If it's under,
we start looking for the weakness. It may be one
machine out of the six. And that tells us that the
spot is a trifle over-equipped. And we have to pull
t hat machine out. Now, I try to do that anywhere
from one to three times a year. That basically is
how we crank in labor costs.
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GREENWALD
Comet Co in Chute
Coin Meters
Coin Chutes
Locks
Timers
Rotary Switches
Custom Designs
GREENWALD IttDlJSmlES
13.0 METROPOLI TAN AVE , BROOKLYN , N Y 11 237 ' TEL 21 24 56-6900
TELEX 1 2281
CABLE ADDRESS GREENCOINS NV
PLAY METER: Have you ever computed a rate of
return on your investment?
LONDON: I have all kinds of ratios that I generate
to let me know what I'm netting on what I've
invested.
PLAY METER: What's an acceptable rate of return
on working capital for you before taxes?
LONDON: If after everything, an operator's return
on everything was ten percent, then I should think
he should be happy. It's an acceptable figure,
considering the risks and the vagaries of the
business. But when you start getting two, three,
four percent, that's bad. But then again, you have
to consider what the operator's personal draw is.
Did he draw an excessive salary? If so, what would
it cost him in salary to replace himself. These are all
variables you have to take into account to
determine your return.
PLAY METER: By using these ratios, have you
had to eliminate locations?
LONDON: Yes, as painful as it is to give up
locations, we have done that. As a result of these
ratios and the profitability study I've made, I use
the data processing to produce the production
reports on the locations, and we will assign to the
sales department the responsibility of hitting as
many as twenty locations. We put these locations
PLAY METER, June, 1978
"That's what makes this machine different. It shoots back."
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