It’s Been a Learning Experience

By PlanetLaundry staff | May 05, 2010

In the blink of an eye, Jim Whitmore went from owning two dozen coin laundries to wondering if could weather the most horrific business storm he had ever faced. Whitmore took the initiative to get into the coin laundry business, which was a positive first step and led to him getting his foot in the door. However, a doomed partnership taught him more lessons than he cared to learn. But Whitmore, now a member of the Coin Laundry Association Board of Directors, is back and more knowledgeable than ever. A former president of the CLA’s New England affiliate, Whitmore owns the Sunshine Laundry locations in Salem, Peabody, Marblehead and Manchester, all in Massachusetts. All are unattended stores.

Whitmore recently shared his experiences in the industry in the hopes of educating others, much like he has been learned from other CLA members.

How did you get involved in the coin laundry industry?

I got into the coin laundry business in 1982. I was in the construction business, building homes on spec. It happened to be a very bad year that year in the housing industry. As a coin laundry customer throughout my early 20s and after, I had always thought it would be a good, steady business – one of the necessities-of-life types of businesses.

I decided to reach out to a couple of people, and got connected with John Hooper and Dick Lutz, who ran Salem Laundry, which had 10 stores. At the time, they were getting a little older and were concerned that they didn’t have a succession plan. I came to them with an interest in the business, and they asked me if I’d like to come work for them – and, in three to five years, they would likely retire and I’d likely run the business.

Did it go according to plan?

Things dragged on, and I got little antsy. I wanted to get an equity position. So, in 1989-90, I bought 10 of the 11 Salem Laundry stores as a partnership with another man who was in the business.

What attracted you to this business?

I had a background of mechanical ability. I had been a line mechanic on MGs and Renaults in Marblehead. I went from there to the metal fabrication business, building Formula racecars and turning Volkswagen conversions into dune buggies. I ran that business for a number of years and then went into residential housing construction and built a number of spec homes. So I guess my skill set lent itself to being in the coin laundry business.

Is it safe to say that you didn’t pay anyone to come out and repair your machines?

Well, I have to now because of time constraints, but for a long time, you’re right, I did all the repair work myself.

How did you form WSI Laundry?

It was formed in 1991. The partnership that I bought the Salem Laundry stores into failed within the first year. At the peak of the project, we had 24 stores and just shy of 100 apartments. But things got messy very quickly and exploded.

So I started WSI with the one of the 24 stores that I had when I was in the partnership. I started with that one store and began building again.

How difficult did the failed partnership prove to be?

Financially, I lost virtually everything in that partnership. I went through a bankruptcy and a prolonged battle with the government and the IRS. But I came out on the other side. And lived to tell about it.

What does WSI look like today?

We are currently at four stores. We reached a high of six stores and there’s still some real estate – about 20 apartments at this point.

What are the keys to a successful self-service laundry business?

Maintain your equipment, keep your stores up-to-date and make them readily accessible, not only physically but also by the availability of store hours and with equipment that’s easy to use.

Another thing that I think has helped me be successful is to not question refund requests. Refund promptly. I think that idea was probably born when working with Salem Laundry. For someone to come into a self-service store and trust that they’re going to be taken care of – the only way an owner can get that trust is to respect the customer’s integrity in terms of making a refund request. Obviously, you get taken sometimes, but that’s a cost of doing business.

What are some of the hot-button issues for laundry operators in your area?

Water and sewer costs are rising, so that’s a concern. There’s also competition pricing issues. The competition isn’t willing to follow suit on pricing, so that keeps the margins thin.

Also, finding quality labor for things like cleaning.

What major trends are you noticing in this industry, particularly in your marketplace?

I’ve seen a move toward larger equipment. It seemed to stall a little bit in this recession, but there’s been a move to the good old American “bigger is better” mentality.

I’ve also noticed more homeowners being willing to step into the store to do their bigger items. There seems to be a higher frequency of that.

What is the biggest concern you hear from the customers in your area?

Cost. Everybody’s pinching pennies. Our 35- to 40-pound frontloaders range from $5 to $6, depending on the location.

What’s the greatest technological advancement you’ve seen since you’ve been in business?

I would say the development of the card systems, although I don’t use them. In addition, the newer versions include the use of credit cards and debit cards.

Also, the migration to high-speed extract machines. That’s a major industry shift and a healthy one. And another thing I’ve liked seeing is the development of the shield combustion hot water heaters.

Do you have a business philosophy that guides your decisions?

I’m here to serve the public. I have a family principle that comes from some religion, I suppose, which is do unto others as you would have them do unto you.

Specific to your market and region of the country, what are your thoughts on vend pricing?

I’ve got a bunch of chicken owners around me. None of them really want to change their vend pricing. It’s tough being a price leader.

How are utilities in your area?

We pay a premium on water and sewer. I think that has to do with the municipalities reaching for financial resources for municipal management.

In your experience, when a coin laundry fails, what is the most common reason?

The two most common reasons are probably failure to reinvest in the business and poor site selection.

Personally, what’s the biggest mistake you’ve ever made in the laundry business?

My business partnership in 1990. I’d say the biggest mistake was getting into a partnership. It would have been better to do it alone. Partnerships are tough. One marriage is enough in a lifetime. Two or three can be a challenge.

From a business standpoint, what goals are you looking to accomplish in 2010?

I’m looking to fully develop a recently retooled store in Salem. And I’m looking at a re-tooling project for another store and making a decision on that this fall.

What was the undertaking for the store in Salem?

I totally rehabbed the entire store, starting in early September, from top to bottom. It had been there 19 years. I didn’t have to shut down at all. I did it in four steps. I kept the store open, and the customers enjoyed watching the progress. It’s 2,500 square feet and packed with all brand new equipment, from 125-pound washers on down.

What advice would you give a new storeowner just getting into this business?

Spend time with several different distributors. Really take in everything they have to offer. Spend some time at an association or affiliate meeting. Try to get to a couple of those before you jump in. Talk to existing owners. Get educated. Join the Coin Laundry Association and read through every bit of literature and watch every video they offer.

And, don’t go in undercapitalized.

In your market, is the coin laundry business still a good business to get into?

Our market is fairly well populated with stores. In the urban areas, which are the heavily populated areas, the best opportunities are in redeveloping existing stores.

Your Salem laundry has some unique green features. Why did you opt to “go green” with the store, and what did that entail?

Our whole intent is to build the greenest, most energy-efficient stores possible, given the current available technology. The Salem store is 90 percent high-extract equipment. We spared no horses getting to that goal.

When did you decide that going green is a good idea?

Back when I was building houses, the second house I built, back in the late 1970s, was a completely solar home. So I’ve always had that bent to me. And we have plans to put solar panels on this store once we secure ownership of the building.