Leading the Way

By Bob Nieman | Jan 09, 2012

Kenny Wells has always been and entrepreneur to some degree. Before entering the coin laundry business, he was a real estate broker, primarily managing his own apartments and mobile homes as rental property. Along the way, he also has owned a country music nightclub, a minor league hockey team, a car dealership and a small drycleaning operation.

Wells – who now owns five laundromats in and around Killeen, Texas, and is currently the chairman of the Coin Laundry Association – has been in the self-service laundry business since 1977 and has attended every Clean Show since 1979.

He and his wife, Shelley, have one daughter, Kelli, who lives in Shreveport, La., with her husband, Greg Beason.

Wells recently took some time out of his busy schedule to share his thoughts on the self-service laundry industry, as well as to discuss his goals for the trade association and his own businesses in 2012.

How did you get involved in the self-service laundry industry?

I owned a building that I was leasing as a coin laundry. It seemed to be a good business, so I built one. As a rental property manager, rent was often difficult to collect. In a coin laundry business, the customer must insert quarters before the water will come on. This seemed like a great concept.

What attracted you to this business?

I was primarily attracted by the fact that it was a cash business with no collectibles.

As the incoming CLA Chairman, what are your goals for the Coin Laundry Association in 2012? And how do you plan to reach those goals?

My main goal as CLA Chairman is to increase membership in this great organization. I believe that a grassroots effort could be effective. It is in the best interest of every member to have their competitor be a member of the CLA. In fact, I challenge every member to encourage one other member of this industry to join the CLA. It is a great investment, and I would probably not still be in the business after 34 years were it not for the CLA.

Another goal is to have current members become more involved in CLA programs. Members already pay for the services, so they need to take advantage of them. The most effective way to become involved is through your local affiliate, and the affiliate program is being revised to be even more effective.

All in all, the most successful members of our industry are involved with CLA programs.

Given the economy of the last few years, what are your thoughts on the current state of the laundry industry?

The economy has been in a recession or near it for an extended period, and it has negatively affected this normally recession-proof business. Many stores were built in areas with large immigrant populations. As the economy soured, the customers moved on, leaving underutilized stores.

On a positive note, I see 2012 as a turning point in our industry. There are many great opportunities, given the fact that we have record low interest rates and rental costs have come down to a manageable level in many areas. I am involved in the construction of new stores in good locations with manageable costs.

What are the keys to a successful self-service laundry business in today’s climate?

Some things never change. It’s still location, location, location. After this is achieved, you must have great employees that encourage customers to return. If an employee offends just one customer per day, you have lost 365 customers in a year. Assuming a customer spends $500 per year doing laundry, you have potentially lost $182,500 in revenue. It is much more cost effective to retain a current customer than to get a new one. We always gain and lose customers – but let’s not lose them because of a poor employee.

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

In Texas, water is becoming an issue due to the drought and the fact that cities are increasingly using water rate increases instead of tax rate increases to raise revenue.

Also, in all areas of the country, the infrastructure of our water and sewer system is aging and must be upgraded. Expect higher water and sewer rates.

What major trends are you noticing in the industry, especially in your marketplace?

There is very little growth and the market is flat at this time. Most owners are simply maintaining the status quo, and their stores are struggling. Store owners are reluctant to raise prices or upgrade their stores. Water rates are increasing and, in general, the cost of doing business is escalating. This industry must find a way to raise prices to a reasonable level.

What’s the biggest concern you hear from other laundry owners in your area?

The biggest concern I hear is related to the reduced number of customers. We must upgrade our stores to increase our market share.

Do you have a business philosophy that guides your decisions?

I generally believe that you must listen to your customers and deliver what they need at a reasonable price. In most cases, if the customer is satisfied, everything else will work out.

Specific to your market, what are your thoughts on vend pricing?

Historically, vend prices have been low in Texas. I make an effort to have the best store with the right equipment mix, which includes large-capacity washers and dryers that many other stores do not have – and I charge accordingly.

In the days of all-toploader stores, pricing was important. Today, with stores that feature five or six different sizes of machines, it is very difficult for customers to compare prices. So, my advice is to simply operate a great laundry and charge a fair price.

Do you employ laundry attendants? If so, tell me about your training program.

My stores are fully attended. My training program is my greatest downfall. In the past, an employee would either be good or not, regardless of training. This is no longer so, I must start implementing a comprehensive training program to remain competitive.

How much marketing and advertising do you do? What seems to be most effective?

I have done very little advertising in the past. It has been limited to the Yellow Pages, which I still believe in, and some print advertising. I am currently working with an advertising agency to implement a professional advertising campaign that could cost in the range of 5 percent of my gross revenue. However, an increase in business of just one turn per day can make this look like a great investment. I think advertising on cable television will be effective in my area.

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

The most likely cause for the failure of a coin laundry is a lease that is not supportable by the revenues of a coin laundry.

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

The biggest mistake I made was not being more aggressive and building more stores when I first entered the business.

What are your top business goals for 2012?

My top business goal for 2012 is to increase volume by one turn per day in my stores. I plan to achieve this by implementing an advertising campaign along with some extensive remodeling. My laundries are known as the best coin laundries in my market. However, I have been somewhat complacent for several years and feel that I may need to improve my stores to retain this distinction.

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

Join the CLA, operate a great store and deliver the services your customers desire.

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

Absolutely, it’s a great business, as long as you are willing to do whatever it takes to make it work.