Striking a Balance

By Bob Nieman | Apr 15, 2009

When Larry Adamski first bought his coin laundry in Muskegon, Mich., it was an existing, 49-washer store.

And 45 of them were toploaders.

“My customers were having fist fights over the other four, larger-capacity frontloading washers,” he laughed. “So, the first thing I did when I was totally revamping that store was to buy eight more big washers and move the other four, so that all 12 of them were in a line against the wall. I tripled the number of large frontloaders right off the bat, while also cutting my number of toploaders in half, down to 20.

“If my customers are literally fighting over a machine, that let’s me know I need more of that machine. That’s how I do it. I just look at what’s happening in the store and decide what needs to change.”

And that, in a nutshell, is all there is to know about the art (science?) of creating a profitable equipment mix at your self-service laundry.

Well, maybe there’s a bit more to it than that…

What’s Trendy?

Although coin laundry equipment mixes certainly vary from region to region, the trend is clearly away from topload machines and smaller, 18-pound frontloaders – and toward the larger washers.

Another trend is toward the giant machines. Recently, there seems to be more interest in putting in at least one or two 75- or 80-pound washers in larger busy stores.

In addition, more and more laundry operators seem to be replacing some of their 30-pound stack dryers with 50-pound tumblers. Again, this switch is occurring particularly in larger stores with several large washers and enough room to handle the bigger dryers.

Of course, high-efficiency, high-performance, high-extract washers also are becoming very popular with today’s store owners.

“The trend for years has been bigger,” said Joel Jorgensen of Continental Girbau Inc. “It draws a broad array of demographics. The final factor is a performance machine. Now you’re combining size, vend variation and performance to help determine your dryer mix, the flow of your store and how you market your business.

“The higher performance machines and the concept of selling time are important. That time convenience is what we try to reach for when we design a store. That is how you get the non-traditional customer.”

Why the Shift?

Of course, there are several reasons for this shift from smaller topload equipment to larger frontload washers – the most compelling being the enthusiastic response from customers.

“I bought a couple of 80-pounders, and they’re my best washers, as far as turns per day,” Adamski said. “I would guess that trend is because the bigger the washer the better it washes. Also, the bigger the washer the better the deal for the customer – they’re paying less per cubic foot.”

“People want bigger equipment,” said Jim Fingerman, a store owner in Richfield, Minn. “Everybody. It’s the Americanization of laundry. Bigger and better seems to be the way it is. I replaced three 30s with two 80s – and my customers have been very pleased with that.”

The other big advantage of larger machines is that, as rent and construction costs continue to escalate, the big machines typically offer a better return on investment because they generate more revenue per square foot.

“We did an analysis per square foot potential,” said Tom Jessen of BDS Laundry Systems in Minnesota. “We calculated the square inches of floor space used by the different machines and included some space needed for the rear service accessibility and customer space in front. And it was amazing how much more revenue potential per square foot an 80-pound washer would do versus a topload washer.”

Rising utility costs, as well as government pressure to save energy (and the subsequent rebates for purchasing equipment that does just that), also have played key roles in the shift to the more energy-efficient frontloading equipment.

Mixing It Up

When figuring out your store’s own equipment mix, there are two main sources – demographics and the competing laundries in your marketplace.

“A demographic report does you a lot of good,” said Tom Rhodes, a multi-store owner in Florida. “You’re figuring out who your potential clients are. For a new laundromat, that’s essential. You can look at what the other laundries in the area are doing, but they may be missing the target, too. That report is probably going to be your best tool, more than anything else.”

Generally, if the demographics point to larger families or a large percentage of ethnic groups, it is wise to lean toward the larger machines as the bulk of the laundromat.

“Perhaps you’re in an area where the average family size may be six or eight people,” said Jay McDonald of Alliance Laundry Systems. “With some ethnic groups, it is more common to have extended family living together, which makes the household size larger. If those are the markets you’re in, by all means, you may want to have more 60-pound machines than 20-pounders.”

By contrast, if there are a lot of retired people and seniors in the area, you should generally purchase more toploaders. Or if your self-service laundry is located close to a college campus or to where there are a lot of singles, again perhaps lean toward topload washers and smaller, 18-pound frontload machines.

“If you’re in an area that is predominantly seniors, usually that is a one- or two-person wash coming in, so you don’t need a real large capacity,” McDonald said.

As for dryers, many store owners and distributors alike suggest figuring out what is needed based on the washer poundage. Basically, determine the total poundage of your washers and then back that into the dryers. If you’re using 30-pound dryers, only figure about 25 to 27 pounds per dryer, because customers always tend to overload the washers and under load the dryers.

Several experts prefer slightly higher than a one-to-one ratio on dryers to washers.

“To me, the number-one factor is dryer capacity,” Fingerman said. “For us, we were constantly bottlenecking at the dryers. That’s probably the case in most places. People really kind of miss the boat in finding that balance.

“I would look first at my dryer capacity and then figure out my washers. On the weekend, to have those customers standing around, waiting for dryers, will infuriate them far more than if they come in and see all of the washers being used. You brought them in the door with the washer, and now they’re mad.”

As a rule of thumb when determining the mix, include at least three sizes of machines, which give customers three options and three price points.

“You don’t want to get too complicated,” Jessen warned. “There can be 15 different washer sizes out there. But, in reality, the laundry is going to end up choosing between two and four of them.

“There is a tendency to think more choices is better,” he added. “But you can get too much, and it makes things confusing and unpleasant for the customer. They walk in, look around and appear frustrated. It’s too much. The lineup that we like to go with steps up in 20-pound increments – 20-, 40-, 60- and 80-pound washers. There are your four choices. If you’re in a smaller community with a smaller budget, go with three.”

But before purchasing a store full of washers and dryers based strictly on what the demographic numbers tell you, take a look around your marketplace. Spend some time at your competitors’ locations, particularly on Saturdays. See what machines are getting the heaviest usage – and which are being ignored by the customers. After spending a couple of Saturday afternoons this way, you can pretty accurately determine what equipment people in your market typically like to use.

“What anyone opening a new store has to remember is that there aren’t customers out there with nowhere to go,” McDonald said. “They’re all going somewhere else. So when you open a new store, whether you like the sound of it or not, your mission is to steal customers from your competition – other coin laundries and apartment laundries.

“So, instead of trying to force those customers to try your new store because you have bigger machines and try to force them into a different way to do their laundry, you really need to spend some time doing laundry in these competitive stores. See how often a toploader gets used. Are there customers who only use 80-pound machines? Get a flavor for the market so that when you design your mix, you’ve got a little bit of everything.”

Of course, another tip to help determine a profitable equipment mix for your coin laundry is to consult with somebody who knows how to read the demographics and understand the competitive nature of the business – as well as how to find out crucial data from your competitors. Certainly, even the most experienced distributors and industry consultants are not going to be exactly on the money all the time, but they’re going to be a lot closer than someone coming in cold off the street.

Avoid These Mistakes

Clearly, several factors go into determining your store’s equipment mix. Therefore, there are several mistakes that can be made during this exercise. One of the biggest is letting the pocketbook rule, rather than taking a long-term view of the business.

If you have the wrong equipment or the wrong equipment mix in a store, you’re never going to reach your potential fast enough. A lot of people think dollar signs at the beginning and don’t buy the 50-pounders and the 80-pounders, thinking they can get by with 18-, 25- and 35-pounders. But if the area really requires the larger machines, these operators aren’t going to get all of the business they could be getting.

In other words, coin laundry owners who make this mistake will not be able to get the maximum revenue per square foot that they could if they just spent a little more money and bought the proper equipment for the particular marketplace.

“Instead of paying $6,000 for a 50-pound washer, an owner may by two 25-pound washers for around the same price, thinking he is getting more equipment for the same amount of money,” explained Duane King, a store owner in Ohio. “But, now, he can’t service the customers with large comforters, and the two 25-pound washers will take up more space than one 50-pound washer, too.”

You can only get so many turns per day. So, if you’re going to get four or six or eight turns on a toploader at about $1.75 per wash, wouldn’t you rather get that same number of turns on a larger capacity machine that will take up almost the same amount of floor space yet bring $5 or more a turn? If your store is underequipped for your specific market, you are surely leaving money on the table.

The same thinking explains the success of today stack dryers. They enable the operator to earn two dryer incomes from the same space that used to handle only one unit.

Obviously, the key is to get your customers in and out of your store in a timely fashion. And to do that, you must have enough equipment to do the job for them – when they want to wash.

“When they want to wash” is a key phrase there, because it leads to another, related mistake coin laundry owners make: Trying to guide their customers to do their wash on the “slow” days. Some operators, for example, will reduce their prices on Tuesday, Wednesday and Thursday, or offer other kinds of specials. However, the most important thing is to have enough washers and dryers on Friday, Saturday and Sunday. If you don’t, it doesn’t matter what you do on Tuesday, Wednesday and Thursday.

Another mistake related to equipment mix can be made when determining how those large and small washers are to be dispersed throughout the store.

Many experts suggest spreading the machines equally throughout the store so that not all of the 50-pound washers are in one area. They could be divided at least into two areas – each with a full complement of machines. Too many operators put all of the 50-pounders in one row, all of the 35-pounders in another and all of the 25-pounders in another. That way, people who want to use a 50-pounder and a 25-pounder have to run back and forth.

Regarding layout, many laundry owners locate the biggest washers upfront.

“Your larger machines should be put in the front of the store,” Jessen said. “If your bigger machines are your profit-makers, revolve your design around making those the most accommodating machines to that user, like having folding tables nearby, and a big dryer close to the big washers.”

One popular analogy is to compare the self-service laundry to a supermarket. The bread and milk are typically in the back, but as you get closer to the cash register, you come across the big-ticket items.

“If someone’s got a bit item, you don’t want to have them haul it all the way across the store,” Jessen reasoned. “Putting those bigger machines upfront is a great visual presentation.”

For some stores, organizing the mix with the bigger washers in front makes sense for two reasons: (1) it’s a better impulse-purchase location, and (2) it rewards the customers who spend the most money in the store.

Another mistake is loading a store with 50- and even 75-pound washers, but continuing to put in all 30-pound stack dryers.

“The old stores had 30-pound, single-pocket tumblers all over,” McDonald recalled. “Then everybody went to stacks and just a couple of 50-pounders. But now we’re seeing a lot more 75-pound-capacity tumblers in stores, as well as some of the large-capacity stack tumblers. It makes sense. If you’re putting in a 60-pound washer and all you have is a 30-pound stack, your customer has to split his one wash load into two dryers.”

Despite the bigger-is-better mantra being spouted by many industry experts, self-service laundry owners need to exercise good judgment.

There is a balancing act to laying out a store. You can get carried away with frontloaders and end up putting $200,000 more into the laundry than it demands – or can do. That could be the difference between failure and success.

Not Just Washers and Dryers

Thus far, we’ve discussed creating the proper mix of washers and dryers. However, it’s important to also pay attention to the other equipment within a store.

One of the most important devices in most coin laundries is, obviously, the coin and bill changer.

You can never have only one, because they do break down. Also, you need to have enough coins in those changers to accommodate as much business as you expect to do between collection periods. For example, if you prefer to collect once a week and you’re projecting your store to do $10,000 a week in business, you better have $10,000 worth of quarters.

Another aspect to consider with changers is the fact that today’s changers can now accept $10 and $20 bills, rather than just $1 and $5 bills, as in the past. These large bill validators are something that all coin laundry owners should consider when figuring their mix.

“The one thing I always considered in determining the number if bill changers was how quickly I could get to the store and fix it if it went down,” Adamski said. “If I had a laundry where it took me an hour to get to it, I would definitely want to have at least two changers.

“The changers today have a pretty good capacity,” he added. “Obviously, the more you have the less often you’ve got to fill them. It’s probably a personal preference more than anything. The number of changers one has depends on how far away he lives and how much he wants to worry about bill changers. The more you have, the less you have to worry.”

As far as folding tables, one table for every five machines is an absolute industry minimum.

A formula that Washington store owner Kent Wales uses is “four feet of folding space” for every three dryers.

The need for ample folding space cannot be emphasized enough. Your customers want convenience, and you want them to be able to go from the changers to the washers to the dryers to the folding areas without hitting any choke points along the way.

Having an efficient laundromat means having wide aisles and enough folding tables and space to create a flow. There is nothing worse than a group of people crowded together in a folding area. Therefore, when altering the mix of your machines, be sure that you don’t alter the smooth work flow you’ve developed.

When it comes to laundry carts, here is a simple formula: double the number of folding tables. The people who are currently on the tables are using carts. And the people coming in waiting for those people to leave also are going to need carts.

Soap vending is another area to consider. You need to decide how big of a soap machine your laundry will require. Typically, this depends on your area. For example, if you have a convenience store or supermarket in your laundry’s shopping center or nearby, perhaps you would choose a smaller soap vendor. After all, you’re competing with those other outlets. By contrast, if you’re the only game in town when it comes to soap, you will no doubt need a larger-capacity vending unit than if you had a 7-Eleven around the corner. Either way, you always want to offer your customers the convenience of buying soap from you.

The situation is the same with drink and snack machines. If you’re in a very dense, urban area, you should probably install larger drink and snack vendors. However, if you’re in a suburban shopping plaza, you can probably get away with having smaller machines for soda and candy.

It’s also important not to overlook parking availability when mixing your self-service laundry. A typical store can get by on between 15 and 30 parking spaces.

Most likely, time is more important to your customers than money. If they can’t find a parking space, they’re going to go somewhere else – just like if they can’t get a washer, they’re going to go somewhere else.

Automatic doors are another amenity quickly gaining favor with today’s savvy, customer-service-oriented operators.

“We put in an automatic door last year, primarily for my drycleaning customers,” Fingerman explained. “Accessibility has become so much more valuable, because people are doing the bigger loads. I’ll see customers hauling three or four carts out to their car and be stacking them up. You have to make sure there are plenty of laundry carts and that customer can get them in and out easily.

“The ease of getting in and out of the store is even more important than whether or not they have to wait once they’re inside. They’ll tolerate some of that stuff, but accessibility is very important. And I get comments from customers every week on the door. It’s an invitation for people to come and do business with us.”

Last but not least, don’t forget to check your store’s infrastructure to see whether or not you can accommodate the grandiose new plans you have for your business.

Hot water heaters and sewer lines are crucial. Some smaller, older coin laundries were built on inadequate sewer lines. Therefore, you have to make sure you have enough sewer-line capacity.

Also, let’s say you own a 2,600-square-foot laundry with 400 amps of power, and you’ve got quite a few machines. What if you have to replace your 400-amp service with 600-amp service? Be sure you have the infrastructure to make that big of a jump.

A related item is combustion air. If your mix calls for added dryers, you must understand that it is also calling for added combustion air. The last thing you want to do is install more dryers and then end up starving them for air.

“Cutting corners with utilities is a major mistake,” Jorgensen said. “And if you don’t plan for adequate combustion air, where are those dryers going to receive their combustion air? From that conditioned space that you’re already paying to either heat or cool. Talk about inefficient and counterproductive. You’re paying for it twice.”

Clearly, there is a lot to consider when tinkering with your equipment mix, as there have been many changes in the way laundries do business over the years.

“A lot distributors get comfortable with a proven formula, so if you’re a new store owner, don’t be afraid to challenge the distributor and understand his reasoning for why the mix is the way it is,” McDonald said. “A person can do himself an injustice if all he does is get opinions from ‘experts.’ The person will learn as much or more if he actually goes and does laundry. Looking at things from the customer’s point of view is often overlooked and, in my opinion, that’s the real secret.”

It’s also a great way to avoid customers leaving your store with black eyes and bruised knuckles. Just ask Larry Adamski.