Opened a new store 5 months ago,

[mikenyc]

HI,
I opened a new store in the nyc area 5 months ago.We have over 60 machines total.It is only doing 3k a week which is break even.The only reason we are even breaking even is because our rent is below the market value.The 1st week it did $2500 a week.I was wondering why the store is not really growing.There really arent any other stores in the neighborhood besides one small store.CAn we expect any future growth?What can we go to increase the growth.Its in a lower income area with lots of buildings.Most buildings dont have laundry facilities.It cost over 400k to open the laundry.Did we waste our money???
Any help would be appreciated

[Jefflange]

I guess you did waste your money. Did you get talked into this store by a distributor? You are not alone there are many new stores like yours. good luck.

[mrcoinop]

Mayby spend some money on advertising make up flyers with coupon for free soap when you wash on tue,wed mid week are slow days should not cost much for flyer and see how it works.

I think In a new mat you need to let people know that you are there use sandwich boards on street or floresent bold signs you could also decal your vehicle with all pertinent info like hours, location,drop off, also letting people know your mat is great for large items like comforters dog beds and so on. just my 2 cents.

Ron

[millenniumplus]

With your business being open for 5months and breaking even would say, "give it more time". We
spent "a lot" on two new stores and broke even the first 6months quite frankly because we didn't
know what the heck we were doing. It was nerve racking and frustrating. We had to grow up fast
and in the 8 month from opening, the business exploded upward. Some will differ but treat your
current customers like gold. They are your best form of "free" advertisement". Next, keep your
store kleen and machines working. Next, we put a lot of energy into WDF - so much so we need
a second/third person on the busiest days - WDF may not be a big money maker therefore not
profitable for some laundromats. We did some of what has been recommended on these websites
from raffles to free soap to free/reduced wash/dry time to owning your vending/video games/gumball
machines. There was no one "magic idea" that turned things around for us - it was an accumulation
of many things. At three years we are still learning and open to ideas. Negative or positive opinions on
these sites can help. Growing the biz and moving into positive cash flow is a different experience
for each owner. We got advice from an out of town very elderly gent who owned a laundromat back
when washing cost 10cents a load (his mat burned down from very dirty lint filters). He said, "listen
to your customers" and "be there", after all this is your investment. So yes, you can expect future
growth and consider yourself amoungest the many who opened up their very first mat and had doubt.
All I can say is put more time into your investment - if you need ideas, use the many laundromat
website posts. We've read virtually every post we could get our eyes on. You didn't outline your
business very much. Either way, ask yourself - what have I done to grow my business? That's
always a good start - there are many things you can do! Good luck and hang in there.

[actionmedia]

I agree with millenniumplus. You should give it more time.
About what kind of "actions" you should take to make it grow quikly, it is up to you. I don't know exactly what is the problem due you did not gived too many details but I hope I can help you with some questions you should ask yourself about your business. Before you can solve a puzzle you have to identify the key pieces first.
You should ask yourself if it is a marketing problem or economic problem?
Here are some basic marketing problems:
- too litle peuples heard or know of your store - you need advertising investment
- you loose too many customers vs. newcommers - you need to improve your service.
- your price is too high comparing to competition, market resouces and quality of service - if you keep the price high be sure you offer better service and peoples know about it.
- it is not the best location according to visibility, traffic and accesibility - that is a major problem that require lot of time and money to improove it in marketing terms. It can be solved quik by WDF, Pik-up and Delivery services and contracts with big consumers like hotels, motels, restaurants.
Almost all marketing problems converge to little traffic in your store, in other words you are "short on customers".
There are possible also economic problems:
- Variable costs to high: you price your services too cheap comparing to your variable expenses (utilities) - if you have a smart card system you can rise up prices gradualy.
- Fixed costs: you have too litle TPD to cover your fixed expences like rent, lease, interest, attendant salary, cleaning and so on. If there is no way to improve your weekly sales volume than you sould cut the costs but be very precautios not to affect the quality of the service. Extremly you can sell out some equipment to make room for other assets or businesses.
There are some combined (marketing and economic) problems:
- Your market is to small and your store is too big and expensive - try to find other ways to use your machines more effective, if it prooves impossible than reduce the size of your laundromat, in the remaining space you can build what business you want.
- Utilities are exepnsive and your price is high because of this reason and there is no way to reduce it. You have to provide ipecable services too keep your customers. Give premiums to newcommers to encurage them to try your services. In time your business will grow.
I hope that helped you ask yourself some questions about your busiess, only you can find the solution, only by asking yourself many questions and looking to the problem from diferent points of view. Go deep in to the problem break it in as smaller pieces as possible look to those pieces form all the angles you can than give the verdict.

Teodor

[Laundry_Mike]

I feel your pain, but 5 months is really a short period of time, although I once put in a new store and operated it for three years at break even. We tried to sell it, but who wants to invest in a store that just breaks even? We tried grand opening, advertising, coupons, flyers, signs, ect..... then made the hard decision to default on the lease, yank the equipment out, and suck bathwater. No matter what demographics say, sometimes a bad location is just a bad location. Good luck.

[azkid]

Not a lot of new insight from me, but more information on your store would be helpful. For example, what are the turns per day (TPD) figures? I would imagine you are in the range of 4-5...if that is the case you may have a little upside but not a tremendous amount (you might get it to 7 if you did a number of specials, etc.). Another thing to consider is whether you have any seasonality impact - in my area we have huge swings, but in NYC you probably don't.

I actually think after 5 months $3K per week is good and I have the same number of machines as you, but I only spent half of what you did to build out the store. Tough call for you, but my overal thought is unless you develop some great WDF business, I don't see you dramatically ramping up the biz in your store.

[Launderess]

You didn't say where in NYC you were (Manhattan or the outers), but running a coin laundry in Manhattan can be tough.

Did you do a demographic survey? How many large buildings in your areas (rentals, condos and co-ops) have onsite laundry equipment? Any idea of how many people have their own laundry equipment in their homes? Is there a way you can get some sort of survey to find out the laundry habits of your local area?

There are three (well now two as one recently closed) mats in our area, both are small and owned by the landlord of the buildings.

The smaller of the two is unattended, open 24/7 with older equipment. The larger recently under went an overhaul and now is totally brand spanking new right down to the floors. But this owner wised up to himself and now offers WDF service.

Look around your area, what is your competition? You will find WDF stores opening up everywhere, not to mention service laundries like All Washed Up.

NYC'ers are busy people and many rather send their laundry out/drop it off rather than hang around and do it themselves. Prices range in my area from 60 cents to 75 cents per pound with various minimums (usually 5lbs). I'm seeing less and less laundrymats in NYC, and more drop off/service laundries.

You may wish to strongly consider offering WDF service with local pick-up and delivery. You have the machines sitting idle so put them to good use.

If you decide to offer WDF service, do a mailing or put fliers up advertsing some sort of "spring cleaning" special. If you have 35lb and up machines you can easily handle comforters and pillows, so maybe do something with them.

If you choose to stick only with your present business model, give yourself some time. Have you analyzed your hours? Maybe opening eariler or staying open later on certian nights may make a difference.

One thing about laundry, people aren't really going to walk miles out of their way if their current mat suits them. So you have to find a way to reach customers in your local area. When you identify those potential customers find out how to appeal to their needs.

Best of luck,

Launderess

[matanamat]

I am in the process of purchasing a laundromat myself, so I am wondering how your business is doing in Manhattan.

[kbc747]

You have all these buildings and we assume people in them so you need to know where they do there laundry now. Then go from there but they do have laundry so find this out.