By Kenny Wells | Jan 26, 2012
Despite all of the economic gloom and doom we’ve endured in recent years, I’m seeing some strong reasons for optimism in 2012, especially for coin laundry owners.
And the best reason to be optimistic is because most of you reading this live in the United States of America, which (last time I checked) is still the land of opportunity. Each of us has the privilege of building a business from nothing and attempting to grow it into a Fortune 500 company, which is a goal yet to be achieved in this industry.
Being a resident of this great country is reason enough to be optimistic. Despite the fact that the economy is down and unemployment is high, the U.S. population continues to increase. High unemployment will probably continue for several years. As a result, more people are relocating to areas with growing economies and will be renting rather than buying homes in the near future.
While I certainly have compassion for those who are in transition, the bottom line for those of us in the self-service laundry business is that when the economy slows, the number of residential washers and dryers sold declines, thus boosting demand for our services. After all, washing clothes is not a luxury – it is a necessity.
I am fortunate to live within the I-35 Corridor in central Texas, which boasts the strongest economy in the nation and probably influences my optimism. The fact that the population in this area has increased by 40 percent in the last 10 years has created a demand for large, energy-efficient laundries.
Nonetheless, I’m convinced no matter where you live, now is the time to expand or enter the coin laundry industry. There are opportunities to acquire existing laundries that would not exist in a stronger economy. This gives operators the chance to purchase stores that will produce solid, long-term income streams.
Coin laundries have a proven track record of producing a very good return on investment for those who have the foresight to take advantage of these opportunities, as well as cash to invest. I regularly meet owners who not only operate profitable laundries but truly enjoy their profession.
Although my conservative nature in the past has restricted me to owning five stores instead of many more, I had planned to acquire or build several additional stores as I began thinking about writing this column. Now, with this column written and published, I am pleased to report that I have acquired two additional existing coin laundries.
Lastly, I am optimistic that this is a great time to be in the coin laundry industry because rents, interest rates, energy and lease rates, as well as employee prospects, are all pointing in our favor.
Natural gas and electricity are available at extremely low rates in most parts of the country. Over the years, I have seen the spot rate for natural gas at well over $1.40 per therm – today, it’s near 30 cents per therm. Currently, I’m paying 50 percent less for electricity than I was several years ago.
Also, lease rates are lower in many areas, and landlords are now willing to lease to coin laundries because they have proven to be reliable, long-term tenants. Our industry is more respected today than ever.
Although acquiring and retaining quality laundry attendants is still a challenge, employees are available at a reasonable wage.
In addition, laundry equipment now can be leased or purchased at low lease or interest rates. What’s more, I have been in this business for 34 years and can attest to the fact that the laundry equipment manufactured today is more reliable and energy efficient than any ever produced.
With all of these factors in our favor, it’s obvious to me that now is the time to be optimistic.
Now is also the perfect time to join and encourage your fellow owners to join and become active in the Coin Laundry Association – a group of optimistic people.