From the Heartland

By Bob Nieman | May 13, 2009

In 1991, Bob Meuschke was working 80 to 85 hours a week in his new and used furniture store. Although the business was very successful, Meuschke knew that he couldn’t work those long hours forever.

Today, Bob owns two laundromats in Kansas City, Mo. – Family Laundry I and Family Laundry II. In addition, he and a partner co-own Springfield Family Laundry, in Springfield, Mo.

How did you get involved in the coin laundry business?

There was a small, 1,200-square-foot laundry in the same shopping mall where my former furniture store was located. It had 22 toploaders and 11 ancient, 50-pound dryers.

Then, one day, it closed down. Apparently, the owner had some personal problems, and he ended up shutting down the business and turning it all back over to the landlord.

At this point, I started to look into the coin laundry business. Of course, I didn’t know anything about the business, so I called around to some of the different distributors in town.

One particular Maytag salesman named Steve Grigsby spent about eight hours with me, just answering my questions. However, one of the first things he told me was to not re-open that store because it was too small. In that area, I really needed a larger laundry, he said.

Now, I also was in the business of selling. I thought that he was just thinking about his pocketbook, so I decided to open that store anyway. In fact, I talked the landlord into letting me have the equipment that was in there, and I even got him to fix the boiler and give me six months’ worth of free rent.

So, in April 1991, I re-opened the store. And after the first two weeks, I began to see cars filled with clothes driving away from my store. I quickly discovered that Steve was right about the size of my laundry.

What attracted you to this business?

The aspect that I really like about the coin laundry business is the fact that I can work only 20 to 30 hours a week, because it takes care of itself. Basically, I just have to manage it. However, I didn’t realize that in the beginning.

At first, I was looking at the coin laundry as merely a side business. The furniture business is very sensitive to people’s incomes. Furniture is "extra money." Therefore, there would be certain times of the month that would be very slow.

I was looking to the coin laundry business to bring in a few bucks every week to help level out some of those low periods in my other business. But I soon found the coin laundry business to be more lucrative than that.

The more I got into it, the more excited I got – and the more I discovered that it was more lucrative than my other business, with less stress and time constraints on me.

Eventually, I found a building that was four blocks up the street from the smaller store, and it was 3,600 square feet. Two years later, I moved Family Laundry I there – and opened up in April 1994.

I started out there with 38 washers and about 34 dryers. But that still wasn’t enough. So, two years later, I maxed out with 56 washers and 50 dryers.

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

I think there are six keys, and I’ll list them in no particular order:

1. Learn and keep learning. The business is changing. I got into it at a time when card systems were barely talked about and there were just a handful of 50-pound washers in place. In fact, I was the first coin laundry in Kansas City to have a 75-pounder. Today, there are several.

2. Be willing to change. At many of the mom-and-pop stores, the owners just come in and do the same thing every day. We can’t do that anymore. We have to be willing to change our advertising strategy, change our equipment and change our motivation.

3. I think we have to have high standards. A lot of today’s stores are just average. We have to strive to be above average. We used to think that the coin laundry business was recession-proof, but we’ve found over the last few years that it’s not quite as recession-proof as we may have thought. So, in order to maintain as much business as we can, we’ve got to set high standards.

4. Be honest with your customers. The customers are very important people. Yes, a large portion of them are probably less educated and from a lower economic class, but we still need to be honest with them and give them the same amount of respect we would give anyone else.

5. Understand your customers’ needs. A lot of store owners just let them come in and do their own thing. We need to be willing to get acquainted with as many customers as we can. We have to take the opportunities we have to show them how to save money on their laundry – perhaps helping them make their clothes last longer by teaching them not to use as much soap or bleach. As their budgets get tighter, we need to show them how they can still get their laundry done and have money left over.

6. On a regular basis, force yourself to take an unbiased look at your laundry – from an owner’s perspective, as well as from a customer’s perspective. We’re in our stores every day, so we see the same things day in and day out. But customers often view our stores in different ways than we do. Try to put yourself in your customers’ shoes.

You’re also the president of the MO-KAN Coin Laundry Association, which has become a new CLA affiliate. What inspires you to give of your time and effort to this local organization?

In 1992, Steve Grigsby, that same distributor who helped me get into the business, introduced me to the Missouri-Kansas Coin Laundry Association. As a local organization, it has been around since the 1960s, and it was very viable for the first 25 years. Then it devolved into just sort of a social club.

I was very faithful to go to all of the meeting from 1992-99, and I’ve been the group’s president since 1999. I’ve tried to change the focus of the association. I wanted it to become a learning institution again, versus just a social institution.

Our average membership includes about 25 coin laundries and approximately eight to 10 business affiliates. Most of those members attend the meetings regularly.

Over the years, the association has fought against the city of Independence on water issues, as well as the city of Kansas City on water runoff issues and sewer fees. And, twice in the last few years, we’ve testified in Kansas over the issue of sales tax for coin laundries.

The association normally meets six times a year, which is more than most of the other CLA affiliates. We try to meet at different locations so that at least some of the meetings are conveniently located for everyone.

As I see it, having a stronger organization gives us a better opportunity to be able to successfully fight state issues like the ones I’ve just mentioned. And those types of issues certainly are going to be more and more widespread as time goes by.

Do you have any immediate goals for the MO-KAN association?

For us to remain effective, we must stay informed and active in helping not just the members but any coin laundry owner who wants help in becoming a better laundry owner and a better businessperson.

I’m amazed at how my smaller owner-operators know very little about their industry, and some of them have been doing it for 10 to 20 years – but it’s like they’ve been in a box or a shell.

When I first talk to an owner about becoming part of the association, one of the biggest obstacles I often encounter is the fact that many of them are scared that we’re trying to find out how much money they make. Of course, it really has nothing to do with that – nor does it have anything to do with all of us conforming to doing everything the same way.

However, through strong local and national associations, we can fight issues much more effectively.

Also in 2007 and beyond, we’d like to see the association membership and activity in both Kansas and Missouri become larger and stronger – to the point where they can split off into their own separate affiliates. In fact, we’re in the process of trying to get a sub-chapter started in the St. Louis area. I’ve got a couple of business affiliates that are very interested in helping me get that started.

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

In the state of Kansas, one of them is the sales tax issue. This has come up twice in the last three or four years, and they’re not going to let it go to bed. I think they’re going to continue to keep bringing it up.

Kansas is under terrific financial pressure. They are searching everywhere they can for additional funds. Unfortunately, with Kansas being such a strong agricultural state, they don’t have a lot of industry or highly populated communities from which to draw tax revenues.

In the state of Missouri, I’d like to approach the Missouri Public Service Commission, which is the group that governs utilities. In Missouri, there is a very unfair situation, because we have for-profit and not-for-profit utilities across the state; however, the commission only deals with for-profit utility companies, so they can tightly regulate their price increases. The bad part is that the not-for-profit companies can do whatever they want to do.

In Springfield, for instance, natural gas last summer was 44 cents a cubic foot and now it’s at 99 cents per cubic foot. That’s a drastic change, and there is no control.

I’d like to see more fairness there, but we’re going to have to be a larger, stronger organization to be able to take on that issue.

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

I like to talk to the customers – and one of the trends is that the cost of doing one’s laundry is going up. I don’t think we can just keep raising prices without watching and considering the customers’ point of view.

We also have to watch the demographic changes in our markets. When I first got into this business, my large store’s client base was about 10 percent Hispanic, about 50 percent African-American, and the rest was white. Today, it’s approximately 40 percent Hispanic, about 30 percent African-American, and the rest of it is white. There have been many changes, and with that goes education and learning how to deal with your current customers.

We need to watch the changes in how our customers do their laundry, as well as how we do our own drop-off laundry.

We need to watch the changes in the time of day that our customers come in, because that affects our utility bills. In my business, I’ve adjusted my opening and closing times a lot through the years – and I will continue to do so. I’ve stayed open all night. I’ve closed early. I’ve stayed open late. I try to accommodate my customers’ needs.

We need to watch the changes in how to attract new customers. We have to look hard at our advertising strategies and go where our customers are. Personally, for the last couple of years, I’ve been searching for the best ways to reach the Hispanic community. And I’m still searching in that area.

We need to watch the changes in our focus on drop-off laundry services. In the past, most of my drop-off business has revolved around individual wash-dry-fold business. But as business changes and the bottom line shifts, we’re going to have to look more toward commercial avenues. In fact, I now have several commercial accounts that I never would have even thought of just five or six years ago.

In a nutshell, there are several trends that we’re going to have to be ready to focus on.

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

Their main concern is price. Therefore, any time that I’m going to raise vend prices, I try to post a notice in my store to explain why I’m increasing prices and what caused the hike – and to let my customers know that the extra money isn’t just going straight into my pocket.

I usually try to post such a notice 30 days in advance of raising prices. What’s more, I’ve even taken my gas bill and posted it. After all, a lot of customers get a $100 gas bill, and they can’t quite visualize a $2,800 gas bill. That helps to educate them.

Do you have a business philosophy that guides your decisions?

My philosophy or mission statement would be to provide a safe environment for everyone to do one of the necessary tasks of life, which is cleaning their clothes – and to teach those who want to learn how to clean their clothes efficiently and economically.

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

Obviously, the Midwest is a little different than the East Coast or the West Coast, where prices tend to run a little bit higher for everything. The cost of living on either coast is a bit higher. Utilities are a little higher, too.

For instance, natural gas prices in the Kansas City area have remained in the 80-cent range per cubic foot. It was 85 cents last summer, and it just went up to 89 cents this past winter. In addition, our electric service runs about seven cents per kilowatt hour, which is fairly reasonable for the Midwest, especially versus the East Coast and the West Coast.

As for vend prices across Kansas City, you’ll find $1.50 to $2 for a toploader. The 18-pound frontloaders range from $1.35 to as high as $2.25. The 35-pound washers will run between $3 and $4. The 50-pounders will run between $3.50 and $5.50. And the 75- to 80-pounders will run between $6.50 and $7.50.

Most of the city is running anywhere from six to eight minutes on their dryers, but there are some older stores that are still at 10 minutes on their dryers.

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

A poor location is one reason. But I don’t think that happens as often today because the cost of getting into the industry is so high that you can’t do it on your own anymore. Most of time, you have to use a business affiliate and, in so doing, they usually help you to find a solid location.

Beyond that, there are two main reasons why stores fail. One is not being able or willing to learn every facet of the business or to ask questions before they get their feet wet.

A lot of new store owners want to just jump right in and “learn on the job.” That’s OK, but you’re going to lose a lot of customers during that training period, and you only have one or two opportunities with a customer; these experiences will determine whether you retain that customer or lose him.

While you’re trying to learn the laundry business, you can run off several customers. And there’s a good chance you may not win them back for several years – until they have a bad experience with where they ended up going after they initially left you.

The second reason is not being able to ask for help. I’ve had owners call me and tell me they’re thinking about getting into the business. I’ve met with them, talked to them and some are fairly successful in the business today. But that’s not because of me – it’s because they were willing to ask questions and not worry about their pride.

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

I lowered my business ideals and values to develop the partnership I have in my store in Springfield. I made room for this partner in my business life. I’d been acquainted with him for more than 20 years, but I didn’t really know him. I should have taken the time to know him better.

The Springfield laundry is in a great location. It has the opportunity to make money, but it’s six and a half years old and we’ve never made a dime. It has hurt my other two coin laundries, and it has hurt my cash flow.

From a business standpoint, what goals are you looking to accomplish in 2007?

My main goal is for increased customer satisfaction, which I think will lead to more avenues to increase my revenue. I’m really out to give the customers the best that I can give them through my employees or through our services.

What advice would you give a new store owner just getting started in this business?

Again, you’ve got to be willing to ask for advice. Then, you’ve got to be willing to use the advice that’s given to you.

You need to charge a fair price. And you need to give the customer the best service that you possibly can.

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

I tell people that coin laundries are America’s secret business opportunity. We don’t see it advertised much, but I think it’s still one of the best, most viable businesses, especially from a satisfaction point of view – because we are accomplishing a task that needs to be done.

We are providing a necessary service. Plus, it gives us an opportunity to meet all kinds of people, from all walks of life.

On the other hand, the equipment has become very expensive. Rents are high, as are building costs.

But I still think it’s a great opportunity for the person who has done a little bit of planning and gotten his or her coin laundry education ahead of time.