It’s Not Easy Being ‘Green’

By Bob Nieman | May 12, 2009

Jason Wentworth has a very diverse background, to say the least. He’s been involved in politics, serving in the state legislature in Maine. He has directed a couple of small non-profit organizations, served as environmental director for Bates College in Lewiston, Maine, and has worked in the alternative energy field for a small company that specialized in solar electric and hot water systems, as well as general energy-efficiency projects.

Today, Wentworth combines his past experiences with his passion for the environment as the owner of the 1,100-square-foot Washboard Eco-Laundry in Portland, Maine.

How did you get involved in the coin laundry business?

I bought my store five years ago. My interest came out of my work in the alternative energy field. As I was trying to help build this little company, we were looking for commercial clients that would be good applications for energy efficiency and the solar systems we were working on. Laundromats were one of the areas that came up because they tend to be so energy-intensive.

I couldn’t get any laundry owners interested in what we were doing and what we could help them with. I put it in the back of my mind, and when I left that job, I decided to more seriously pursue finding a laundry – either a new or existing location – that would meet my criteria.

I got lucky. In the classifieds of our local paper, I saw a tiny ad for a laundromat for sale in the west end of Portland. I called the woman up and went to take a look at it. It was in bad condition. It was just about ready to go under.

It had been in business for about 45 years at that point, so it definitely had potential. It also had a rooftop with enough of a southern orientation to install a solar hot water system. And the building itself has some good character.

However, there were a lot of things that I didn’t really think very deeply about because I was so motivated by the idea of creating a store that would be focused around environmental stewardship and energy efficiency, as well as an atmosphere that would be more conducive to people really enjoying themselves in the store.

I didn’t think much about how I was going to market it. How was I going to attract customers? I had this naïve assumption that, if we built something that was really nice, people would flood in.

I didn’t pay attention at all to some of the details that oftentimes are the most important in running a coin laundry. We’re an attended store, so employees are a key factor. I didn’t think about how much time I was going to spend training new employees and helping them understand the importance of consistent performance and getting to work on time. I didn’t even think about how much time was involved in collecting quarters.

What are the keys to being successful in the coin laundry business?

I don’t think there is one formula that works for every type of store. I see three really distinct types. One is the urban, neighborhood laundry, which is what we have, where a huge number of customers are walking to the store. People know each other, and it’s really a friendly atmosphere. Then, there is the strip mall laundromat that is pulling from a much wider geographic area. Everybody is coming to it in a car, and there isn’t necessarily as much of a neighborhood feel. Then, there is the rural laundromat, where people have to drive long distances to get there. Generally, they’re not using it for their weekly laundry. I think all of those different types of stores take slightly different approaches.

However, one of the things that is universal is the need for owners to be engaged in running their stores. Some owners assume they can build an unattended store, keep it clean, maintain the machines and collect the quarters. But there aren’t many markets where that formula actually works. It’s a nostalgic image of the industry, or perhaps an image that is perpetrated by people who want you to buy a store.

If you want your store to work well, no matter where it is, you have to be in there a lot, and you have to pay attention to the details. You have to hire good people, and you have to train them well and really pay attention to how their doing.

You’ve got to stay on top of all the little details that can add up to the store starting to get rundown, such as equipment maintenance. It takes a lot of work.

In most markets, it’s a seven-day-a-week job. There are some small businesses that close down on Friday, and the owners go home for the weekend. But it’s hard to be in a 360-day-a-year business when you’re a small-business owner. Unless you have incredibly trustworthy employees or a good manager, you just can’t get away. This can be stressful on a family, and it can burn you out.

Personally, how do you deal with it?

We take regular vacations. I work very hard to find someone in my family who can manage the store for a few weeks while we’re away. I work double time with my employees to get them all set up. It’s almost more work than not going away – and then you have to deal with everything when you get back.

We regularly take a three-week trip to France, where my wife is from. And we get away at other times during the year. But it’s a lot of work to be able to do that and to keep the quality of your store’s service at the level you want. Things slide when you go away.

What are some of the hot-button issues that laundry operators are facing in your marketplace?

Utility costs are always high on the list here. In northern New England, we have pretty high utility rates. Water is fairly reasonable, but natural gas and electricity are high.

I pay almost 15 cents a kilowatt hour for electricity. We’re in a small service area, and the cost of distribution is pretty high for the number of people getting served. Consequently, we have fairly high rates.

Another really big issue is a shrinking market in some areas. We definitely have one in my market here in Portland. We have about 50 large, three- or four-unit apartment buildings that have converted to condos in the last two years. When they convert, the new owners of those buildings want laundry facilities in the buildings, whereas the apartment landlords typically didn’t want laundry facilities in the buildings, because it was too much of a risk and hassle.

A shrinking market creates one of two things. It forces some stores that were doing OK into becoming marginal stores. And it forces store owners to be more aggressive in going after other kinds of fill-in work – commercial and wash-dry-fold service – which require more labor than the self-service side and is more challenging.

What are the biggest industry trends you’ve noticed lately?

In terms of the manufacturers’ side, I see much more emphasis on energy efficiency then when I was buying my machines. Five years ago, their advertising wasn’t talking about energy efficiency. It was focusing on customer convenience and durability, which are important things, too. But it’s good to see that’s starting to change.

However, today, every company wants to make the claim that their products are energy efficient – whether they are or not. And that presents a new level of confusion for store owners.

In my market, I’m definitely seeing stores that five to 10 years ago were solid stores becoming more marginal. In my opinion, some of this is due to bad management. The stores are not run as well as the previous owners.

Again, I think some of the pressure is just a changing marketplace. I know a couple of stores in Portland that are losing money. The owners would like to get out, but they can’t find a buyer. These are stores that were making a profit 10 years ago

What are the greatest technological advancements you’ve seen in the industry?

Number one on my list is the DC inverted drive on washers. It’s so much more efficient than an AC motor. You have much higher extract speeds, and you can get reversing cycles. All of that makes such a difference to the quality of the wash and efficiency of the machine.

Plus, DC motors generally last longer and are more durable. This has come along with an increased emphasis on frontloading machines and higher efficiency. You just can’t get there with an AC motor.

On the water side, consumption has gone down on most machines.

As far as card technology, I don’t have a card store, but if I did, I’m sure I would list that as a great advancement. It offers so many more opportunities for pricing and generating more commitment by customers to come back to your store.

The first couple of weeks I owned the laundry, emptying the machines was exciting. But now it’s just drudgery, and card systems eliminate that chore.

While we’re discussing technology, your laundry features a solar water heating system. Correct?

I have four evacuated tube collectors, which is one of two common types of technology for solar hot water. It amounts to 112 tubes. It was designed originally to heat 65 percent of our hot water. It now does about 45 percent, and that’s because our business has grown a lot since the system was installed.

It works well with the laundry business, even in New England where people generally would assume that solar has some limitations. One of the great things about solar systems in laundries is that, in most stores, your customer load on your water heating system picks up during the course of the day – as you get toward the end of the day you get much busier in most markets. I have a lot of people who come in after their workday in the evening – and the solar system then has had its chance to do its work during the course of the day, leaving me with great storage of heated water at the end of the day.

In our case, the solar system just supplements what our gas water heater does. It’s basically acting as a pre-heat for the gas water heater. With that kind of design, even if we get cloudy weather, whatever heat goes into the tank is getting used, assuming that the tank is warmer than the street temperature. The water coming in is first passing through the solar tank and getting boosted up to whatever temperature the solar tank is and then going into the water heater. That combination means I’ll never run out of hot water because I’ve got the heat unit online. However, on days like today when it’s beautifully sunny, the water heater is running much shorter cycles or, in some cases, not running at all when the machine is filling.

In this part of the country, you really have to design for about 65 percent of your annual hot water, because in the summer, you’re going to get close to 100 percent. But in the winter, you’re going to get much lower, like 15 percent to 20 percent.

If you designed it big enough so that in the winter you were getting 50 percent, then in the summer, you’d be making 150 percent. You’d have to design into the system a way to dump that excess heat, or you’d boil your tank.

As you get farther south and you get to less differential between the winter and summer sun, you can design the system much more easily to do a higher percentage of your total. Places like Arizona and Texas could be close to 100 percent. Of course, you always want to have some backup because you’re going to get cloudy periods, and customers are still going to want to do their laundry on those days.

What other energy-efficient and environmentally friendly initiatives have you implemented at Washboard Eco-Laundry?

We have a long list of things we focus on. First of all, we have no toploaders in our store. All but one of our 20 washers are soft-mount, and all have extract speeds greater than 250 G force. So we’re getting really dry clothes out of all of our washers.

On the dryer side, I installed insulated doors over my makeup air vents that I can close at night, because here in Maine we’re going down to below zero on a lot of winter days.

Also, I designed a basic heat recovery system for my dryers that I’m going to eventually modify to be more efficient. I try to preheat the makeup air coming in by passing it through a small “greenhouse area” in which the exhaust pipes are also going through. The incoming air is going through an area that gets much warmer than ambient temperature. This preheats some of the makeup air, which has gotten me about a 6 percent efficiency boost in my dryers. It’s not possible to do this in some stores, but I can do it with mine.

Our lighting system features only compact fluorescent bulbs, which gives off the kind of lighting that makes the store pleasant to be in. The lighting is not “hospital operating room” bright, which a lot of store owners shoot for. I think some owners over-light their stores with the assumption that it’s going to make customers feel more positive about their experience.

I’ve been in many other laundromats, and I’ve never heard customers comment about the lighting. But we get them all the time in our store. We focus on creating a café-like atmosphere – perhaps a little better lit than your typical café, but the feel is in that direction, with the colors, the seating area and the lighting. Also, we have a lot of windows, so in the daytime, we’re getting tons of natural light. In the summertime, we don’t run our lighting very much at all. After all, natural light is the best way to light a store. It’s what makes people feel more energetic and alive when they’re inside a building.

We also have an aggressive recycling program. We recycle everything except dryer sheets, some food items and odd trash. We recycle all of our soap containers, our paper, cardboard, clothing, lint, plastic, metal – everything we can.

You recycle your lint?

We give it to a local contractor who mixes it in with insulation. It’s quite unusual, but I was determined to find a source for every single item I possibly could. There are a couple of manufacturers out there now actually making insulation out of clothing fibers, and lint is really just a much finer mix of clothing fibers.

In our store, we create just one 15-gallon trash bag of waste a week.

Lastly, we are a drop-off location for wetcleaning. We have worked very closely with a local drycleaner who was interested in getting into wetcleaning – helping them get set up and promoting that option. In fact, about 80 percent of our drop-off drycleaning customers choose wetcleaning over drycleaning, even though we offer both methods. And although we contract out all of that work, it’s a huge and growing segment of our business. It’s a reason why a lot of customers come to our store.

Do you have a business philosophy that guides your decisions?

I could probably come up with a very complex one, but the simplest way to put it is to be humble. It’s important to show respect for you customers, to listen to them and not assume that you’ve always got it right because you’ve been doing it for a long time.

I don’t always assume that my customers have it right either, but I’m open exploring different ways of doing things. I’m that way with my employees and my customers. I think that helps to build a better business, rather than making assumptions about the “right way” and the “wrong way” to do things and being overconfident.

I think it’s important to treat everyone who comes into your business – whether it’s an employee, a commercial client or a walk-in customer – the way that you would want to be treated if you were in the same relationship, on the other side of it. I think some laundry owners overlook that. They make an assumption that, because they’re the only laundromat in the neighborhood, they deserve the customers who are coming in. Some owners assume that the customers won’t go someplace else because they’re the most convenient store in their market to those people.

Yes, we’ve had our share of mistakes. We’ve ruined people’s clothes. I’ve had customers have their clothing trapped in our machines for a couple of hours. We’ve had people have bad experiences with employees. I don’t pretend in any way that we’ve got a better formula in terms of how we manage our business than the next laundromat owner. But I have never had a customer go away being treated unfairly.

I had one wash-dry-fold customer whose laundry we really messed up. We mixed it with another person’s clothes and even lost a few of the items. I took 100 percent responsibility, even though it cost me a lot of money. However, this customer returned my check and asked me to give it to the employee who had made the error in the first place, because he knew she was having a really hard time in her life.

For me, it was a good reminder that doing the right thing and treating people as you would want to be treated will always benefit your business in the long run.

In your marketplace, what are your thoughts on vend pricing?

I think we’re generally on the higher side, as compared to national figures. That’s primarily related to our utility costs. There is not a lot of variation in our local market. Almost everyone charges close to the same vend prices.

When I started this business, one of my goals was to keep my prices as low as I could and still make a decent living. My reason for that is a moral one: I don’t want to get wealthy off of the working class customers who come to my store. I just can’t justify that. I try to keep my prices as reasonable as I can. We’re a little bit lower than most of the other stores around us.

However, it doesn’t hurt us because our utility costs are a lot lower than the other stores, because we focus so heavily on energy efficiency. Our utility costs are between 13 percent and 14 percent of gross. This helps us pay our employees better, keep our prices a little lower and still make a comfortable living. Frankly, I’m surprised that more store owners don’t focus on that formula.

In this market, we’re getting into an area where the prices that we have to charge to make ends meet in our stores are starting to get customers thinking about how they could buy their own machines. This is one of those areas that puts pressure on the market.

Today, it is more affordable for a lot of people to buy a washing machine for their homes. They can go to Sears or Best Buy, buy a washer and dryer, and pay for them on a monthly basis. For some people, that monthly minimum is less than they’re going to pay at a laundromat.

I don’t think that was the case 10 or 15 years ago. Washing machines were more expensive as a percentage of income back then, and credit was not as easy to come by.

When coin laundries fail, what is the most common reason for that failure?

I don’t think there’s one reason that necessarily is the most common. It’s usually a combination of a shrinking market and a poorly managed store. If you’re feeling downward pressure from the number of customers getting smaller and you’re not running your store really well, the customers are going to leave your store first. That’s probably the biggest thing that causes stores to fail – just letting the machines get old and not maintaining them, letting the store get dirty and letting the atmosphere deteriorate so that customers don’t feel as secure or welcome. And once a store starts losing money, the downward spiral is fast. When you lose a customer who goes away unhappy, it’s twice as hard to get them back.

I have a friend who I’ve know since I was 5 years old. He’s been coming to my laundry since we opened. His wife, who I also have known for a long time, was going to another laundromat in the next town over before we opened.

Well, they got married, and he started coming to our store. But, to this day, she still has not come in to do her laundry in our store. Sure, they could come in together, but she is so into her other laundromat that she has been going to for a long time.

And this is a close friend. If I can’t convince her to switch to a cleaner, better store, how can I convince a customer that I don’t even know? It’s just loyalty to a habit, and laundry is an area that people are incredibly habitual about.

Some store owners look at a new location that they’re thinking about buying, and they assume that cleaning the place up and getting a few new machines is going to be enough to get a lot of people to switch. That’s just not the case.

What are the biggest mistakes you’ve made in this business?

The first mistake deals with financing my store. I think the industry is set up so that the manufacturers can offer credit fairly easily to get people buy their machines. That is not always necessarily the best way to finance a new store.

This is a criticism of the financing wing of the manufacturers. Their repossession process is a well-oiled machine. In my experience, I got credit from a company. But when things were going badly with that same company’s machines and I was trying to get the machines to work according to the way they were supposed to, the people who dealt with collecting the money were not sitting in the same office as the people who deal with warranty issues. It seemed to me that they didn’t really care that they were in the same company.

The folks who wanted the money back rightly wanted it back according to the agreement. However, the fact that the machines that their company had sold me weren’t working, which was causing problems with our business running smoothly, didn’t seem to concern them. It’s like fighting two separate battles with the same company. It was very frustrating, and it almost put us under the first year.

I caution other owners to think carefully about how they finance their stores if they are borrowing money. Don’t get lured in by what appears to be a good deal on the surface. Research it.

There is nothing like having the pressure of a loan to repay and not enough cash flow to do it. It’s enough to make your go crazy.

Six months, which a lot of companies will give you for interest-only payments, may seem like a long time, but it goes by fast. If you have a store that you’ve got to work hard to build up, that six months is going to go by like a day – and then you’re going to be into your full payments.

The second mistake isn’t really a mistake, but it deals with the fact that I lease my store rather than own it. I have good terms on my lease, with respect to price and duration. I have a 15-year lease, and the only escalator is for increases in property tax. A lot of people would look at that and say it’s a great deal.

However, my store is doing really well now, and I’d love to make a few changes. The parking lot is large enough so that I can expand the building a little, but my landlord has no incentive to make any changes because he’s getting paid every month.

Therefore, if there is a way where you can own your building, that is a huge plus. If you have to lease, carefully study the details of that agreement. Try to negotiate something that gives you the kind of flexibility that you’re going to need if your business does well.

Lastly, I would think long and hard before buying first-generation machines of any manufacturer’s model. I think the industry has too much pressure to rush new designs to the market, and some manufacturers use store owners as guinea pigs for fine-tuning their machines. I don’t know if that’s a conscious decision or just the way the market functions. But if you buy a machine that’s a new model from a manufacturer and it’s the first year they’ve been selling it, you can almost be guaranteed that you’re going to have issues with how it functions.

It may be covered by a good warranty, but a good warranty does not necessarily compensate you for a machine that is down repeatedly and customers not having a place to do their laundry.

In my case, a lot of my machines had not been on the market very long, and there were a lot of kinks that got worked out. To the manufacturers’ credit, they stood behind the products and worked with me. But I had a lot of frustrated customers that first year who were not getting their clothes washed the way they expected. I gave out a lot of free washes.

I only have three different manufacturers’ machines in my store, so I can only speak for those three. But in all three cases, I had issues where, had I waited, the kinks would have been worked out.

What are you business goals for the rest of this year and heading into 2008?

I don’t have any major changes in mind, other than hopefully refining our recovery system for our dryers. I think that’s a big area where we could be saving a lot more energy.

I’d also like to change my equipment mix a little bit, but that is completely dependent on my landlord changing his attitude, and that’s something I can’t control. So I don’t know if that will happen.

Plus, we’ve got a little bit more capacity, and I’m working on commercial contract customers to fill that capacity.

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

It’s important for a new store owner to get into the business for the right reasons. The idea that you can throw a store together, light it up, put an attendant in there and the quarters will just start rolling in is false. It just doesn’t work that way.

There is a little bit of hype in the industry on the part of the folks who want to sell stores, suggesting that this is a really solid business to get into. Yes, it can be, but it’s important to study the market you’re going into.

If you’re looking to buy a store a couple of towns over from where you live and you don’t really know the area or the neighborhood or who lives there, it’s easy to make some mistakes in assuming who your customers might be.

It’s important to talk to customers. Sit down and chat with the people who could be your potential customers. If you’re thinking of buying an existing store, don’t just talk to the store owner, talk to some of the customers and find out what they like about the place. Then, talk to some customers from the competing stores. It will save you some huge headaches.

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

If you get a good store, it’s a great business. But there also are some stores that, if you bought them, you would lose your shirt, even if you got a good deal on it. There are others that are in great locations – in really good neighborhoods or shopping locations – that, if you run them well and respect your customers and employees, you can make a good living and enjoy doing it.