5 Things All Laundry Owners Should Do (Or At Least Consider) in 2011

By Bob Nieman | Oct 27, 2010

One of the subtle beauties of the coin laundry industry is its uniqueness. No two stores are exactly the same – just as no two laundry markets are exactly the same.

As proven by the national laundry chains that have come and gone, the “cookie-cutter” method of business management is the quickest path to failure in this industry. For instance, unlike a McDonald’s or a Walgreens drug store, the products and services that are a big hit with laundry customers in Oakland may not resonate with patrons in Portland, Maine.

That said, the five suggestions below are the closest things to universal truths this diverse industry has. And each one is flexible enough to accommodate every laundry owner’s own personal spin.

1. Grow Your Market

Seemingly forever, the general consensus has been that competing laundries share a finite customer base within a given marketplace. Following this line of reasoning, a new store in the neighborhood simply slices the “pieces of the pie” smaller for all competitors.

However, it’s time to redirect the focus onto how to make the “pie” bigger for everyone. As an industry, it’s essential to begin growing the market for coin laundries, rather than obsessing over the cannibalization existing business from one another.

For instance, billions of dollars go through apartment laundry rooms alone, which provide basically the same service you do. And what about homeowners – all of these individuals with access to their own washers and dryers?

What if you could devise a strategy for reaching out and capturing a larger share of the overall laundry market? If the industry as a whole were able to capture merely 5 percent of those households currently using apartment laundries, the resulting increase in sales volume would represent hundreds of millions of dollars annually.

Despite all of the vast improvements in multi-housing laundry facilities, the coin laundry still has the competitive edge in several areas. The comfortable atmosphere of today’s laundries, as well as amenities such as attendants, televisions and children’s areas, all play a role in getting apartment residents out of the basement and across the street to the local laundromat.

However, the biggest draw to a coin laundry for many apartment dwellers is the access to larger machines, as well as the large number of these high-capacity machines most laundromats have available.

Most apartment laundries are vulnerable to coin laundries that have larger equipment. Also, drying time is a key. The real advantage of a coin laundry with larger dryers is that it can get most people in and out in half the time it would take in an apartment laundry.

The good thing about apartment laundries is that they are typically quite convenient for the tenants. However, the bad thing is there are never enough machines on the weekends for the laundry customer to use – and that is what will entice them into the coin laundry.

Beyond apartments, today’s laundry owners also need to target homeowners who have more money than free time. Make 2011 the year you start (or upgrade) that wash-dry-fold service and begin attracting an even broader customer base. By embracing the concept of "one-stop shopping," you too can convert your laundry into more of a full-service operation.

Low start-up costs associated with a wash-dry-fold service is a major advantage. Obviously, you’ve already made the major investments in your location and equipment. In fact, you may be closer to starting up a wash-dry-fold service than you think. You already have nearly everything you need in your store right now. Your additional costs will be in the training of your attendants, along with some of the following:

• A desk, counter, shelves, etc.

• A scale.

• General supplies: Soap; bleach; softeners; a general spotter; packaging bags, paper and/or film; receipts and invoices; hangers; safety pins; and so on.

• Optional items: A cash register, a computer system, an incentive pay program for attendants.

If you are already running an attended operation, another advantage of offering wash-dry-fold is that you will upgrade your employees’ productivity. You may have to compensate them at a higher rate, but the increased productivity is likely to cover that cost.

In many cases, a wash-dry-fold service can be the perfect solution for making more efficient use of your self-service laundry equipment. However, there are a few problems that can come up with such an operation. Here are some potential hurdles to consider:

• Space. You will need additional space for bundles of dirty clothes, as well as for the finished loads. However, you probably don’t need as much space as you may think. In most cases, simply using your current space more efficiently and creatively.

One space-saving strategy is to ask for payment in advance. This is possible once you have established that you provide a consistently high-quality service. Customers tend to pick up their laundry more promptly if it has already been paid for, thus cutting down on the storage space required.

• Store security. If you will be keeping clothing overnight (and you will), reevaluate your laundry’s security measures. You may find it necessary to enhance your security by adding locks, installing an alarm, implementing surveillance cameras and so on.

• Workload. Some laundry owners have discovered that, after initially starting a wash-dry-fold service mainly to keep one attendant busy, others soon need to be hired to handle the increased workload.

If the purpose of adding a wash-dry-fold service is only to serve as an ancillary profit center – and you don’t want to add to your staff – consider raising your w-d-f prices to a level that will stem some of that growth. In most cases, you will lose some volume, but the higher price will keep your profits from dipping too severely, if at all.

And give it time. It takes approximately twice as long to build up a good wash-dry-fold operation as it does to build up a successful self-service business.

The message is clear: Be consistent, be focused, be diligent. And soon you’ll be enjoying a larger slice of a larger “pie.”

2. Spruce Up Your Store

How many times have you heard it said that, in business, if you’re not moving forward, you’re losing ground? Especially in today’s economic climate, maintaining the status quo can very well lead to boarded-up windows and an “Out of Business” sign.

Nowhere is this more accurate than when it comes to the outward appearance of your coin laundry. If you maintain your laundry in a static manner, it’s on its way down just due to a natural atrophy from the day you open the door. People are using part of that store every day. It's going to show its wear and tear if you don't keep up with it.

First impressions are indeed a big deal. If you walk into a store, the first thing your eye is going to do is look up above, and then it's going to look below to where you're stepping. If you've got a floor that's dirty or in disrepair, or if you've got a service area that’s in disarray, you're leaving an impression. You may be the best person in the world. You may give the best service. You may have the best washers in town. But if customers see initial things that turn them off, you can potentially lose that customer.

And, once you lose that customer, not only have you lost that one customer but you’ve also lost her friends and relatives, because she’s going to tell everybody she knows.

To avoid this, all laundry owners need to focus on the details in 2011 – the smaller things that all operators can do relatively quickly and inexpensively… the things that provide the most bang for the buck.

If you suspect your laundry’s decor could use a bit of sprucing up, the following tips may prove useful in helping get your improvement project off on the right foot:

1. First, accept the fact that change may be in order, no matter how much you might dread the prospect. Try to recall the last time you did anything different to your decor. If you can't remember, chances are your business has become a little too stale. It's time to shake things up a bit.

2. Visit your business. Experience it from start to finish as if you were a customer. Notice the look, how it makes you feel and what you could do to make it more inviting.

3. Ask a friend to visit your store and to do so with a critical eye. Their feedback may be less biased and more original than your own observations.

4. Solicit customer feedback from any and all. Although suggestion boxes are comforting because they ensure anonymity, the writing effort required discourages many. Tell your clients you're looking for ways to spice up their surroundings and see what they say.

5. Have a brainstorming session with your attendants. Turn this into an idea free-for-all. Encourage them to be as creative as they like. All you want to do is generate and collect as many ideas as possible, so don't stop to analyze whether they are feasible or not. Later, you can take a look at the list and see which ones would work for you.

To get you started, here’s a list of areas that commonly need regular attention and maintenance:

• Check the parking lot for needed improvements. Consider lighting issues for customer safety. Remember, the parking lot is the first encounter the customer is going to have with your store.

• Review the exterior of your building. Does it need a fresh coat of paint?

• Is your front door a barrier for your customers?

• Does the floor have a shiny, clean appearance? Are the tiles scuffed? Are they in need of replacing?

• Do you have ample lighting?

• Are your ceiling lights clean and bright?

• If you have ceiling tiles, review their condition. Are they broken? Do they have water stains? Are they dirty?

• Take a look at your walls. Are they clean? Could they use a fresh coat of paint?

• Review your baseboards. Do they need cleaning, painting or replacement?

• Consider new colors and décor.

• Review the signs in your store. Do they need to be replaced?

• Examine exterior signs. Are they faded? Are they in need of replacement? Do they look professional?

• Are the windows clean and uncluttered? Can you see in and out of the store?

• Is your service area clean and clutter free?

• If you have television sets or music in the store, is it in working order?

People have choices. If you don’t recognize that, you’re going to fail. You have to respect your customers and make sure things are nice for them when they come to your store. Owners walk into the same place seven days a week and may not notice the dryer glass being smudged or dirt in the corners. Starting today, develop your ability to notice those details.

3. Go ‘Green’

In 2011, going “green” for increased energy efficiency and reduced utility consumption is a given. However, it doesn’t necessarily mean a complete equipment overhaul. First, look at the little things, such as scheduled maintenance, installation improvements and lighting.

Maintenance. Consistent maintenance is the key to the safe and efficient operation of every piece of equipment at your laundry – from water heaters and HVAC systems to washers and dryers. Follow the manufacturer’s recommendations found in the back of almost every installation manual for regular preventative maintenance. Maintain or replace filters, and thoroughly clean tumbler lint screens, blower fan blades, air intake louvers/screens and burner manifolds. Check belt tensioning, inspect water valve and drain devices for slow leaks, and pay attention to vent system clean-outs and main manifold trunks.

Water heater, HVAC, lighting. Correctly sized and installed water heating systems and heating and air conditioning equipment will reduce operating expenses and maintenance problems. Manufacturers of these systems can help owners properly size the systems to meet store demand of the washers. Often, they can even tell you how much energy you can save by replacing a less-efficient water heater or HVAC system with a new model.

Perhaps consider on-demand water heaters, which produce hot water only as needed. On-demand systems cost more than water heaters requiring storage, but are less expensive to operate and take up considerably less space. So, determine your return on investment by comparing both options before you buy.

More traditional water heaters often require more storage tank capacity. The tanks are full of hot water that is always heated to temperature. One reason they are less efficient than on-demand models is because of the constant loss of heat energy from the storage tank. If you have a traditional heating system with storage tanks, be sure your tank is well insulated.

Similarly, heating and cooling systems must be properly sized, installed and maintained to gain energy-efficient results. Always insulate your store from the outside, clean vents and filters, and ensure HVAC systems are properly maintained.

As for lighting your store, energy-efficient T-8 fluorescent lamps with electronic ballasts are the norm for new fixtures and can easily replace older T-12 lighting with a simple-to-install conversion kit.

Equipment replacement. Although preventative maintenance, new lighting and proper installation are crucial to driving down your utility costs, nothing will impact those costs more than your equipment. So, if 2011 is the year to get rid of that old equipment, be sure to install new, properly sized, energy-efficient replacements.

While toploading washers continue to flourish in some stores in certain markets, all owners should consider replacing at least some of their toploaders (if not all of them) with frontloading machines. The facts are clear: topload washers guzzle water and energy, and they limit the income and profit potential of your store per square foot. Replacing toploaders with high-speed, frontloaders can save up to 18 to 20 gallons of water per load – not to mention sewer costs, water heating costs, gas usage, and dryer wear and tear.

Go for efficiency with your dryers as well. Purchase dryers that remove the most moisture per therm of heat energy possible. Although the key to improved energy efficiency comes from the high extraction of the washers, your dryers still play a vital role in your utility bill at the end of the month.

4. Keep Accurate Records

The quality of records kept in the coin laundry industry has been the source of debate throughout the history of the business. Many have followed the “old school” edict that a laundry is a cash business and that under-reporting income is a virtue. Others face limited information when trying to purchase existing stores. An increasing number of progressive operators today are breaking the old stereotype by making accurate record-keeping a priority.

Solid business practices dictate that good records are the key to making informed business decisions. Here are some of the more compelling reasons why good records are essential in the coin laundry business, along with some minimum record-keeping standards:

• With poor records, it is impossible to make solid business decisions. Selecting proper equipment mix; determining the timing and amount of vend price increases; monitoring your level of profitability; tracking expense trends; purchasing new equipment; and identifying problems in your operation all rely upon the quality and detail of records you keep.

• Poor records de-value your coin laundry. An educated buyer will not purchase your laundry based on income that is hidden. The days of “two sets of books” are long gone. Coin laundries are often valued at a multiplier of net income. If you can’t prove your profitability, the value of your laundry is diminished. Brokers who specialize in coin laundries often say that detailed, computerized records can add as much as 10 percent to the value of a store. What’s more, poor records hurt your ability to borrow. As potential lenders review the financial history of your business and see limited profitability or a plateau in sales volume, they are not inspired to invest in an additional store or new equipment. This has hindered the expansion of many budding laundry chains.

• The IRS continues to pursue coin laundry audits. While the industry-wide audits seen in years past have dissipated, individual IRS agents continue to keep a close eye on coin laundries.

For all of these reasons and more, improving the quality of record-keeping needs to be a priority for everyone in this industry. Of course, this process begins with proper collection procedures. Among the standards for collections should be:

• Collect by machine type. This is truly the key to uncovering the most helpful management information. Collecting by machine type puts you in a position to determine “turns per day” and other crucial information. This isn’t to suggest that you keep each washer and dryer separately. Rather, group the collection by type, such as toploaders, 18-pound washers, 25-pound washers, 30-pound dryers, etc. To be entirely accurate, you may want to collect by all “like” machines. For example, if you have different models within a particular type, it would be a good to track those separately.

• Track “cash-on-hand” accurately. After collecting from the machines, the coins should be counted and recorded. Then, each changer’s volume should be counted and recorded. Only then should the changer be refilled with new coins and the total cash recorded. Then, the paper currency for deposit should be removed and subtracted from the total cash-on-hand. It is also important to note cash expenses paid out of the store; cash balances in drawers, registers, or other store banks; and record any coins purchased from the bank and added to the changers.

• Generate a monthly profit-and-loss statement. Utilize the information you gather by creating a monthly statement of operations that shows your progress. This will help you monitor your net income and identify problems early.

• Be accurate and computerize your records. The whole process is wasted unless the most accurate information is used. The next step is to computerize your records – after all, it’s almost 2011. Use any off-the-shelf accounting program, and get started. Talk to other laundry owners and see what programs they are using.

Improved record-keeping requires discipline and commitment. But the benefits are significant. It’s a simple business practice that can further improve the image of the industry, while, more importantly, helping you to get to know your laundry business a lot better.

5. Advertise

Even as we speed toward 2011, there remains a misconception among many owners that coin laundries are somehow the only businesses in the world that require no marketing or advertising.

The actual fact of the matter is that with every laundry’s client base changing every year – people moving, people dying, people purchasing their own washers and dryers – you simply can’t afford to do nothing for very long and remain in business.

The following are a few proven methods for raising your customers’ – and potential customers’ – awareness of your store:

Online marketing. In 2010 and beyond, it’s imperative to back up any advertising campaign with a solid presence on the Internet. A website for your coin laundry should clearly describe your services, location and equipment, as well as any advertising or marketing promotions. A professional website offers instant credibility. Customers know immediately that your store is a professional business offering services they desire.

In addition to just a website, some forward-thinking laundry owners have supplemented their sites with e-newsletters, as well as Facebook pages and Twitter accounts. Social media sites have several benefits. First, they develop a following of users that can offer feedback on your store. They also generate a larger Web presence for your store, which assists search engines in moving your site to the top of the first search page.

Another advantage of a website or social media site is that they offer inexpensive marketing tools to promote your store to existing customers in addition to new customers. Using sites like Twitter, it is possible to give your “followers” discounts.

Yellow Pages. With the digital age upon us, are the humdrum Yellow Pages – long an advertising staple for the coin laundry industry – still a must for store owners?

While most laundry owners continue to run at least a small ad in their local Yellow Pages simply to maintain a presence there, the use of a phone book continues to dwindle as more people discontinue their home phone service and use their cell phones as their main phones.

Direct mail. One of the most common and effective forms of advertising for self-service laundries is direct mail. Localized, narrow vehicles typically enjoy great success in this industry.

Some owners prefer using bulk-mailing services, such as Valpak, to get their stores’ message to the public. For more targeted direct mail campaigns, some laundry operators utilize their local chambers of commerce; they’ll list the apartment buildings they want to focus on, and the chamber will provide the mailing list.

Although direct-mail marketing is among the most effective and personal ways to reach a targeted audience, if a direct-mail campaign lacks sufficient planning, a clearly defined mailing list or an enticing offer, you may be throwing your money and energy out the window. (For more about direct mail campaigns, see page 19.)

Print advertising. Most communities have at least one daily or weekly newspaper, and some areas even publish a local magazine. In addition, nearly every town has a community “shopper,” a regularly produced publication filled with ads and coupons.

An advertising representative from each publication can tell you the rates available for one-time, as well as multiple, insertions. Prices are determined by the size of the advertisement you choose. Typically, the more often you advertise, the less expensive each insertion will cost.

In addition to getting the prices for the ad placement, find out how much the publication will charge you for the design, layout and typesetting of your ad. Some newspapers will even perform this service free-of-charge, as a courtesy.

When planning your print ad, avoid the temptation to cram as much information as possible into your allotted space. Try to keep your ad crisp and uncluttered. A few “musts” include: your store’s name, your store’s address, a local landmark to help customers find you, and an attention-getter – words like “free” and “limited time offer” work well.

Radio. Although statistics vary, it’s generally agreed upon the 70 percent to 90 percent of Americans listen to the radio. For advertising, the medium offers major benefits and will go a long way toward helping small businesses, like coin laundries, gain customers and boost sales.

In addition, developing a radio spot isn’t that difficult and doesn’t require a professional to be effective. Most radio advertising departments will write and produce the advertisement for you at no cost.

Of course, the Coin Laundry Association believes so strongly in advertising that it has created a couple of benefits aimed at helping store owners promote their businesses. They are: DIY Direct, which is an online marketing center for CLA members that features professional templates owners can customize and send directly from their personal computers; and the LaundryWeb Network, which is a program that entitles every store-owner member to a free website, as well as free hosting for that site.

What type of advertising you do to promote your self-service laundry business, as well as how much you spend to get the word out, depends on your particular marketplace and your specific budget. But, whatever you do, you must do something to let people know about your store and its services.

Target these five areas of your laundry operation in 2011. Tailor them to your own particular facility, customer base, marketplace and budgetary limitations. And you’re on your way to a productive and profitable 2011.