Laundromat 101

By Bob Nieman | Jul 02, 2010

Most college kids while away their spring breaks on the beaches of Florida, in the nightclubs of Cancun… or, at the very least, sleeping until mid-afternoon at their parents’ house.

Not Conrad Cutler.

Cutler, a 20-year-old who attends Syracuse University, will be a junior this fall in the school’s business management program.

However, he’s also the owner of the 5,000-square-foot MegaMat Super Laundromat in Mt. Vernon, N.Y.

“I go to school eight months out of the year,” Cutler said. “Whenever I’m not in school, whether it’s spring break or summer vacation, I dedicate my time to the facility – interacting with the customers, training my staff. I want this place to be a full-service operation. When a car pulls up outside, a cart is brought out to the customer, and the attendants help them bring their laundry in, ask them if they need help with the machines, even help them fold for free. And, to make that happen, I’ll spend 16 hours a day here if need be.”

Despite his dedication to the laundry, Cutler admitted that he is forced to run his business remotely the majority of the time. After all, Syracuse University is a 260-mile drive from Mt. Vernon, taking about four and a half hours.

“Managing the operation from a remote location is very challenging,” he said. “Yet, being a student and having the responsibility of a business is even more of a challenge. My first priority is my schoolwork, as I know that there is only a short span of time and single opportunity to do well in school, while I have the rest of my life to be a successful entrepreneur.”

Therefore, Cutler depends heavily on his staff and family members, as well as today’s technology.

“The most important asset to me are my employees, and the trust that I instill in them,” explained Cutler, who has six attendants overseeing the 24-hour operation. “My employees take pride in their work and care for the business as if it were their own. They are trained extensively in customer relations, equipment troubleshooting and store management so that many issues can be addressed without being escalated to my attention.”

However, Cutler requires his attendants to keep log of all issues that arise so that any necessary adjustments can be made. Also, although the MegaMat attendants know that Cutler is in school, they never know his schedule.

“It is not uncommon for me to spot-check the store in the middle of the night,” Cutler said. “The employees report to me multiple times per shift via cell phone and text message to keep my peace of mind.

“I also rely on our advanced infrared surveillance system to monitor employee productivity, which I can view from any computer or my Blackberry,” he added.

But perhaps the most challenging obstacles for Cutler when school is in session are collections and cash management. Luckily, his two brothers Winston, 17, and Hunter, 14, work as a team to help their older sibling when he can’t be on site.

“Depending on my workload, I attempt to visit the store at least once every five weeks,” Cutler explained. “During my visits, I spend an extensive amount of time there, interacting with customers and observing any behavior from customers or employees that may require adjustment or training.”

So, how does a college junior end up owning a 24/7 coin laundry located nearly five hours from his school’s campus?

As it turns out, the building in which the laundry is located has been in Cutler’s family since 1919.

“We own the property, which used to be a warehouse,” he explained. “We leased it out to a tenant who installed this mega-laundromat in the facility, and then, five years later, he went bankrupt.”

Enter young Mr. Cutler – who took over last August without missing a beat.

“The store never closed,” he noted. “My family is in the wholesale auto parts business, and I’ve worked with them. But I definitely got into the laundry business by default – we would have been in debt due to the real estate tax that would have accrued had I not assumed the operation.”

However, Cutler clearly pointed out that this store is his operation.

“It’s only me,” he said. “I own the business.”

When the store’s former operator threw in the towel, he left a sizable outstanding note with the finance company – a note that Cutler was able to renegotiate to much more favorable terms, given the state of the economy.

These days, he holds a five-year, triple-net lease with options on the facility and pays rent to his grandparents.

Another financial consideration for the business major was the store’s renovation, which took about four months and came with a $30,000 price tag.

“The store was in shambles when I took it over,” Cutler recalled. “The floor hadn’t been mopped in a month. There were 48 machines out of 123 out of service. Computer boards had been stolen. Doors were missing. You name it, and I had problems with it.

“The place was beyond disgusting,” he added. “The basement was a story in itself. It had five feet of water in it. When we were cleaning up, we couldn’t figure out where the water was coming from. We didn’t know if it was a crack in the foundation or if there was a problem with the septic system or the pumps. We finally discovered that the drain line was pitched incorrectly and that we’d have to snake the drain every week.”

With the basement dried out, Cutler purchased new replacement parts for all of the out-of-service equipment, as well as cleaning and painting the store from top to bottom. He also installed car vacuums in the parking lot for his customers to use, along with putting in televisions, computers, Internet access, vending machines, a massage chair, an ATM and a number of arcade games – none of which the store previously offered.

To be sure he maximizes his investment in MegaMat, Cutler has been aggressive with his advertising and in-store marketing.

“I’ve done a lot of things to turn around the image of the store,” said Cutler, whose laundry is located in a low-income, predominantly African-American neighborhood surrounded by apartment complexes. “I started out with free soap. We handed out flyers advertising our free soap program, and we painted the windows with ‘Free Soap!’

“The problem with this area is that many of the residents don’t really read the newspaper. This is the only effective type of advertising. It has to be in-store or literally placed in their hands.”

And with 12 laundromats within a one-mile radius, competition in the marketplace is beyond stiff.

Cutler’s newest promotion is to offer a $1 cold-water wash on his 20-pound frontloaders.

“The reasons I offer the $1 wash is, number one, to get the people in the door,” he said. “There are only eight machines at that price. Hopefully, customers will come in and those machines will be taken, and they’ll have to go to another machine. The second reason for that promotion is to ‘wow’ the customer. People are just astonished that they can wash for $1. When they come in, they’ll wash for $1, dry for $1 and maybe buy a soda. I’m not going to lose money on these people. Plus, being a service to the community and dependable for my customers will get me far. I don’t plan to get rid of the $1 wash program.”

Beyond special pricing, MegaMat differentiates itself from the competition with its varied equipment mix and top-notch customer service, according to Cutler.

“No one has the type of machines – or the variety of machines – that we have. We have everything from $1 washes to $12.50 washes. We even have a machine that can handle 125 pounds of clothes.

“And it’s a full-service operation,” he added. “My attendants are trained. They never sit down. They’re always helping the customers. They’ll help them fold. We sell all of the supplies. The machines are always in working order; I have a mechanic, so it’s a reliable, dependable destination. Plus, we have 35 parking spaces, and most laundries around here don’t have parking.”

This summer, Cutler plans to take advantage of MegaMat’s location to seek out commercial clients as well.

“We’re in the metropolitan New York area, just outside of Manhattan,” he explained. “There are so many different avenues we can go down. Just two miles away are very affluent, wealthy communities. There is a lot of potential to expand a commercial division. That’s my summer project. Hopefully, by the end of summer, we’ll have commercial accounts launched.”

Now that MegaMat is running smoothly after nearly a year with Cutler at the helm, does the young entrepreneur see more stores in his future?

“I fell into this operation by accident,” Cutler said. “I never thought I would be in the laundromat business, because I never thought that it would be anything of interest to me. However, since going into it, I think it’s a great business. There are so many avenues you can explore, so many ways to expand.

“The most valuable thing I have learned – and you can never teach this to someone in a classroom – is how to manage chaos. In the laundromat, there are so many different things that can happen. I get calls literally 24 hours a day – a machine not rinsing properly, the basement flooding, the fire alarm going off.

“I’ve learned how to channel and allocate responsibility, which you can never learn in a classroom. I learned how to manage my time more efficiently. I’ve learned how to manage people and deal with problems – just overall management.”