By Bob Nieman | Apr 27, 2012
Phil Arvin’s self-service laundry business is nothing like his “day job.”
And that’s one of the aspects he really enjoys about his year-old entrepreneurial venture, located in Memphis, Tenn.
“I’ve worked at some of the largest consulting firms in the world,” said Arvin, who currently serves as an information management analyst for Hewlett-Packard. “And we always look to prove how smart we were by doing very complex things better than anyone else. But the beauty of the coin laundry business model is the simplicity. It’s not a complex business model to operate, but you can still differentiate in a lot of different ways.”
Although Arvin has always worked in corporate American, he also knew that one day he would run his own small business.
“My dad was a small-business owner,” Arvin explained. “He was president of a small-town bank, owned a farm and also was involved in some other ventures with his brothers and nephews.”
In addition, Arvin long ago drew inspiration from the perpetual bestseller, “The Millionaire Next Door,” by Thomas Stanley and William Danko.
“If you want to control your own destiny,” Arvin quoted from the book, “the best way to do that is to own your own business.”
But what type of business was Arvin looking for?
“I talked to a lot of different businesspeople about a lot of different businesses,” he said. “I knew that I didn’t want to be in foodservice, and I didn’t want to be responsible for cleaning homes. There were a lot of business ideas that just didn’t interest me. However, the coin laundry business was right up my alley.
“First of all, there are no account receivables with coin laundries. And there’s a real need for their services.”
Thus, Arvin and his distributor – Justin Laundry Systems, based in Little Rock, Ark. – began looking for a suitable location for his first laundry business. In fact, with some general laundromat parameters in mind, Arvin drove tirelessly through Memphis’ working-class neighborhoods in search of just the right spot.
And he found a home for his first laundry in the city’s Orange Mound neighborhood, which is an historically low income, primarily African-American area that features a predominance of single-family homes.
In addition, the location Arvin chose is somewhat of an economic center of the community, with a Kroger supermarket across the street, as well as a KFC, a Family Dollar, a number of clothing stores, a hair salon, four auto parts retailers and a couple of phone stores.
“We’re in a strip mall,” said Arvin, who leases the location. “The space is actually 10,000 square feet, even though we only needed 5,000 square feet. It’s difficult to find 3,000 to 5,000 square feet of retail space. But we have a great landlord; he has owned this property for a long time, and he wanted it to be a family-type center. So, they were excited to have a coin laundry come in and allowed us to build a wall halfway down the back of the space and just use 5,000 square feet.
“Our plan is to build more stores and to use the back of this store for storage space and repairs.”
Renovating the empty storefront took eight weeks and cost Arvin, who has two business partners in the project, $210,000 for the buildout and an additional $530,000 for the equipment and installation.
“We’re not originally from Memphis, so one of the really surprising things for my family and me has been the absolute outpouring of affection that we’ve received from the neighborhood’s residents,” Arvin marveled. “I think, number one, it’s because we built something really nice in their community and they appreciate that – and, number two, they appreciate the fact that we’re not absentee owners. We’re down here, and they know who we are. They have treated me and my family incredibly well.”
To a certain degree, Arvin said, his self-service laundry has grown into somewhat of a social hub for those within the Orange Mound community.
“They’re either shopping in the strip mall, or they go to the grocery store,” he said. “And there are people who come into the store and just starting cleaning. It’s amazing. I have attendants, but I’ll look up on the remote monitor and I’ll see customers wiping down machines – because this is their laundry, and they want it taken care of.”
Arvin thinks his customers really began to feel that sense of ownership toward his business a few months after the store actually opened – during the grand opening event, where all of the washers were free for four full days.
“We had advertised and advertised that grand opening,” Arvin recalled. “I got down here at 6 a.m. on the first day of the event, thinking there would be a line out the door. At 7 a.m., there were four people in the store and all of them were regulars.
“I said, ‘You know these are free today?’ And they said, ‘What’s free?’
‘The washing machines.’
‘All of them.’
‘How many can I use?’
‘How many do you need? There is no gimmick. We’re going to let these things run for the next four days.’
By 8:30, the laundry was packed.
“Sadly, the less fortunate are used to being taken advantage of,” said Arvin, who competes with three other laundries within a mile and a half of his store. “We were doing well before that. But, since then, it has just been phenomenal. If you treat your customers with respect and dignity, you get a lot of people to come back. They’re not used to it. Once they figure out you’re not running some scam, they come – and they bring their families with them.”
Arvin’s Maytag-Equipped Coin Laundry is a large, brightly lit, colorfully painted store featuring a wide-open floor plan and new, energy-efficient equipment, along with cable television and wireless Internet service for customer convenience.
“It’s a better experience than you can get anywhere else in Memphis,” said Arvin, whose laundry is open from 7 a.m. to 10 p.m. during the week, and from 6:30 a.m. to 10 p.m. on the weekends. “Justin Laundry Systems was very clear: you want a clean, well-lit, secure area where customers, especially moms, can come to do their laundry and not feel like something negative is going to happen to them.”
The store has two attendants – one full-time and the other part-time. In addition, Arvin’s wife, Gayla, son, Zach, and daughter, Lindsay, also help out with various aspects of the business.
“From a customer perspective, they appreciate the cleanliness of it all and the customer service,” Arvin said.
And he plans to bring two more coin laundries to the people of Memphis very soon. In fact, his second store is scheduled to open its doors later this month, just four and a half miles from his current laundromat.
“And we’re waiting for another property to become available,” he confided. “If it does, which we think it will, we’ll open up two new stores – one in late May and the other by July or August.
“The self-service laundry is phenomenal business model,” he continued. “And when I talk to my neighbors, they always say, ‘Oh, a coin laundry – I haven’t used one of those since college.’ It’s a business that flies under the radar, but there is certainly a lot of upside to it.
“And, frankly, I’d like to see it stay a secret until I get to about 12 or 15 stores.”