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Balancing the Demands of Multi-Store Ownership

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Balancing the Demands of Multi-Store Ownership (Part 1)

Pointers from Paulie B: Do it right and enhance sales, profit, performance at each site

GLENDALE, Ariz. — Owning and operating more than one laundromat at a time has more advantages than disadvantages. If done right, you can enhance the sales, profit and performance for each mat. You can enjoy some efficiencies of scale, such as better buying power from vendors. Landlords will look upon you much more favorably than if you’re just starting your first mat with no experience. You can shuttle employees from one mat to the others (bailed me out many times when one was slammed with drop-offs).

The obvious disadvantage is more work, and most of the typical mat headaches, including floods, crime, faltering equipment, and people issues.

But mats are a natural to operate at multiple locations because many are already being run at least partially by absentee ownership. However, I caution anyone to learn the business inside and out first before entrusting your mat to be operated by others for you. This includes employees and family.

You may love Uncle Joe, but does he have the ability to run a business? Also, just because he’s your relative doesn’t mean that he won’t steal from you. Family has screwed up many a small business. A son or daughter may not have the same ability or determination, or even the interest, to run your mats.

Location Strategies — Once my first mat was up and running successfully, I set my sights on the next one about two years later. I found one about six miles down the street, between the first store and my home. It was on the same street, making it easy for customers to drive to the other location if needed. This can come in handy over the course of ownership.

Consider this: Long drives between your mats can eventually wear you down. Besides, it’s not efficient. Why waste your day driving? I chose my locations so I could route my day into a big loop, circling it by the end of the day. I would change it up occasionally to throw off anyone staking things out for when I would show up.

I think a better strategy is to imagine a wagon wheel with your home in the center at the hub, and your mats radiating out like the spokes. No one mat would be very far from your home, allowing you to easily shuffle your visits. Plus, you can still operate your route in a linear loop.

Branding — It helps to develop a catchy common name and logo so customers recognize your other mat(s). Keeping them within a handy distance of each other will make it easier for people to recognize them. If something happens that makes you temporarily shut down one store and you have another easily recognized location, you can steer the customers you would have lost to No. 2.

There was a power outage in the county next to mine. I had a mat near the border that was slammed by an overwhelming number of customers whose home washers/dryers were unusable. We directed people to our other two mats for days because they weren’t too far from each other. Just knowing that your brand has more than one location helps to impress people that they chose an established and growing business.

Exception: Branding your chain with the same name only helps if you operate your mats in a superior way. Otherwise, why would anyone want to seek out only your mats, if there is a competitor who’s just as good nearby?

If you want to open other mats but don’t want to or can’t operate them better than the average mat, then open under different names.

Advertising and Marketing — Since all of your locations can chip in on advertising, you can reach a lot more people and hopefully dominate the advertising in your area, which in turn gives an impression of success and permanence. Put all of your locations on all your advertising: online, business cards, even the signage inside each mat.

Parts and Supplies — Location No. 2 needs a bill acceptor for a change machine that’s down on a Saturday. That’s a drag, but Location No. 1 has an extra acceptor, so it saves you from a weekend of stress. Why stock every part at every location?

Multiple Stores Put You in Better Competitive Position — How many times has your mat been threatened by a new mat opening nearby? If all your mats are within a short drive of each other, and a newbie opens a new mat, you’ll have more clout. Your other mats can carry the one under threat for a looong time. You’ll be able to drop your prices lower than the newbie who surely has big expenses to pay off and make them wish they’d never built that mat.

You’ll build a reputation as a newbie killer among the local distributors. They could steer newbies away from your mats, thereby preventing one from being built in the first place. If a new mat is built, it will most likely not go away, but you’ll send that newbie back to his day job and prevent or cut down the odds that you’ll be seeing another newbie in your area.

Check back Tuesday for the conclusion!

Have a question or comment? E-mail our editor Bruce Beggs at [email protected].