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Competition is Healthy, but Be Ever Vigilant

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Competition is Healthy, but Be Ever Vigilant (Part 1)

Pointers from Paulie B: Launch ‘recon’ patrol of contending laundromat

GLENDALE, Ariz. — I believe that competition is healthy because it keeps business owners and managers on their toes to do a good job for their customers. Laundromats are wide open to the public, and competitors copy each other all the time. This helps advance the industry to new levels. It’s just that you want to limit how deeply they can see into your operation, while you can do a little of your own copying.

You might say, “I don’t need to know my competitors. We’re already doing quite well.” Yes, you may be doing well, but wouldn’t you like to do better?

Wouldn’t you like to know if a competitor has implemented a great idea you’re not aware of, an idea that could be slowly milking your mat of customers? Wouldn’t you like to know if any competitors are using your hard-earned ideas? Wouldn’t you like to see a flaw in their operation that you could exploit? I know I would.

For example, you don’t get why XYZ Laundromat does so many more drop-offs than you do. So you launch a little “recon” patrol of the mat. You discover they wrap their customers’ socks and small items in paper wrappers. Turns out customers love that, and you’ve been missing out on duplicating their success for a few years now.

There’s an old saying: “If you’re not going forward, you’re going backward, so always move forward.” This especially applies in business.

So, from time to time, it’s important to know what your competitors are doing. You can hear some things from customers but I think it’s best to personally see what your competitors are doing. This applies not only to nearby competitors but any other mat you may come across.

HOW TO LEARN THE MOST ABOUT COMPETITORS

Years ago, people would come into my mats with notebooks and a camera. By the time I threw them out, they had already copied most of my operation.

They kept coming and when cell phones came out, they could simply scan the entire store—signs, machines, prices, the works—on video within minutes.

I have an approach that’s better: simply become a customer of a competing mat.

I used to keep a bag of old laundry in the trunk of my car, ready to bring into a target mat. I’d get change or buy a card, use a couple washers and dryers, and even fold there. As the machines were going, I might even strike up a conversation with an employee. (Or you could send a trusted friend to be your scout.)

You learn a lot. You learn what they have, the vend prices, the condition of the mat and its machines. You learn the wash cycles offered, water temperature, and restroom condition. You learn the overall level of store comfort, the cycle times—in short, nearly everything you need to know except the rent!

You even learn how it feels to be a customer at that mat. This is important because people are more likely to make decisions based on how they feel about something rather than based on logic.

You see and experience the same things as their customers. I hope you can see why people are choosing that mat instead of yours. Looking past their own bias is a hard thing for an owner to do. Most mat owners think their mat is better, but is it? If so, why isn’t everyone using only their mat?

ONLINE RESEARCH AND EQUIPMENT PROS AND CONS

While a personal visit garners the best information, check out a mat online before visiting in person. Read what ownership says about its mat. Look over the store’s website, photos, reviews, etc. Customer reviews can give you good insights if you feel uncomfortable to visit your competitors in person. You may be able to duplicate what the reviewers really like, avoid what they hate.

Getting back to those personal visits, becoming a competitor’s customer may give you the opportunity to learn how equipment from brands other than what you own can operate and perform. You may find a new brand attractive. For more technical information, I think it’s best to talk to your distributor as well as others in your area. Distributors know all the pluses and minuses of all brands. If they want to sell you their equipment, they will be glad to point out the great stuff about their brand and the bad stuff about their competitors.

BUSINESS SECRETS AND HIRING PRACTICES

I once had a plastic bag distribution business. It did OK, not bad, not great. However, my partner and I had a rude awakening when a neighboring store owner told us that people were going through our dumpster and taking paperwork that we had thrown out. We bought a paper shredder the next day.

When hiring, hiring someone who used to work for your competitor may be useful. After all, they have experience. Some people are eager to spill the beans on their previous employers, but this must be judged on an individual basis. Why did they leave your competitor? How long did they work there? What were their duties?

However, if they reveal your competitor’s secrets, wouldn’t they do the same to you at some point?

So, you ask, “If I hire you, are you willing to sign a non-compete agreement stating that you won’t bring what you learn from us to any competitor within X miles of this store?” Probably overkill for the laundromat business, but it is an option to explore.

Non-competes aren’t 100% effective in many cases because you can’t force an employee to sign one. However, you can choose not to hire someone who refuses. An agreement must have parameters to be enforceable, such as being limited to your local area, and it should have a time limit. Laws vary, so you’ll need to check with your attorney first to make sure you aren’t doing anything illegal.

Check back Tuesday for the conclusion!

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