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Diving Into Diversification (Part 2)

Options, considerations to make before plunging into extra-profit centers

CHICAGO — Sunday has become the busiest day of the week at Mark Schottland’s Laundromat called Madeline Nashville.

Located approximately three miles from downtown Nashville, the laundry facility has only seven washers and eight dryers, and is nestled in just 400 square feet of space. One can imagine how busy the Laundromat must be.

“We have 10 or 11 regulars, and what I mean by that is people who come in [to] use five of the seven machines,” he says.

“There have been some days where we have a wait to get into the Laundromat, which is good and bad,” says Schottland. “Fortunately, we have plenty of other things for them to do.”

There certainly is more to his Laundromat, as Madeline’s is not only a neighborhood laundry, but a café, as well.

Establishing an extra-profit center as a complementary business is nothing new in the self-service laundry industry, as the core business is combined with other types of services, among them car washes, tanning salons and gas stations.

Exploring other revenue streams can increase profits, but what should operators know before taking the plunge?

American Coin-Op spoke with experts in the industry to find out.

‘SILENT SALESMEN’

Another extra-profit mainstay in many laundries includes vending machines that dispense items like soaps, snacks, soft drinks and candies, according to Terry Anderson, consultant for laundry equipment distributor Midwest Laundries, Chicago.

“While the ‘hotter-spicier’ snacks are popular, owners will typically stay away from chocolate and chewing gum due to difficulty of cleaning,” says John Antene, president of coin laundry sales and marketing for laundry equipment distributor Coin-O-Matic, Alsip, Ill.

“The coin-operated soap vendor and the pop machine and the snack machine, those things take care of themselves,” says Anderson. “We always call that service your silent salesmen.”

These vending options, according to Anderson, are perfect offerings to patrons waiting for their laundry to finish.

“The thing that people don’t realize before they get into the business is you’ve got a captive audience there. They’re there for two to three hours,” he says. “All of these things like that are all adding to your profits of your Laundromat. And you make good money on all of those things, and you don’t have to do anything other than plug them in.”

Regardless of whether they place a vending machine, ATM or video games in their store, Anderson advises operators to be strategic in where they place them.

“It all goes back to if you have the room,” says Anderson. “If you’re thinking about having 20 people [in the store] doing laundry, will this thing still flow? Can people get in, can people get out? Can they get their wash done, can they get to the dryers? Do they have enough folding table [space], and does this thing flow?

“If the Laundromat can’t flow because you added [vending machines or gaming machines], then you’re defeating the purpose of putting them in there.”

NEW CHALLENGES

Taking on new revenue streams, like wash-dry-fold, can present new challenges outside of the day-to-day responsibilities of operating a Laundromat, according to Antene.

“New managerial challenges that might present themselves by taking on wash-dry-fold for the first time may run hurdles by introducing a new process or program to attendants set in their work habits,” he says. “The change in schedules and priorities may affect an attendant’s productivity.”

“By discussing different circumstances that arise with fellow operators, solutions in most cases are realized through networking,” adds Antene.

To help manage new challenges with wash-dry-fold and commercial accounts, the Coin Laundry Association offers training videos available for operators and attendants, according to Anderson.

To have a strong grasp on managing challenges for both the Laundromat and the accompanying extra-profit center, Anderson stresses the importance of operators mastering the processes themselves.

“Whoever the managing partner [is] should know how to do every aspect of the business—take in dry cleaning, take in wash-dry-fold—[they should] train themselves,” says Anderson.

“If you know how to do it, you can train your people yourself.”

Schottland shares this mentality.

“I’ve got all the problems of a restaurant, and now, I’ve got all the problems of a Laundromat. And because the Laundromat is so small, it’s very high-volume. And so, when one of those machines goes down … it hurts,” he says.

“[From] the laundry side, the biggest challenge is obviously keeping the machines up and running.”

“Laundromat servicing can be pretty expensive … but learning to do some amount of work on the machines yourself saves you an awful lot of time and money,” Schottland says.

In training his attendants, Mike Gilley, owner of Laundry & Tan Connection, Indianapolis, ensures that his employees become jacks-of-all-trades.

“If you’re operating a combination store, you need somebody that has great customer service skills that doesn’t mind cleaning and has sales skills,” says Gilley. “So, the person has to be a little bit more well-rounded in a combination store.”

Check back Monday for the conclusion!

Missed Part 1 of this story? You can read it now HERE.

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(Photo: ©iStockphoto/IPGGutenbergUKLtd)

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Demographics play a big role in how much tanning equipment Mike Gilley, owner of Laundry & Tan Connection, installs in each of his stores. One location features 22 pieces of tanning equipment. (Photos: Courtesy of Mike Gilley/Laundry & Tan Connection)

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Gilley has 17 locations for his Laundromat/tanning salon stores throughout Indianapolis and Kentucky.

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