GLENDALE, Ariz. — Being a new store owner—a “newbie”—is both exciting and scary. A long time ago, I remember being really stoked that I was realizing my dream of “being my own boss.” Optimism and hope were my big feelings back then.
But so was the fear of failing. Did I cover all the bases during the due diligence period? No. Did I miss something that could hurt my chances of success? I missed a few things. Unexpected challenges came up in the beginning. After all, I knew nothing about the business when I started in 1976.
My fear was more motivating to me than my optimism, so I worked very hard not to fail. My optimism helped me come up with creative ideas I thought customers would like.
In Part 1, I shared my personal newbie mistakes. Let me conclude:
OTHER NEWBIE MISTAKES
I didn’t make any of these errors but do take care to avoid making them yourself:
Not Using a Lawyer to Protect You — Landlords may want your mat for themselves, and most know their leases very well. There are all kinds of traps for tenants in a commercial lease, more than a residential lease. Your lease is extremely important for many reasons. I always consulted a lawyer so they could point out the risks of my leases … before I signed them.
I know some people who built a beautiful rooftop restaurant overlooking the ocean. About a year after opening and the restaurant becoming clearly profitable, the landlord used a loophole in the lease to kick them out and take over the restaurant. This does happen to laundromats as well. You want to make sure your lease protects you in case the landlord has a friend or relative who always wanted a mat. Pay the money for a good lawyer who specializes in commercial real estate. They can also protect you with the sale contract.
Not Using Fear of Failure to Motivate You — To be successful, you can’t be lazy. It’s not just your dreams of building a better mat that can motivate you. Your positive energy is extremely important and can help you think up new ideas. It’s a great motivator, but fear of failure can be, too. Nobody wants to lose all their work and investment. If you’re a little scared, that’s a good thing! Use that fear to get your butt in gear.
You need to learn real fast what customers want and need. When you first open, many customers will be judging your mat. Float a survey early on to find out what customers like and dislike about your mat. Repeat the survey every now and then since things can change.
Sometimes, I’d walk up to a customer and ask, “Hey, Pete, could you do me a quick favor? Could you name three things you like about this laundromat, and three things you don’t?” Not everyone will tell you to your face what they really think, so I later decided to print up “report cards” for customers to fill out in the store. The blank cards were in a small, wall-mounted acrylic file folder, and there was a small mailbox next to it for completed cards. A sign above them both read “Suggestions.” I learned a lot.
Thinking That Running a Mat Will be Easy — Many times, when you walk into a laundromat, you may not see the owner there. Some people wrongly extrapolate that into thinking mats are an easy business. This is a dangerous attitude that can lead you into complacency right from the beginning. Yes, people do have to wash and dry their clothes, but they don’t have to use your mat!
Always remember that you have competitors, business owners who already know the market and have more experience than you. These people will not be happy that you showed up to build/renovate a mat that pulls customers away from them into your mat. Some will respond aggressively.
Not Being Serious About Keeping Your Mat Immaculate — Keeping a laundromat clean is a no-brainer to me, and it should be for every other mat owner, too. After all, why would people want to go to a dirty place to clean their laundry? It doesn’t jive. Yet many mats are extremely dirty and run-down. A dirty mat is sure to turn off customers.
Not Exploring the Situation When You Get a Bad Vibe — Make sure all your questions are satisfactorily answered before you commit to anything related to your mat. If you get a bad vibe about something, explore it.
AND THE NO. 1 NEWBIE MISTAKE IS...
The mistake I’ve seen committed over and over again is a new owner not doing any serious due diligence. Lots of newbies are weak in this area.
It’s incredible to me that there are people willing to risk hundreds of thousands of dollars in a mat yet take a lackadaisical approach to checking out whether the mat’s numbers work or whether they are personally capable of successfully operating a laundry business.
Due diligence has many definitions, but in the laundromat industry, I understand it to be simply confirming as much information about your prospective mat as you can.
This means studying the mat’s local market by visiting competitors to learn their pros and cons, talking to other tenants in the building, driving around the neighborhood, and checking that there’s easy accessibility to the mat. How much parking is available? Is there a new mat already under construction? Ask yourself why some mats you visit are busy and some are not.
Due diligence also means learning about any government requirements or prohibitions that can affect the mat. In the case of metropolitan areas, dealing with local building and consumer affairs departments can be daunting. You may not even be allowed to open a mat in certain areas such as places with high water tables, or you may find out there’s a steep hookup fee per washer.
This also means studying all the mat’s financials and getting reliable verification that everything represented in them is true. And you have to study your own financials and make an honest appraisal about your likelihood of success in owning and operating a laundromat. Remember, the mat business can look easy on the surface but there’s a lot more going on behind the scenes.
There you have it. And while this list of potential newbie mistakes is fairly comprehensive, I’m sure there are other possible errors that I’ve missed.
We’re human, after all, and in our youth and inexperience, we’re prone to slip up. The important thing is to recognize an error and learn from it so it doesn’t happen again. And don’t be afraid to ask for help when you’re just getting started.
Miss Part 1? You can read it HERE.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].