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Improving the Industry Roundtable: Planning for Growth; Manufacturer or Distributor Aid

Consider today’s efficiencies, ways to improve profits

CHICAGO — With the last calendar page flipping to reveal another year has passed, how would you rate your self-service laundry operation? Do you think it has improved, has gotten worse, or is about the same?

The self-service laundry industry, while well-established, is still subject to internal and external influences. The basics of your laundry operations are largely unchanged but there are factors at play when it comes to building your business.

American Coin-Op invited representatives from several manufacturers and distributors, along with some store owners, to size up the industry today compared to five years ago, to identify opportunities for stores to improve, and to establish the manufacturer’s, distributor’s and store owner’s roles in moving this industry forward.

Q: I’ve identified planning for growth as a key aspect of a self-service laundry operation. Name at least one way that any store owner can seek improvement, and suggest a general plan or course of action to achieve it.

Gary GauthierNational Sales Manager, Vended LaundriesPellerin Milnor Corp.

Growth is a relative term – it could mean a bigger machine or an additional location. All growth needs a plan, however, and it should be carefully cost-justified.

Kevin HietpasDirector of SalesDexter Laundry

Developing a plan is a great exercise, and whether or not the plan is executed exactly as outlined, simply the development of a plan forces an individual to think about what they wish to accomplish and how they might achieve those goals. By actively thinking about the future, an individual is better able to recognize threats and opportunities as they arise, and they are better able to confidently take action.

Chad LangeSales DirectorMaytag Commercial Laundry

Planning for growth can mean considering efficiencies and ways to increase profit in a current store, or plans for expansion into other locations. Store owners might consider building in time to truly take stock of where their business is, and where they would like to head in the future.

While building relationships directly with customers is key, owners should, when considering growth, also be sure to rely on their manufacturer and distributor for key information and advice about items including neighborhood demographics, equipment selection, upgrades and maintenance, and store design.

In addition, owners are encouraged to look at current store operations and identify key takeaways or learnings that can influence any planning for expansion. This may include peak operation times, price threshold and popularity of equipment.

Cathy NeilleyStore owner based in New Jersey

Whether considering expansion of a current site or opening at a new location, construct a business plan. Include financials and market data so you can make a sound decision.

Kathryn RowenNorth American Sales ManagerHuebsch

The reality of retail and ever-changing consumer habits and wants requires a store owner to always be seeking ways to provide additional value and save them time and trouble.

Tod SorensenRegional Sales ManagerContinental GirbauVice PresidentContinental Girbau West

Put together a business plan that phases your business into new revenue streams. Start with a quality self-service business, then phase into providing drop-off wash/dry/fold, drop-off dry cleaning, commercial laundry services, and pickup and delivery. Consider a customized wash and fold POS system. It can simplify transactions for the average laundry owner.

Brad SteinbergCo-PresidentPWS – The Laundry Company

Using technology like card payment systems can allow a store owner to properly scale.

Andy WraySales ManagerACE Commercial Laundry Equipment

In our market, it is difficult (not impossible) to grow within an existing coin laundry. Many customers are looking for fluff and fold business for additional income, adding larger pieces of equipment, and … trying to lower the bottom line with more efficient washers, dryers, water heaters and such.

John AntenePresident of Coin Laundry Sales and MarketingCoin-O-Matic

Growth can be determined by where you’ve been. This will provide you a road map to move forward in building your business. What efforts have worked for you in the past? What has not? When was the last time you tried anything new: marketing, equipment changes due to demographics, etc?

Kurt ArcherSales RepresentativeWestern State Design

The best way to plan for growth is to know your store volume and trends intimately. Understanding which size units are in demand and even have customers waiting allow you to plan to add equipment. This can be done by trading out underused sizes or even expanding into neighboring space if it comes available.

Brian BrunckhorstMulti-store owner based in California

Regardless of how you want to grow, the first step is to make a plan. Focus on areas that have a natural extension to what you are already doing, like adding delivery or commercial accounts to wash and fold or selling items over the counter or in vending machines. My advice would be to focus on “low-hanging fruit” at first. In other words, look for areas within your business that would give you the most growth for the least amount of effort.

Michael FinkelsteinMulti-store owner based in Virginia

It’s not always about buying a new location necessarily when you’re planning for growth. You could look at your existing space and then remodel to better utilize that space. If you’re in a shopping center, you might want to expand into that space next to you. … there’s a vacancy next door and you can knock through that wall. That’s another way to look to grow.

Connor FrankianVice President of SalesD&M Equipment

I believe an optimal plan for growing a self-service laundry operation is to tactically plan retooling measures. Advise with your accountant on equipment depreciation and Section 179 tax incentives, and plan retooling of equipment around these criteria. This will give you an opportunity to change your equipment mix, acquire more water-efficient machines, and the latest and greatest features when it is best-suited for you and your business.

Q: In what ways can manufacturers and distributors best help vended laundry owners succeed?

Hietpas: We are always happy to deal with store owners who have taken time to do their homework. There continues to be lots of opportunity in our industry, but there are times when we see individuals jump in too quickly on committing to a location, or an equipment purchase, without doing much research.

Lange: A vended owner’s distributor/manufacturer choice is extremely important to their long-term success. Distributors can provide critical support to owners when they are considering important decisions like building a store, retooling a store, or expanding into multiple locations. Counseling store owners through location selection, aspects of store construction, choosing the right mix of equipment for their neighborhood demographic, financing and education are significant ways distributors can help provide expertise to help a store be successful.

What’s more, manufacturer and distributor support through a machine’s entire life cycle is important; they should be willing to troubleshoot with you on a moment’s notice to solve issues and potentially reduce downtime.

Neilley: Be consultative and a “connector” as it regards local opportunities and competition; a subject-matter expert on new technologies, systems, and processes that can support the smooth operation of your business.

Rowen: It’s all about full service. That starts with equipment that is efficient and leverages technology to simplify management for owners, while giving customers the experience they want. Equipment, alone, however, isn’t enough. Owners should work with full-service companies that give them access to value-added services, such as financing, design, technology and support. Laundry owners are choosing partners who are completely invested in their success before, during and, most importantly, after the sale.

Sorensen: They both help in so many ways. Together, the distributor, manufacturer and laundry owner form a partnership that lasts for years to come. The distributor and manufacturer help with laundry design and development, financing and business planning, as well as marketing and technical service. The goal is always a successful laundry owner and business.

Steinberg: Distributors can come up with a game plan to help investors be successful. Not all investors are made the same, so the distributor can help create and then execute on a road map that makes sense for a specific investor.

Wray: Manufacturers are looking to assist customers by rolling out more sophisticated washers and dryers that are really ramping up the technology side. As a distributor, it has always been our commitment to help our customers succeed any way possible with their store—from “Next Day Airing” a part for free to being open Saturdays to assist the guy who can’t get by during the week. Being there when customers need help is just as important, if not more important than receiving an equipment order from them.

Antene: This can easily be accomplished by realizing the store owner’s unique needs. And keeping them aware of marketing trends and equipment technology advances to better their revenue potential.

Archer: Manufacturers and distributors spend their full time learning both equipment and local markets. A good partner provides solutions. In order to provide solutions, store owners must give good information to their distributor, and this is impossible without trust. Trust is a two-way street. It appears that the line between end-user and manufacturer is becoming blurred in our industry. Owners will hesitate to reach out to manufacturers and distributors whom they deem to be in competition with them for locations. Owners should look to find organizations they trust and work to develop a strong working relationship. An honest, knowledgeable salesperson is worth their weight in gold.

Brunckhorst: It’s important for manufacturers to continue to innovate, while maintaining high standards of quality control. We are approaching some of the limitations of utility improvements, so focusing more on remote management and customer experience in the future will help keep manufacturers’ new equipment relevant. Distributors need to focus on full-service solutions for their customers, not just sales of equipment and fixing broken machines. Being there to help store owners with all stages of the lifecycle of a laundry is a must. Distributors and owners will both win when they help customers create a strategy for each stage and a plan for the maximum potential of a location.

Finkelstein: I think both need to make customers aware of the equipment that they offer, educate them on it. One of the things they can do is continue to make it so it is not too difficult to repair. … You want to make sure the equipment you’re buying lasts, and that it is different from residential equipment that a customer could buy. … From the distributor side, you need to continue to look for locations that might be available that might make sense for someone to go into.

Frankian: I believe the best way … is a strong network of communication from the store owner all the way up to the top management level of our manufacturers. As a distributor, I believe it is our responsibility to listen to our vended laundry owners’ feedback from the day-to-day operations of having our equipment, and then take that information and communicate it to our manufacturer. After all, if you, the vended laundry owners, are not successful, the distributors and manufacturers are not successful.

Gauthier: Manufacturers and dealers can help owners recognize efficiencies through the machinery we provide. Our equipment can’t lower building rent costs but we can help vended laundries be successful and profitable through more efficient machinery. Distributors can be great partners for success in the field as they are closely in-tune with local trends.

Coming up Tuesday: In a Web exclusive, the panelists weigh in on water and energy conservation, and the impact of smartphones on our industry