GLENDALE, Ariz. — We need to talk about the public’s perception of what they think it’s like to own a Laundromat.
During my 41-year career in the industry, I can’t tell you how many times I was asked about owning a mat. I was approached many times by my own customers. I was also cornered at parties by inquiring minds, and by other shopkeepers in my shopping centers who were not happy with their own businesses.
Seems that people are fascinated with our industry, and rightfully so. But what do they really see?
- They see a store loaded with customers using washers and dryers, and maybe one or two attendants.
- They rarely see you, the owner, but if they do, they see you come for a few hours and then leave, probably for another location.
- They note that you’re “hardly ever there.”
- They see you collect the money, fill the vending machines and ATM, oversee the employees and drop-off service, and repair a machine or two that may be out of order.
- They see you, every now and then, engage in some kind of improvement or upgrade.
- They see a cash business with no accounts receivable.
- They figure that mats are recession-proof (and they are, to a degree, but they’re more like recession-resistant).
- They see no perishable inventory. In fact, they will see very little inventory at all. (Maintaining a big inventory is time-consuming and expensive, and causes worry about the supply chain being interrupted. Mats don’t have that problem.)
- They see no inventory shrinkage, or shoplifting worries.
- They see no shipping headaches.
- They see no product returns.
- They see, in many cases, no delivery service.
“This is a simple, easy business to operate,” they think. “A business I could run in my spare time while keeping my ‘real’ job,” they muse, “almost like a hobby. After all, people have to do laundry, and if this owner can run this store part-time, so can I.”
These are all real and valid truths about our industry. But while a mat is easier to run than, say, a restaurant, it is not as easy as it looks!
Mats are real businesses that must be managed as such, requiring technical skill, determination, and lots of capital, luck, and general business management skills.
DREAM HOBBY? NAH, DREAM BUSINESS
In Part 1 of this article, I discussed the skills and commitment needed to make a go of it in self-service laundry ownership. While mat ownership may look like a hobby, it is indeed a business in every sense of the word!
So how do you turn your dream hobby into a dream business? You’ll need to have a business plan. Here’s how to get started:
- Join the Coin Laundry Association.
This is the best advice I can give you here. It offers a wealth of information that could easily make the difference between your success or failure. Its forum is frequented by lots of industry veterans, including yours truly.
- Have sufficient capital.
This is a capital-intensive business. The equipment and its infrastructure can get really expensive, so be sure you can afford a mat in the first place.
- Find a location that has great potential, whether you are buying an existing mat or building new.
If you are buying, you must be able to verify all the income and expense numbers the seller will give you. This is important because sellers sometimes stretch the truth.
If you are building new, you have the advantage of the distributor who can be of great help to you in many ways. For instance, they can help you with financing. Just make sure you check his references well because you will be trusting your life savings with a stranger.
If you find a location that has old washers, you may want to retool the store with new equipment, thereby gaining access to your distributor’s knowledge and help.
In the long run, it’s much better to own your own building, but this can be quite expensive. If you lease, you’ll have a lot more good locations to choose from, but then you have to deal with a landlord, which can be difficult, especially for a newbie.
Consult a good real estate attorney who can advise you on leasing. Generally, you’ll want as long a lease as possible. Without a good lease that is reasonably assignable to a new buyer, your business will be worth next to nothing when it’s time for you to sell.
- Hire and manage great employees.
This can be challenging, especially if you’ve never done it before. They are literally the face of your business. You need to become skilled at interviewing, choosing the honest and hard-working, filing all the paperwork for Uncle Sam, maintaining an ever-changing work schedule, and managing them so they are happy and willing to stay with you for the next few years.
- Consider doing some advertising.
Nowadays, nearly everyone uses the Internet to see which stores they may want to patronize. Guess what everyone looks at? Reviews! The more 5-star reviews your mat has, the more customers will come by. That’s why I said before to pay good attention to customer complaints. You want to go online and claim your mat’s Facebook page, Yelp page, Google, etc.
Once you have your physical location, a great lease, built or remodeled your mat to look better than your competitors, have your crew ready to go, and spread the word about your business, you’ll want to do a grand opening.
Here’s a little tip: do a “soft” opening for about a week. By this, I mean when you are ready to open, just quietly open with no hoopla. Customers will trickle in. Use this time to work out any kinks before your grand opening.
When someone looks at a well-run mat, they see a thing of beauty, because such a mat is probably being operated by a seasoned mat veteran. An expert in the business, if you will, and experts in any field always make it look easy.
Be wary of opening your new “hobby” mat anywhere near an expertly run mat. Seasoned veterans will have the advantage when competing against newcomers.
Miss Part 1? You can read it HERE.