GLENDALE, Ariz. — So far, the laundromat business has been good for you. So good, in fact, that your mat can’t accommodate all the customers during busy times, resulting in more and more “walkouts” when they can’t get a machine. You also notice your busy times are lasting longer and happening more frequently. Pat yourself on the back because you’re doing something right!

Now that you’re enjoying some hard-earned success, what are you thinking about for the future? If you’re satisfied, then just keep doing what you’ve been doing. Maybe just raise your vend prices to control the “herd.”

The problem with using price increases to cut down crowds is that you can only raise prices for so long. Plus, you’ll still have a small mat. If your mat pleases so many people, isn’t it better to give them more of what they love, rather than make them pay more for it?

While it is indeed a thrill that more and more people are choosing your mat, it’s wise to not let this go on for too long.

A busy mat can invite competition. Its machines wear out faster, have more “Out of Order” signs, and require more maintenance. More fights break out among customers when it’s too busy. More and more customers ask you, “When is this laundromat slow?” Employees may quit under the strain. These are all signs that you may need to expand … if you can.

You also need to ask yourself, “Is operating another new mat, or a bigger mat, something that I really want to do?” Will you have the time to work more hours? Can you handle the extra stress that comes with a new risk? Are you OK with more of everything, including emergency calls? Do you have enough money to expand?

Let’s look at some advantages. While building another mat near yours can potentially double your income, you’ll enjoy an economy of scale that will not double your time nor quite double your expenses. While you are out on the road visiting one mat, it’s not twice as hard to visit another one. You’ll be advertising for two mats instead of one, buying supplies in larger quantities that will give you some economy of scale. You can shuttle employees and/or drop-offs from one store to another.

After all, you already have in place many of the tools to open another mat: your lawyer, accountant, work car, bank accounts, plumbers, electricians, etc.

Landlords, distributors, and any other companies you do business with will take notice that you have a growing business, which should earn you some respect when they deal with you.

So, let’s say you’re leaning toward expanding. What are some options?

LATERAL EXPANSIONS

You may not even be thinking of expanding when a store next to you becomes empty. If you have a history of paying rent on time with no headaches, you may even get a call from your landlord offering the store to you before it becomes available to the public (that happened to me twice). This is the best scenario. After all, you’re already visiting that mat. Making it twice as big doesn’t require much more of your time to run.

You’ll still have the same crew, probably only slightly bigger. If you’re gung-ho about expanding your existing mat, then you might want to give your landlord a heads-up that you’re looking to expand. You may even want to get “a right of first refusal” added to your lease when it’s time to renew.

However, just because a space becomes available doesn’t mean you could or should expand.

Before committing any money, you need to know if it’s even possible to expand. Check the zoning for your area to determine if the city building department will allow another mat, or a bigger mat, there. It’s also important to check if there’s enough infrastructure to economically double your plumbing and electric. Some localities have sizable hookup fees that could substantially raise the cost of opening when commercial washers are installed in an area you may not be familiar with. If you didn’t build your existing mat and don’t know about the possible fees, you should verify all this first.

Last, but certainly not least, does your area have enough potential customers to support doubling your mat, even though it’s currently busting at the seams?

That was an issue at one store I owned. Business was great for years. Eventually, an empty space came up right next to my mat. I took it, nearly doubling the mat size. But the entire first year, the sales were disappointing. I had targeted them to double but they only went up around 60%. I was caught completely off-guard. My profit actually went down the first year due to the extra expenses. The next year, sales rose to a more comfortable point, but not before I spent a lot of time and effort trying to boost that mat. So ask yourself, “Where will my extra customers come from?”

Check back Thursday for Part 2!