GLENDALE, Ariz. — If you’ve been in the business for a while, sooner or later you will get that churn in your stomach when you discover a new competing Laundromat under construction.

For an existing mat owner, it’s not a pretty sight. By the time you see a new mat under construction, in 99% of the cases, it will open. This applies to brand-new competitors, or to old mats that have been retooled.

If more washers and dryers are added to an existing market, I believe that no matter what you do, prices will invariably fall to a new lower equilibrium, until and if more customers enter the marketplace. It’s the law of supply and demand and there’s no escaping this basic, proven principle.

You’ll have a few months to prepare while a new mat is under construction. So, what do you do?

There are basically three responses to a new competitor. All three have their place, but I have a favorite.

In Part 1, we took a look at 1) doing nothing, and 2) re-examining your store’s weak points and correcting them. Today, let’s look at the third option:


I ran multiple mats for decades. Most of my life, actually. I experienced the challenges of new competitors many times, and tried all three of the approaches described in this column. With all this experience, I’ve settled on the “war” approach.

A new store opens up, usually offering free drying or some other enticing deal like low prices across the board. It’s time to go into “battle phase,” not only re-evaluating and fixing up your mats (while also assessing the competitor’s strengths and weaknesses), but creating a deal so sweet as to make your customers have no desire to leave.

As I mentioned in Part 1, people are creatures of habit, so they will tend to stay with you if they feel you are giving them an incentive to do so. Yes, you will lose customers no matter what you do, and, yes, your income will drop, especially initially when you drop your prices, but you will have at least planted a floor to the loss of volume. At some point, your business will begin to grow again.

Eventually, you may end up drawing people from other parts of your market because they now feel it’s worth it to travel an extra few minutes to go to your nice, clean mat with enticing prices. It may take several months, maybe even a year or so, but you will turn it around.

You simply have to accept the fact that you will lose customers and prices will eventually drop anyhow (it’s supply and demand), so swallow your pride and come out with both guns blazing right from the start!

Yes, you will be in a price war, which will probably extend the new mat’s opening specials, and it will cost you money. You must accept your new norm, your new equilibrium, but you will stay in the game during this battle!

What’s more, you’ll end up sending a signal to your local equipment distributors that they should steer newbies away from you, this crazy mat owner who will fight tooth and nail to retain his customers!

When I first opened way back in 1976, my closest competitor hit me with a 2-for-1 sale on all his washers. He did this for about six months and really scared the daylights out of me. But then he mysteriously stopped his sale and went back to his regular pricing.

Years later, we became friendly, even to the point that he did a few tub bearing jobs for me.

One day, he told me, “Paul, I have an admission to make. When you first opened up, I panicked so much that I did the 2-for-1 deal. After six months, I ended up making more money and more profit than before you opened!”

To motivate you into the battle-phase mentality, watch the movie Rocky III. It’s a terrific metaphor for this exact scenario, only in the business of professional boxing. Rocky Balboa (Sylvester Stallone) became complacent with his title until “newbie” Clubber Lang (Mr. T) knocked his lights out.

You can let a newbie knock your lights out, or you can do what Rocky did: Pick yourself up and fight back with a vengeance! Eye of the Tiger!

Show everyone that anyone who competes with you will get their lights knocked out—financially speaking, of course.

So, lace up your boxing gloves and come out swingin’ when the bell rings.

Miss Part 1? You read it HERE.