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, let’s take a look at options 1 and 2:

1. DO NOTHING

Some Laundromat owners will say to do nothing when a new competitor shows up, the logic being that you trigger a price war and nobody wins (except the consumer). I’ve tried this and personally do not believe in this approach. You only allow your new competitor to grow at your expense by siphoning off your customers. Drip, drip, drip.

If you allow this attrition of customers to continue while doing nothing, you could end up being forced to sell your mat. Then guess what will happen? The new owner will probably respond with fixing the place up somewhat, running some kind of sale, or even dropping some prices, to attract more customers. This is what you should have done in the first place!

2. RE-EXAMINE YOUR STORE’S WEAK POINTS AND CORRECT THEM

Most mat veterans will agree that you need to at least take this option. All else being equal, a new competitor really has only one major advantage: everything is new, which does attract customers.

After all, if a customer will spend, say, $25 to do their laundry somewhere, will they choose to spend that money in an old, rundown mat, or in a brand-new one? If you need to rent a car from an inventory of compact cars priced identically, will you pick the nicest, cleanest, newest car, or one that has some scratches, a couple of dings, and smells of cigarettes?

When it comes to laundry, you have a big advantage! You already have a going business with satisfied customers. It’s a lot harder to get new customers than it is to retain old ones. People are creatures of habit, and old habits are hard to break. The edge belongs to you if you make sure your mat is up to par.

Here’s another big advantage you most probably have: Your new competitor almost surely has a lot of debt on his mat to pay off.

So, simple logic dictates that you spruce up your mat as much as possible to dilute that one advantage your new competitor has. Make and keep your mat always looking as new as possible.

Step back and take an honest assessment of your mat’s strong points and weak points. As the owner, you are biased, and your own denial will cloud your interpretation of your store’s strengths and weaknesses.

You’ll need to ask other people (especially customers, but employees and friends may also help) their honest opinions of your mat’s plusses and minuses.

Do this verbally, but also in writing. People are far more likely to share what they really think of your store if it’s done anonymously on a paper that goes into a locked “suggestion box.”

Don’t forget to check your online reviews as well, for there is valuable feedback there.

Do some brainstorming with friends, family, employees, and most importantly, your customers. Not only should you ask customers what changes they would love to see you make, but have your employees ask the customers as well. They may be more open and honest speaking with a worker rather than the boss. You should even ask this question on your written questionnaire.

The requests for improvements can range from small things that may only cost you a few bucks, to things that can cost you many thousands of dollars, such as replacing worn-out machines. Get as many of the improvements done that you can afford. Also, don’t forget the human factor, that you and your employees should always treat the customers with respect and a smile.

The key thing here is to make a positive difference in people’s perception of your mat.

If you think about it, getting this feedback from customers is something that all businesses should do from time to time. It’s entirely possible that if you were doing this all along, you would have made more money, and maybe even scared off your new competitor! You, the boss, cannot think of everything. You need the feedback.

In some cases, existing mats have been neglected for so long that they actually “invited” the new competitor.

If your mat has been clean, well-managed, attractively priced, with highly functional equipment all along, a potential investor just may decide to build his or her new mat in less threatening territory.

After all, look at it from the other side. Would you decide to risk hundreds of thousands of dollars to build a new mat that must start with zero customers and heavy debt service near a well-run established Laundromat?

Seems to me there are plenty of newbies out there who don’t understand what they are getting into and don’t do their due diligence.

So, they buy the weaker mats that are already in an unfavorable competitive position instead of letting them fall by the wayside. I believe that weak mats in highly competitive situations should fade away, but they often don’t in some markets.

Check back Thursday for the conclusion!