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Self-Service Laundry Industry Pitfalls to Avoid (Part 1)

Sidestep these stumbling blocks on your way to profit, peace of mind

CHICAGO — When embarking on a new venture, we’re bound to make mistakes. Laundry investors are no different. There are errors that new owners are prone to make, especially during store conception or early stages of operation, that could cost them.

American Coin-Op sought the counsel of experts from several equipment manufacturers to identify some of the pitfalls to sidestep among the makings of a typical self-service laundry operation.

STORE SITE SELECTION AND ACQUISITION

A big pitfall here is the desire to get going too quickly or to be in a particular area can cause an owner to overpay for a location, says Kevin Hietpas, director of sales, Dexter Laundry. One can end up with a site that’s busy but not a success financially.

“For example, a lease might be very attractive in the early years, but ongoing yearly rent increases can quickly make the location unprofitable,” he says. “For this reason, prospective owners need to take a longer-term perspective in understanding their lease and how it will impact the bottom line of their business, not just starting out, but over the long term as well.”

Chad Lange, sales director of Maytag® Commercial Laundry, says owners may inadequately research the neighborhood prior to selection, missing an opportunity to learn more about the store’s potential customers.

“To help ensure owners are informed before making decisions, our distributors can provide critical support to owners by counseling them through location selection, competitor assessments, aspects of store construction and choosing the right mix of equipment for their neighborhood demographic,” Lange says.

Co-tenants are sometimes overlooked, says Aubrey Pollesch, Laundromat sales development manager for Alliance Laundry Systems: “If you are in a strip center, it’s important to understand who your co-tenants are and if they will help drive customers to your business or scare them away.”

Tod Sorensen, sales manager for Continental Girbau, sees not doing due diligence on the lease as a danger.

“Consult people in the business to negotiate your lease,” he says. “Get several legal opinions on your lease before signing. No matter how your business performs, without a rock-solid lease you’ll be doomed.”

STORE DESIGN/LAYOUT

Store owners can be rightly focused on logistics, but there is potential to sometimes overlook elements related to store design, Lange says. A store’s general layout and condition, from its overall cleanliness to specific components like lighting, equipment, and aesthetic look and feel, are important considerations.

“A priority in this area for owners should be making sure that customers feel safe and comfortable in their stores,” Lange says. “Clear sight lines and machine-offering indicators, along with judicious use of lighting—both natural and artificial—can really make a difference.”

“Some mistakes store owners make are not having enough dryer pockets (which holds up customers on weekends waiting for dryers), not having enough large washers, putting large washers in the back of the store where customers don’t always walk … and not having enough folding tables,” Pollesch lists.

In this area, Sorensen sees not clearly defining the laundry’s purpose, cramming too much equipment into too little space, and not having enough storage space as issues.

“Is this just another self-service laundry or will you expand services to provide drop-off wash/dry/fold, commercial laundry services and pickup and delivery?” he says. “Be sure you have adequate space to provide these services, outwardly communicate and market these convenient and appealing services to the entire demographic in your service area.”

As for the equipment footprint, he adds, “Personal space is important. … Make sure you have balanced wash, dry and folding areas to efficiently move customers through the laundry process.” And plan for storage of snacks, drinks, soap, drop-off laundry, etc.

Taking the time to plan your store design can turn a potential pitfall into an opportunity, Hietpas says.

“Owners with a great feel for store design and space utilization can sometimes get very favorable deals on ‘oddly shaped’ or otherwise imperfect spaces and turn them into highly functional (and profitable) locations,” he says.

PARKING AND ACCESS

“If you have a great spot—but nowhere for people to park—they will go elsewhere,” Pollesch says. “If customers have to wait five minutes to turn left into your parking lot every time they want to visit, that may be enough to send them to your competitors.”

“Parking must be convenient with good ingress, egress and signage to designated store spaces,” says Sorensen. “We recommend four to five spots per 1,000 square feet of laundry service, with safe and relatively close access to the store entry/exit.”

“Owners must always keep in mind that customers are loading and unloading numerous bags and/or baskets, and the convenience of not having to carry these loads over large distances can’t be underestimated,” Hietpas says.

Barriers like one-way streets and/or nearby rivers can be major obstacles making it more difficult for customers to access a location. And if the location is going to rely on public parking, Hietpas adds, review the rules and fees for parking, especially on nights and weekends when store usage is generally higher.

Check back Monday for Part 2 covering equipment acquisition, days and hours of operation, payment methods and acceptance, and collection practices