Separating Laundry Myth from Reality (Part 1)

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Bruce Beggs |

How to assess the validity of commonly shared industry theories

CHICAGO — Every industry has its own set of “theories,” although not everyone agrees on them. Try operating your store in a certain way and your distributor or even a fellow operator might chide you about your business plan, exclaiming, “You can’t do that!”

New investors have a lot at stake and they may pin their success on statements they believe to be maxims when they could actually be a bunch of malarkey, generally speaking.

There’s more information available to potential laundry investors and new store owners today than ever before, but how can you make sure the info you’re using in making your self-service laundry business decisions is based in fact? How do you separate the industry myth from reality?

American Coin-Op interviewed representatives from several equipment manufacturers about this issue.

“The good news is that there’s a ton of information out there, and the bad news is there’s a ton of information out there,” says Kathryn Rowen, North American sales manager for Huebsch. “One of the fantastic things about this industry is that there’s a general broad willingness of store owners, distributors, etc., for sharing best practices, lessons learned, etc.

“People like certain manufacturers, distributors, marketing techniques for different reasons — there isn’t one right answer to a question, it just depends on what each individual store owner wants and needs.”

“Do your homework. Store owners should vet the market, too,” advises Nick Koukourakis, senior product development manager for Whirlpool Corp. Commercial Laundry, parent of Maytag Commercial Laundry and ADC. “Do you know your audience? Are you fulfilling a need? How many stores will you be competing with? It doesn’t hurt to reach out to the community and put feelers out there—is the neighborhood open to a new store? Look to industry associations and trade media for additional information and research. In addition, local chambers of commerce are good resources for community information.”

“Check and double-check,” suggests Mark Schram, North American sales manager for Primus. “Looking at this question from an equipment company angle, verify what your distributor is telling you. If they are making ease of use, efficiency and ROI (return on investment) claims, verify them with others in the industry. This means digging deeper. I liken this to the current news climate. Don’t feel that if you read a headline, you have the correct information about a news story. Same holds true for our industry. Dig deeper to understand who is putting the ‘news’ together—is there a bias? Does it even make sense on its surface?”

“For potential investors, I would say rely on hard facts in the form of demographics reports, firsthand walk-throughs of stores in the market: their condition, pricing, how far away they are,” advises Tom Weisheipl, Midwest senior regional sales manager for Speed Queen. “New store owners should lean on the technology in their store for the details necessary to improve operations and spot trends. The goal is utilizing management/payment systems to make fact-based decisions.”

COMMON MISCONCEPTIONS

What are some common misconceptions about owning or running a self-service laundry—such as “Running a successful laundry takes little to no work each week”—that you have heard during your career?

“‘Absentee ownership’ is one,” says Joel Jorgensen, vice president of sales for Continental Girbau. “‘All you have to do to own a laundry is open and close the doors, clean and collect the money’ is another.”

“I definitely hear that (little to no work) myth more than any other,” Weisheipl says. “The truth is, running any business successfully is work. Owners doing it the right way are the face of the business, setting high standards for staff and ensuring processes are followed to create a great customer experience.”

“Perhaps one of the more common misconceptions is that a new owner doesn’t need a lot of start-up money to get started,” says Koukourakis. “Start-up costs depend on whether you are building a new laundry or taking over an existing laundry. These costs may include: construction, renovation, hook-up fees, licenses, permits and equipment. In addition to basic start-up costs, there will be ongoing items, including utilities, insurance, employee payroll, lease or rental costs and miscellaneous supplies. It is good practice to research financial options and make a plan that allows you to meet start-up and extended ongoing costs. Many owners will create a pro forma to project costs and income estimates.”

“Hard to beat that (little to no work) one. You can be successful with minimal time in, but there are so many added rewards for creating a business that commands your time and takes on your own personality,” says Rowen. “Owning your own business is never easy, especially since you now need to be adept at operations, marketing, service, human resources, payroll, etc. The good thing is that there are numerous resources to learn best practices from, including a long-standing industry trade association, highly experienced distributors, quality media publications/websites and a network of willing store-owner peers.”

“‘Just open the door and the money will roll in.’ Any seasoned owner or reputable distributor will tell you to prepare for a ramp-up period. This is why our finance packages often contain interest-only payments and similar tools to allow for the business to build,” Schram says. “There’s always the myth that ‘customers will always go to the laundry with the lowest prices.’ We all know that’s not the truth. Another myth is that customers want only basic wash selections and will not pay more for additional wash options. Again, the reality is that a high percentage of customers will choose extra washes and rinses.”

Check back Thursday for the conclusion!

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

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Get to know Laurance Cohen, author of the popular American Coin-Op column who got his start in self-service laundry at age 8.

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