During the past year, there have been plenty of stimulus dollars meted out to banks, car companies and insurance companies. Isn’t it time for a self-service laundry stimulus package?In my 20 years as a distributor, I have seen the business grow and develop, but the current recession has stressed out our recession-resistant business. I know what the ideal industry stimulus package would contain.MOVING FORWARDFirst, I would provide financial incentives in the form of tax credits or rebates for store owners willing to learn how to run their businesses in a sustainable fashion. Investing in technologies with energy-saving features is a good start. There are modern dryers that are extremely energy-efficient. And there are washers that come equipped with sophisticated controls that allow for nuanced water and temperature settings, as well as leak and slow-drain detection. Using these settings properly will result in measurable energy and water savings, less expensive repairs and fewer machine replacements.But installing new energy-saving equipment without modifying utilities and redefining the store’s infrastructure is counterproductive. I would provide low-interest loans for not only the purchase of state-of-the-art equipment, but also for property renovations needed to accommodate the new energy-saving appliances.I would like to see the utility companies step up and reward laundries that demonstrate their conservation efforts. Perhaps water municipalities could offer discounted or locked-in rates to businesses that meet water-saving goals or install leak-detection systems. My tax-credit and loan program would also extend to store owners who invest in upgrading their properties. During down financial times, it is easy to rationalize cutting back on maintenance and improvements. Flooring and lighting are two of the biggest factors in a store’s appearance and desirability — and are often the most neglected. Clean, well-maintained floors telegraph an owner’s commitment to the upkeep of his property. Good lighting is essential for making the store more attractive and for enhancing security. And new, energy-saving bulbs and fixtures can lower utility bills, further contributing to a sustainable business model.THE EDUCATED OPERATOROne of the most important components of my program would be designed to stimulate education. One of the weakest aspects of our industry is the lack of desire on the part of many store owners to really understand this business. As those of us who thrive in this industry know, running a laundry involves a lot more than buying some machines and collecting quarters.Many people get into the self-service laundry business without having done their due diligence. They are unprepared for the start-up and ongoing expenses, and are often undercapitalized. Continuing education offered by manufacturers, distributors, business experts or even their peers would help store owners improve their business acumen. There is a tendency for owners to think they know all there is to know after a few months in business when, in reality, there are always new things to learn that can make your business more profitable. The educational aspect of my stimulus package would focus on three areas:
- Know your equipment and take advantage of technology. Learn how to maximize the technologies offered on new, sophisticated equipment to generate energy savings, but also understand when and how your revenue is being generated. Modern controls enable owners to identify the peak activity times and most popular machines in order to staff and equip their stores accordingly.Controls can allow owners to monitor their stores remotely, receiving notification if a machine develops a problem or a coin box is being tampered with. Card-operated machines have variable vend features that let owners increase rates in less than 25-cent increments or lower rates for special promotions. Owners should also attend repair-and-maintenance seminars so they are able to work on equipment themselves, reducing service calls and extending the life of their machines.
- Become a smarter businessman. Store owners need to not only educate themselves about their equipment, but they also need to hone their business skills. Oddly, many store owners don’t demonstrate the best business sense. It is in their best interest to make sure that they understand tax incentives and learn strategies that will make their business more profitable. It is also beneficial to learn how to use marketing and promotions to build the reputation of, and drive traffic to, the store. Owners should become comfortable not only with traditional marketing tools, such as print ads, flyers and direct-mail pieces, but also with new, online tools and social media. Downloadable coupons, mobile promotions and e-mail marketing are all great potential business builders that reach a younger customer demographic.
- Develop an exit strategy. Many store owners don’t recognize the need to develop a smart exit strategy. The investment in building your store’s brand, installing state-of-the-art equipment, maximizing available technology, tracking and measuring savings and revenue, and maintaining and improving your facilities all pays off when it is time to sell the store or retire from the business.
Your efforts will make your store more valuable and more attractive to buyers. A smart exit strategy, implemented early on, makes your store a profit center not only for the years you own and operate it, but for many years afterward.Building and running a coin laundry is not a cheap proposition. The significant initial capital required for equipment and property, followed by ongoing maintenance and improvement costs, represents a serious financial investment. My stimulus would help owners maximize that investment to achieve the highest level of performance and ROI. Failure to pursue the best possible results for your business makes no more sense than buying a Ferrari and putting a rock under the accelerator.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].