CHICAGO — I refer to demographics as a misleading chart that only paints a rough picture of the whole truth.Many sales people who don’t truly understand the whole story behind the demographics reports will talk to you about potential locations for a new coin laundry. These reports are misused and misunderstood, and they have been a big reason for business casualties over the years.Sure, you can review the density of population as it is related to your location and types of incomes, occupation, races, ages, gender, etc., but what you don’t have is the whole truth. There’s more to consider.Do not base your decision to develop a new coin laundry solely on the demographic profile statistics you find online or are given by a sales representative.SEARCHING FOR ANSWERSHow much do you really know about demographics? Many things have been said about demographics. Here are some sayings that you may be familiar with: * Demographics are very overrated. * Demographic numbers can sometimes lie. * Demographics are only a tool.Let’s look at some examples of how demographics may not tell you everything. First, demographic reports do not tell you how many laundries are in your area, nor do they give you the size, vend prices or machine counts of the nearby laundries. Do the reports detail how much parking each competitor has, how much debt service they have, or even how long it took those businesses to establish a customer base? Do these owners pay rent or do they own the property? Are they good operators or bad operators? Do they have a marketing plan, and if so what are they doing? Are they providing good customer service? What other services do they offer to set them apart from the others? Plenty of questions, where are the answers?There are different questions and answers that demographic reports don’t cover. Demographic reports do not tell you who’s looking at blueprints of the city for a plan check, awaiting approval to potentially build a big, new laundry, maybe right across the street from your selected site. What future-development plans does the city have? These plans could either enhance your potential location or crush future business.GET THE RIGHT HELPDemographic reports are not a bible to build a business or establish a business foundation. The point I’m stressing is that you need to do your due diligence and choose the right distributor who has longevity in the industry and can personally provide a list of locations he/she has developed and customers he/she has helped. Discuss the distributor with these people before you invest what may be your life savings.You want to find someone who has the business credentials, someone who can hold your hand, help you, embrace you and protect you from overspending, becoming overleveraged and avoiding collateral problems.The right person can help you avoid bad leases and the wrong equipment mix. The right person knows your area and has his/her finger on the pulse of the chosen marketplace. Make sure this person is assisting you with many, if not all, of the examples I have mentioned. I have lost sleep countless number of times just making sure that I have covered all of these points and have done everything in my power to get the best possible results for a person looking at a new location.I have personally been involved in the development of more than 500 new and existing coin laundries nationally and abroad. The laundry industry is a great business, one that provides a service that is a daily necessity regardless of the state of the economy. Remember, nobody wants to wear dirty clothes.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].