ATLANTA — What do you think it would take to enter the commercial linen and uniform rental market? There are streams of potential new revenue available there, yes, but also some new operational challenges and maybe some headaches.
If you run a self-service laundry, starting to service commercial customers might require adding personnel, some type of client management system, more programmable and/or larger-capacity equipment, and more physical space for order storage.
During this summer’s Clean Show, organizers hosted a trio of laundry and drycleaning business owners to discuss the best place to start the transition, how the industry works, and what competition exists, all to help attendees determine if pursuing commercial laundry customers might be the right move for them.
The panelists were Monika Manter of Balfurd Linen Service in Tipton, Pennsylvania; Kelley Dixon of St. Croix Linen in St. Paul, Minnesota; and Dan Campbell of Wash Around the Clock in Tallahassee, Florida. Each had a unique story to tell.
ORGANIZATION A CHALLENGE FROM DAY 1
Campbell says he’s a perfect example that you don’t need to know much to get started in commercial laundry.
“I got into this business by throwing mud at the wall to see what stuck, seriously,” he says. “I had no idea what I was doing, and I convince myself often that I’m still in that stage. That’s why I love being around these folks and learning about this stuff. But if you can find a niche in your market, if you’re not looking to scale (large), there are really a lot of (laundry) opportunities that can be very profitable and a very good use of your time and your equipment.”
As Campbell’s number of Wash Around the Clock laundromats grew (he has six now), in 2008, he built out his 6,500-square-foot flagship store and had additional business space next door that he was going to rent to a gym or hair salon.
“I had no aspirations of commercial laundry but this laundromat took off very successfully and I realized pretty quickly I couldn’t sacrifice renting 5,000 square feet to lose parking,” he says.
He watched as personnel from area massage therapists, medical offices and party rental businesses all washed their goods at his laundromat.
“So my distributor and I just basically said, ‘Well, what if we built a commercial laundry in this 5,000 square feet that we have.’ We put in four washers and an ironer, and in the beginning, we didn’t even buy dryers, we just used the laundromat 80-pounders. We rolled the carts back and forth, there was a wall separating (the two sides). And as soon as people heard that we were in the commercial laundry business, they just started calling us.”
His “small boutique commercial laundry,” which he markets as part of his overall business, launders both COG (customer-owned goods) and textile rental.
He warns that providing textile rental services is “very cost-heavy” because you have to purchase and maintain the textile inventory. And this is especially true if you land a big client like Campbell did.
“We had budgeted about $25,000 for inventory, and they grew, they’re actually one of the largest medical marijuana facilities, I think, in North America now. So that $25,000 projection goes to about $125,000 in three months. If you get into the rental business, make sure you’re prepared, even if it’s just a line of credit or something, that if you’re going to commit, you’ll be able to keep up.”
Campbell’s commercial laundry service cleans food-and-beverage, hospitality and healthcare linens for various clients. It’s proven popular with his area’s party rental firms, he says.
“To me, that’s easy business for a laundromat operator if you have a press, because most of those folks aren’t going to make the investment,” he explains. “They’re doing it by hand or steaming it. It’s very labor-intensive, or they’re not pressing at all, which makes their product look really bad, so it’s really a lot of opportunities in the COG side, I think, for a laundromat operator that’s looking to break into the business.”
And depending on the amount of work you’re willing to take on, it can be done without building a commercial facility.
“If you’ve got quality equipment, and you’ve got good dryers and you’ve got good people that can do the work,” he says. “You know, I look at commercial laundry from a self-serve operator vision as just additional turns per day at my laundromat. Instead of the revenue from the card or the coins, it’s how much per pound or how much per piece I’m going to charge.
“If you can take your store from four turns a day to seven turns a day as you pick up 30 or 40, even relatively small, commercial clients who have a weekly need, it’s a really good, solid business. And if you get a salon, or you get a massage parlor, all those folks know each other. … If you’re not going to build out a facility, manage your hours. You know when your times are busy and you know when your times are slow and just staff it accordingly.”
You must evaluate your market, and one of the best ways to do that is by speaking with various businesses in your local community, he suggests.
“Just go talk to them and say, ‘Is this really the best use of your time? Is this really what you want to be doing as a business owner?’ If you find any that say yes, I’ll be shocked. And then you say, ‘How about I take that burden off your plate?’ and that’s how you start.”
Looking back at what he might have done differently as he pursued commercial laundry business, Campbell says he would’ve taken the time to look into training and education.
“I would probably take about a year to invest in some of the training courses offered by some of the associations represented here,” he says. “Plant management, how to run a route, how to understand the software … I can tell you that from the beginning, we grew so fast, organization has been a challenge from day one.”
Miss earlier parts of this article? You can read them here: Part 1 - Part 2
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].