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Where to Start? Tips for Entering the Commercial Laundry Business (Part 2)

Work with small COG accounts first to learn what’s involved

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.

IMAGINE IF YOU WILL...

When the mic was passed to Dixon, general manager of her linen service company, she admitted that not all that long ago, she was sitting in the audience herself, eager to learn.

“In 2017, I sat in this classroom learning how to enter commercial laundry. Five years later, we have a $12 million-a-year, 35,000-square-foot facility. And it’s been quite a ride over the last five years.”

Dixon got her first taste of the textile care business in dry cleaning; her father bought a couple of drycleaning businesses in 2001 that he’s since grown to as many as 20 locations. “So I grew up in dry cleaning and went to college, and didn’t think that dry cleaning was the most exciting thing to go into. So I actually worked in corporate America for quite a while.

“After five, six years, I came back to my dad and said, ‘You know what, this entrepreneurship thing, I’m really interested, I’d love to learn more about dry cleaning.’ And at that point, he said, ‘Great, however, I don’t have any positions for you. I’m not gonna kick anybody out, you know, you’re gonna have to figure something out on your own.’”

After speaking to some vendors in the area, Dixon decided there was opportunity for commercial laundry in the Twin Cities. “So, I decided I was gonna get a washer, a dryer, an ironer, and get out there and sell and see what happened.”

Right about then, a local commercial laundry closed and filed for bankruptcy, leaving Delta Airlines in need of someone to clean its first-class linens, blankets and whatnot.

“They needed someone to do their laundry, so they flew some representatives up to the Twin Cities and they went to eight different laundries, and we decided to throw our hat in the ring.”

She took the reps to what had been a St. Croix Cleaners facility, about 4,000 square feet, devoid of equipment, empty but still dirty.

“It still had the rails on there and all the dust, and we were showing Delta Airlines, ‘Hey, imagine if you will, we’ll put some washers here and dryers here and we’ll turn it into a laundry for you,’ and they said, ‘Yeah, OK. You start tomorrow.’”

She quickly hired 15 workers from the just-closed laundry.

“They knew what they needed to do. A couple of them went to the laundromat that my dad owned and overnight were washing Delta blankets. And then we were renting an ironer from another laundry so that we could put the napkins through the ironer for about two months while we were building out this 4,000-square-foot facility.”

Once it was up and running smoothly, St. Croix Linen starting getting calls from restaurants and hotels looking to become customers. Soon, it was apparent there wasn’t enough room to accommodate that kind of business.

“We moved into a 35,000-square-foot facility in May of 2019. Bought a tunnel, a huge ironer and towel folder, and decided we were going to go big with hotels because that was really where the market was. … So right away, we got three hotels that signed on with us and started growing and then COVID hit. At that time, we were operating seven days a week, two shifts, and completely closed the doors for a couple weeks. Repositioned a little bit. Got some healthcare and were able to help out, make it through the pandemic.”

Pivoting to clean food-and-beverage linen also helped, and that market has since become St. Croix’s largest.

“We still service hotels, we have about eight hotels, and we don’t do any healthcare anymore. And we do still have just a little bit of [customer-owned goods (COG) work] that isn’t hotels. We are continuing to grow and things are looking much better now that we’ve come out of COVID.”

The 2018 acquisition of another laundry company that primarily did party rental work truly helped St. Croix learn how to be a commercial laundry, she says.

“It was all COG, all real small accounts, and it was a wonderful way to start learning how to get into the business,” Dixon says. “And when you start with COG, there’s no real upfront costs other than the equipment, so if you have a laundromat, you have the equipment already, and as you scale and grow, that’s when you have to get more of the specialty equipment.”

Miss Part 1? You can read it HERE.

Check back Thursday for the conclusion!

Tips for Entering the Commercial Laundry Business

(Photo: © GentleGraphix/Depositphotos)

Tips for Entering the Commercial Laundry Business

Kelley Dixon, owner/general manager of St. Croix Linen, St. Paul, Minnesota, listens to an audience member's question during the Clean Show education session on getting into commercial laundry. (Photo: Bruce Beggs)

Have a question or comment? E-mail our editor Bruce Beggs at [email protected].