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Write Your Own Coin Laundry Success Story (Part 1)

Bruce Beggs |

Sidestep these common pitfalls on your way to profit and peace of mind

CHICAGO — We all make mistakes. We’re human, after all. And there are some errors that coin laundry store owners are prone to make, especially at times of store conception or the early stages of operation, that could cost them dearly if not avoided or at least addressed.

This month, American Coin-Op sought the counsel of several industry experts to identify the pitfalls to sidestep amongst the components of a typical vended laundry operation.

What’s more, they offer valuable suggestions for how store owners can remain on the path to profit and peace of mind. By following these guidelines, you can write your own success story.

STORE SITE SELECTION

Pitfalls: Not adequately researching a potential location’s demographics; choosing a site based on its rent instead of its quality; choosing a location that is not viable for a laundry business; choosing a site that is not located amongst a good mix of co-tenants.

“I’ve seen too many prospective investors fall ‘in love’ with a particular site or neighborhood, even when the demographics indicate that the location is not ideal for a vended laundry,” says Gary Gauthier, national sales manager of vended laundries for Milnor. “I usually recommend that a careful review of demos for that site be compared to data for successful vended laundries. That’s usually enough to move the investor toward a better direction.”

Location is everything in business, says Chris Brick, national sales manager for Maytag® Commercial Laundry, but it’s not just the physical location of your business that’s important.

“Where are you in the everyday traffic pattern of your customer base? What makes your location a great Laundromat opportunity? Do you have great parking? Does the size of your building afford you adequate space for your customers? Do you have adequate utility services? Do you have exterior walls? Where is the location of your competitor? Are you more convenient to the customer base?”

Brick encourages investors to evaluate 1) the physical location, 2) the building and/or building site, and 3) the proximity to competitors and to customer base. “When a potential store owner evaluates these three components and ranks them individually on a scale from 1 to 10, a good rule of thumb is that each one should score between an 8 and 10 to make this a viable location for a coin store.”

“Accessibility, visibility and parking are for me, I think, the top three in terms of items (desired) around the site,” says John Sabino, chief operating officer, Laundrylux, and former president of Laundry Capital LLC, a company that developed more than 150 Clean Rite Center superstores in 10 states across the country.

“I also think being close to certain other retailers is not really a good idea.” He mentioned bars, nightclubs and drug rehabilitation centers as examples of facilities that attract a clientele who would potentially be in conflict with your customers. “All of those uses wouldn’t link up nicely with a family trying to do its laundry.”

Choosing low rent over the best location available is a mistake that Speed Queen’s Dan Bowe tries to help people avoid. “Rent is important, but it’s a percentage of your gross sales,” says Bowe, national sales manager for the Alliance Laundry Systems brand. “Sometimes, finding (a site that has) the lowest rent that doesn’t have the best visibility, the best ingress/egress, ample parking … you just have to be careful. You want to make sure you have all those ingredients.”

And there are times that a site isn’t suitable for a coin laundry, Bowe says. “Sometimes, the utilities may be too costly to bring in. Sometimes, the sewer may be too far away.”
Craig Kirchner, vice president of sales, marketing, and customer service for Dexter Laundry, says prospective store owners can rely on the advice of distributors or others, but ultimately it’s up to them to “do their homework.”

“Once a site or multiple sites have been picked out to choose from, it’s up to the owner to literally confirm for himself or herself that it’s the right selection,” Kirchner says. “I would recommend that they go at different times of day to look at different traffic patterns to ensure that the people are able to get in and out of the store when they need to.”

STORE DESIGN/LAYOUT

Pitfalls: Thinking that the layout is unimportant; obstructing views into and out of the store; not providing adequate drying capacity based on number of washers; not meeting ADA requirements.

Failing to anticipate and accommodate common customer movements—loading and unloading machines, rolling carts, and folding clean laundry—in a store’s design is “definitely a big miss in terms of providing a good customer experience,” Sabino says.

It’s here where an experienced distributor can prove invaluable, he adds. “Unless you’ve lived through seeing those Saturday and Sunday rushes when people can’t move in the store, you really don’t have a good appreciation for that.”

Brick says one of the most important design aspects to consider is safety.

“Patrons, the bulk of which are female, want to feel safe in every part of the store. That being said, store owners should incorporate numerous, large windows into the store’s design. Also, all aisles should run parallel to the front entrance, allowing for an unobstructed view from the front to the back of the store.”

“I’ve always been a firm believer in high ceilings, a great retail experience, tons of windows in the front, and really giving that feeling of space and freedom while you’re inside, and giving the feeling of action and safety from the outside,” says Sabino.

Any location within the store that sees two-way traffic should have a minimum of 7-foot walkways to ensure uninterrupted traffic flow, according to Brick. And keeping the folding tables out of high-traffic areas will help eliminate bottlenecks.

“The most neglected area that I see with layout and design is folding space, with adequate seating coming in as a close second,” Gauthier says. “These are customer convenience issues that can usually be reconsidered after a review of a variety of store layouts.”

Larger-capacity washers provide more profit per square foot, so you want to encourage more use of your larger machines, Bowe says. “You want to have good consideration of where you’re putting those, as far as visibility and ease of use vs. a lower-profit machine like a top loader.”

A ratio of 1.2 dryer pockets per washer pocket should be the minimum, he adds. “The last thing anyone remembers is drying their clothes. If someone has to wait to dry their clothes, they’re going to remember that.”

If the store is attended, the station should be located toward the front, Bowe says.

Whatever specific design choices are made, they must be in compliance with ADA (Americans with Disabilities Act) regulations, Kirchner says. “Make sure that they have products that are ADA-compliant, restrooms, access into the store, that type of thing.”

PARKING AND ACCESS

Pitfalls: Not providing enough parking spaces in your lot; not providing parking near your store; making it difficult for customers to transport clothes into and out of the store; not meeting ADA requirements.

Speed Queen uses one parking spot for every 300 square feet in its store designs. “And you want (your parking) close to the entrance,” Bowe says. “You don’t want to have parking across the street. You don’t want to have it far away. … You don’t want to have any steps or obstructions.”

Ample parking with easy access to laundry carts is imperative to keep customers happy, says Brick. “Ideally, a store has more than one point of entry and is equipped with automatic doors. In addition to parking, a clean storefront should be free of trash and wide enough for laundry carts and baskets to easily enter and exit. This simplifies a customer’s experience and helps reiterate the owner’s focus on customer satisfaction.”

Bowe prefers having just the one main entrance, for increased security.

Should a customer pull up to the store and find no parking available, they may just continue on their way, says Kirchner.

EQUIPMENT ACQUISITION (EITHER PURCHASE OR LEASE)

Pitfalls: Focusing on upfront cost rather than long-term benefits; not taking advantage of long-term amortization.

Operators often focus on the initial capital cost of equipment instead of their long-term cash flow and profitability potential. “I think that’s a big mistake for a lot of people,” Bowe says. “Machines are going to last 10-plus years, hopefully, and you need to look at reducing expenses, features on equipment that do that, and also features that increase revenue.”

Kirchner favors working with a distributor to learn what makes sense in the store owner’s specific financial situation, whether it be purchase or lease, to finance or pay cash, “whatever it might be.”

“If I had to give one comment to someone, clearly I would look to amortize the loan over the longest period,” says Sabino. “From a cash flow standpoint, to increase the length of the loan gives you a lot more freedom to invest into the store, do additional marketing and, frankly, take more cash home to your family.”

Check back Wednesday 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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