CHICAGO — American Coin-Op covered a variety of important topics this year. If you happened to miss a story along the way, or you could use a refresher, then you might appreciate a brief recap. Here’s a quick look at just a few of the informative articles presented in 2017.
Retooling in terms of complete renovation most often happens with a store acquisition. It’s not uncommon for a store owner to upgrade his/her existing Laundromat, either a portion or the entire facility.
The state of existing wash/dry equipment, the local competitive landscape and changing demographics are among the factors that might encourage one to retool.
Concerning equipment, it may be either the machinery is no longer sustainable due to increasing maintenance and repair issues, or it’s somewhat outdated when compared to today’s high-efficiency models. Also relatively new to the game is the ability to monetize additional features like a pre-wash or extra rinse.
Installing new washers and dryers offers a natural opening for store owners to increase vend prices to help pay for their investment.
A more modern look attracts more customers, a store can provide additional wash capacity through larger machines, and new equipment controls offer greater store management tools.
All of them work together to streamline the laundry process and enable customers to get in and out of a Laundromat more quickly.
When ordering a cup of coffee, the Starbucks experience is quite different than that of McDonald’s, and that difference is rooted in the customer experience. It’s a nice parallel to our business, says Jim Hohnstein of Martin-Ray Laundry Systems. You can command a premium for your services by focusing on a high-level customer experience.
Be as pliable as when you started. Never stop learning and growing as an owner. Seek out new ideas and ways to give your customers more than just basic tools that wash and dry. A clean store with good lighting is not enhancing the customer experience; these are basic prerequisites to being in this business.
The vended laundry game is trending toward larger equipment, Hohnstein says. If you don’t offer 40-, 60- and 80-pound washer-extractors, your store isn’t giving customers what they want (and you also are missing out on utility savings and profit potential).
A truly exemplary customer experience starts from the first interaction with a store – the front door. Customers are lugging giant bags into stores, and large automatic doors definitely help simplify things for them. Upsize laundry carts and customers will appreciate not having to balance bags and baskets overflowing with laundry on carts too small for their needs.
Print stickers or implement a cart color-coding system that ties to machine capacity to help customers understand how much each machine can hold.
Having a variety of cycle options and modifiers on laundry equipment is a must in delivering a great customer experience, Hohnstein believes.
Greater wash capacity should mean greater dryer capacity as well, and big stacks can enhance customer experience. He suggests installing stacks on platforms to make loading and unloading easier on a customer’s back.
Larger equipment plus larger carts should equal more space overall, so make sure the store is airy and easy to navigate for customers.
As consumers ourselves, ideas are all around us. Look at your grocery store, car dealership, restaurant, etc., and identify little things that make your task easier or make you feel more valued as a customer. Then bring these ideas to your store and adapt them.
While purchasing a coin- or card-operated laundry can be a great investment, when a store comes up for sale in your area, how do you know if acquiring it will be the right move for you?
That’s where due diligence comes in. It’s important to research and analyze the existing business and real estate thoroughly before making the decision to buy or not.
It’s helpful to know the reason someone is selling, says Brad Steinberg, co-president of PWS, a California-based company that says it is the largest broker of existing and new Laundromats in the United States, and it is imperative if the reason is because of changing market conditions (i.e. a new store being built in the area).
“Meeting the seller is very important,” says Larry Larsen, of Laundromat123.com, with more than 30 years of experience in the ownership, management and construction of Laundromats. “If you are an insightful buyer, it might help you perceive the validity of the statements of income and condition provided by the broker. A meeting with the seller will also provide valuable additional information on the current manner of operation.”
Local area market and demographic research is an important part of the process.
“The most important issues to review are total population, percentage of renters, age of the surrounding buildings, and ethnic makeup of the population,” says Larsen.
“When buying an existing store, demographics are not as important as when building new, with the exception of knowing if there has been any shift in population that would affect the business,” says John Vassiliades, CEO of Chicago-based J. Vassiliades & Co. and a licensed business and real estate broker responsible for brokering the sales of over 1,000 coin laundries.
How closely should a prospective owner examine the exterior, interior and physical layout of the business for sale?
“I believe the most important factors of a Laundromat’s success are location and the lease,” says Steinberg. “If you can purchase a good location with a good lease, someone can always replace the equipment and be a better operator than the previous owner. Obviously, if a store has a tired interior, bad layout or old equipment, the purchase price should be reduced accordingly, but those are not deal breakers.”
“The buyer should be examining all of that, especially the machines themselves: washers, dryers, water heaters, especially the HVAC units,” says Vassiliades. “I’ve always encouraged (clients) to have experts come in and give their opinion on the condition of the equipment.”
And what financials should a prospective owner request from the current owner and review before making an offer?
“Ideally, three years of tax returns if they’ve got it, P&L (profit and loss) statements if they don’t,” Vassiliades says. “I know some banks request balance sheets for three years. In addition to that, I would request at least 12 months of actual utility bills and a copy of the lease. Those are the basics, but you could always ask for more.”
The longer the glimpse into the past, the better the understanding of the business, Larsen says: “You can determine trends in income and increases in expenses by viewing the history.”
“Twenty-four months of information is helpful, but you should get 12 months at a minimum,” says Steinberg. “It should include collection reports, tax returns, utility bills, attendant labor payments and schedules, vending product expenses, repair bills, parts bills and any other applicable expenses.”
Getting the most from your attendant starts at the very beginning when you begin the hiring process and continues for as long as they work for you, says Brian Brunckhorst, the owner of six Laundromats in the San Francisco Bay area.
There are lots of people looking for a job, but finding someone who has the qualities that you want representing you and your business and who will actually work is not so easy. The first step to keeping a good employee is to make sure you hire one.
So, what traits make a good laundry attendant? Brunckhorst looks for someone who is trainable/follows directions; honest; good work ethic/hard worker; bilingual; friendly/smiles a lot; outgoing; bubbly personality; shows up on time/reliable; attention to detail; and is a problem-solver.
Once you hire an attendant, there are several things that you must do if you want to keep them:
1. Give them clear job expectations and goals. In Brunckhorst’s company, there are three main components to the attendant’s job: customer service, store cleanliness, and wash-and-fold processing. Additional responsibilities include maintaining good communication with store supervisor, being dependable, and having fun.
2. Provide them with some resources, the first being an employee manual or handbook. A good handbook should contain things like a detailed job description, operating instructions for each type of washer and dryer, customer service policy, daily duties and employee benefits. A quick reference guide/duties checklist is also helpful.
3. After providing the resources to make your attendants successful, you need to provide them training—lots of training! Brunckhorst goes over step-by-step the procedures for cleaning the store, maintaining the equipment, processing wash-and-fold orders, handling the money and selling items over the counter. Another area to focus on is customer service skills. Lastly, train them on emergency procedures.
4. Once your employees are trained, you need to enable them for success. Never forget that your people are your business. For 90%-plus of the hours you’re open, the fate of your business rests with the lowest wage earner in your organization. Empower them by giving them predetermined decision spending limits and support their decisions. Listen to their feedback and incorporate good ideas into your company procedures. Allow them the ability to swap schedules, following your guidelines.
For more stories on vended laundry ownership and management, check out the department tabs atop our home page here at AmericanCoinOp.com.