American Coin-Op - April 2012

INSIDE: APRIL 2012

INSIDE: JULY 2005

COIN-OP 101: BECOMING A MULTI-STORE OWNER

GROW YOUR BUSINESS ONE LITTLE IDEA AT A TIME

TOP LOADERS: FILLING A NEED IN SELF-SERVICE LAUNDRIES

COIN-OP 101: MULTI-STORE OWNERSHIP

Distributor Sonny Rogalla, Pittsburgh Laundry Systems, says if you’re considering opening a second store, it’s important to go back to the basics and look at everything from location and equipment mix to store naming.

MAYFLOWER DOES RIGHT BY ITS CUSTOMERS

At Mayflower Laundry, located in a former shopping plaza in Plymouth, Mass., it’s all about providing good customer service, says owner Neil King.

PRODUCT SHOWCASE: TOP LOADERS

Top loaders continue to play a role in many stores, our annual State of the Industry survey shows. Read about the latest top-loader energy-efficiency innovations.

STATE OF THE INDUSTRY SURVEY

How do you think your self-service laundry business compared to others last year? How does your current pricing stack up? These and many other questions can be answered from the results of our annual State of the Industry survey.

COLUMNS

28 GROW YOUR BUSINESS ONE LITTLE IDEA AT A TIME

Little changes over time can make the difference, says columnist Howard Scott, who offers up a number of little ideas—hanging a purple neon sign, offering a wash-dry-fold deal, giving your washers names—for growing your business.

hose and

long-lasting energy savings in

5.99% FIXED-rate financing. Terms up to 96 months.*

*Subject to credit approval and individual’s credit worthiness. Contact your distributor for details.

Rebates up to $600 on select multi-load washers and dryers.*

*Rebate amounts vary by product and model types. Rebate effective April 1–June 15, 2012. Contact your distributor for details.

The closer you look at Maytag ® equipment, the more resourceful thinking you’ll see. Take the innovative TurboWash™ System, for instance, which allows our MFR30 washer to deliver impressive cleaning power—along with the potential to cut your water use by over 60%.* Add to that extra-large capacity that helps you turn more profits per load, plus our 5-year warranty** onevery single part. Visit mclaundry.com for digital brochures, or for more information, visit our website at maytagcommerciallaundry.com or call 800-662-3587.

Every little hinge,

housing is engineered with

mind.

VIEWPOINT

SURVEY SAYS: MIXED BAG

STATE OF THE INDUSTRY

Benchmarking—comparing your business against certain industry standards, as well as your competitors—is a tried-and-true tool. But you need solid information to make the exercise worthwhile. Our annual State of the Industry survey provides the kinds of data and statistics that you can use to bolster your operation. What percentage of store owners saw their coin business increase last year? What’s the most popular price for a 30-pound washer? How many operators have purchased or are planning to purchase new equipment this year? Our analysis begins on page 10.

BECOMING A MULTI-STORE OWNER

Distributor Sonny Rogalla warns that just because you’ve successfully opened one store doesn’t mean you can completely replicate it when opening a second. In this month’s Coin-Op 101, Rogalla walks readers through the steps he suggests store owners take to get back to basics and look at the same issues—location, equipment mix, store naming and more—they did the first time around.

LITTLE IDEAS

Store owners sometimes look at the big picture when the little touches are what can truly make the difference. Columnist Howard Scott thumbs through his files to share some little ideas he’s seen in different Laundromats that aren’t generally used, little ideas told to him by others, and even little ideas that popped into his head.

AND THERE’S MORE...

The Multi-housing Laundry Association is preparing for its Spring Educational Conference in Florida. Sudz Yur Dudz has positioned itself for success in its Arizona neighborhood. Mayflower Laundry, a Massachusetts store, is all about providing good customer service and maximizing convenience.

And there’s more in this springtime issue. I hope you enjoy searching through our mixed bag of goodies.

Bruce Beggs Editorial Director

EDITORIAL

Charles Thompson, Publisher

E-mail: cthompson@ americantrademagazines.com

Phone: 312-361-1680

Bruce Beggs, Editorial Director

E-mail: bbeggs@ americantrademagazines.com

Phone: 312-361-1683

Roger Napiwocki, Production Manager

Jean Teller, Contributing Editor

Nathan Frerichs, Digital Media Director

E-mail: nfrerichs@ americantrademagazines.com

Phone: 312-361-1681

ADVERTISING

Donald Feinstein, Natl. Sales Director

E-mail: dfeinstein@ americantrademagazines.com

Phone: 312-361-1682

OFFICE INFORMATION

Main: 312-361-1700

Fax: 312-361-1685

SUBSCRIPTIONS

630-739-0600

www.AmericanCoinOp.com

American Coin-Op (ISSN 0092-2811) is published monthly except Nov/Dec combined. Subscription prices, payment in advance: U.S. and Possessions, 1 year $39.00; 2 years $73.00. Foreign, 1 year $89.00; 2 years $166.00. Single copies $7.00 for U.S. and Possessions, $14.00 for all other countries. Published by American Trade Magazines LLC, 566 West Lake Street, Suite 420, Chicago, IL 60661. Periodicals postage paid at Chicago, IL and at additional mailing offices.

POSTMASTER, Send changes of address and form 3579 to American Coin-Op, Subscription Dept., 440 Quadrangle Drive, Suite E, Bolingbrook, IL 60440. Volume 53, number 4. Editorial, executive and advertising offices are at 566 West Lake Street, Suite 420, Chicago, IL 60661. Charles Thompson, President and Publisher. American Coin-Op is distributed selectively to owners, operators and managers of chain and individually owned coin-operated laundry establishments in the United States. No material appearing in American Coin-Op may be reprinted without written permission. The publisher reserves the right to reject any advertising for any reason.

© Copyright AMERICAN TRADE MAGAZINES LLC, 2012. Printed in U.S.A.

Bruce Beggs

INDUSTRY IMAGE NEEDS IMPROVEMENT, SAY NEARLY HALF OF RESPONDENTS

Majority believe sprucing up of stores would be best thing to happen to industry in 2012

CHICAGO — The self-service laundry industry has some work to do on its image, based on the results of March’s AmericanCoinOp.com Wire survey.

Nearly half of the respondents to the unscientific survey— 47.4%—don’t believe the self-service laundry industry presents a good image. Roughly 26% do believe the industry presents a good image, and the remaining 26.3% are unsure.

Sprucing up of stores by their operators would be the best thing to happen to the industry in 2012, according to 50% of respondents. Another 27.8% believe having fewer stores would be best. Roughly 17% think implementing industrywide price hikes would be the best thing that could happen.

As far as naming the next major change in this industry, 47.4% of respondents believe there will be no major changes in the next several years. Technology will play a greater role in their businesses, according to 31.6% of respondents.

Approximately 26% say that smaller laundries will gradually die out, while 15.8% believe that laundries will offer a broader array of services. None of the respondents see the emergence of a strong franchise operation.

Respondents also had the opportunity to comment on what they expect from their business in 2012. Several comments related to increasing growth (at least two operators hope for 10% increases) while other operators just hope they can weather the economic storm and withstand what they believe will be a tough year. One operator wants to improve his/her customer service.

The Wire survey presents a snapshot of readers’ viewpoints at a particular moment, but it should not be considered scientific. Subscribers to Wire e-mails—distributed twice weekly— are invited to take a brief industry survey anonymously online each month.

All self-service laundry owners and operators are encouraged to participate, as a greater number of responses will help to better define operator opinions and industry trends. ■

Anne Cobb

How

Many

Coin Laundries Has Your Insurance Agent Handled?

One or Two? Three?

I’ve personally handled insurance for hundreds of coin laundries! I’ve already dealt with most any issue your business is likely to face. If you have any questions about insuring coin laundries, I can and will give you a prompt, clear answer. Skeptical? Call me with a question and find out for yourself.

There’s more: I’m just one member of a team of experts at NIE. The entire organization has been handling fabricare insurance full time since 1915! We are the only property & casualty insurer devoted 100% to coin laundries and dry cleaners.

Quote Request

Fabricare Insurance Specialist

Cobb@nie.biz

DEDICATED TO SETTING N

Let’s talk about expectations. The unwavering ability to get it right time and time again. Some people would say you can rely on to make your life easier and more productive. We believe in taking what’s there and making it better,

By Bruce Beggs, Editorial Director

Operators Soldier On Amidst Lagging Economy, Increasing Costs

45% REPORT BUSINESS INCREASED IN 2011

CHICAGO — How do you think your self-service laundry business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with others?

American Coin-Op’s annual State of the Industry survey offers you the opportunity to compare your operation to others in the industry. It focuses on 2011/2012 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

In instances where respondents were asked about 2011 business results, they were given the opportunity to state that their results were up, down or unchanged. This is a slight departure from previous surveys that asked only if their business results were up or down. Keep this in mind as you are making comparisons to previous years’ polls.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores. Some percentages may not equal 100% due to rounding.

2011 BUSINESS VS. 2010 BUSINESS

In 2011, nearly 45% of respondents saw their overall coin laundry business increase from 2010.

Survey Says...

More specifically, 44.8% of operators reported an increase in business (gross dollar volume) in 2011 compared to 2010. In last year’s survey, 42% reported an increase in business, and two years ago, 40.2% reported a bump in business.

The average 2011 business increase was 11.5%, up from 10.8% last year. Other past average business increases were 7.9% (2009), 14% (2008) and 12.2% (2007).

Here’s a closer look at the 2011 business increases (the figures relate to those reporting increases, not all respondents):

• Operators with a business increase of less than 10%: 40.4%;

• Operators with a business increase of 10-14%: 38.5%; and

• Operators with a business increase of 15% or greater: 21.2%.

■ Average business increase in 2011 was 11.5%

The largest single increase in 2011 was reported to be 50%.

Approximately 35% of respondents saw their business decrease (in gross dollar volume) last year. In our survey of 2010 business, 58% saw a drop in business. The percentage was 59.8% in 2009.

The average 2011 business decrease was 10.2%, down a bit from last year’s figure (11.2%). Previous averages were 13.7% in 2009, 14.3% in 2008 and 13.2% in 2007.

Were the losses consistent last year or did they vary? Here’s a closer look at the 2011 business decreases:

• Operators experiencing a business reduction of less than 10%: 56.1%;

• Operators experiencing a business reduction of 10 to 14%: 17.1%; and

• Operators experiencing a business reduction of 15% or greater: 26.8%.

The largest single decrease in 2011 was reported to be 50%.

Approximately 20% of operators reported their 2011 business was unchanged compared to their 2010 results.

Overall, these results continue to reflect year-to-year improvement, on average. The number of operators reporting an increase

in business was up slightly from last year, as was the average business increase.

The average business decrease (10.2%) was a percentage point lower than the prior year. In addition, the number of operators suffering a large business reduction (15% or greater) shrank from 31.7% in 2010 to 26.8% in 2011.

DROP-OFF-SERVICE BUSINESS

In a culture built on saving time and intent on finding ways to free up that precious commodity, drop-off service would look to be a popular choice for self-service laundry customers. But do the numbers bear that out?

Did drop-off service improve in 2011 or do customers still consider it a bit of a luxury?

Approximately 32% of respondents reported that drop-off-service business (gross dollar volume) increased in 2011. For 2010, approximately 47% reported business increases.

The average drop-off-service business increase was 17.3%, four points higher than 2010’s increase of 13.3%. It should be noted that a handful of respondents

Survey Says...

THOUSANDSIN REBATES. FINANCINGAT6.99%.

■ 2011: 44.6% purchased at least one piece of equipment (washer, dryer, water heater, vender or changer) last year

reported an increase of more than 20%.

Roughly 24% saw a decrease in drop-off-service business. That is much lower than in 2010 (53%), but that could be attributed at least in part to surveytakers’ ability to list their dropoff-service business as being unchanged.

The average decrease was 18.1%, down a bit from 2010’s figure (18.8%). In 2009, the average drop-off-service decrease was 24.2%.

Nearly 45% of respondents said their 2011 drop-off-service business was unchanged from 2010.

Two-thirds of respondents offer some type of drycleaning service. Only 17.5% reported business increases. The average business increase was 10.4%. The average business decrease was 15.1%.

VENDING RESULTS

Roughly 35% of the respondents had an increase in vending sales in 2011, slightly lower than 2010’s reported one-third. Approximately 31% saw their vending sales decrease in 2011, and 34.2% saw vending sales remain unchanged.

The average vending gain was 11.2%, up a bit from last year’s figure (9.2%).

The average decrease in vending business was 11%, compared to 12% in 2010.

WASHER PRICES

Respondents were asked about their current washer prices, and if they increased prices this year or planned on doing so by the end of the year.

Eighty percent of respondents offer top loaders. The price range for a top-load wash is $1 to $3.50. The most expensive top-load wash was the same price last year.

Here are the most popular top-load prices followed by the percentages of respondents using them:

1. $2 (25.8%)

2. $1.75 (20.6%)

3. $1.50 and $2.25 (14.4%-tie)

5. $2.50 (11.3%)

The biggest change is that $2 jumped from No. 3 last year to No. 1 this year. This moved last year’s No. 1 $1.75 into No. 2.

Tying for third were $1.50 and $2.25.

A handful of operators continue to charge $3 or more for a top-load wash. This is the second straight year that there have been multiple prices topping $3 reported in the survey.

The most popular prices for some of the small front loaders are:

Survey Says...

• 18-pound washers: $2.50

• 20-pound washers: $2.50

• 25-pound washers: $3

The lowest price in the above grouping is $1.75 (20-pound washer) and the highest price is $5 (also a 20-pound washer). Overall, this year’s most popular small-front-loader prices are a bit more expensive than last year’s prices.

The price range for a 30pound wash is $2 to $5.50. Here are the most popular 30pound prices, along with the percentages of respondents using them:

1. $3.50 (34.8%)

2. $4 (10.9%)

3. $3, $3.25, $4.25 (8.7%-tie)

The most popular price for a 35-pound wash is $3.50, followed closely by $4.50. The price range for a 35-pound wash is $3.25 to $5.25.

The most popular price for a 40-pound wash is $4.50, but $4 and $5 aren’t far behind. The most popular 50-pound wash price is $5.50, followed closely by $5.

The most popular price for a 60-pound wash is $6. The price range for an 80-pound wash is $6.25 to $13, with $8 being the most popular price.

The most popular prices for the largest front loaders (125 pounds) are $14.99 to $15.50.

Because the groups of operators who respond to our survey is different each year, prices tend to vary. But the survey consistently has shown that operators offer a wide variety of front loaders (prices for 20 different capacities were logged this year) with a broad price range.

DRYER PRICES

Operators have historically tended to shy away from raising dryer prices, choosing instead to focus on washer price hikes. The average store owner continues to operate under the belief that customers will be upset by tinkered-with dryer prices but less apt to complain about washer price hikes.

Here are the most popular dryer prices, followed by the percentage of respondents using them:

1. 25 cents/6 minutes (23.1%)

2. 25 cents/8 minutes (18.5%)

Survey Says...

■ Operator Outlook: 2012

47.5% expect business to be better in 2012

41.7% expect business to be about the same as 2011

10.8% expect business to decrease in 2012

■ The most popular price for drop-off service is $1 per pound

3. 25 cents/5 minutes (16.7%)

4. 25 cents/7 minutes (13.9%)

5. 25 cents/10 minutes (8.3%)

The No. 1 price remains the same as last year, but a smaller percentage of operators is using it. Seven minutes of drying time dropped from No. 2 last year to No. 4 this year, and the 25-for-8 and 25-for-5 prices each moved up a spot from last year. The 25-for-10 price—once an industry staple— remained fifth at practically the same percentage as last year.

As usual, there were a wide variety of dryer prices reported. The most expensive (and longest cycle) was $1.75 for 35 minutes.

A handful of respondents reported they offer free dry in their stores.

DROP-OFF SERVICE PRICING

Drop-off-service pricing ranges from 75 cents to $2 per pound. Here are the most popular drop-off-service prices (per pound), followed by the percentage of respondents using them:

1. $1 (34.9%)

2. $1.20 and $1.25 (10.8%-tie)

4. 90 cents (6%)

Survey Says...

raised washer and/or dryer prices in 2012 or intend to do so before year’s end.

Approximately 50% say they have raised washer prices this year or intend to raise prices by the end of the year. Roughly 31% of respondents say they are not planning to raise washer prices this year, and 19% are undecided if they are going to hike prices in 2012.

Regarding dryer prices, 17.8% have raised dryer prices this year or intend to do so later in the year. Roughly 64% don’t plan to hike dryer prices this year, and 17.8% are undecided about raising their prices.

5. $1.10 (4.8%)

The drop-off-service prices remain similar to 2011 prices, and there are a greater variety of prices charged. There were 21 different prices charged per pound in the responses to our survey.

Slightly more than two-thirds of the respondents offer drop-off service, which is down from last year’s survey.

PRICE HIKES?

We asked operators if they have already

In 2011, only 34% said they raised washer prices or intended to do so by the end of that year, and 13% said they raised dryer prices or intended to do so before that year’s end.

ADDING EQUIPMENT IN 2011

Approximately 45% of the respondents purchased at least one piece of equipment (washer, dryer, water heater, vender or changer) in 2011. In 2010, that figure was 47%.

Here’s a breakdown of 2011 purchases:

■ The most popular dryer price is 25 cents/6 minutes

• 23.6% of respondents purchased at least one top loader. The average purchase was 17.1 machines (it should be noted that this statistic includes a single operator’s reported purchase of 97 machines; when excluding that operator, the average purchase was 9.1 machines).

• 28.9% of respondents purchased at least one front loader (a breakdown by capacity follows below).

• 12.4% purchased at least one dryer (regular or stacked). The average purchase was 11.3 machines (it should be noted that this statistic includes a single operator’s reported purchase of 97 machines; when excluding that operator, the average purchase was 5.1 machines). And we break it down further by frontload wash capacity:

• 42.9% purchased at least one machine with a capacity up to 25 pounds. The average purchase was 8.9 machines.

• 48.6% bought at least one machine with a capacity of 25 to 50 pounds. The average purchase was 4.2 machines.

• 37.1% purchased at least one machine with a capacity of more than 50 pounds. The average purchase was 1.8 machines. (Editor’s note: Some respondents didn’t identify machine sizes, so the front-loader breakdown doesn’t include their purchases. Also, the percentages do not total 100% because some buyers purchased equipment in multiple capacity categories.)

SHOPPING IN 2012

Respondents were asked if they have

bought, or plan on buying, any new machinery this year. Approximately 36% intend to add something (washer, dryer, water heater, vender or changer) to their mix, or already have done so. Last year, this figure was 47%.

• 6.6% of respondents have purchased or plan to purchase a new top loader this year. The average purchase is (or will be) 10.4 machines.

• 21.5% have purchased or plan to purchase a new front loader this year. (A breakdown by capacity follows below.)

• 14% plan on buying, or have already bought, a dryer in 2012. The average purchase is (or will be) 7.0 machines. And we break things down further by front-load wash capacity:

• 34.6% purchased or plan to purchase at least one machine with a capacity up to 25 pounds. The average purchase was 6.0 machines.

• 30.8% bought at least one machine with a capacity of 25 to 50 pounds. The average purchase was 4.1 machines.

• 23.1% purchased at least one machine with a capacity of more than 50 pounds. The average purchase was 2.5 machines. (Editor’s note: Some respondents didn’t identify machine sizes, so the front-loader breakdown doesn’t include their purchases. Also, the percentages do not total 100% because some buyers purchased equipment in multiple capacity categories.)

Survey Says...

Survey Says...

WHAT SEEMS TO BE THE TROUBLE HERE?

What problems cause you the most grief? Here are the top-five industry problems:

1. High cost of utilities

2. Dealing with employees

3. A lack of customers

4. Poor economy

5. Equipment maintenance/repair issues Gone from the top five is rent, although it did pop up on a number of surveys.

TURNS PER DAY

The average turns per day for top loaders are 3.0, up slightly from last year (2.9). The average turns per day for a front loader is 3.8, also up from last year (3.4).

UTILITIES COST

We asked operators about their utilities cost (as a percentage of gross). The responses ranged from 5.6% to 50%. The most popular response is 25%, followed by 20%. Operators are paying an average of 24.1% for utilities (as a percentage of gross).

2012 BUSINESS FORECAST

Slightly less than half of the respondents (47.5%) expect their 2012 business to be better than it was in 2011. Approximately 42% expect business to be about the same this year, and 10.8% expect their business to not perform as well this year as it did in 2011.

Want to track the coin laundry business month to month? Check out our StatShot reports, available exclusively on American CoinOp.com! ■

■ Average utilities cost (% of gross) is 24.1%

Equipment Show Spring

NEW HIGH EFFICIENCY EQUIPMENT ON DISPLAY

DEXTER EXPRESS WASHERS & DRYERS

NATCO SUPER E WHIRLPOOL WASHERS

FACTORY REPRESENTATIVES ON SITE SPECIAL PRIZES AND GIVE AWAYS

S

udz Yur Dudz positions itself for success

CHINO VALLEY, Ariz. — It’s been more than two years since Heavenly Graham opened Sudz Yur Dudz. Like many Laundromat owners, Graham opened her store while pursuing another career. She approached the investment through careful planning and research. She chose a convenient and well-visited area in the Chino Valley shopping center, with favorable foot traffic.

With the location secured, Graham needed to determine which machinery would be best for her customers and her bottom line. She chose Pellerin Milnor and, through the guidance of local dealer Laundry and Cleaners Equipment Co., elected to equip the store with Milnor’s coin-operated washers and high-efficiency dryers.

In order to get financing, Graham submitted a comprehensive business plan to her bank, laying out strategies to create a positive cash flow. “The community rallied in support of a new Laundromat,” she said.

“Our employees are professional, helpful and friendly, creating an excellent reputation, which will contribute to long-term returning customers.”

Using Milnor Capital to finance the equipment helped reduce her terms and keep more funds for operational expenses.

Sudz Yur Dudz is located across Highway 89 from a senior mobile home park; many of the park’s residents rely on her store for their laundry services.

Four different machine capacities offer them and other Sudz Yur Dudz customers flexibility in choosing the right machinery based on their needs.

With approximately 1,500 square feet of retail space, there is plenty of room to wash, dry and fold comfortably.

With only one other coin store in the area, Sudz Yur Dudz has positioned itself for success in this market. It recently began offering commercial laundry services during off-hours to restaurants, a car wash, a mid-size hotel and the local Humane Society to fully utilize its equipment. ■

Multi-housing laundry event focuses on workforce management, increasing profits

The 2012 Spring Educational Conference of the Multihousing Laundry Association (MLA) will focus on increasing profits through business cycle changes; interviewing, hiring and evaluating employees; and the political picture of 2012. Also, the group will bring back its popular route operator roundtable discussion. The Ritz-Carlton Fort Lauderdale (Fla.) will play host to the event on April 22-24. Three educational sessions are scheduled in addition to MLA committee meetings, networking opportunities, and more. Sessions on the tentative agenda include:

• The Intersection of Politics and Policy, by Ron Brownstein, National Journal Group. A two-time Pulitzer Prize finalist, Brownstein explains with lucid precision the complexities of American politics. He appears regularly on MSNBC news programs and has served as a regular panelist on Face the Nation

• Talent Acquisition and Retention, by Deidre Siegel, PEAR™ Core Solutions. She

is founder and CEO of an outsourced, human resources management firm that provides core competencies in behavioral analytics for individuals and in the workplace, talent acquisition strategies, and all levels of human resource support in areas of legal compliance and organizational development pertaining to policies, procedures, process, and people.

Beaulieu co-authored Make Your Move, a book on how to increase profits through business cycle changes. He is president of the Institute for Trend Research, principal and managing partner of ITR Capital Partners, and an active member of ITR’s Investment Committee.

Beaulieu has consulted with companies throughout the United States, Europe and Japan. His firm’s accuracy rate and unique position—with more than 60 years of calls throughout every major historic economic turning point—as well as his extensive understanding of business cycles and the ability to explain the implications makes his presentation unique, MLA says.

Her company has worked with teams in many organizations across a variety of industries to help them understand their unique business culture in a strategic manner, MLA says, and use this knowledge of corporate dynamics to remain in growth mode perpetually.

• Increasing Profits through Business Cycle Changes, by Alan Beaulieu, ITR Capital Partners.

The reservation deadline at the host hotel has passed, but rooms may still be available. Call 800-542-8680 for information.

MLA membership entitles each member company to two complimentary registrations. Additional registrants or guests may attend for a fee set to cover the cost of food, beverages and speaker expenses. To learn how to register, call 800-380-3652 or e-mail nshore@mla-online.com. ■

Photos courtesy Pellerin Milnor Corp.

Expanding Your Business:

HOW TO BECOME A

MULTI-STORE OWNER

Congratulations, you’re a successful laundry owner. You have a great location, a solid customer base and well-maintained machines—but now what? It may be time to look at expanding your business and opening a second store.

By now, you know the basics of running a laundry business. Unfortunately, a complete replication of your first store may not make for a successful second store. It is important to go back to the basics and look at everything from location to equipment mix and store naming.

LOCATION

Here’s a challenge for you: don’t just find a location as good as your first one, find one better. Understand that this is no easy task and will require lots of time and research.

The first thing you should consider when looking for a location is how far away from your original store your second one should be. Carve out an area of no more than an eight-mile radius from your original store and use that as your market. Having your stores in close proximity— no more than 45 minutes from each other—allows you to easily move between stores. Also, if your stores are all close together, it can be a great way to corner the market from your competition.

Now it’s time to talk with your distributor. Since you already have a successful store, you most likely are already working with an experienced distributor. Make sure to continue to cultivate that relationship, as it can be a great benefit when looking to purchase an existing store or build a new store.

Distributors typically have information on existing Laundromats coming up for sale and will approach you to judge your interest. The distributor can easily identify whether this laundry is a potential good investment, knowing the performance and location of the store.

Rehabbing a store has its pros and cons, but can make a great second store if proper due diligence is done. A benefit to choosing a store to rehab is that utility company charges and codes are more likely to be grandfathered in, meaning you will not have to deal with the hassle of obtaining multiple permits from the city and retooling plumbing or electricity to meet building codes. This varies between municipalities, so make sure to ask your distributor before assuming this is the case.

If there are no stores for sale in your target area, it’s time to start scouting other possible locations. Get in your car. Learn about your surrounding neighborhood. Look for areas where there are many apartments or maybe even a college campus.

Once you’ve identified an area, it’s time to consult with your distributor. Your distributor will be able to pull detailed demographic reports that will be able to provide you with an idea of the surrounding population near the proposed location. If the demographics look favorable, it may be time to buy the land or storefront and start your second store.

ADVANCED CONTROL OPTIONS

Whether rehabbing a store or building one from the ground up, it’s time to rely on what you’ve learned from your first store. You already know what works—now it’s time to make it even better. Look at the machines your distributor has to offer; there are probably new advancements since you last purchased equipment. It may also be time to look at investing in advanced controls if your previous store doesn’t have them; these controls can be a great resource for multi-store owners.

Certain manufacturers produce controls that allow an operator to program a machine right from their PDA. With the control, you can alter the time-of-day pricing and retrieve audit data right from the palm of your hand. Reports pulled can detail how each machine performed throughout the day. If a machine is taking too long to drain or is not filling with water to the appropriate level, the report will show this. Without these reports, it may take days or weeks to catch problems like these. In conclusion, these reports help prevent wasted energy and water.

Specific controls can give owners the option of choosing from up to 30 water levels, which can save thousands of dollars a year in water and energy savings when compared to older machines without advanced controls. Customers can benefit from having up to 24 cycle selections with these controls, keeping them happy and in turn giving your store a good reputation for being technologically advanced.

THE INVESTMENT

Although the rewards and return on investment can be great from owning multiple stores, the initial investment

Sonny Rogalla

COIN-OP 101

for a second store is not inexpensive. It’s important to work with your distributor and commercial laundry machine manufacturer to develop a financing plan that is suitable to your needs. Some commercial laundry manufacturers will allow you to finance directly through them, which streamlines the financial process.

Financing through a laundry manufacturer is far better than using a bank. Manufacturers not only understand the industry better than anyone else, but can also tailor a financial solution that meets an individual laundry owner’s and/or facility manager’s needs.

Choosing a financial service provider that is unfamiliar with the commercial laundry industry can lead to unnecessary risks and costs, including overpaying for services, hidden fees, slower response to time-sensitive opportunities, and limitations on the long-term success of the business.

Another financial area to consider is the cost of employees in your new store. Many stores in the Pittsburgh area are unattended, for example, but the trend is moving toward attended stores. Customers want to be able to interact with someone when they have a problem. This is a great benefit for customers who want face-to-face interaction and for you, having the peace of mind of someone always being on-site to deal with any issues that may arise. If you do choose to open an attended store, you will need to factor in this additional cost.

If looking at an attended store, I would suggest a credit/debit card store. Although the upfront investment of a card system is more than a traditional coin system, the ROI down the line may be higher. Along with that, card systems save busy multi-store owners time since they do not have to empty coin boxes regularly, or make multiple trips to the bank on a weekly basis.

FINISHING TOUCHES

After you have all your logistics figured out, it’s time to name your store. I suggest that multi-store owners keep the same type of name for each store. Customers will make the connection between your stores; if you’re already known for running one successful business, why waste time rebuilding your reputation?

Throughout the whole process of becoming a multi-store owner, it is important to have confidence in your distributor and your equipment manufacturer. They will be your go-to source during this transition and before you know it, you could be opening your third, fourth or fifth store! ■

Sonny Rogalla is the owner of Pittsburgh Laundry Systems, a Huebsch distributor in Pittsburgh, with services in western Pennsylvania, as well as northern West Virginia, western New York and eastern Ohio. He can be reached at 412-351-4500 or by e-mail at sonny@pittsburghlaundry.com.

GROW YOUR BUSINESS ONE LITTLE IDEA AT A TIME

Purple Neon Sign? Wash-Dry-Fold Deal? Name Your Machines?

Just like your business grows one customer at a time, so you improve your operation by implementing one little idea after another. In time, your business becomes a different entity. It is little changes over time that makes the difference. Here, then, are a number of little ideas I’ve seen in different Laundromats that aren’t generally used, or little ideas told to me by others, or even little ideas that popped into my head.

Hang a Purple Neon Sign in Your Front Window

Nothing attracts attention quite like purple neon. The sign could say “Open 6 to Midnight” or “We Clean Your Clothes” or simply “Laundromat.” Passers-by will take notice, and the identification could result in new customers.

Put a Sandwich Board Sign on Your Front Sidewalk

Have it professionally made. Offer a feature or a service or a price break. Better yet, put a rail on the sides of your sandwich board so ads can be added and removed at will. People walking by will take notice. You never know when this might mean something.

Announce That You Offer High-Quality Equipment

Whenever you purchase some new equipment, put up a sign in your front window that reads “New Washers/Dryers” and “State-of-the-Art Equipment.”

One of the most common complaints about Laundromats is malfunctioning equipment. Coins get stuck, machines stops working, dryers have no heat, and washers don’t rotate clothes, that sort of thing. So, if you can become known as an operator who keeps his equipment in fighting trim, replacing older models regularly, this will give you an advantage in the market. The front-window sign reinforces that impression.

Place a Wooden Bench Out Front

Give your customers a comfortable place to sit while waiting for their laundry to finish. Who knows, maybe two strangers will strike up a conversation. Maybe even people will become…friends. Laugh if you will, but who among us has not walked into a Laundromat with the hope of meeting someone special and finding romance. It is possible in such an environment because it’s hard to put on airs when you are doing a mundane task. I submit that if self-service laundries could further this image, they’d boost their patronage by 50%.

But whatever, a long bench out front is a nice place to wait on a mild, sunny day.

Sell Three Sizes of Laundry Bags

Laundromats that don’t sell laundry bags are missing a sales opportunity. Most Laundromats sell only one size, but different families have different needs. So, sell three sizes—at varying prices of, say, $6, $8 and $10— and win extra business.

Offer a Deal for Wash-Dry-Fold Service

Most “Laundromateurs” charge a per-pound price— say $1 per pound. The customer does 15 pounds and pays $15. But how about incentivizing the offer? The first 8 pounds will cost the customer $8, and each additional pound will cost 69 cents (with a minimum order of 8 pounds). That way, the customer feels he/she is getting a deal. The same 15pound order will cost $12.83 (8 pounds X $1 + 7 pounds X 69 cents). You’re losing $2 on this sale, but you will gain more total business.

For one thing, the customer will be happy to save money (in his/her mind) and will give you more laundry in future orders (“after all, it’s only 69 cents a pound”).

Whenever you buy some new equipment, put up a sign in your front window to announce this.

Howard Scott

Photo:© iStockphoto/Don Bayley

Customers who haven’t tried your wash-dry-fold service will say, “What the heck, I might as well use their service instead of wasting my time here.” The loss in unit-sale dollars will result in total greater revenue. That is always the way sales incentives work.

Hang a Large Clock in Your Store

Sure, most people have cell phones and can just look at their gadget of choice to see the time. But not all of your customers have them. Why not make it easier for everyone to know what time it is? It is just a service you should provide.

Give Machines Names,Not Numbers

Some of you don’t assign any machine identity. Others num-

than-life faces. If the spirit moves you/the artist, a vivid abstract will do. The point of the effort is to draw attention to your building, and thus to your Laundromat.

You ever have someone call up and ask, “Where is your place?” If you do, all you have to say, “I’m the building with the water mural.” Plus, you become an arts supporter, and that’s something you can use to rope in the arts community as customers.

ber their machines. How about giving each machine a name? You could name them after celebrities: Clooney, Madonna, Eastwood. Or professional athletes: Manning, Woods, Ortiz. Or just funky names: Orville, Fritz, Miranda. It’s a whimsical touch that might bring a smile to the face of your customer who comes to you and says, “Miranda isn’t working.”

Sell a Value Card

Offer $10 worth of laundry for $8. Giving the customer a break is always a good strategy. It makes the customer appreciate you that much more. When someone has a problem, they’ll be more forgiving. When a new Laundromat opens up that is closer, your customer will remain loyal to your store.

Paint a Mural on Your Exterior Side Wall

Have an exterior wall that’s just a white rectangle? Select an artist, who, for a moderate sum, will paint an interesting mural the length of the side. What subject? If you are located in an ethnic neighborhood, choose a scene depicting the “old country.”

If in a dull commercial area, paint a group of smiling, larger-

Set Up a Glass Display of Your Merchandise for Sale

Include all the detergent products in their colorful boxes, along with stain stick products, laundry bags, and whatever else you peddle. With a display case attractively arranged, patrons will have a look. You never know what might happen. If you sell soap bars (as an add-on), they might buy. They might purchase a box of detergent for next time. If you have a Laundromat decal, they might purchase that. The first rule of retail sales is to make it attractive.

If any of these ideas float your boat, give them a try. Even better, give them all a try.

Howard Scott is a long-time business writer and small-business consultant. He has published four books. If you have any questions about this column, contact Editorial Director Bruce Beggs at bbeggs@americantrademagazines.com.

Mayflower Mayflower Does Right by Its Customers Does Right by Its Customers

Massachusetts laundry keeps things clean, convenient

At Mayflower Laundry, located in a former shopping plaza in Plymouth, Mass., it’s all about providing good customer service, says owner Neil King.

“We take care of our customers, that’s No. 1. We have a clean place. We are open seven days a week, 6 to 10. There’s always an attendant on duty. We have the right mix of machines, to let customers do their laundry in a hurry if they want to. We offer personalized wash, dry and fold. We have pickup and drop-off to offer maximum convenience.”

As a result, Mayflower takes in $360,000 in revenue annually. The company earns a profit out of that volume by keeping a rein on expenses—doing 25% of its own repairs, holding down utilities to 20% of volume, and having no debt. It helps that the operation depends little on marketing, rather relying on word of mouth to generate most of its business. Finally, rent plus fees are a reasonable 11% of volume.

The 2,000-square-foot Laundromat has a transportation company and a health club as plaza neighbors. It is right off the main road and has unlimited parking. Inside, the facility is clean, spacious, with many individual workstations. A ceramic-tiled waiting room contains padded seats, magazines, as well as children’s toys. Framed paintings adorn some walls. A glasswalled office is where management and staff do their paper work. This placement allows close monitoring.

Two 50-pound dryers

By Howard Scott

and 36 30-pound dryers, all from American Dryer Corp. (ADC), are positioned along one wall. Mayflower’s washers, manufactured by either IPSO or Continental Girbau, include two 75-pound front loaders, eight 40-pound front loaders, five 25pound front loaders, six 25-pound highspeed front loaders, two 40-pound highspeed front loaders, and two conventional top loaders.

Several vending machines, including a soft drink machine, a snack machine and gum machines, stand alongside the seating area. “I don’t make much out of the Coke machine, but I fill my snack unit by going to BJ’s (Wholesale Club) and I do OK,” King says.

1,800 WASH-DRY-FOLD POUNDS WEEKLY

Keeping the customers happy largely falls on the shoulders of King’s manager, Michelle Ligue. She and her staff of four part-timers are responsible for maintaining clean premises, solving customer problems, and keeping the flow of wash-dry-fold work going. The staff processes 1,800 pounds each week at $1.10/lb.

“I’ve been here 12 years and I know most of the customers,” Ligue says. “And I know

Mayflower Laundry owner Neil King (left) poses with his store manager, Michelle Ligue.

90% of wash-dry-fold customers’ phone numbers. It’s important to keep up with the work, including in-store customers, washdry-fold work, cleaning, and the paperwork.

“I train them [her staff] to have a system, do one customer at a time, plan ahead as to which machines to use. The worst thing is to confuse orders. For this to work, it’s necessary to be a multitasker, because a staffer

EXPANDING ON PICKUP AND DELIVERY

King is doing pickup and delivery for eight customers and is in the process of expanding that business. “It’s good business because it is priced at $1.35 a pound, and it gives us more to work with,” he says. “The key is to keep the customers bunched together and to develop an efficient route of pickup and delivery.” He is running ads in the newspapers of nearby wealthier communities to build up clientele.

“Price isn’t a problem,” says King. “Many prospects are two-career households and they want the convenience and are willing to pay for it. We even have customers come in here who have washers and dryers at home, but use us because they can do all their laundry in an hour and a half. We focus on convenience in this portion of our business.”

Mayflower also does a big business in comforters because the bedding is too big

noon, and night. Dryer lint traps are cleaned three times each day.

King attributes the ability to control expenses to having new equipment. “Our utility costs run 20% of volume, which is 5% less than industry average. Newer machines are highly efficient, three-phase machines. It also helps that all dryers are powered by gas.”

not smart.

might have four things needing attention at once. We each do our own customers’ washfold-and-dry work, so we make sure their stuff comes to them the way they want it.

“For instance, I have a woman customer who owns a lot of rental property. She color-codes everything. She is very particular about the folding. I make sure I give her exactly what she wants. It makes a difference in staffers’ take, for 75% of wash-dry-and-fold customers tip.”

Ligue doesn’t hire anyone too young. A Mayflower applicant should have some previous laundry or hotel experience and be accustomed to doing physical work. Ligue says she can tell if a person is going to make it based on the first hour of training. She is not opposed to letting people go after a day.

for conventional machines. Cleaning dry mops for municipalities is another specialty.

Having a clean facility is key to a selfservice laundry’s success, according to King; he believes customers won’t use a dirty Laundromat. At Mayflower, there’s a cleaning checklist for every shift—morning,

King motivates his staff by paying them 20% of their wash-dry-fold business, which keeps the workers turning out good product. Finally, it helps that everything is owned. Mayflower operates with a $50,000 equity line of credit, but doesn’t owe a cent on the investment.

With the company well positioned in the Plymouth-KingstonDuxbury market, King has no plans to open another operation. Instead, he wants to build up drop-off and pickup service and continue relying on his staff to run the enterprise. This way, he only has to spend a few hours a day at the laundry and can devote more time to his real estate and other business interests.

“It’s a good business because you don’t have to be there, and you can still make money,” King says. ■

The waiting area.

Wash-dry-fold orders await pickup in the office.

Mayflower’s washers features capacities of 25, 40 and 75 pounds.

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SPEED QUEEN MAYTAG COMMERCIAL LAUNDRY

Speed Queen offers an easy-to-use top-load washer equipped with Quantum™ Gold control. The washers use a curved four-vane agitator, which delivers a 210-degree wash stroke. The Automatic Balance System ensures even the most outof-balance loads complete a cycle without stopping, the company says.

The machine offers a final spin speed of 710 rpm, and water usage is kept as low as 23.7 gallons per cycle. Store owners can program 27 different cycles.

Quantum Gold also allows owners to customize price settings according to traffic volume throughout the day.

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Maytag® Commercial Laundry’s Energy Advantage™ high-efficiency, top-load washers are equipped with microprocessor Computer Trac® controls to allow the flexibility to set vend prices by day, time or specific wash cycles.

Operators have the option to program the equipment with a PDA and download the machine data for review off premises.

Others features include a direct-drive transmission, front access, and a selfdiagnostic feature. The high-security vault is compatible with card readers and dual coin drops.

The Energy Advantage™ top loader reduces water usage by 25% compared to Maytag washers manufactured before 2005, the company says.

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HUEBSCH

Huebsch’s HWTT top-load washer is powered by a heavy-duty 1/2-hp motor and has a final spin speed of 710 rpm. Washer performance is enhanced by an Automatic Balance System, which ensures cycles are not interrupted by unbalanced loads.

The machine comes equipped with a micro-display control, featuring a time-remaining countdown and coin

countdown, allowing customers to see how much time is left on their loads or if they need to add more coins.

Vended laundry owners can decrease water usage and lower utility consumption by using a water-saver cycle, the company says. On average, the HWTT uses 23.7 gallons of water per cycle.

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800-553-5120

The IPSO BWT series of top-load washers uses just 23.7 gallons of water in the water-saver cycle, the company says.

The washer’s 1/2-hp motor produces a 710-rpm final spin speed. A 210degree agitation stroke, coupled with an out-of-balance protection to ensure cycles continue without stopping, help produce better results, according

to IPSO.

The washers come with a digital control model that keeps customers informed of time remaining in the cycle.

Equipped with IPSO’s MDC control, the machines have the audit capabilities to monitor the number of coins inserted and cycles run.

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WHIRLPOOL COMMERCIAL LAUNDRY

The Whirlpool® Commercial Laundry top-load washer models are easy to use and deliver exceptional and dependable cleaning performance, the company says.

The top loaders have a capacity of 3.2 cubic feet, and customers still have the option of a small-load setting, helping minimize water usage to

23.22 gallons per cycle. The washers feature a thermistor on the water valves to regulate water temperature, and washer spin time has been increased to allow more water to be removed from loads. The machines also feature a beltless Direct-Drive System.

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TELENOVELA STAR VISITS LAUNDROMATS FOR TIDE PRODUCT LAUNCH

Tide has recruited telenovela star Jencarlos Canela to show Hispanic consumers the brand’s new Tide® Pods™, a threechamber unit dose laundry detergent that brightens, cleans and fight stains in one.

At press time, consumers were to have the chance to meet Canela on April 3 at a Los Angeles Laundromat to get a glance at the product benefits. The singer and actor has already made some surprise visits to Miami-area laundries as part of the product launch.

“I’m very happy to represent Tide and to be able to reach my friends for the launch of this innovative product,” says Canela. “At home, we’re already using Tide Pods, the future of laundry, and I noticed that it is very easy to use because with one single ‘pac’ you can obtain in your clothes brightness, cleanness and fight stains; everything in the palm of your hand.”

DISTRIBUTOR CG WEST HIRES BAKKER AS VP OF SALES

Continental Girbau West (CG West) has hired Andrew “Bud” Bakker as vice president of sales. In his new role, Bakker manages and works to grow the regional distributor’s vended, on-premise and industrial laundry sales efforts.

“Bud is an incredibly experienced sales professional with undeniable character,” says Continental Girbau President Mike Floyd. “He understands field sales and comes to CG West with more than 28 years of experience.”

Bakker launched his career in 1984 as an owner/operator of Simon and Son Fine Dry Cleaning, in Woodinville, Wash., where he stayed for 11 years. He went on to serve Westport Supply, Tukwila, Wash., where he handled drycleaning, industrial laundry, hotel laundry and janitorial supply sales. Most recently, he served as the Northwest sales account manager at Dynamic Sales and Service, Kirkland, Wash., where he managed a territory including Washington, Oregon, Idaho and Montana.

AMERICAN DRYER CORP. REFOCUSES REGIONAL ATTENTION

In an effort to provide its customers with more direct, handson regional attention, American Dryer Corp. (ADC) has given additional responsibilities to two members of its sales team, the company reports.

Corey Simonson, who manages regional sales in the Midwest and Canada, now has additional responsibilities that include Arizona, Colorado, Montana, New Mexico and Wyoming.

John Olson, who is charge of ADC’s Eastern regional sales, now

assumes added responsibilities in California, Idaho, Nevada, Oregon, Utah and Washington.

The company believes that Simonson’s and Olson’s extensive experience will prove invaluable as they work directly with distributors and support staff to ensure that all efforts are made to help grow their ADC business.

LAUNDRYLUX NAMES CHATEAU WESTERN REGIONAL BUSINESS MANAGER

Robert Chateau is the new Western regional business manager for coin sales for Laundrylux. His territory includes Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Alberta and British Columbia in Canada.

“We have been working with Robert for a number of years and his sales skills, leadership abilities, and product knowledge are outstanding,” says Howard Herman, Laundrylux president.

San Diego-based Chateau brings 12 years of industry experience to Laundrylux. He learned to repair commercial washers and dryers while in the Navy. In 2000, Chateau joined longtime Laundrylux distributor Golden State Laundry Systems as service manager and worked his way up through the sales department.

For the past two years, he has worked for Electrolux Professional, traveling to the Electrolux factories in Sweden and France many times for training.

WHIRLPOOL HONORS MAC-GRAY FOR COMMITMENT TO CONSERVATION

Mac-Gray Corp. has once again been awarded Whirlpool’s Energy Advantage Award, the third time the company has received the honor since the award began in 2006.

“We are delighted to have been selected to receive this prestigious award, which reflects our strong commitment to both technology innovation and environmental sustainability,” says Stewart D. MacDonald, Mac-Gray CEO. “We believe that an environmentally friendly approach to business and cost-effective customer solutions are not mutually exclusive.”

Mac-Gray deployed the most ENERGY STAR®-rated washers and dryers of any Whirlpool distributor in 2011, Mac-Gray says. “Mac-Gray remains the top provider of laundry facilities management to colleges and universities as a direct result of our well-established position as a ‘green’ company,” MacDonald adds.

“Whirlpool Corp. is pleased to announce this award,” says Robert English, Whirlpool’s general manager of Global Commercial Laundry. “Mac-Gray stands out as a company dedicated to energy conservation. They have long been the industry leader when it comes to the conversion of laundry facilities from coin to their various card technology platforms, reducing both operational expenses and the CO2 emissions associated with the collection of coins, while increasing customer satisfaction.” ■

Canela

Chateau

Bakker

UPGRADE YOUR MACHINES. UPGRADE YOUR PROFITS.

There’s more than one reason to choose Speed Queen machines. Sure, they have best-in-class technology and more options for generating higher vend prices, but they’re also more efficient. So you have more cycle options and higher profits per cycle than older machines. Plus you’ll have new, reliable equipment, and that is one of the strongest contributors to customer growth . Speed Queen brings it all together to give you a more profitable store. Put Speed Queen to work generating profits for you. Learnaboutourrebateandspecialfinancingoptionsbyvisiting speedqueen.com/spring2012 or calling 800.590.8872.