American Coin-Op - February 2016

MOVING FROM DRY CLEANING TO VENDED: CARES FAMILY BUSINESS EVOLVES

Sheldon Cleaners has reinvented itself multiple times, embraced and eliminated revenue streams, and overcome economic and industry-specific hurdles since its inception in 1949. Its newest venture is the Laundry Room Café, a 6,500-square-foot card-operated vended laundry featuring clusters of laundry equipment, bright lighting, cozy nooks and more.

COIN-OP 101: BENEFITS OF ATTENDING DISTRIBUTOR EVENTS

The best distributor events can provide you with profitenhancement opportunities that you can use to get ahead of the competition and maximize your success, writes Jim Rosenthal, North American sales manager of Speed Queen’s® Commercial division. Take a closer look at some of the benefits awaiting those store owners who make the time to attend these semi-annual events.

THE FUTURE OF ON-DEMAND LAUNDRY SERVICES

The idea of wash/dry/fold isn’t new. Neither is the concept of pickup and delivery. But developing an app through which a customer can order laundry service, share preferences and request delivery is a relatively new trend.

COLUMNS

26 CLEARING UP SOME TAX MISCONCEPTIONS

Having prepared tax returns professionally for more than 20 years, columnist Howard Scott has often encountered business owners who have misconceptions about income taxes. This month, he’s looking to clear things up a bit.

A CLOSER LOOK 12

The Laundry Room Café was developed to be an added revenue generator, but having fun with it was essential to its owners.

(Cover Image: ©iStockphoto/Ridofranz & Alex Belomlinsky)

APP-SOLUTE SERVICE

On my smartphone, I have a lot of apps. I have an auction app, travel apps, weather forecasting apps, sports apps, TV/music streaming apps, you name it. I even have an app that tells me about the latest, greatest apps!

I’m no youngster, but I’m not too old to take advantage of technology to make my life a bit easier. I check in for a haircut, find the cheapest gas price around me and transfer bank funds, all right from my smartphone. And, yes, I do sometimes order pizza delivery.

In recent years, a number of companies have developed apps that enable customers to order pickup of their dirty laundry, share their garment care preferences and request delivery of their cleaned goods. My cover story this month takes a look at this growing on-demand trend and features input from CEOs of three laundry service companies known for their apps.

Elsewhere in the issue, Sheldon Cleaners, Kentwood, Mich., has had to reinvent itself numerous times over the years, and the latest addition to its business portfolio is the Laundry Room Café. Haley Jorgensen looks back at Sheldon’s history and takes us inside the new vended laundry.

In this month’s Coin-Op 101 column, Speed Queen’s Jim Rosenthal summarizes the benefits of attending distributor events, or, as he calls them, “profit-enhancement opportunities.”

Having prepared tax returns professionally for 20-plus years, Howard Scott says he often encounters small-business owners who have misconceptions about income taxes. This month, he’s ready to clear a few things up.

There’s more to this issue, yes, but where’s the fun if I spoil it for you?

Read on!

Bruce Beggs Editorial Director

EDITORIAL

Charles Thompson, Publisher

E-mail: cthompson@ATMags.com Phone: 312-361-1680

Bruce Beggs, Editorial Director

E-mail: bbeggs@ATMags.com Phone: 312-361-1683

Roger Napiwocki, Production Manager

Nathan Frerichs, Digital Media Director

E-mail: nfrerichs@ATMags.com Phone: 312-361-1681

ADVISORY BOARD

Kurt Archer Ann Hawkins

Wayne Lewis Kathryn Q. Rowen

ADVERTISING

Donald Feinstein, Natl. Sales Director

E-mail: dfeinstein@ATMags.com Phone: 312-361-1682

OFFICE INFORMATION

Main: 312-361-1700 Fax: 312-361-1685

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American Coin-Op (ISSN 0092-2811) is published monthly. Subscription prices, payment in advance: U.S., 1 year $39.00; 2 years $73.00. Foreign, 1 year $89.00; 2 years $166.00. Single copies $7.00 for U.S., $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 57, number 2. 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. The publisher reserves the right to reject any advertising for any reason.

© Copyright AMERICAN TRADE MAGAZINES LLC, 2016. Printed in U.S.A. No part of this publication may be transmitted or reproduced in any form, electronic or mechanical, without written permission from the publisher or his representative. American Coin-Op does not endorse, recommend or guarantee any article, product, service or information found within. Opinions expressed are those of the writers and do not necessarily reflect the views of American Coin-Op or its staff. While precautions have been taken to ensure the accuracy of the magazine’s contents at time of publication, neither the editors, publishers nor its agents can accept responsibility for damages or injury which may arise therefrom.

Bruce Beggs

MANY STORE OWNERS PLAN TO SPRUCE THINGS UP IN ’16

Nearly half (48.9%) of coin laundry owners are planning to spruce up their stores in 2016, according to results from January’s American Coin-Op Your Views survey.

Further, store owners who responded to the unscientific poll say they plan to add new washers and/or dryers (38.3%), increase prices (36.2%) and/or increase marketing efforts (29.8%).

Respondents were invited to select any or all from a list of choices. Smaller shares say they are planning to add other equipment like a water heater or changer (23.4%) or another service (12.8%).

A share of 12.8% say they have other initiatives planned this year, such as lowering dryer prices, reducing drop-off hours, improving lighting and signage, or even closing a store so another store garners more business.

Roughly 11% are planning no changes, and 2.1% are unsure of their plans.

Nearly 81% of respondents predict their 2016 business will be better than (53.2%) or the same as 2015’s (27.7%). A small percentage believes “business won’t be as good as 2015” (12.8%), and the remaining 6.4% are unsure.

What is your greatest business concern looking ahead? The majority of coin laundry owners who took the survey say they worry “utility costs will rise” (38.6%). The need to update equipment concerns 13.6% of respondents, while 11.4% worry that more competition will open up.

Roughly 18% listed other concerns, including marketing, finding “good help,” the increasing minimum wage, and dealing with government that isn’t business-friendly. The smallest share, just 4.6%, is concerned about keeping up the store maintenance schedule.

The remaining 13.6% report they “have no business concerns for [the] coming year.”

Taking everything into consideration, how challenging is it to run a coin laundry today? The majority of store owners polled (37.8%) believe “nothing really has changed during the last five years.” One-third of respondents believe it is “more difficult to run a store today.” Approximately 13% say it’s “easier than running a store five years ago,” and the remaining 15.6% are “not sure.”

While the Your Views survey presents a snapshot of readers’ viewpoints at a particular moment, it should not be considered scientific. Qualified subscribers to American Coin-Op’s e-mails are invited to take the industry survey anonymously online. Percentages may not add up to 100% due to rounding. ACO

The of On-Demand Laundry Services

Future

by Bruce Beggs, Editorial Director

Need to get somewhere but don’t have a car? Schedule a ride through Uber.

Don’t feel like going out to eat? Use GrubHub to order from a nearby restaurant and have your meal delivered.

Looking for a birthday gift for a friend? Go shopping on Amazon to find that perfect item and have it shipped right to your door.

The ease with which consumers can connect with businesses through the apps on their smartphones or the websites accessible from their personal computers has never been greater.

A January 2014 Pew Research Center survey revealed that 87% of American adults use the Internet. Add to this the proliferation of smartphones—Pew reports that, as of October 2014, 64% of American adults have such a phone—and their increasing functionality places unparalleled tools at a consumer’s fingertips to easily order and customize service experiences.

The idea of wash/dry/fold isn’t new— 60% of store owners offer the service, according to the 2014 Coin Laundry Association Industry Survey. Neither is the concept of pickup and delivery. But developing an app through which a customer can order laundry service, share preferences and request delivery is a relatively new trend. A number of players have entered the market in hopes of capturing the do-itfor-me crowd.

In metropolitan cities like New York, Chicago and San Francisco, or in commuter-heavy areas like Bakersfield, Calif., these businesses will gladly pick up one’s dirty laundry, have it cleaned, and then return their clothes to them for a price.

The companies behind these laundry service mobile apps either process the laundry in their own facility or they partner with a Laundromat or Laundromats in the service area to do the cleaning.

Writing a Coin-Op 101 column for American Coin-Op last year, Dan Bowe, national sales manager for Speed Queen’s Commercial division, offered this: While some may see these laundry service providers as negative because they decrease foot

traffic, these companies can actually benefit a store owner by increasing overall machine utilization.

Chris Balestracci, president of Super Wash Laundry, a Laundromat in East Haven, Conn., told Bowe, “I believe these apps lend the greatest opportunities for growth when it comes to extra-profit centers, especially as the services expand to include more metro areas.”

American Coin-Op spoke to the developers of three such mobile apps to get a sense of what they offer and where they see on-demand laundry services going in the future.

WASHCLUB

Rick Rome is the CEO and founder of WashClub, an on-demand laundry, drycleaning and tailoring service that is now available in 12 states and four New York City boroughs. Last month, the company announced the opening of its newest branch in Lehigh Valley, Pa.

WashClub licenses its exclusive, customizable software to brick-and-mortar laundry and drycleaning operators across the United States. Licensees are able to offer

(Photo: © iStockphoto/ Ridofranz & Alex Belomlinsky)

services to customers via WashClub or their own branded concept.

“Our software is built by an operator for operators,” says Rome, who owns WashClub NYC and offers laundry services to New Yorkers in Manhattan and Brooklyn.

WashClub charges a one-time fee, then receives 5% of all business generated by the software. “Our interest is aligned with yours,” Rome says. “There is no competition. If you kill, we get to eat, too. If you don’t kill, we’re starving with you.”

It can be difficult for a traditional laundry business to grow organically without acquiring another laundry, he says, and the growth of the Internet is “all about extending your storefront virtually.”

In many cases, the laundries that become WashClub licensees already have the necessary laundry equipment and facility in place, and the software enables them to utilize their excess capacity, according to Rome.

He doesn’t agree with the assertion that on-demand services like his may simply be an “urban phenomenon.”

“That’s not true at all. I don’t know anybody in the suburbs who likes doing laundry anymore than someone likes doing laundry or dry cleaning in the city. It’s just about service and convenience.”

STARCHUP

Starchup is a new entry among the laundry app start-ups, having gone public in September. CEO Nick Chapleau cofounded it with Dan Tobon. They got the idea from Tobon’s father, whom Chapleau says works in marketing in the Laundromat industry.

Rather than establishing a service that could be seen as being in competition with laundries and dry cleaners, Chapleau says, “we knew there were thousands of excellent laundry and drycleaning operators out there in the market who have been doing it for

years, might not be able to build a mobile app or might not have that kind of technological ability, but can certainly clean your clothes better than anybody else.”

Starchup focuses on connecting a laundry or dry cleaner with customers they may not otherwise reach.

“The goal is to connect you with customers you might be losing to someone who has better technology. Because of Starchup, you’re able to reach those customers and possibly widen your demographic reach generally by getting a younger, busier customer base who might forgo [doing laundry] because it’s a pain in the butt but if you’re going to come pick up their clothes at their house, they’ll do it.”

There is no set-up fee. Each Starchup client receives a free trial, then a paid trial before full pricing—a monthly subscription fee plus a “small percentage” of each software-driven transaction—takes effect, according to Chapleau. Clients can choose from among different tiers of service to find a package that suits them.

“We work with all of our vendors to make sure that the service is both economically beneficial to them as well as us so that, in the end, everybody wins,” he says. “We’re really trying to grow the pie for everybody and then share in that value.”

CD One Price Cleaners and Tide (“Tide Spin”) are examples of companies that utilize the Starchup platform, according to Chapleau.

WASHIO

Washio arrived on the scene in March 2013 after several months of software development. CEO Jordan Metzner and the co-founder came up with the concept based on experiences both had while living abroad. Metzner owned restaurants in Latin America and, while living in Argentina, would have his clothes washed in a “laundry service center.”

“I had this idea that if people could use the service and get the clothes picked up from their home, it would be an incredibly valuable service,” Metzner says. “When I

came back to the States, I realized that bythe-pound laundry service was not something readily available except within New York.”

Washio currently operates in Los Angeles, San Francisco, Washington, D.C., Chicago, Boston and Oakland.

In each market, it partners with an individual laundry provider and an individual dry cleaner that do the garment cleaning, Metzner says.

“I think that might change over time as our size changes and our geographical spread changes,” he says. “Currently, in most cities we operate in, we really focus on the city center, so all of our service partners are kind of by the center of the city.”

WHAT LIES AHEAD

Each of these services’ creators believes that the use of technology to provide or enhance on-demand laundry and drycleaning services is really only getting started.

“The customer, in this day and age, they want that kind of instant experience, or at least want the convenience wherever they can find it,” Chapleau says. “We all have less time in the day than we ever have before and anything like this that can help me save time and energy is something that customers like.”

“Technology is changing the world around us,” Metzner says. “Even to this day, [doing] laundry is still a very manual process that has not been automated as many other things in our society have. I think, over time, you’ll see that technology could provide a significant benefit to lowering the cost and allowing the increase of service in the physical location to spread as well.”

“There are phenomenal opportunities on the horizon for those who embrace the technology and the paradigm swings that are happening in our society today,” says Rome. “Whether they like it or not is a another story, but this is the reality of what’s happening.”

ACO

“The goal is to connect you with customers you might be losing to someone who has better technology.”

—Nick Chapleau, CEO, Starchup

“There are phenomenal opportunities on the horizon for those who embrace the technology and the paradigm swings that are happening in our society today.”

—Rick Rome, CEO, WashClub

Moving from Dry Cleaning to Vended:

Cares Family Business Evolves

By Haley Jorgensen

“It was something I could do,” says George Cares, of launching Sheldon Cleaners, in 1949. During its 66-year history, the Kentwood, Mich., company has reinvented itself multiple times; embraced and eliminated revenue streams; and overcome economic and industry-specific hurdles.

Today, George’s sons, Louie and Paul, lead the enterprise. The business umbrellas the 32,000-square-foot Sheldon Cleaners;

25 satellite locations that are situated in strip malls or on real estate owned by the Cares family; a 6,500-square-foot cardoperated vended laundry (The Laundry Room Café); and a coffee and crêperie inside the laundry (Café Louis). Revenue flows from various income generators, including dry cleaning, self-service laundry, fluff-n-fold, rental income, and food and coffee. In total, the enterprise employs 240 people throughout Grand Rapids, Holland and Kalamazoo, Mich.

George Cares, and his wife, Hope, have five children: Paul, Louie, Sandy, Linda and Martha. Paul and Louie took over leadership in 2010.

FOUNDING AND GROWTH

George Cares launched the business in

1949 after studying architecture in college and serving in the Navy during World War II. As a child, he had worked in his father’s drycleaning business as a tailor and presser.

The transformation of the big thoroughfare where the business was located— Sheldon Boulevard—choked drop-off business, spurring George to look for another revenue generator, according to a 1984 American Drycleaner story. George and Hope hopped a train to Chicago.

“We went to Maxwell Street and bought a whole warehouse of used tuxedos,” recalls Hope, who was 19 to George’s 22 at the time. “On the way home, crates filled with tuxedos lined the train aisles. When we arrived home, I waited at the train station guarding the tuxedo crates until George got the truck and drove over to

Sheldon Cleaners, The Laundry Room Café and Café Louie are family-owned businesses in Kentwood, Mich. The Cares family started Sheldon Cleaners in 1949 and opened the vended laundry less than a year ago. (Photos: Continental Girbau)

The Cares family—(from left) George, Sandy, Paul, Louie and Hope—with business consultant Michael “Stucky” Szczotka.

pick us up. The next day, we were in the tuxedo rental business.”

It wasn’t long before George got on a roll buying up small, abandoned gas stations. His first satellite branch was a renovated Texaco station. Ultimately, he converted 12 gas stations into successful satellite stores.

In 1965, George moved Sheldon Cleaners from its 1,400-square-foot plant to a 5,000-square-foot plant across the street. By 1980, Sheldon had moved again—this time to its current 26,000-square-foot plant on Brenton Road, in Kentwood, Mich.

By 1985, George’s high-volume drycleaning focus spurred him to back off of tailoring. Shortly thereafter, the tuxedo rental business was sold and the Cares family commenced building strip malls.

“We did the tuxedos in order to survive early on,” says Louie. “But, by 1991, we realized that the tuxedo rental business took 80% of our effort and generated just 20% of our income.” By comparison, dry cleaning took 20% of the effort but delivered 80% of income.

Meanwhile, the newly developed strip malls began flowing retail rental revenue, according to Louie.

MUCH DIFFERENT LOOK TODAY

George, now 90 and retired, stops into Sheldon several times a week. It looks a lot different today than it did in 1949.

The business eliminated the use of perchloroethylene (perc) in 2006, substituting another solvent that was said to be environmentally friendly and Environmental Protection Agency (EPA)-approved but was

hard on machinery, according to Paul.

“We didn’t want to buy more perc machines because perc is harmful to our employees, us, and the environment,” he says. “But our drycleaning machines were becoming corroded using an alternative solvent. We were at a crossroads.”

That’s when they turned to Michael

Bright lighting, cozy nooks, high-speed laundry equipment and Amish-made folding tables make The Laundry Room Café an appealing place to do laundry.

“Stucky” Szczotka, who had sold them a few Continental Girbau soft-mount washers through the years. The Cares brothers were thinking hard about getting into different industries.

As the owner of Carrington Cleaners, CRDN of Southern Nevada, and Eagle Star Equipment, a commercial laundry and drycleaning equipment distributor, Szczotka knows dry cleaning and laundry. He also knows the vended laundry business, as owner of New Wave Laundromat, in Sterling Heights, Mich.

“He came in and pumped new life into Sheldon,” says Paul.

A complete plant overhaul commenced that resulted in huge throughput gains and labor and energy savings, according to the Careses. By driving operational and energy costs down, Sheldon Cleaners gains profitability. “We are projecting a 10-15% elevation in profit,” says Paul.

All told, Sheldon Cleaners is more productive, efficient, green and profitable than ever, according to the Cares brothers. Plus, it occupies a 20% smaller footprint.

Focused on ways to produce additional revenue from that extra space, the brothers turned to Szczotka with their idea of developing a 6,500-square-foot, high-speed vended laundry and café.

BIRTH OF THE LAUNDRY ROOM CAFÉ

Together, they designed a cozy and hip laundry, complete with semi-private areas featuring clusters of laundry equipment, Amish-made folding tables, Wi-Fi, TVs and kids’ play areas. The laundry also encompasses a dining area with an indooroutdoor fireplace; and Café Louis, offering crepes of all types, wraps, sandwiches, salads, muffins and a full menu of coffees, lattes and mochas.

The new laundry is attached to Sheldon Cleaners and features a convenient driveup door.

“We had 10,000 square feet available, and 32,000 cars drive by daily,” says Paul. “We are on the border of upscale housing and apartments. Mom gave us the idea of building a vended laundry. So we decided to make it a nice one.”

The Laundry Room Café was developed to be an added revenue generator, but having fun with it was essential to its owners. Immediately, the new laundry spurred an unexpected 30% surge in over-the-counter

drycleaning sales at that location.

Szczotka recommended a mix of highspeed Continental laundry equipment, including card-operated ExpressWash Washers and ExpressDry Dryers.

“We purchased Continental machines for the drycleaning plant through Stucky and have had great success with them,” says Louie.

Thus, The Laundry Room Café touts three 90-, six 55-, eight 40-, 10 30- and 12 20-pound-capacity ExpressWash Washers; five 45- and 13 30-pound double-pocket stack ExpressDry Dryers; and six reversing single-pocket 75-pound Continental dryers. “All of the washers are freestanding, stainless and high-speed,” says Szczotka.

Equipped with the ProfitPlus Control, the washers feature four primary cycle options: Superwash, an extra-long cycle for heavy soil; Hot, for whites; Warm for colorfast and permanent press items; and Cold for colors. They allow customers to add an Extra Wash, Extra Rinse and/or Delicate Cycle. Anytime an “Extra” is selected, it adds to overall revenue.

The ExpressWash Washers produce extract speeds up to 384 G-force, according to Szczotka, so they remove more moisture from every load when compared with traditional hard-mount washers.

“Laundry comes out of the washers nearly dry,” he says. “This shortens dry time by up to 50% and allows customers to get in and out of the laundry in less than 60 minutes.” Dryers run less often, which conserves natural gas and electricity.

Meanwhile, the Card Concepts card system seamlessly communicates with the ProfitPlus Control, allowing the Cares

brothers to quickly tweak vend prices and programs on multiple machines simultaneously. From a cell phone or remote computer, using the Internet, they can also track revenue and turns per day; run operational reports; execute pricing specials and promotions; and build customer loyalty.

While the self-service side of the business is humming, full-service wash/dry/fold is also gearing up.

“We are just getting into wash/dry/fold,” says Louie, “but want to promote it at all of our drycleaning satellite locations. We piloted wash/dry/fold at the main store and charge $20 per laundry bag, no matter what is in it or how much it weighs. It is working out great as a new revenue stream.”

So is the newly developed Café Louis.

“We love that our customers can drive up, pick up their dry cleaning, a coffee and a wrap, and be on their way in a couple minutes,” says Louie. “We feel good knowing they are receiving quality products and services.”

And like George, Paul and Louie infuse that quality commitment into all they do.

“Dad always said you have to work harder than your competitors,” says Louie.

Opened less than a year, The Laundry Room Café and Café Louie are expected to deliver a full return on investment in just five years, according to the Cares brothers. Simultaneously, they anticipate that Sheldon Cleaners will enjoy a 10% profit boost this year.

ACO

Haley Jorgensen is a public relations writer for commercial laundry equipment manufacturer Continental Girbau.

A view of coffee and crêperie Café Louie.

MATTHEWS RETIRES AFTER 53 YEARS IN INDUSTRY

Bob Matthews, regional sales manager for mechanical and electronic payment systems manufacturer ESD—and a 53-year veteran of the self-service laundry industry—is retiring, the company reports.

Born and raised in Manhattan, Matthews graduated from Saint Catherine’s of Sienna Elementary School and Power Memorial High School, two old-time schools in New York that each boast a long list of distinguished alumni.

He attended classes at CCNY until joining the U.S. Navy, where he served a portion of his tour on the aircraft carrier USS Coral Sea in the Mediterranean. Once back home, his first job out of the military was with Remington Rand, which is where he met his wife-to-be, Rose. The couple have been married 52 years and have three children and seven grandchildren.

Matthews entered the vended laundry industry when he accepted a job at Greenwald Industries. He later worked for Pyramid

Manufacturing, Jonathan Lock Co. and ABT Lock before landing at ESD, and developed a reputation for being an expert in the mechanical payment system and security field.

Matthews invested in another well-known industry company, Vend-Rite Manufacturing, but he remained fond of the mechanical hardware business, money boxes, locks and keys, and coin slides. In 1980, he returned to ESD, where he has worked until retirement.

As ESD grew into new products and markets, Matthews grew with it. Working out of his home base in Chicago, he logged an average of 45,000 to 50,000 miles a year in his car, calling on accounts and helping to build the ESD brand, the company says.

When asked about the highlight of his career, Matthews says it was being able to participate in the transition from mechanical payment systems to electronic systems.

LOOMIS BROS. PROMOTES LAMONS TO SALES AND MARKETING MANAGER

Loomis Bros. Equipment Co., Fenton, Mo., has named Matthew Lamons its sales and marketing manager, the company reports.

In his new position, Lamons will be responsible for growing the company’s sales to vended and OPL laundries in the distribu-

Matthews

tor’s Missouri, Kansas, Illinois and Indiana region. Loomis Bros. is a dealer for Milnor, ADC, Chicago Dryer Co., Huebsch and Maytag.

Lamons started with Loomis Brothers in 2007 as its vended laundry specialist and later was an OPL territory sales representative.

“Matt’s work ethic and dedication to customer satisfaction have earned him respect from his customers, vendors and co-workers,” says Dale Loomis, president of Loomis Bros. “Matt brings high-energy enthusiasm and new ideas to our sales and marketing efforts, and we are looking forward to his leadership in his new position.”

Lamons earned a bachelor of science degree in business administration from the University of Central Missouri and an MBA from Maryville University.

FIFTEEN U.S. DISTRIBUTORS NOW OFFERING PRIMUS LAUNDRY EQUIPMENT

Primus® has partnered with 15 U.S. distributors that now provide the commercial laundry equipment manufacturer’s washers and dryers to vended and on-premises laundries throughout the country, the company reports.

“With cutting-edge technology and quality manufacturing, Primus is the industry leader in Europe. We are thrilled to be able to offer Primus in the U.S. through our qualified and experienced distributor network,” says Mark Schram, North American sales manager for Primus. “Through their industry knowledge

and expertise, each of the 15 Primus distributors will provide unmatched customer service and support to their customers.”

The distributors include:

• Atlas International Laundry, Dallas

• Automated Laundry Systems, Anchorage, Alaska

• BDS Laundry Systems, St. Paul, Minn.

• Caldwell and Gregory LLC, Manakin Sabot, Va.

• Clean Designs, Lakewood, Colo.

• CSC Serviceworks, Plainview, N.Y.

Lamons

Alliance Laundry Systems employees and representatives from the 15 U.S. distributors that now offer Primus laundry equipment. (Photo: Alliance Laundry Systems)

BENEFITS OF ATTENDING DISTRIBUTOR EVENTS

As a Laundromat owner, your primary objective is to make your store as profitable as possible while keeping expenses down and standing out from the competition. Partnering with the right equipment distributor is a crucial decision made early on; you should choose a knowledgeable distributor that shares your vision of building a successful business.

One of the things that quality distributors do is organize events to benefit and educate store owners and potential investors on a semi-annual basis to ensure they are up-to-date on the latest equipment innovations, industry trends and technologies available in the market. The best distributor events can provide you with profit-enhancement opportunities that you can use to get ahead of the competition and maximize your success.

INDUSTRY KNOWLEDGE

As the self-service laundry industry continues to evolve, it’s important to stay ahead of the trends. You will want to partner with a distributor that offers expertise and events to stay current on what’s changing and how to make smart decisions for your Laundromat.

Distributor events typically center on thought leadership, industry best practices, and advice and tips to make your business successful. This information can be delivered in the form of expert panels, Q&A sessions and presentations by vendors and manufacturers, and may cover topics such as utility costs, energy efficiency, equipment replacement, marketing, alternative revenue streams, creative financing and customer retention.

“The information presented at distributor events is applicable to everyone, from the interested potential investor to the seasoned Laundromat veteran,” says Brad Steinberg, co-president of Speed Queen® distributor PWS. “No matter how long you’ve been in the business, there is always more to learn, and distributor events are a great opportunity to do so.”

If you’re someone who is considering getting into the Laundromat business but need more information, you can attend investment seminars to learn more and evaluate the opportunity. If you’re just getting started

To read more Coin-Op 101 columns, visit www.americancoinop.com

by opening your first store, you can work with your distributor and join sessions focused on determining the right equipment mix; how to design the layout of your store; deciding which ancillary services to provide (such as wash/dry/fold, vending machines, Wi-Fi access, etc.); and how to keep utility and operational costs as low as possible.

More experienced professionals can take away information on how to renegotiate a store’s lease to achieve a better rate, determine the right time to replace equipment, as well as marketing and advertising tactics—all of which can greatly impact a business’s profitability. You can also learn more creative ways to retain customers and increase customer loyalty, as well as which in-store improvements will enhance a customer’s experience.

THOUGHT LEADERSHIP

Even if your Laundromat is well established and profitable, a modern store must keep up with advances in today’s retail environment to stay relevant and competitive. It’s no longer enough for a Laundromat to provide a simple transaction for customers. Expectations in retail environments are higher than ever, and customers are looking for a true experience rather than being provided the simple necessary service of washing clothes.

Distributor events can provide ideas to combat the competition by enhancing store experience with wider aisles, comfortable seating options, more windows and skylights, updated carts, larger machines, clean bathrooms and more.

They can also provide information on how to brand your store and differentiate your offerings from your competitors, with extra profit centers such as tanning facilities, lottery ticket sales, gaming machines and U.S.

Jim Rosenthal

The best distributor events can provide you with profit-enhancement opportunities that you can use to get ahead of the competition and maximize your success.

postage sales. It’s important to note that the success of these services will depend on the demographics of your customer base; distributors can work with you to determine which services will help generate the most revenue based on store location and the needs of your customers.

NETWORKING OPPORTUNITIES

It’s one thing to discuss the aforementioned information in theory, but distributor events also provide the perfect venue to connect with other Laundromat owners and discuss real-world implications and best practices.

“These events bring together store owners with a wide variety of business experience in one place to discuss issues, brainstorm solutions and bounce ideas off one another,” says Steinberg. “Many times, another Laundromat owner has experienced things you haven’t, or run into issues you’re currently facing and can share their advice and insight.”

Distributor events are also an opportune time to touch base with your equipment distributor and share any specific questions you may have.

EQUIPMENT AND PRODUCT SHOWCASE

Because the success of your Laundromat relies heavily on the equipment you fill it with, it’s crucial to stay informed on the latest products, technology and control innovations available. Many distributor events include a showroom with vendors who perform product demonstrations, display new equipment and showcase new technologies.

Equipment manufacturer and distributor representatives may also offer discounted machines or parts at these events and can work with you directly to determine the appropriate equipment mix for your store. Many times, you’ll have industry Laundromat financing experts at your fingertips to provide detailed information on competitive pricing and financing options specific to your unique situation, as well as offer special financing rates on-site.

Distributor events are the ideal avenue to learn about upand-coming mobile applications, remote store management and other technologies that can help increase overall machine utilization and improve customer convenience.

SERVICE TIPS

“It’s not enough to simply have the right equipment in your store. To increase the success of your Laundromat, you ▼

must know how to properly program and service your machines,” explains Steinberg.

At most distributor events, equipment manufacturer and distributor representatives are available to demonstrate how to service your equipment, give you maintenance and repair advice, and offer advice on how to get the most use out of your machines. They can also help maximize the program settings, such as implementing tiered pricing based on time of day and cycle options, as well as making sure you’re running your laundry operation as efficiently and cost-effectively as possible.

KNOWLEDGE APPLICATION

In essence, distributor events provide a one-stop shop to get all of your questions answered and equip you with the information and resources you need to run a more successful Laundromat operation.

If you are interested in entering the laundry industry or taking your Laundromat business to the next level, speak with your equipment distributor to find out what events are coming up. If your distributor has an e-mail newsletter, sign up to receive it. You can

also check your distributor’s and equipment manufacturer’s websites for upcoming events and other business resources.

Most of these events are free of charge and open to anyone. Whether you’re a veteran Laundromat owner wanting to stay informed on industry trends or someone who is interested in investing in the Laundromat business, attending a distributor event is a great opportunity to stay educated about all things vended laundry. ACO

Jim Rosenthal is the North American sales manager of Speed Queen’s® Commercial division. For more information, visit www. speedqueencommercial.com/CoinOp101 or call 800-590-8872.

CLEARING UP SOME TAX MISCONCEPTIONS

I’ve been preparing tax returns professionally for more than 20 years, and this year, I’d thought I’d present several misconceptions that I’ve encountered. Of all people, you would think successful businessmen and women would understand their taxes. Often, their beliefs do not stand up to scrutiny, as you will soon see.

‘THE HIGHER YOUR INCOME, THE HIGHER YOUR OVERALL TAX BRACKET’

It amazes me that many people don’t understand how incorrect this notion is. A successful Laundromat operator approached me with this question: “I make quite a bit of money, so I don’t want my wife working because she pushes my income into the next bracket.”

“What do you mean?” I asked.

“Well, I’m at the 28% bracket now and a few more thousand would put me over into the 33% bracket. It would be pretty silly to pay $20,000 more in taxes just for letting her make $10,000.”

It began to dawn on me that he thought that an additional $10,000 in income would put him into the next tax bracket, and all his income would be taxed at the

higher bracket. He didn’t know that he would be taxed at the 33% only on the $10,000 marginal income and that the rest of his income would be taxed at the lower brackets—10% on the first $18,450; 15% on the next $56,450; 25% on the next $76,300; and 28% on the next $79,250.

This is how our progressive income tax system works. Several steps exist. At each step of your income level, you pay the appropriate tax percentage. What this means is that every taxpayer pays the identical amount of taxes for the same income level.

‘TAXES ARE SOMETHING WE SHOULD TRY TO AVOID’

It’s true that no one loves to pay taxes. And, true, 47% of the population does not pay federal taxes (although many of those individuals do pay Social Security and state taxes). Taxes keep our society healthy and vibrant. Taxes keep up the infrastructure, maintain our highways, provide peace in our land, support law and order, guarantee public safety, ensure that our foodstuffs are safe, provide a safety net for the poor, and keep the flow of enterprise rolling. I don’t want to sound super-patriotic, but you should do your part to pay your share of taxes.

For those of you who argue that graft and corruption rule the land and that politicians only want us to pay taxes because they want their share, I respond yes, there is graft and corruption, and there is mismanagement in our institutions. But there is much that is right and functional at the same time.

Our democratic system has worked for more than 200 years to provide us with an ever-rising standard of living. When 68% of the population owns their own homes, that’s prosperity with a capital P. When the average person lives today to 78, compared to the average lifespan in 1900 of 43, that’s progress. When any individual has the ability to open a business and build it into a large enterprise, that’s a remarkably open society.

‘FILING A HOME OFFICE RAISES A RED FLAG’

Many Laundromat operators are afraid to set up a home office because they don’t want to confuse their home with business. Nothing could be further from the truth. A home office deduction is an expense that is

Howard Scott

composed of a proportionate portion of housing costs—mortgage, property taxes, utilities, repairs, improvements and depreciation. The only requirement is that the space is used exclusively and regularly for doing administrative chores.

If you do some work at home, then you should set aside space— a desk and file cabinet, say—to do the work, and do it regularly there and reserve the space for your business work. That’s a legitimate home office. Even if you have an office at work, you can still have a home office at home, and in turn, receive a home office deduction.

investors. For example, a person invests in real estate that puts out huge paper losses during the first several years. Result: the business owner’s $200,000 income is offset by $200,000 in losses, resulting in zero tax liability. But President Ronald Reagan created the Income Tax Reform Act of 1986, in which he limited passive losses to $25,000. In one fell swoop, the greatest personal income tax loophole was destroyed.

In fact, the IRS audits all kinds of situations, from solo practitioners to large corporations.

Its reasons for auditing are varied: because the firm’s results are vastly different from past years, because the company is out of line with companies in the same industry, because there’s a gross disparity between lifestyle living and business performance; because there’s a big push on that industry.

In addition, the IRS also undertakes a number of random audits.

‘SO MANY OF THE RICH AVOID PAYING TAXES, SO WHY SHOULDN’T I?’

Before 1986, this was true. There was a provision in the tax code that said that passive loss could reduce income to zero. Many wealthy people invested in schemes in which they were passive

Today, there is only one loophole left: a venture capital principal pays federal taxes at 15% maximum. For the high-income taxpayer, there are automatic reductions in credits as income rises. In addition, AMT (alternative minimum tax), an autonomous tax system, is superimposed above the conventional system to make sure the taxpayer pays at the 26% tax rate for a part of his income. As a result, most rich people, with incomes at $300,000, pay 30% federal, state and Social Security taxes. Wealthy families making $500,000 pay 35% taxes. To compare, a family in the $100,000 income range averages 18% to 20%.

One might argue that the wealthy can afford to pay more than 35%, or that 20% is a far more onerous burden on the $100,000 income earner. That subject is open for debate. But one can no longer say that the rich don’t pay a lot of taxes.

Have a good tax season. ACO

Columnist Howard Scott is a former business owner who has published 1,700 magazine articles and four books. He welcomes reader comments or questions at dancinghill@gmail.com.

‘THE IRS DOESN’T AUDIT SMALL COMPANIES BECAUSE IT ISN’T WORTH THEIR WHILE’

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If we don’t have what you want, ask us, and we’ll find it for you.

FACILITY DESIGN

From initial site inspections and recommendations to equipment purchase and installation, we are here to help with every aspect of your project.

We can help you with specifications, dimensions, illustrations of commercial and on-premise laundry equipment.

FINANCING

We are able to offer competitive rates and low, affordable monthly payments for financing coin laundry and laundromat facilities.

We have a coin laundry financing solution to meet the needs of new store owners, and veterans alike.

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CALL FOR SPECIAL NEEDS

NEWSMAKERS

• Equipment Marketers, Cherry Hill, N.J.

• Great Lakes Commercial Sales, Brookfield, Wis.

• Happy Valley Service, Wailuku, Hawaii

• Hildreth’s Commercial Laundry Equipment, Columbus, Ohio

• John Morris Equipment & Supply Co, Springfield, Mo.

• Justin Laundry Systems, Little Rock, Ark.

• Mendenhall Commercial Laundry Equipment, North Salt Lake City, Utah

• Metropolitan Laundry Machinery Sales, Richmond Hill, N.Y.

• Pierce Commercial Laundry Distributors LLC, Mandeville, La.

“Primus is recognized globally for its efficient and reliable performance, and we are proud to provide these state-of-the-art products to vended Laundromats and OPL facilities in the U.S.,” says Schram. “We look forward to the expansion of Primus in the U.S. as we grow our distributor network, and the continued innovation of Primus products in the years to come.”

The company can be reached at 920-748-3121, www.north america.primuslaundry.com

HUEBSCH HONORS OHIO’S ADAMS AS STORE OWNER OF QUARTER

Huebsch, an equipment brand of Alliance Laundry Systems, has named Jim Adams, owner of four Jennifer Haley’s Coin Laundromats in Ohio, its latest Store Owner of the Quarter.

“Jim has an ambitious spirit and strong work ethic, leading him to become a profitable multi-store owner with a strong understanding of the laundry industry. He is a genuine businessman with great people skills,” says Kathryn Rowen, North American sales manager for Huebsch. “We enjoy partnering with perseverant, hardworking entrepreneurs like Jim, and we cannot wait to see what the future holds for him and his stores.”

Before embarking on his laundry business venture, Adams worked as a sales representative for trucking companies, and also owned and managed apartment buildings. When a local Laundromat across the street from one of his apartment buildings in Akron, Ohio, went out of business, he saw it as a business opportunity.

Making a late career change and entering a new industry, Adams relied heavily on commercial laundry equipment distributor M&L Equipment Co., Akron. The distributor shared its expertise, provided professional design services to determine the best store layout and educated Adams on the equipment technology to improve customer experience and increase profitability.

After three years of running a lucrative store, Adams decided to open a second in Akron. He was able to open two additional stores in 2015: one in Canton, Ohio, and a third Akron store.

“I have learned a lot about the industry over the past nine years, and I owe a lot to M&L Equipment Co.,” Adams says. “From determining the right equipment mix to the best layout of my store, their insight and recommendations were instrumental to my suc-

cessful start in the laundry industry.”

All four Jennifer Haley’s Coin Laundromats, which are named after Adams’ teenage daughter, have the same look and feel, incorporating an Ohio State University Buckeye color paint job.

In addition to a consistent and welcoming atmosphere, Adams added ancillary services and special amenities—free Wi-Fi, vending machines and air conditioning are among them—to help his businesses stand out from competitors.

WASH ACQUIRES DISTRIBUTOR GREAT LAKES LAUNDRY

WASH Multifamily Laundry Systems, a laundry facilities management service company, has acquired Great Lakes Laundry, a distributor of coin-operated and commercial laundry equipment and accessories throughout the Midwest, the company reports.

According to WASH, the acquisition will expand the company’s footprint into the Carolinas and will add several new WASH branch offices throughout the Midwest.

“Our acquisition of Great Lakes Laundry is a significant step in our continued nationwide expansion. It will enable WASH to better serve our customers in the Midwest and to deliver our best-in-class services to new customers,” says Adam Coffey, president of WASH. “We are delighted that Great Lakes President Dan Naumann will be joining WASH to facilitate this transition and to oversee the growth of our commercial operations in the United States.”

WASH will acquire all divisions of the Great Lakes Laundry business, including its route laundry and distributorship, according to the company. In 2012, WASH partnered with the multi-family route division of Great Lakes Commercial Laundry Sales to expand its services to customers in the Midwest region.

“WASH has been a valued partner for the past three years and shares our high standards for customer service,” says Naumann. “I’m confident that our customers will benefit from this transition and will continue to receive the same top-quality service and equipment that they have come to expect.”

Ryan Sheridan (left), Huebsch regional sales manager, and Steve Michalec (right), M&L Equipment Co., congratulate Jim Adams on his selection as Huebsch Store Owner of the Quarter. (Photo: Alliance Laundry Systems)