Originally posted – Nov 26, 2014
It’s that time of year again – a time to reminisce about the 365 days gone by… and to try to predict what the next 365 have in store.
Everyone does it – from the largest television networks to the most niche bloggers. This month, we will be inundated with all that 2014 had to offer in the way of politics, sports, music, movies, literature, and so on.
What about the laundry business?
This past year, small-business owners faced good news and bad news. The housing crisis appeared to be in the rearview mirror and access to credit seemed to be improving. However, gridlock in Washington, the Affordable Care Act, the minimum wage and nervous consumers were all valid reasons for concern.
Specifically in the self-service laundry industry, store owners in 2014 pondered alternative payment systems, larger equipment, utility costs, rising water rates, commercial rents, shifting marketplace demographics, vend price decisions, energy-efficiency measures, drop-off laundry options, staffing and more.
Below, a number of laundry operators from across the country share their best and worst of 2014 – as well as offering their thoughts on 2015:
Wash It Kwik
The highlights for us in 2014 were more than $100,000 in major renovations, all paid for in cash. We installed a new boiler, storage tank, recirculating system and water filtration system. This helped us maintain a constant water temperature and also improved our water quality by removing the magnesium and calcium.
In addition, we removed all of our toploaders and upgraded to all hard-mount washers. This enabled us to increase our dollars per square foot.
Our biggest challenge was a single order that we had to turn over in 24 hours. This one order actually was about 300 small orders. We worked overnight and got it all done and delivered, and made a handsome profit.
This industry is slowly realizing that marketing gimmicks, such as “free dry,” are a poison that not only cannibalizes the market but also their own profitability. To survive and thrive, there must be more margin. This mistake can be seen throughout markets that have gone down this self-destructive path in all of the stores that are rundown and many just barely hanging on. They can’t break out of the cycle because they have built their business on a principle that doesn’t work for the owner… nor for the consumer.
Another negative trend I’ve witnessed is laundry owners going into debt to buy new equipment. When businesses are perpetually leveraged, it takes on too much risk and ends up working against their goal of having a thriving business. If you are looking for a competitive advantage in the marketplace, be debt free. This trumps every gimmick out there. It may not be very sophisticated, but show me one laundry owner who is debt free who went out of business. I’ve never heard of one. Now, show me all of the laundry owners who went out of business with debt coming out of their ears.
For 2015, I hope to see more laundry owners price for profit. With more profits, we can build more stores and improve our existing ones – with cash.
16th Street Coin Laundry
St. Petersburg, Fla.
I bought my first laundromat in June 2013, and so far it has been what I thought it would be. It has definitely been challenging but also rewarding. I enjoy being able to help people when there is a problem and not having to refer to some corporate guideline sheet that turns human beings into numbers measured by profit or loss.
Previously, I owned an Allstate insurance and financial agency. And, prior to that, I operated a soccer training company. So, I’m a service-driven person.
I’m currently looking for a second store; however, between laundromats being unreasonably priced in my market, as well as extremely high commercial rents, it’s been very difficult to find “Number Two.” Not that my first laundry was easy to find – it took me about two years to open that one.
I would like to see the laundry industry move toward renewable energy more quickly. We need to be able to use solar energy and wind to fully power our laundromats, and to get away from natural gas and electricity. This will bring down our utility costs and allow us to lessen our footprint on the environment.
Also, in 2015, the minimum wage needs to become a living wage. The more money in working people’s hands, the more money they spend. Study after study has shown the benefits of money in the hands of the masses. Trickle-down economics is a proven failure. Money in the hands of the few does not create jobs, or the ability of those with jobs to spend more.
If the trickle-down theory worked, we would be seeing the benefit of it with corporations making record profits, but we don’t. Demand creates jobs, and demand is created by working people spending money. Give more money to the working people. I’m tired of hearing about how raising the minimum wage hurts small business. All you need to do is look around at states with minimum wages higher than federal minimum – these states are the ones that are doing better economically.
Laundry owners should be ashamed to pay employees poverty wages.
Sunshine Express Laundry Center
This year has been a relatively tame one. We are taking steps toward the installation of photovoltaic arrays at two of our three facilities. The good news overall is that we are seeing double-digit sales increases with corresponding bottom line improvements.
For us, the larger challenges were weighing more sizable long-term investments. What’s more, succession planning is on the table now, too – and that’s always a weighty subject.
Trending in 2015, I believe high-extract washers have found their place in the laundry industry and will become the only long-term viable option for store owners as they retool and build new facilities. I also see us stepping deeper into green and sustainable practices – hopefully, being good stewards of the environment, as well as cutting-edge entrepreneurs.
EZ Coin Op
San Jose, Calif.
Business was stable at all three of my locations in 2014 – despite the fact that I had to move one of my stores to a new location directly across the street from its original location, when its lease expired.
The failed lease negotiation with a very stubborn property management company, followed by several months to complete successful lease negotiations with my new landlord, was definitely a challenge for me this year.
However, I took the opportunity to add a credit/debit/cash acceptance system to the laundry that I had to move.
This year, I saw the continued emergence of better-operated, cleaner and more up-to-date self-service laundries. I believe these more well-run stores will continue to drive out the older, poorly run, ill-equipped laundromats within the marketplace.
The Wash Tub
The biggest challenge we have faced is covering too much short-term debt. It cost us more to rebuild this laundry then we anticipated, starting out in 2012; in fact, we had to gut this building back to the block walls and start over.
However, we’ve seen our income slowly rise during the last two years.
From the very start, we offered our customers credit card and loyalty card acceptance. And, if I were to build another laundry, there’s no question I would install the same type of system. The record-keeping function is crucial – I can go back to the beginning and see what every machine we own has done and how heavily it’s being used.
I predict more laundromats in the future will either go with some type of card system, or else stores like mine will take their business.
Perfect Wash Express Laundry Center
Huntington Beach, Calif.
The main highlight of 2014 was finally opening my store after a 10-month buildout. But the best part of that was the gasping “Wows!” I heard from the customers visiting the store for the first time.
I gutted a 40-year-old store and retooled it with high-speed machines. The feedback from my customers was:
“This comforter has never been this clean!”
“Eighteen minutes to wash? Are you sure?”
“I can’t believe how fast I can get all of my laundry done!”
Most of my customers are coming out of their inadequately equipped apartment laundry rooms, and what they are finding is a store that’s safe to hang out in, washers that do a better job of cleaning their clothes in under an hour, and a staff that greets them and helps them with whatever they need while they’re here. We’re giving them back their days and weekends. My customers are recognizing the value of Perfect Wash, and we’re making them happy by making a positive difference in their lives.
Getting all of my systems up and running and managing all of them was a huge challenge. Three of my four attendants had no previous laundromat experience. Getting them trained – while developing a set of efficient practices, and dialing in the payment and storage systems – took some time. Mixing technology and people usually comes with a learning curve, but we’re steadily rockin’ it, and all of my attendants have proven to be valuable assets to this community and the success of Perfect Wash.
I believe one of the most important and least-talked-about trends is impeccable customer service with well-trained attendants. Self-service laundries are often thought to be absentee businesses, like a giant vending machine you come to periodically to clean the money out of. But that perception is an outdated paradigm and not a viable practice, if you want to stay in business.
My laundry is always attended by knowledgeable, friendly attendants who work hard to serve and educate our customers, as well as to keep the store looking great. As a result, my customers view Perfect Wash as their cutting-edge “neighborhood laundromat” in which they feel safe.
For 2015, I’m looking to focus more on my commercial accounts business. Perfect Wash is equipped to process thousands of pounds of laundry every day – in only 1,800 square feet of space – so it’s a matter of finding the businesses to partner with and keeping our systems and staff running and working smoothly; all while not intruding on our loyal self-service customers. To me, these types of opportunities are what make business ownership stimulating and enjoyable.
For me, the biggest event this year was being nominated for Small Business of the Year by my local Chamber of Commerce. Of course, there were several other highlights, including the payoff of a couple of small loans that we used for renovations and new equipment in one of the stores.
However, attending Dave Ramsey’s “Financial Peace University” early in the year made the biggest impact on my laundry business. Putting together a monthly budget for the business, as well as my personal life, has eased a lot of the stress. Items such as repairs, taxes and supplies are all budgeted and tracked. And watching the date on which I will be completely debt free really helps me keep my focus.
There were a few challenges in 2014. We had some staff changes that required hiring and training, but this has become a smoother process with the help of the CLA’s training DVDs and internal operation standards. The main focus this year has been on stabilizing the business, automating some tasks and experimenting with different marketing methods.
In 2015, we are looking into the installation of some larger equipment. Our biggest washers are in almost constant use. Switching other machines to accept $1 coins or tokens also is being considered.
And I’m researching the cost of bulk purchases of store supplies to reduce our ordering to one to two times per year.
And, as always, I’m looking for more locations.
Bakers Centre Laundry
This year was our first full year in business, and it was highlighted by steady growth, month after month. This exceeded our projections, as well as our expectations.
Perhaps our biggest challenge was being able to handle the continuously higher volume of wash-dry-fold laundry that customers were bringing us. Another hurdle was directing our marketing budget to be as effective as possible in order to continue to grow our customer base.
The biggest trends in our market were customers using their EBT cards to add value to their laundry cards, along with more customers continuing to use their credit cards and debit cards directly at the machines.
In 2015, we anticipate our volume will continue to grow, thanks for our increased use of social media and other innovative marketing strategies.
Candy Clean Laundry
Pembroke Pines, Fla.
So much has happened in 2014. At Candy Clean Laundry, we focused on “scent” – and the wash-dry-fold segment of our business doubled in revenue. That clearly was the highlight of our business.
We also launched our website and developed a more aggressive marketing strategy.
By contrast, the biggest challenge of 2014 was our staff. To this day, this remains a big obstacle. When they do show up, they often show up with an attitude. Despite this challenge, in 2015 we will try to grow our pickup and delivery service.
Family Laundry II
Kansas City, Mo.
In 2014, my wash-dry-fold business was up, but walk-in customer traffic was flat. This has encouraged me to go after more commercial business.
As the president of the CLA affiliate in this region, I have spoken with a number of other laundry owners in Missouri and Kansas. They tell me that, even though the economy for our customers is not much better than it have been, many of them have adapted and, therefore, laundries here are seeing some increases in business.
In 2015, I personally would like to see a big increase in my drop-off business, to get over the plateau on cash flow and to be able to upgrade and go after the potential walk-in customers again.
Canon Coin Laundry
I didn’t face any major challenges in 2014. In fact, it was a solid year for sales at all six of my stores.
I increased my vend prices in January without a single customer complaint. In addition, besides the usual repainting and repairs, I continued my long-term plan to upgrade to more efficient lighting and water heating. I still have one laundry left with eight-foot T-12 bulbs; I think that will be my first LED retrofit store.
In 2015, I see credit card acceptance as being the biggest trend in our industry. Every other business is seeing increases in credit card payments; even the self-service car wash industry has embraced it. Many laundry owners are so worried about the fees that ours is one of the few businesses left that doesn’t accept them universally. The next generation is moving quickly toward a cashless society, and most of us laundry owners are behind the curve.
Splish Splash Laundry
One of the highlights of 2014 for me was opening my second location, which was a rehab project. I bought a really beat-down store and installed all new equipment, rebuilt the walls that has featured old paneling, and added a nice bright light-blue color. And the customers love it.
The other major high point of this past business year was watching my first location, which I opened in mid-2013, grow past my original projections.
My biggest challenge has been managing my water bill. The city just raised my water rate in October; I’m paying once for the water and three more times for the sewer. To save on water, I’m replacing the last of my older washers this year, and I’ll be installing new low-flow toilets and touchless faucets as soon as my budget allows.
Another big challenge has been trying to grow my wash-dry-fold business. I’ve tried promoting it with coupons and flyers. My focus has been strictly on residential drop-off laundry, but I may consider going after some commercial accounts in 2015.
Also, I saw a large increase in the usage of my 60- and 80-pound washers this year and anticipate further increases next year. Customers are realizing the value in doing one big load, versus several smaller one. As a result, I added two new 60-pounders this year.
The Washboard Laundry
San Diego, Calif.
In 2014, I effectively left the coin laundry business and focused solely on my wash-dry-fold and commercial accounts business – and it has been best thing I’ve ever done. Within months, we turned a profit.
We landed some large commercial accounts that put a lot pressure on our production; we had to reschedule our staff accordingly so that we could maintain our existing customers, while being able to handle the additional volume.
The continued rise in utility costs and how to handle them is a constant challenge – do we absorb them into the bottom line or pass them along to the customer? This is what prompted the change from a self-service laundry to a full-service business – the double-digit profitability in a full-service laundry is not limited to the number of customers, but rather the service area and marketing.
In 2015, we will continue to focus on being a full-service laundry. We will continue to aggressively market and grow these services. And we will add staff, drivers and possibly a production facility.
The Laundry Basket
At my store, we do quite a bit of commercial work. We have 1,200 square feet of space adjacent to the laundromat where we have two 165-pound washers, a 175-pound dryer and a 24- by 120-inch ironer. We take in about 4,000 to 5,000 pounds of laundry per week from restaurants, delis, retirement homes and a local university. We also service salons, physical therapists, training centers and gyms.
For us, some of highlights of 2014 were picking up new commercial accounts and expanding that scope of our business. Also this year, our laundromat business enjoyed a significant increase in drop-off business through aggressive marketing, internet advertising and strong word of mouth. In the self-service segment, the highlights have been an increase in gross volume; we have been open for two and a half years, and volume still hasn’t completely leveled out.
One of the biggest challenges we faced in 2014 was staffing. We are busy every day of the week and that can be overwhelming for some. Also, as the machines begin to age, minor repairs have begun to spring up, and getting them fixed quickly is crucial.
I see our self-service business eventually leveling out, but being well above industry standards. In the future, we will focus on keeping that customer base happy and satisfied.
David and Jeff Gordon
Snow White Laundry
Long Branch, N.J.
The key to 2014 is simply that we had another successful year. With all of the steadily increasing costs of doing business – from soap costs to taxes to all of the other ridiculous standards that any business owner has to deal with – we continued to stay enough ahead to make a living.
Attracting new customers is always the biggest challenge. In our marketplace, customers come and go seasonally, so the goal is to constantly advertise and reach out to potential customers every year, without overspending on mailers and coupons. However, the cost of advertising versus the amount of customer traffic it draws can get a bit tricky.
In 2014, our wash-dry-fold service increased by 10 percent to 15 percent. I assume this is due to the fact that many people in the area just don’t have the time to do their own laundry anymore. For what it costs to sit here washing, drying and folding, they could be at work making money. So, they let us free up their days for just a few more dollars.
Next year, we plan to install a few credit/debit card readers on our larger machines and on about one-third of our dryers. I believe this will make our customers happier than having to pump $8.50 worth of quarters into an 80-pound machine. We truly believe this will boost cash flow and profits.
Associated Services Corp.
My highlights for 2014 were remodeling and expanding two existing locations, which included installing 80-pound machines at each location.
A big challenge has been trying to forecast the effect of Obamacare on my business, that added taxes and bureaucracy we’re facing. Also, we experienced high propane bills in my area, due to a shortage of propane in January and February of this year. In fact, our bills literally tripled for a while, and that hurt us. Of course, rising water bills also posed a challenge – and, as a result, being more efficient is an ongoing trend.
Another growing trend is alternative payments with credit cards, debit cards and phones. I’ve expanded those payment options into two additional stores this year.
In 2015, my goals are to try to be more profitable, to continue to invest in better equipment, and to continue to remodel and make my stores more efficient. Also, to see what happens with the business environment in general, relative to taxes, health insurance and all of those other rising costs.
In addition, we all face a pending decision from the U.S. Mint, which could alter our currency.
Of course, I’m also looking forward to the Clean Show in Atlanta this coming April. It’s a great chance to learn from others and to see what new equipment and trends are coming down the pike.
Salem Laundry Company, Inc.
The biggest highlight of 2014 is that I made it through it!
Actually, I conducted a major remodel of a store in 2013, and that laundry really took off this past year. It definitely pays to have new, efficient equipment. Your costs go down, while your gross goes up.
The biggest business challenge has been dealing with the harsh banking climate out there. I didn’t have a single mortgage loan that went bad, yet the banks, in general, treat small businesses like mine as if they were the root of the economic crash a few years ago. If you believe them, the federal regulators are forcing them into these positions.
Trend-wise, I didn’t see any huge adjustments within the industry in the last few years. Alternative forms of payment seem to be growing both in variety of options and acceptance by owners and customers alike.
Hopefully, 2015 will offer me business more of the same – constant improvement and streamlining of operations. I hope to do another major remodel in 2015, including a conversion to a card system.
It’s hard to believe we are already talking about 2015. I thought we just started 2014…