An Interview with Long-Time Industry Veteran Lionel Bogut

lionelWith more than 50 years in the industry, Lionel Bogut’s list of industry credentials is an impressive one, and his experience has run the gamut from multi-store ownership to owning his own commercial distributorship. Additionally, Bogut, who received the CLA’s Founder’s Award in 1997, has always given freely of his time and talent to the industry’s associations at the local, state and national levels. He has served as president of the now-defunct San Diego County Coin Laundry Association, as well as having been an active member of the CLA’s Board of Directors. Also, as publisher of Coin Laundry News, Bogut continues to distribute timely industry information and business-building ideas to today’s laundry owners.

How and when did you first get involved in the laundry industry?

I literally was born into the business. My father and mother operated a laundry business in the Twin Cities. Then, in the mid-1930s, when I was about 2 years old, we moved to Montana – and it was there that they ended up owning the majority of the laundries in the northeastern portion of the state.

This was a boom time in the area because they were building the Fort Peck Dam, which was a major, long-term construction project. So, our laundry business thrived.

Also, around the time, my dad became one of the earliest coin laundry operators in the United States. However, he didn’t think it would work well, so he closed it down shortly after opening it. Again, this was in the mid- to late-1930s.

My first job in the family laundry business was doing what we called “jumping truck.” I rode along with the driver, who was probably just old enough to have a license and only a few years older than me – and, when he would stop to make big delivery, I would run smaller bundles to other customers in the neighboring area. That was my first job, even though it was before I was legal to work.

Eventually, I went to work for Maytag’s commercial laundry division. At the time, the company was just beginning to sell machines for coin-operated use. Up until that time, individual laundry owners would buy washers, and the company would “convert” them – basically, slapping meters or whatever they needed onto the machine so that it could be used in that way.

What attracted you to the laundry industry in the first place?

In many ways, due to my family’s business, it was chosen for me. And, of course, I almost left several times. I did serve a stint in the Army, going to Korea. And I also went away to college, studying at the University of Montana.

However, even while in school, I couldn’t seem to stay away from the business, as I took a job at a local drycleaning plant for a short period of time. To be honest, I probably worked there only for the equivalent of about one quarter. The owner was desperate for someone who had some kind of experience in the business. And, by the way, I wasn’t very good at it.

How would you best describe the early days of the self-service laundry industry?

In those early days, customers didn’t run machines for an entire cycle. Instead, they rented them by the hour to do their laundry, and then they took their laundry someplace else to dry, most likely they took it home to be hung up.

Then, shortly after World War II, automatic laundries began to add dryers as a service, and that’s where it became more of a full-service business.

The laundry business was booming, and there were those who honestly felt they could put a new laundry every four or five blocks and that they all would do well. All types of professionals – like doctors and lawyers – were investing in these new laundromats. But, after a while, many of them began to discover that their new “side businesses” weren’t as easy to run as they were led to believe – and that these laundries required consistent ownership management. This is when the business became more of a profession.

When I began, you could get a wash for a dime or 15 cents. In fact, for a long time, there was a huge argument among laundry owners, as to whether or not they could go to a quarter? Would the public stand for such a price increase?

Finally, some of the more proactive, advanced leaders in the business decided to increase their vend prices to 25 cents – and the sky didn’t fall. Of course, today the average price is about $1.50, and I assume one of these days it will be $2.

What are the biggest changes you’ve noticed in the industry since you’ve been involved in it?

The cost of building a laundry has risen remarkably. This is a big change. In the beginning, a small investor could own a coin laundry, but today it requires a large-capacity, well-capitalized investor to buy or build a new self-service laundry. That’s changed the game.

I believe small laundries will survive and continue to be around, because there are several markets in the U.S. where big-capacity, large-format laundries would simply be an over-build. A small, well-run laundry that is kept modern and up to date and is located in the right marketplace will survive and do well for years and years to come.

And, by “small,” I mean 30 to 40 washers or less. In fact, there are still a number of 20-washer laundries around. And that is something the average investor possibly could afford.

Another big change is the growth of the national Coin Laundry Association. In the early days, there used to be simply a bunch of small local organizations, until the industry formed the National Automatic Laundry Cleaning Council – the forerunner of today’s CLA – which began primarily with the backing and blessing of the manufacturers.

This has led to a much more professional laundry industry. The CLA offers a lot of industry education to owners throughout the year. A great example will be the educational sessions it will present at next month’s Clean Show in Atlanta. And even the laundry operators who don’t attend those presentations will hear and read about them – and they will, in turn, adopt a lot of those forward-thinking policies. All in all, the industry is more professionally run and features more business-savvy owners these days.

What are the most dramatic equipment enhancements you’ve seen over the years?

You must remember that, at first, it was nothing but toploading washers. Then, Westinghouse came out with frontloading models – but, for years, the majority of the coin laundries being built featured toploaders.

Laundries evolved from offering single-load washers to gradually adding large-capacity dryers, and then one or two heavy-duty, multi-load washers. And the industry grew from there.

Today, most of the laundries seem to be being built with a lot of frontloading washers – and, of course, there are several all-frontload laundries now.

I think someone who deserves a lot of credit for this is Bernie Milch of Wascomat, who early on decided that an all-frontload washer store would work in this industry and who he worked for years with that concept in mind. When I first met Bernie, I hadn’t even heard of his brand.

To me, this is the single biggest equipment change I’ve seen.

The increase in the size of washers from single-load equipment to big machines that I suppose could be called 10-loaders also changed the laundromat industry.

There’s also the stack dryer. When it was first introduced, I was working for Maytag; we introduced a single-load dryer stacked on top of another single-load dryer. Of course, that has now been enhanced with large-capacity dryers on top of large-capacity dryers. So, owners can get more equipment into a smaller space. And, at the cost per square foot of space these days, that’s a big enhancement. It doubles your capacity.

Payment options are another huge change. It used to be that customers had to go to the laundry with enough quarters to do business. Then, we added the coin changer. If a customer brought in a 50-cent piece, he or she would receive two quarters for the machines.

Next, the manufacturers introduced the dollar bill changer and then the multi-bill changer, which further increased capacity and convenience. And, now, laundry owners have the ability to offer their customers the option to prepay with their credit and debit cards. Again, this makes it even easier to do business.

During your career, you’ve been a laundry owner, as well as being involved on the manufacturing side. You’ve also been a distributor, a store broker, and have served as an expert witness in cases revolving around the laundry industry. And, of course, these days you’re perhaps most well-known for founding and publishing Coin Laundry News. How have your business activities evolved?

Recognizing that it takes a lot of energy to run a self-service laundry, I’m out of the laundry business. Although I’m still interested in it, and I still visit some of the laundries I used to own.

I’m also no longer a store broker; I retired from that about a year and a half ago. But I still am perfectly willing to serve as an expert witness, primarily when it’s a case of laundry owner against laundry owner.

I’ve testified in more than a hundred court cases over the years. It’s typically a case of when a laundry owner sells a store, and they’ve been offering a certain type of service – and then somebody else buys that business and stops offering that service.

For instance, in one case, a laundry owner would give every customer a free ice cream cup whenever the temperature in the store reached 90 degrees; this promotion helped keep his business up over the hot summer months. However, after he sold the laundry, the new owner – who didn’t like to waste money – wasn’t about to give away free ice cream, so his business dipped in the summer. He got upset and sued the previous owner for not telling him the truth about the store’s business during the summer.

Of course, the magazine is still going strong. We published our first issue in October 1989. These days, I’m in the office for a couple of hours every day, usually in the morning. During that time, I’ll write my column and any other articles that will be going into the upcoming issue. But, for all intents and purposes, my son David is the publisher; he’s doing everything with the magazine these days.

What did your first laundry cost you?

It cost me $12,000 to buy it, and when I sold it about five years later, I got $70,000 for it. This was in the early 1970s. It was a 1,000-square-foot facility – a 25-washer laundry, with one frontloader and 12 dryers.

When you first got into the business, what did you charge for a load of laundry?

I always charged at least a quarter.

Years ago, at an industry convention in Chicago, I was talking with this owner, and he said he was really struggling with whether or not to raise his price from 15 cents to a quarter. About a year later, I spoke with him again, and he said he went to a quarter after our conversation – and he added that his business went up, because his customers preferred using just one coin, rather than two. He said this improved his business, and his entire market went to a quarter.

In what ways have laundries changed over the years?

First of all, nobody really cared much about decorating or designing their laundries in the early days. They slapped in the plumbing and that was it. The washers were on one side and the dryers on the other, and that was a modern laundry for the time.

Since that time, owners have gone into a lot of decorating, which makes a good deal of sense to help attract customers. Today, the basic rough-plumbing-only laundry is not going to do well, especially if customers have the choice to go someplace that’s more pleasant.

Also, there are other profits centers in stores today, which is a wonderful idea. Drop-off laundry and drycleaning services are probably the first offerings that come to mind – all you need is a limited amount of extra space and to be attended for a certain number of hours every day. And, if you’ve already got an attendant, that employee can do the wash-dry-fold loads. It’s a considerable help for working parents and singles.

Of course, other profit centers that have become almost standard in laundries include the sale of soft drinks, snacks and detergent.

Over the years, there are laundry owners who have tried just about everything – from having small grocery stores in the laundries to selling beer and wine. In Nevada, they’ve even put slot machines into the laundries – and I understand they were very profitable.

Have laundry owners themselves changed over the years?

Most of the operators I knew in the beginning were retirees or people about to retire. Now, owners are considerably younger. Plus, I’ve noticed that we’re now getting a good deal of second- and third-generation ownership of laundries and distributors.

How has the laundry industry improved itself since you first broke into the business?

Above all, the efficiency of the equipment has improved greatly – from the amount of water used to the lower energy requirements.

The other big improvement is that owners have become a good deal more professional. As I noted before, even the operators who choose not to attend industry meetings have become more professional, because they’re forced to by their competitors who do attend.

What’s the biggest mistake you’ve ever made in this industry?

When I needed cash, I sold laundries for much lower prices than I really should have. I wish I would have held onto them, even despite the momentary financial discomfort it might have caused. Had I hung onto them, I could have made a good deal more money. That’s my only major regret.

Also, I probably shouldn’t have waited until I had worked for corporations for nearly 10 years before getting into distributing or publishing myself.

What’s been the most gratifying aspect of your life in the laundry business?

I hope I’ve comfortably fed and led my family. Beyond that, I enjoyed serving on the CLA’s Board of Directors. I’ve met some of the most wonderful people in my life in the laundry business.

What keeps you active in this business after all these years?

My wife likes me out of the house…

Other than that, I like to feel that I’m contributing. And I think I can help more people by staying in the industry than by getting out.

In general, what’s the key to longevity in this industry?

As long a laundry owner is enjoying it, he or she should stay in it. The minute you start not liking something, get out. As for me, I’m only 82, and I expect to be here until 90 or 100.

What does the future look like for the self-service laundry business?

I think self-service laundries will be part of American society for the totally foreseeable future; I’m talking about the next 50 to 100 years.

When they come up with a way to wash clothes without machinery or water, maybe then things will change. But, until then, I think there will always be vended laundries in America’s future.

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