Running a Self-Service Laundry in Rural America
Rural laundromat.
At first glance, it’s almost an oxymoron. Just like “jumbo shrimp,” “deafening silence,” “virtual reality” and “random order,” the term “rural” simply should not be used to describe a self-service laundry.
After all, doesn’t Chapter One of the “Laundry 101” textbook tell us to select a store site that’s ultra-densely populated with low-income, blue-collar renters and large households bursting at the seams with small children?
Given those guidelines, the concept of the rural laundromat out in the wide open spaces somewhere simply shouldn’t work.
Yet, in reality, it does. Every laundry can’t be situated in the middle of New York City, Los Angeles or Chicago. And, although it’s probably the big operations in the major metro areas that initially come to mind when thinking of a traditional or stereotypical laundromat, the rural facilities also have an important role to play.
These are different types of operations, with different types of operators at the helm. But today’s rural laundry owners are making it work.
As a result, this month, we examine the businesses of five store owners who are going against the grain – succeeding in the self-service laundry industry far away from the bright lights of the big city:
Daryl Johnson
Locations: 7 Giant Wash facilities (six urban laundries in the Minneapolis-St. Paul market; and one rural store in Clear Lake, Iowa)
Store Size (Clear Lake): 1,700 square feet
Equipment: 22 washers and 16 dryers
Operations: Unattended; open 24 hours
Additional Services: Strictly self-service
Lease or Own: Lease
Other Businesses: Johnson also owns a small sign company that makes signs, banners and so on. This business grew as a result of the laundry operation needing signs for promotional purposes.
Advantages of a Rural Market: Typically, your cost of operation is going to be less. Your rent will be less. The cost of your space will be less. Typically, you’ll have a municipal water supply, and maybe even a local gas and electric – and I’ve found that it’s typically a bit cheaper than in a metro area. For example, in my Clear Lake store, my utilities are running about 9 percent of my gross sales. Also, my rent is 25 percent to 30 percent cheaper than what it would be in a metro area.
In addition, when I built the store, the cost of getting in – outside of the equipment – was cheaper than doing so in a metropolitan area.
Also, the obligations of inspectors and the difficulty of dealing with mechanical contractors and licenses was less.
When you talk to the city to pull your permits to be able to build out, you’ll find that the smaller, rural communities are much more pro-business and pro-development. They want to see their communities grow.
As a result, when you tell them you want to build a laundromat, they’re likely to say, “Fantastic! Where is it going, and how can we help you?”
And you likely can take advantage of tax abatements. There are tons of programs to help small businesses get going, because it’s a good thing for their community. This support is huge, and it’s one of the reasons why I built where I did – because the community was so positive.
Challenges of a Rural Market: Of course, the big disadvantage is the lack of density of population, and the fact that the customers are way more price-sensitive.
In most metro markets, you have different classes of customers – and, by that, I mean different personalities and buying habits. Some people are looking for the cheapest, while others want a higher end experience and are willing to pay to it. And then there’s everything in between.
However, in a rural market, you have all of those types of people mixed together, and you can’t design a specific type of business to meet a specific type of personality. Since there are only so many people in a rural market, anybody who wants to do laundry comes to your store because you’re the only one; but, the flip side of that is you’ve got to have what they want – your offerings have to be a bit wider.
After all, these potential customers are already in their cars driving to you – and, if there is another store 10 or 15 miles away that’s better than yours, they’re going to go there, because they’re already driving.
In a metro environment, your competition is a half-mile to a mile away. In a rural market, you competition might be 20 miles away, and your customers will leave you and drive 20 miles to another store. Rural people are much more mobile. As a result, you have to think more regionally.
For example, there’s a group of Hispanic customers who come up in two vans about once a week from a community that’s 40 miles away, passing by at least five other laundries on the way to use my large equipment. Clearly, I never in a million years thought I would get that type of business from that far away. You can’t plan for that, but that’s the kind of thing that occurs in rural markets.
Another huge challenge comes down to simply not having the cash flow. You’re not running enough revenue to be able to go out and spend $80,000 to $100,000 to do a full or partial remodel of your store.
So, now you’re constantly trying to upgrade your equipment on a slow, methodical basis – and this becomes a big challenge. The remodel becomes a 10-year process, because you’ve got to do it piecemeal. And that’s a hard way to upgrade.
By the time you get to the end of your upgrade, the manufacturers may have changed the equipment. Your overall design is now flawed. But that’s how many rural operators are forced to remodel.
Best Advice for Other Rural Operators: If you’re going to be an absentee owner, who you choose to do your cleaning and otherwise be the “face” of your store, is critical in rural communities. Much more than in a large city, if you choose the wrong person for your small town store, you will drive people away.
Also, be ultra-conservative in running your numbers. Initially, those figures aren’t going to be as good as you thought. Rural communities have very slow growth rates. And, if there’s not a laundromat in the town in which you’re building, you have to change behaviors, which is a slow process.
Although your demographics may support $100,000 a year in revenue, you might come in at half or one-third of that during your first couple of years in business. My laundry in Clear Lake is four years old, and I’m finally hitting the numbers I thought I would hit within 18 months. It’s hard to change the behaviors of rural people; they’re very slow when it comes to buying in.
Lawrence Keenan
Location: Nokomis Coin Laundry, Alexandria, Minn.
Store Size: 3,100 square feet
Equipment: 40 washers and 32 dryers
Operations: The laundry is partially attended three hours per day. Its business hours are 5:45 a.m. to 10:00 p.m. daily.
Additional Services: Strictly self-service
Lease or Own: Keenan owns the strip center in which Nokomis is located and leases the store back to himself. The only way he could get financing for the strip center was to have the place leased out, so he pays rent just like any other tenant.
Other Businesses: Keenan has been a real estate agent for 38 years.
Marketplace Facts: Alexandria is known as a tourism center due to its many lakes and resorts. A large number of those who live in the city are not calculated into the population because they are actually outside of the city, living on and around the area’s lakes. In 2013, Alexandria was voted among the “Top 10 Best Small Towns” by Livability.com.
Challenges of a Rural Market: I do 99 percent of the equipment repairs myself. In 10 years, I’ve only had my laundry distributor come up here twice to work on my machines.
Unfortunately, I’ve been unable to find a local appliance repair person who knows how to work on commercial laundry equipment, so maintenance and repair fall to me, as is the case with many rural laundry operators I would assume.
Another minor disadvantage of operating in a small community is the fact that people know me – so, they will come up to me wherever I’m at and ask for that quarter they lost in one of my washers. I’ve had customers come to my real estate office, stop me in the local coffee shop and even go to my wife’s office looking for refunds. I’m guessing that wouldn’t happen in a metro area.
Designing a Rural Laundry: When visiting stores in larger cities, I’m astounded by the number of people in there, and more importantly, by the narrowness of the aisles. Customers across from each other will be bumping into each other as they load their respective washers.
With Nokomis, I purposely designed 10-foot aisles and plenty of room. For whatever reasons, small-town rural folks in less-densely populated areas prefer more open space, even in their laundromats – so I’ve built a store to meet that somewhat intangible need.
Tony May
Locations: Suds & Sparkle, Stacyville, Iowa; and The Wash Tub, Osage, Iowa. They are 12 miles apart.
Equipment: Suds & Sparkle has 12 washers, including 10 toploaders, and four dryers. The Wash Tub features 16 washers and 14 dryers
Operations: Both laundries are unattended and open 24 hours.
Additional Services: Suds & Sparkle also features a car wash, while The Wash Tub includes a wash-dry-fold service, as well as a dog wash. The dog wash costs $5 for 10 minutes, and May views each dog washed at his store as similar to a wash cycle on one of his 50-pound frontloaders.
Lease or Own: Own
Other Businesses: May also sells portable buildings, installs windows and siding, and owns a construction business.
Marketplace Fact: According to the U.S. Census Bureau, Stacyville encompasses a total land area of 0.53 square miles and boasts a population of 494.
Advantages of a Rural Market: There’s no vandalism and very little crime. In fact, I once left the back door to my mechanical room open, with the key still in the lock – and one of my customers locked up the store and took the keys to the police station.
On another occasion, I had a customer forget a load of clothes in the dryer, so I gathered them up and delivered them to her at home. There’s more of a personal touch going both ways in a rural community, so you can develop a stronger relationship with your customers than in an urban setting.
I believe in loyalty. I do a lot of construction around the area, and I can pull customers to my store from 30 miles away, because of loyalty and relationship-building.
Keys to Success: In rural areas, there’s not a lot of traffic at night, so being well-lit is a key. It’s also important to have good visibility; in a small community, a laundromat can’t be sitting way back off the road. You have to be on the main drag through town.
It’s also crucial to scale your laundry operation to your particular marketplace. My distributor studied the demographics with me and planned out what equipment I should put in here. That’s so important – go to the marketplace experts, do your own research and get your demographics figured out before anything else.
For example, in Stacyville, we have a combination car wash/laundry business. If it didn’t have a car wash, we’d tear that store down. There’s not enough laundry business there to keep the lights on. In fact, I don’t know if you can make it in a town of less than 2,000 or 3,000 people – unless that town has something to draw those from other towns, such as jobs or shopping.
In my mind, another major key is simply answering your phone. My cell phone number is on the walls of my stores – in foot-tall numbers. And I do answer my phone. It may seem like a small thing, but I’m a firm believer that you must answer the phone, especially in a rural market.
Best Advice for Other Rural Operators: You have to keep up with the times. I believe card acceptance eventually will be available in all stores. It’s going to happen. I’ve got $21,000 invested in my card system, and it’s been well worth every penny. My entire Osage store has card readers.
Especially for rural operators, many of whom also are working other business ventures, the management capabilities are huge. I track everything on my computer. If you’re not going to keep up with technology and stay modern, it’s time to quit.
Bob Frandsen
Locations: 7 Maytag Laundry facilities (six Minnesota locations: Lexington, Forest Lake, North Branch, Pine City, Cloquet and Duluth; and one Wisconsin location in Superior)
Store Sizes: The largest store is approximately 3,600 square feet, and the smallest laundry is about 2,200 square feet.
Equipment: On average, Frandsen’s typical store features all hard-mount, frontloading washers – including two 80-pounders, four 4 60-pounders, four 40-pounders and about 10 20-pounders.
Operations: Unattended; open from 6:00 a.m. to 10:00 p.m. daily
Additional Services: Strictly self-service
Lease or Own: Own. Frandsen said he wouldn’t buy a coin laundry these days unless he can own the property.
Marketplace Fact: From one end to the other, Frandsen’s stores stretch approximately 150 miles. Frandsen lives in the middle, and his manager lives on one end. Bob noted that he puts about 50,000 miles on his vehicle per year.
Marketplace Demographics: With rural markets, you can’t just look at the town population. You’ve also got to look at what’s around the town. How big is the school district, for example? People tend to shop near where their kids go to school. Being close to the grocery store is very helpful, too.
In Pine City, for instance, the grocery store is right next to me, and the trailer park is three blocks away. That’s a lot of customers.
In addition, with small towns, a lot of your customers live out in the country where the zoning isn’t so strict. They may have five acres with a trailer house on it, but they don’t have the greatest sewer system or water system. Those people tend to be laundry customers, because they don’t have the infrastructure and aren’t hooked up to city water.
Of course, the other demographic are the tourists who come up in the summer. Maybe they’ve got a camper parked in a resort area or a permanent little modular home for the weekends, but they don’t have any laundry facilities. So you have to look beyond just the city limits of these small towns.
With that said, if we can’t do at least $2,500 a week in sales and probably closer to $3,000 a week, we’re not interested. Perhaps the trailer park isn’t big enough or there aren’t enough apartments or tourists, but we just can’t make it on $1,500 a week in sales and do it properly.
Advantages of a Rural Market: First of all, you’re typically the only show in town. Secondly, there is the security factor – we haven’t had any major vandalism or break-in problems for several years. And, lastly, rural markets provide you with the ability to own your building; if my laundry went out of business, I would still have something to sell.
Challenges of a Rural Market: One of the biggest challenges for me is the distance between stores. I’ve got 150 miles between my stores, whereas owners in some metro areas may have seven stores within 25 miles or less. If I’m 100 miles away and there’s a flood or a dryer fire, that’s a big disadvantage.
Also, when you get into some of these small towns, their water and sewer rates can be extremely high. I’ve got a couple stores where my water and sewer bill costs more than my electric and natural gas combined. Because of that, in some of our laundries, we don’t offer a pre-wash. After all, how much can you charge? I don’t want to take advantage of people just because we’re the only show in town.
Keys to Success: Partner with a knowledgeable distributor, try to get a good feel for the town and surrounding areas, and don’t overbuild your rural store. It’s OK if someone has to wait 10 minutes once in a while for a machine. Of course, if it’s happening all the time or you’re averaging eight turns per day, then you need more machines.
Also, you’ve got to have parking right in front or very close to the laundry. Small towns aren’t so densely populated that you can’t find a location that has good parking. That’s a big advantage that rural laundries have, and rural customers expect it.
To me, the final keys are to own your building and then take care of it. When I walk into another store and see half the lights burned out and three or four pieces of equipment out of service – to me, that’s taking advantage of people.
Trent Atkins
Location: Spot-On Laundry, Vidalia, Ga.
Store Size: 2,500 square feet
Equipment: 30 washers and 31 dryers
Operations: Partially attended; open 24 hours
Additional Services: Wash-dry-fold and ironing
Lease or Own: Own
Other Businesses: Atkins is a pharmacist who also owns three pharmacies.
Marketplace Fact: Vidalia, Ga., is perhaps best known for producing the world-famous Vidalia Sweet Onion. The peak harvest season is from April until July. During this time, Spot-On Laundry benefits from having a large number of migrant workers living and working in the area – with the vast majority of them washing their clothes at a laundromat.
Advantages of a Rural Market: Since I’m in more of a rural area and seeing as I’m already in the pharmacy business here, a lot of people already knew me. That common ground probably helps my laundry business a little bit.
Also, in rural areas like this, you don’t have as many people trying to get into the business. Just bringing in a new product or a new entity like this will get noticed quickly here, whereas if we were in a metropolitan area, it’s much harder to get noticed – and someone five miles away might not even know you exist. Although 90 percent of our customers are within a 10-mile radius of the store, we draw some customers from as far away as 25 to 30 miles. Of course, out here, you can drive 30 miles in 30 minutes; in Atlanta, that might take you three hours.
Challenges of a Rural Market: You’d like to have your laundromat bursting at the seams all the time, with every washer and dryer turning. However, simply because of sheer numbers, you don’t have as many clients as you would in more of a metropolitan area. Then again, you would have more competition in a metro marketing, too.
Another challenge is not having a repair person in the same town. Currently, my service tech has to drive 90 miles to get here.
Also, with a rural area like this, if I’m doing well and am considering opening another store, I would need to go to another town, which is probably about 30 miles away. Simply because of logistics and demographics, I’m going to have to travel that far to another town that needs a store. By contrast, if I were based in Savannah or Atlanta, I could own several laundries just within the metro area.
Best Advice for Other Rural Operators: Treat it like you’ve got a dozen other competitors going against you and they’re all trying to put you out of business. Just because you think you can corner the market and be the only game in town, don’t ever think that way. Don’t take that for granted. Give it your best. Treat your store like it’s where you’ll be doing your own laundry. Don’t get complacent.
Competition is good for everybody. It drives you. You may feel like you don’t have a lot of competition, but you still need to act like you’re operating against a dozen other aggressive laundry owners, ready to take your business.
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