And the Survey Says

Whether Researching the Industry for the First Time or an Established Store Owner, Doing Your Homework is the Key to Success – And the CLA’s Annual Coin Laundry Industry Survey Can HelpCall it “due diligence” or “doing your homework” or just simply “keeping up on the industry.”Whatever you choose to call it, staying up to date on the laundry business can be a difficult task. After all, you’re busy running your own store. How can you keep up with what everyone else is doing around the country?No, it’s not easy. However, being aware of changes, challenges and opportunities in the vended laundry business, as well as the growing industry trends, can place you well ahead of the curve and in the best position to maximize your profit potential – it can make you the leader in your marketplace.To this end, the Coin Laundry Association annually commissions Readex Research, a nationally recognized independent research company, to conduct an industrywide survey of self-service laundry owners. With questions covering everything from utility costs to vend pricing, the purpose of the survey is to compose what essentially is a profile of today’s retail, self-service laundries within the U.S.With the 2016 version of this industry survey having recently been released, here’s a look at some of the more critical statistics for those running self-service laundries in 2016 or at least thinking about getting into the industry.‘The Big Three’When it comes to overhead, “The Big Three” for the majority of laundry owners are rent, payroll and utilities. The CLA survey takes a look at all three of these critical factors.With regard to rent, 23% of laundry owners responding to the survey are paying between $1.50 and $1.99 per square foot per month, followed by 18% of operators paying between $1.25 and $1.49 a month, and another 18% paying between $1.00 and $1.24 monthly. At the highest end, 4% of owners noted that they are paying $3.00 or more per square foot per month in rent.In addition, 26% of the respondents said their rent represents 20% to 29% of their gross revenue. This group was followed by 23% of owners whose monthly rent is between 15% and 19% of their gross. For 3% of the owners responding, rent represents 60% or more of their gross revenue.For payroll, nearly a quarter of store owners responding (22%) indicated that paying their employees represented between 25% and 29% of their gross revenue, which was a huge jump from last year’s survey, where only 4% of the respondents said their payroll took such a significant bite out of their gross revenue. Furthermore, 12% of owners are paying 30% to 34% of their gross to their staff members, while only 3% of responding operators in 2015’s survey were doing so.As far as utilities, 26% of survey respondents pointed out that their utility costs represented from 20% to 24% of their gross revenue, while the second most popular response (given by 19% of the laundry owners surveyed) was 25% to 29% of their gross. Interestingly, operators who indicated that their utility costs are running less than 10% of their gross jumped from 3% last year to 7% in this year’s survey.Grossed OutWhen asked their annual total gross revenue, including any revenue generated from drycleaning or other ancillary services, 18% of the owners responding said they were making between $100,000 and $149,999. This answer was followed by 16% of respondents pulling in between $150,000 and $199,999 per year, and 12% in the $200,000-to-$299,999 range.At the higher end of the spectrum, the percent of operators grossing $300,000 to $399,999 doubled from last year – from 5% to 10%. And those making between $400,000 and $499,999 jumped from just 2% to 7%.What the Future HoldsTaking a look down the road, the survey asked laundry owners what their business plans were for the next 12 months. Nearly a quarter of the operators responding (23%) said that they planned on purchasing an existing store, while an additional 8% of the respondents are considering building a new self-service laundry from the ground up.It’s interesting to note that in 2015’s survey only 15% of store owners were considering buying an existing store in the coming year.Ancillary Profit CentersBeyond the self-service segment of the industry, wash-dry-fold continues to be a strong “business-within-a-business” for many laundry operators. In fact, 58% of store owners responding to the survey offer some form of drop-off laundry service to their customers. What’s more, nearly one in four of those owners (21%) are now providing pick and delivery for the wash-dry-fold customers.The top 5 ancillary services broke down as follows:• Vended Soap: 84%
• Vended Soda and/or Snacks: 83%
• Laundry Bag Sales: 61%
• WiFi Access: 55%
• Soap Sold Over the Counter: 31%Getting the Word OutLaundry owners are increasingly looking toward digital marketing as the way to promote their businesses. This was made clear by the 23% of operators who indicated they used social media to advertise their stores, making it the leading advertising vehicle in the survey and marking the first time it has topped this category. Social media was followed closely (22%) by promoting their business through a website.Rounding out the top five ways to advertise their laundries, respondents pointed to signs and banners (18%), the Yellow Pages (16%), and in-store promotions (13%). Also, the use of online directories dropped significantly (11%) from last year (21%).Where Credit is DueAlthough the majority of laundry owners responding to the CLA survey (68%) don’t accept credit cards as a form of payment, this thinking among operators appears to be changing. In fact, 18% of store owners accept credit cards at their customer service counters for wash-dry-fold and other services. Moreover, 10% of respondents offer credit card acceptance on some of their washers and dryers, while 6% offer the ability to pay by credit card on all of their laundry equipment.Living LargeThe movement toward larger washers and dryers in today’s self-service laundries in nothing new. The bigger-is-better trend has been with us for several years, and this year’s survey seems to show that laundry owners are maintaining that mindset.The average number of 40- to 49-pound frontloaders – as well as 50- to 60-pound and 90- to 100-pound washers – increased over last year’s quantities at the laundries surveyed. Additionally, the average number of 50- and 75-pound dryers also jumped, when compared to the 2015 survey.Prepare to SucceedTennis great Arthur Ashe once said, “One important key to success is self-confidence. An important key to self-confidence is preparation.”Your preparation toward becoming a more confident, successful laundry owner can start with the crucial knowledge gained from the CLA’s Coin Laundry Industry Survey.Additionally, the CLA has released its Multi-Year Compilation Survey. Want to dig a bit deeper into today’s laundry industry trends? This store profile study provides trending data that goes back 10 years on the majority of the industry topics covered.Both of these reports are available for free to CLA members as downloads at the Member Library at coinlaundry.org. In addition, this data is available for purchase to non-members at the CLA’s online store, also located at coinlaundry.org.