Provide a Colorful Palette of Services – And Smile All the Way to the Bank

All vended laundries are different and cater to their own unique demographics. No two locations are the same. To maximize revenue generated from a specific demographic, it makes sense to appeal to its diversity. Consider offering services – from your laundry hub – that go beyond the self-service customer. Create services that appeal to homeowners, professionals, singles, nearby businesses and so on. Then, as you transition your laundry into a service center, help the market realize how you can best serve those within it. By offering solutions that appeal to your entire demographic, you’ll better penetrate your market; create multiple, diverse revenue streams; and grow store revenue and profits – all while better utilizing your equipment and labor.

Demographics and Distributors

The first step is to analyze your demographic and evaluate the services you offer with new services you might introduce. This is as important for a store that’s just opening as it is for a laundry that’s been in business for years. Expect that demographic report to help you build a profile of your laundry’s customer base. It will provide data detailing income level, gender, race, education level, homeownership rate, occupation and marital status, among others. Get in touch with your equipment distributor for assistance. Your distributor does more than simply sell equipment. Distributors understand their local markets well and will tell you if your unique demographics can support an additional service. A quality distributor will run a demographic report and evaluate it; analyze competitors and their services; evaluate store layout and space requirements; and provide a pro forma financial statement, which is a cash flow summary that overviews capital outlay, return on investment, wash and dry income, services income, taxable income, losses, expenses and more. The pro forma illuminates the numbers in black and white so that it’s easier to determine if adding a new service makes financial sense. A vended laundry might embrace multiple services to better penetrate its demographic. John Stuckey, owner of four Wash World laundries in Omaha, Neb., offers several services for this reason. That’s why his laundries – in addition to offering the self-service option – provide wash-dry-fold, drop-off drycleaning, and full-service pickup and delivery of residential and commercial laundry. “It’s been our philosophy all along that a full combination of services evens the ups and downs of a strictly self-service business,” he explained. “It evens out the cash flow stream.” In the last five years, Stuckey has purchased two Continental flatwork ironers to broaden that offering. Today, Wash World laundries service food and beverage businesses that require ironed table linens. For Stuckey, each service adds to his gross revenue, while more fully utilizing labor and equipment. To capture business from mid- and high-income homeowners, professionals or local businesses – such as spas and motels – most vended laundries start by initiating drop-off wash-dry-fold and drycleaning.

Drop-Off Drycleaning

Be certain to partner with a reputable drycleaner, warns Dan Sofranko, owner of Perfect Wash Express Laundry Center, located in Huntington Beach, Calif. “I partner with a great drycleaner, so it’s well worth it because it adds to the customer’s top-of-mind image that laundry gets done right with us,” he noted. By offering drop-off drycleaning, Sofranko draws men and women looking to dryclean higher-end garments and business attire. When customers drop garments off, they’re bound to make note of the other services offered. Perhaps they’ll return to clean their comforters in Sofranko’s large washers or to take advantage of his full-service wash-dry-fold option? It’s a great way to drive more business to your store. Although the revenue generated from drop-off drycleaning might be a small percentage of sales, it still adds to the bottom line. Plus, it sets the stage for a bigger moneymaker – wash-dry-fold.

Drop-Off Wash-Dry-Fold

Drop-off wash-dry-fold attracts higher-income customers who don’t have the desire or time to do laundry themselves, as well as local businesses in need of clean towels or sheets. Additionally, a wash-dry-fold service appeals to customers looking to clean bulky items – including comforters, boat covers, moving blankets and boat carpeting. Wash-dry-fold harnesses attendant labor and idle equipment to create a new revenue stream and maximize profit per square foot. A recent Coin Laundry Association survey discovered that 56 percent of responding laundries offer drop-off wash-dry-fold services. According to the CLA, the average family spends $12 per week at a vended laundry. Wash-dry-fold service quadruples that amount, enabling laundries to move from generating $12 per family to $45 or $60! At Sofranko’s laundry, wash-dry-fold represents 47 percent of the total business.

Ironing

A measly 7 percent of laundry owners offer ironing services, according to the CLA survey. Yet, doing so can catapult your business! If you already enjoy a solid wash-dry-fold business and have the room, by all means get an ironer. While a flatwork ironer will allow you to capture more commercial accounts, it requires about 60 square feet of dedicated space. I know several laundry owners, like Stuckey, who agree that owning an ironer is a game-changer. Each has successfully captured larger commercial accounts, even when the percentage of ironed goods was small. Additionally, they experienced a return on their investment in less than a year. Who are they? Rob Maes, owner of three laundries in the Houston area; Jeff Gardner, president of The Laundry Doctor in St. Paul, Minn.; and Mike “Stucky” Szczotka, who owns New Wave Laundry in a suburb of Detroit. Gardner said sales jumped thanks to his ability to iron sheets and pillowcases. “That single piece of equipment allowed me to do work for massage therapists, spas and acupuncturists,” he explained. “They started talking about my business to friends. Then business boomed.” Similarly, Szczotka picked up accounts from cosmetic surgeons, massage therapists and party rental companies. He uses the ironer in combination with highly programmable washers to properly clean and finish spa and table linens. The ironer addition elevated profits by $800 per week. It’s been in use there for 15 years.

Pickup and Delivery

Like ironing, a pickup-and-delivery service can take wash-dry-fold revenue to new heights by allowing laundries to expand their market reach and attract new residential and commercial business. But, is it worth the investment of a vehicle, driver, insurance costs and advertising? Stuckey thinks so. “Adding pickup and delivery increases expenses, but I already have the equipment and most of the labor assets sitting there,” he reasoned. “I believe that, if there is any way to make that equipment run, it will end up paying for the additional expenses. It’s about economy of scale. The bigger business gets, the more profitable it becomes.” Sofranko agrees. Launched a couple of years ago, Sofranko’s pickup and delivery now generates the lion’s share of his total wash-dry-fold revenue. “I knew I could only capture certain commercial customers by having pickup and delivery,” he said. “So, I eased into it. The initial investment takes a while to pay off, so invest when you know you can afford to.”

Embrace Multiple Services, Customers and Revenue Streams

What can we learn from all of this? The business is out there. It just might not be in the form of the traditional, self-service customer. So, look into your demographics, contact your distributor, run a pro forma, and evaluate the pros and cons of launching more services from your laundry hub. Then, rely on these new services to attract more business from your location’s diverse demographic mix, which will generate added revenue and profit.