Originally posted – Oct issue/2012
A Look at Some of Today’s Successful ‘No-Frills’ Laundry Operations
If you spend any time reading the industry trade magazines, surfing the industry websites or attending industry events, you might be led to believe that the only ways to make real money in the retail, self-service laundry business have nothing whatsoever to do with your customers serving themselves – or even laundry, for that matter.
Articles on how to capture your fair share of wash-dry-fold business abound. Blog posts detailing the keys to adding a successful drop-off drycleaning business are everywhere. And seminars outlining the best ways to tackle stains presented to you by your commercial accounts have become almost commonplace.
On top of that, it seems like every other new laundry that opens is a fully attended, 24-hour store with 72-inch televisions, Internet access, a service counter made from exotic woods and cut crystal, an espresso bar, more sandwich options than the local deli, a full-scale video arcade, a dozen tanning beds in the back and “Open Mic Night” on Thursdays.
Yes, there are some outstanding laundry businesses out there that have gone well beyond the scope of a basic, self-service laundromat – many of which have been covered in this magazine (and rightly so).
But there also are several hugely successful store owners who have chosen to eschew the many bells and whistles, instead preferring to run lean, mean and perhaps slightly less glamorous operations.
Kenny Wells of Wells Laundry, Inc., in Killeen Texas, owns seven such laundries.
“I would advise a new laundry owner to concentrate on making the basic services profitable,” Wells explained. “While additional services can be profitable, they will seldom save a laundry with inadequate revenue generated from washers and dryers.”
Below are three coin laundry owners who have heeded Mr. Wells’ advice – and gone back to basics:
Born Into It
Kevin Beggs’ father started the family laundromat business when he bought his first store in 1967. Before that, he served as general manager of a chain of full-service “LaunderCenters,” which were owned by a local grocery store chain that was building full-service coin-operated laundries drycleaning stores next to each of their supermarkets.
Each LaunderCenter had a full staff of attendants who opened and closed the stores daily, did wash-dry-fold, cleaned all of the washers, cleaned out the dryer lint traps, ran the cash register for the drop-off laundry and drycleaning pickups, and anything else that needed to be handled. Each facility also had a separate maintenance crew to take care of equipment problems at the 15 to 20 locations.
“So, when my dad decided to start his own laundromat business, he decided to keep it simple,” Beggs explained. “He knew the challenges of managing people and felt that he could run laundromats completely self-service and be successful. And he was right.
“The reason I run our laundries completely self-service is because that’s how my dad taught me to run them. We’ve never done an ounce of wash-dry-fold, and my guess is that we never will.”
Today, BCL, Inc., headquartered in Brockton, Mass., owns and operates nine stores – the smallest is 1,600 square feet, and the largest is 3,300 square feet. However most of the laundries are in the 2,000- to 2,500-square-foot range.
Six of the laundries offer soda vending, and one location has snack vending. Otherwise, the operations are strictly self-service wash and dry. All of the laundries are open from 5 a.m. to midnight, seven days a week – and the doors are opened and closed by a time clock.
“We don’t have an ‘attendant’ at the store, per se,” Beggs explained. “We have one part-time employee for each location who comes in to clean twice each day. We also have three managers for our nine stores who come and go as needed, doing maintenance, collections and so on. So, while someone’s there, I guess we’re attended, but there are no set times.”
From Beggs’ point of view, the advantages of running a lean operation are many, including fewer personnel headaches, lower operating costs and fewer customer claims.
“Since we don’t do wash-dry-fold, we don’t have ‘control’ of anyone’s clothes, so we don’t have that liability,” he explained. “We can put more energy into keeping our stores clean and well maintained – and that’s the main thing most customers want.”
What’s more, “following up 100 percent with customer service” can be easier to do with a strictly self-service operation since there are fewer incidents, according to Beggs.
“A policy of ‘Every Question Answered/Every Problem Addressed’ will get a customer’s attention,” he said “It can set you apart from the operators who don’t want to be bothered. Over the years, the most common thing I’ve had customers say is: ‘Thank you for calling back and taking care of this. I didn’t really think anyone would call.'”
Not that there aren’t some drawbacks to Beggs’ business model.
“When a customer closes a frontloader door on a shoelace and starts the machine, we’re going to have water on the floor – with no one there to mop it up,” he admitted. “So we have to pay for an extra trip every now and then.”
For such situations, the BCL office phone number is posted in each store, with a 24-hour answering service to screen calls and group-text the owners, if necessary.
Beggs also conceded that he might have slightly less information regarding machine malfunctions, but added that he compensates for this by knowing the equipment as well as he can and keeping impeccable maintenance records.
“If you’re in an area that needs a new or improved laundromat, and if you have a good location, then no matter what kind of store you build, as long as you really care about how it’s running, you’ll be successful,” Beggs said. “Your customers will notice, they’ll appreciate it, they’ll be loyal and they’ll pass the word.
“However, laundromats can’t support too many layers of management – so, with less management available, you have to keep it simple to grow.”
Been There, Done That
Gary Gray’s first coin laundry had a bar in it.
“We sold beer, wine and food,” explained Gray, who operates Fun Wash, Inc., in Little Rock, Ark. “The revenue for the laundry was fantastic, but when we looked at the bottom line, we weren’t making any money.
“So, we ended up using that space for more washing machines, did away with all of those extra employees, and discovered that we could make a lot of money.”
Although he was quick to do away with “soap-and-suds” theme, Gray continued to run nearly 20 full-service laundries – complete with wash-dry-fold – for many years.
Today, he owns 14 Fun Wash locations, which average about 4,000 square feet.
“Five of the 14 stores are full-service and still offer wash-dry-fold,” he said. “However, we converted two more stores this year from full-service to self-service only. After all, some areas truly can only support a self-service store, based on the demographics.”
The shift to a more basic business model certainly has made Gray’s business life a lot simpler.
“First of all, taking care of a self-service-only store is so much easier from an administrative standpoint,” he explained. “In general, I can run a strictly self-service store with anywhere from one to one-and-a-half employees, while it typically takes me three employees for a full-service laundry.
“It’s amazing how much more administrative work there is to train an employee at a store that offers wash-dry-fold, because you’re not just training them how to clean, but also how to do the paperwork and how to balance their time between doing wash-dry-fold and cleaning the store. That can be a challenge, especially if your attendants are incentivized with a bonus to do the wash-dry-fold; they’d rather do that than clean – and I’d rather have them clean, because my core business is self-service laundry in every case.”
In addition, full-service operations require at least an additional 200 square feet, according to Gray.
“When we began to design stores for self-service only, we found that we could install more equipment – and a wider variety of equipment – than with full-service locations.”
Gray is not opposed to the fully attended, full-service model. In fact, he noted that one of his Fun Wash locations currently brings in more than $2,000 a week in wash-dry-fold business, while his other full-service laundries each earn between $500 and $1,000 a week in drop-off revenue.
Nor does he run any of his laundromats completely “bare bones,” he clarified. Each store has a television (some have two); most feature vending machines and video games; and free coffee, magazines and plenty of seating are always available. In addition, all of the stores have stools at the folding tables, as well as at least one laundry cart per folding table.
“We’re trying to keep our focus on our biggest revenue stream, which are the washers and dryers,” Gray explained. “I’ve found that many times I can make as much – and sometimes more – money with a well-operated self-service store as I can with a full-service store. And there is absolutely no doubt it takes less of my time.
“Plus, it takes hardly any more effort to run a large store than it does a smaller laundry, assuming both of them are self-service,” he added. “It only takes a few minutes longer to dump a few more coin boxes and balance one more changer.”
For Gray, as a multi-store owner, it’s as much about making the best use of his time as anything else.
“I prefer to concentrate my efforts on running a coin laundry, rather than running a coffee shop, a restaurant, a tanning salon or something else,” he said. “I can spend all of my time on a couple of stores and a bunch of wash-dry-fold, or I can spread it among a lot more stores and try to bring in a lot more revenue.
“We continue to challenge our approach and our business model. We continuously tweak it. But the general basic business model has stayed the same – and that’s to focus on where the money is.”
The Multi-, Multi-, Multi-Store Operator
Jeff Waggener owns and operates 38 strictly self-service laundries in and around San Antonio. The stores range in size from 2,000 to 6,000 square feet; however, Waggener prefers his laundromats to be at least 4,000 square feet, and wherever possible, is working to expand the smaller locations.
The company employs 70, which includes management, accounting services and 57 front-line attendants.
“I started out with laundries that had all of the bells and whistles,” Waggener said. “At one time, about 20 years ago, I had up to six stores that were fully attended with wash-dry-fold services, and it was way more than I could manage personally. I had to hire managers to manage the wash-dry-fold, and my employee costs got way out of line in relation to the income I was generating. I’m well aware that there are a lot of people who have just a few stores that do a phenomenal job of managing it, but I wasn’t able to do it.
“I also concluded that customers who give us meaningful volume really wanted a good quality machine that works well at a good price. Those bells and whistles, like big-screen TVs and being fully attended, cost money.”
Waggener’s goal is to keep his employee costs below 10 percent of sales, which necessitates that his laundries be partially attended.
“I have been trying to pay our employees more,” he explained. “I’m trying to give them paid vacation, and we just recently started offering health insurance again. I don’t think there are a lot of owners who offer that in this industry, and it’s something I think is important.”
The typical store features electric door locks that open at 5:45 a.m. An attendant will arrive around 10:00 a.m. and stay until noon; he or she will return at 6:30 p.m. and work until 10:00 p.m., when the laundry closes.
Beyond simplifying his employee issues, Waggener embraces a basic, self-service business model because he has discovered that the customers his stores cater to have a lot of laundry to do, and they don’t want any help or frills – they want it at a competitive price.
“I’ve found that the customer who really likes all of the added benefits is a customer that tends to not wash as much and have smaller loads,” Waggener said. “So, I took all of the effort I was focusing on keeping the store fully attended and serving free coffee and so on, and I refocused that effort on just having really good equipment that works well.
“I’ve heard other operators say they need to be fully attended because their machines give the customers too much trouble. To me, that’s the worst economy in the world. You’re much better off spending the money on good equipment.”
Waggener’s no-frills, cost-conscious approach has carried over to his advertising and marketing strategy as well.
“I don’t do any at all,” he said. “These days, my marketing pretty much consists of trying to do the best job we can of running the stores, and I feel that the customers will come. Typically, if one of my stores is not doing as well as it should, I’m not operating it as well as I should, as far as keeping the machines running and keeping the laundromat as clean as it can be.
“Whatever money other people might suggest I spend on marketing, I try to spend it on doing a better job of operating the stores. And I find that, if we do a good job of running the stores, the customers will tell their neighbors and their relatives about us.”
Being only partially attended, as Waggener’s stores are, the one disadvantage he concedes is an increased risk of petty vandalism – from scratched stainless steel and trash on the floor to defaced folding tables and stolen laundry carts.
However, it’s a price he’s willing to pay to keep his multi-store operation running lean and efficient.
“My personal experience is that I’ve been more successful in trying to hold costs down and passing the savings along to the customers than spending more money on adding a lot of frills,” Waggener noted. “My opinion is the owners start off with so many frills that the overhead gets out of hand. The bottom line is that this is a tough business, and you have to watch every quarter. You can start creating a bureaucracy that becomes too big and too expensive.
“If I had only one store, I think I would definitely go all out with it. But if someone has a lot of other things going on and they want to keep their management time to a minimum, then the no-frills way is the way to go.”
Clearly, the no-frills way doesn’t in any way indicate a poorly managed, poorly run or neglected store. However, in many cases, it can point to a very profitable one.
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