Are You Running a Finite Laundromat Business or an Infinite One?
Let me start with a very simple question: did you “win” at business last year?
Huh?
I’m serious. I’m talking about the battle with your competitors. Did you win it last year?
If your answer is yes, my response is: by what definition? Sorry, you don’t get to stack the deck, make arbitrary rules with random and unknown players, and then say, “I win!”
Many small businesses base their success on year-over-year sales and/or profits or net operating income. However, did you know that it’s quite possible to make more money year over year, but actually be a weaker organization and business?
You set records last year? Good for you, but are you better for it? Did you make more money at the expense of team morale? Did you make more money by letting go of a higher paid employee and “doing the work yourself?”
Oddly enough, this is how most businesses are run at all levels. Think about it – most business leaders and owners set arbitrary goals, and then pressure themselves and their teams to hit them at any cost. They often use quarterly – or even yearly – goals and projections to gauge their success.
But I don’t believe that bigger is better, and I think most of us realize this is true. I’m glad that you’ve grown from one laundromat to a six-store operation, but are you better?
My only gauge for success is whether or not I (or my organization, in this case) am better this year than last. With that said, I want to challenge everything you think you know about business objectives and decision making. My belief is that this paradigm shift could make your business, your community and our industry monumentally better.
I’m asking you to open your mind with the notion that it will make you better at what you do and, by default, make you a lot more money as well.
Game Time
In 1986, James Carse wrote a book called “Finite and Infinite Games” – in which he proposes that nearly all of life breaks down into two types of games. More recently, Simon Sinek has given a number of presentations on this fascinating subject, especially as it pertains to business ownership and leadership.
According to Carse and Sinek, a finite game is a competition with known players, fixed rules and agreed upon objectives. Examples of finite games are sports like baseball and football, as well as most board or card games such as chess and poker. The purpose of finite games is to win the game.
By contrast, infinite games feature both known and unknown players, along with arbitrary and changeable rules. The objective of an infinite game is to perpetuate the game and stay in it indefinitely, with the goal being constant improvement. And under this second category is where the “game of business” falls.
Unfortunately, many play the “laundromat game” as if it were a finite competition. These operators eventually will exhaust their will and resources. When this happens, they will drop out of the game. They didn’t “lose,” because business can’t be won or lost – it’s never really over. Those owners simply stopped “playing the game,” and others stepped in to fill the void. The game continues on indefinitely.
My question is this: what if you’re making decisions based on your competitors, but they’re actually playing a completely different game?
Perhaps you’re playing to “beat” them or to “win” the game. However, they may be playing to improve, build stronger organizations and better serve their communities tomorrow than they did yesterday.
Which kind of business do you want to be – an organization focused only on being better tomorrow than today, or an organization focused on the here and now?
What’s that? You want a little bit of both?
The problem is that is – by trying to simultaneously play both games – you’ll end up being great at neither. And, even if you’re focused on a near-term retirement, I’d argue that you should want your business to be as strong as possible, thus making it much more valuable to sell.
Personally, my only goal in life and business is to be better tomorrow than yesterday. I’m playing an infinite game in my life, as well as in my laundry business. Because of this, my organization has grown stronger every single year. Early on, this mindset didn’t manifest itself in profitability. But, after about five years of making decisions based on being an infinite business, I woke up one day to find my organization reaping the fruits of our labor.
To Infinity and Beyond
Finite business leaders who are profitable may make poor decisions to become even more profitable. They may lay off employees to achieve arbitrary objectives. They may convert from being attended to running unattended. Meanwhile, an infinite business leader will look on and say, “As a result, maybe your customers will find your store less clean, less friendly, less helpful and less safe.”
A finite leader may decide to forego raises for well-deserving employees, in an effort to be more profitable. On the other hand, an infinite leader will observe, “Maybe your best employees will leave your organization or, worse yet, maybe they’ll stay and become disgruntled.”
My point is we can all be better, if we become infinite leaders of infinite businesses. As an industry, we all can be better, if we stop viewing each other as competitors, but view each other as rivals. Competitors try to “beat” each other, but rivals simply challenge each other to be better versions of themselves.
Laundromat owners are players in a game that never ends. However, so many are making decisions as if it were finite. This is fool’s gold.
Are you focused on quarterly sales, growth, profitability, metrics and targets? Do you pay your team members as little as possible, or as much as possible?
Infinite business leaders are constantly looking to reward their best team members whenever possible. They also are always looking to strengthen relationships with their distributors, accountants and attorneys – and are constantly networking with others in their industries.
In my 12 years in the laundry business, I’ve made my decisions based on a few principals – my faith, my integrity, and always looking three to five years out. It’s not about profitability this month… or even this year.
When I launched Queen City Laundry, we reinvested everything we earned for more than five years before taking anything out of the business. After five years, I quit my corporate job and only replaced my salary. I reinvested everything else for another three to four years before ever taking anything of significance out of the business for myself.
That’s eight to nine years of delayed gratification and reinvestment, but it all paid off in that ninth year and onward. We still make every decision focusing on the infinite game. We do everything based on whether it’ll make the organization and team stronger tomorrow than yesterday.
I’ve never worried about my rivals. Yes, I use them as a source of motivation. If they’re doing certain things better than us, I want to learn from them and be better tomorrow because of it. Of course, if we’re already doing things much better than them, we’re not happy or content with that, because they aren’t “the bar” – we are!
Over time, we gradually transitioned from unattended to fully attended stores. We’d get one store to the point where it generated a healthy monthly profit, then buy another rundown laundromat. We’d reinvest everything into the new project, and then another.
Some years, we’d spend more on marketing, ozone, branding, etc. Also along the way, we started launching vertically integrated businesses, such as wash-dry-fold service and eventually pickup and delivery. Additionally, we reinvested in store managers, a general manager and, more recently, an assistant GM.
In each case, I never believed we were competing with anything other than last year’s version of Queen City Laundry. More importantly, I’ve recruited, trained, invested in and coached a team of amazing people who now also have this same mindset. They want to serve our community better tomorrow than they did yesterday. We quite honestly have some extremely overqualified people working for us – retired college professors, former engineers and even ex-Marines. And they all tell me ours is the best place they’ve ever worked. It’s all about mindset.
Whether for selfish ambition, altruism or even an early retirement, I challenge you to shift your mindset from a finite game to an infinite one. I challenge you to always focus on being better tomorrow than you were yesterday.
And then prepare to watch your team get stronger, your processes smoother, your community better served – and, yes, your bank account bigger, too!
