An Interview with Multi-Store Owner Michael Finkelstein
Michael Finkelstein began his professional career as a broker manager for Georgia Pacific, where he worked with supermarkets in the Maryland, Ohio, Pennsylvania, Virginia and West Virginia territories.
In 1983, he went to work in his family’s food brokerage business, Kluge Finkelstein based in the Baltimore/Washington D.C. area, managing various grocery lines and, ultimately, being named group vice president. The family business was sold to another broker in 1998, and Finkelstein became a regional broker serving the mid-Atlantic region. During that period – and through two subsequent mergers over the next 15 years – Finkelstein rose to regional vice president, managing four offices and four markets, handling multiple lines, and calling on key retailers in Maryland and central Pennsylvania. In all, he was responsible for more than $600 million in sales annually.
In 2005, he shifted gears and bought Associated Services Corporation, instantly becoming one of the largest laundromat operators in the country.
“Our goal is not to be the biggest, it is to be the best,” Finkelstein said. “I have been fortunate to have developed a great team that is truly focused on making our many laundries in Virginia and North Carolina the best laundries they can be in the towns we serve. We have continued to grow and expand our business in this geographic area. We also have remodeled our existing stores and consistently modernized them.”
In addition, Michael served on the CLA’s Board of Directors for six years. During his time on the Board, he chaired the association’s Legislative Committee – successfully testifying twice before the U.S. Mint on behalf of the CLA, during periods when that government body was considering altering the makeup of our national currency. Finkelstein also served as chairman of the CLA Nominating Committee and co-chaired the organization’s Affiliate Committee during a time of transition, where those local chapters were brought under the direction of the national organization.
Finkelstein, 60, holds a bachelor’s degree in marketing from the University of Miami. He lives in Baltimore with his wife, Juli. Together, they have a son and a daughter, and they recently welcomed their first grandchild.
At this year’s Clean Show in New Orleans, Finkelstein was named the CLA’s Member of the Year. He recently sat down the PlanetLaundry Editor Bob Nieman to discuss his career in laundry business and to share his thoughts on the industry.
Congratulations on being named the Coin Laundry Association’s Member of the Year. What does this recognition mean to you?
I’m extremely humbled and honored to be selected, because it’s a selection by my peers in the industry. To know that my fellow operators, as well as manufacturers and distributors, selected me means an awful lot to me. I’m truly blessed and grateful to be selected. I have made a lot of friends along the way, and I want to thank everyone for their help, advice, support and friendship.
How did you first get involved with the Coin Laundry Association?
I first entered the laundry industry nearly 15 years ago in January 2005, and I started to get involved with the CLA immediately by attending its local chapter meetings near me in Baltimore.
I also attended my first Clean Show in 2005 in Orlando. I found it to be extremely informative, valuable and useful. And this encouraged me to become more involved with the association.
Then, in 2012, I was approached by store owner Jeff Gardner, who many refer to as just The Laundry Doctor. At the time, Jeff was overseeing the CLA’s Nominating Committee for new Board members. I thought it was something I should try to do and to learn from, and fortunately I was elected to serve.
Specifically, how has the association helped you along your journey as a laundry owner?
Certainly, while serving on the Board, I made some solid and very helpful contacts and built some great relationships along the way.
Of course, if you simply attend the Clean Show or one of the CLA Connect LIVE events near you, along with reading PlanetLaundry and other CLA publications, you’ll learn what other owners are doing. You’ll be able to connect with others in the industry and find out what’s happening in the laundry business beyond just your own store.
I’ve been able to learn from others mishaps and experiences on a variety of topics related to the running of a laundry business. And I’ve hopefully helped others by sharing my own experiences – good and bad.
What first attracted you to the self-service laundry business?
At the time, I was in the grocery business, which was changing quickly. The retailers were becoming national or even international, and a lot of them were disappearing. There was a lot of consolidation occurring.
In light of that, I was 45 and still young enough and dumb enough to say, “Hey, maybe I need to look into something else.” As it happened, I was approached by the former owner of Associated Services Corporation, and I proceeded to sign my life away, buying ASC and entering the laundromat industry. And it worked!
In what ways are the two industries different? And, on the other hand, in what ways are they similar?
Of course, there are a lot of similarities between supermarkets and vended laundries. With both, you’re dealing with people, and you’re offering a service. Also, you’ve got landlords and leases to contend with in both businesses. You want clean, safe environments in both types of operations.
Clearly, with supermarkets, you’re dealing with 30,000- or 40,000-plus-square-foot stores, while laundromats are only 2,000 to 4,000 square feet, on average. Also, a laundry business will have much less labor – you don’t have employees bagging up the lettuce, rotating the orange juice and those types of tasks.
Another difference is that, with the grocery business, those lines are becoming blurred. In addition to supermarket operators, we now have Amazon, Walmart, Target, CVS, Walgreens and other similar companies that that are now essentially in the grocery business.
The vended laundry industry doesn’t really have that. Of course, there are some drycleaners that are experimenting with taking in laundry, but it’s different from the grocery industry in how we view our competition.
What did you learn from your past career in the supermarket industry about being a laundry operator?
In the supermarket business, we were dealing with people who are starved for time and becoming more tech-savvy than at any other time in the past, so the result of that was we were trying to solve their problems and meet their needs. Of course, in essence, we’re doing the very same thing in the self-service laundry business; it’s just how we approach it that might be a bit different.
The supermarket industry has changed immensely even within the last five years. Again, customers are more time-starved than ever before, and they’re more tech-savvy with smartphones and just the instantaneous nature of today’s world. Whether we’re talking about online reviews, delivery and the increased reliance on GPS or mobile payments – such as Apply Pay or Google Wallet – a lot of those trends began in the grocery business and have evolved quickly to other industries, including laundromats.
In fact, today, at least 70 percent of all transactions in supermarkets are through credit or debit cards. And I see a similar trends occurring in our industry as well.
How has the business changed since you first got involved?
We’ve already discussed the change in today’s customers, who are more starved for time and definitely more tech-savvy than before. To go along with that change, there has been the increased use of alternative payment options in the laundry business.
Beyond those changes, I feel that that the equipment has improved greatly in recent years, as well as the options for increased energy efficiency. For example, I have tankless water heaters in my stores now. When I first started in the industry, none of my laundries had this technology.
Break down your typical day, if there is such a thing as a “typical day.”
To be honest, I don’t have a typical day. It would be more accurate to say that I have certain weeks where I’m focusing on a specific aspect of my business.
For instance, I’ll pick a week to visit my stores. During that week, I’ll start touring stores at 7:00 in the morning, and I won’t stop until 9:00 at night. Then, I have other weeks where I’m not looking at stores, but I’m looking at the numbers – I might look at sales by day, by week or by month. During other weeks, I’ll be involved in other factors of my laundromat operation, like negotiating leases, budgeting, reviewing my energy contracts, meeting with a 401(k) provider, looking at all of my insurance for the business, conducting employee performance evaluations, and so on.
So, I don’t really have a typical day. Every day is different and every week is different. However, I do plan out what I’m going to do next, and what I’m doing on any given day is all dependent upon that particular week.
How much time per week is spent on your laundry business – both in and out of the stores?
I spend probably more than 55 hours per week on my business, whether it’s involving visiting store locations or handling the other aspects of my business I just mentioned, which could be related to accounting, management and so on. Of course, there are always unplanned equipment issues to deal with as well.
You’ve certainly given freely of your time and advice to help other laundry owners and potential investors – through volunteering with the CLA and the LaundryCares Foundation. Why is that so important to you?
I strongly feel that the self-service laundry business has been good to me. I feel that, if I can help others in this industry, as well as in the neighborhoods I serve, than not only did I provide a service but I’ve also done a good thing. At the end of the day, I’m just trying to give back in whatever way I can.
In 2020, what will be the hot-button issues for laundry owners?
I think finding quality laundromat employees and labor seems to be a big issue at the moment and will remain so heading into next year.
In addition, I believe that the national, state and local elections in 2020 could strongly impact small-business owners, especially if some of the extreme concepts out there, such as the Green New Deal and similar legislation, gain traction. If these extreme ideas are implemented, we might be in trouble, because I feel it could damage the economy and hurt our industry. However, there are people who want to go down that road, and that’s the scary part.
What major trends are you noticing in the industry?
As I mentioned earlier, I got out of the food business because I was seeing international retailers buying up supermarket chains, and I was witnessing a lot of consolidation. And I think we’re starting to see some of that beginning to crop up in the laundry industry – with manufacturers buying laundromats, perhaps aligning with distributors, or even acquiring distributors in an effort to grab increased market share.
I don’t think that’s going to benefit the industry or the consumer. To be honest, I don’t think it’s even going to benefit those who are doing it. I think they’re doing it as a reflex, and I think they might live to regret it.
If you plan your work and work your plan – and you know what you do and you know who you are – you should stay in those lanes. If you over-extend yourself and stray into other areas in which you have no knowledge or expertise, I think you could get burned.
In your experience, when a self-service laundry business fails, what are the most common reasons for that failure?
In my opinion and my experience, there typically are four common reasons for laundromat failure, and they’re all sort of related. One is store neglect. Another one is owner ignorance. Another is overpaying with regard to rent. And the last one is failing to upgrade the store with the latest technology and equipment.
Personally, what’s the biggest mistake you’ve ever made in this business?
Actually, I have two mistakes to share.
The first mistake occurred about 13 years ago. I was approached by someone to install ATMs in my stores – and it just didn’t work out. In the first place, I didn’t own these machines. However, I was enticed to install them, which I did, into about 10 of my laundries. Unfortunately, it caused problems with vandalism and other issues.
Once I realized the mistake, I quickly removed all of the ATMs. And, over time, the experience actually helped me to figure out a better way to get convenient new payment systems into my stores. I was able to begin adding alternative methods of paying for washing and drying, which I am currently utilizing in about half of my stores. At those locations, my customers can pay with credit cards, debit cards, smartphones or cash. Plus, I offer loyalty programs.
This change in my business has really helped me. So, I made a mistake with the ATMs, but I learned from it and was able to come up with a better and more convenient solution for my customers.
The other big mistake I made was having the desire to run a laundromat in a particular town so badly that it blinded me to the reality of the situation. I thought the situation would be perfect for me and my business. At the time, the rent was acceptable, but over time it just continued to escalate, and the landlord was inflexible with me. Although my business grew in that town, it didn’t grow nearly enough to offset rent increases. Therefore, when the first five-year lease option was up, I got out.
What one piece of technology could you not live without?
That would easily be my iPhone. It enables me to do so much. Whether I’m taking photos, texting, receiving email, looking up information on the internet, using the GPS or just using it as a phone, it seems to do it all. It keeps me connected.
What do you like to do for fun?
I love to fish. I like to read a lot. I’m also a Baltimore Ravens fan, so I go to all of the Ravens home games with my son, my son-in-law or my daughter. I’ve also been lucky enough to have gone to the Super Bowls the Ravens were in, and won. I definitely enjoy it.
For my health, I like to run, and I go to the gym on a regular basis.
But, all in all, I just really love to spend time with my wife, kids and new granddaughter, along with close friends. That’s really what I do for fun, whether it’s simply going out to dinner or whatever else we may plan.
What might others be surprised to learn about you?
I think some people might be surprised to find out that I actually played the bass guitar in a rock band during the ’70s. My bandmates and I were in high school, but we actually made some money at it. It also paid off when I was looking for a date, because girls seem to go for guys who play music.
If you could magically sit down with the 18-year-old version of yourself, what life and/or business lessons would you bestow upon “young Michael?”
I would tell him to follow his passions, to do what he enjoys doing and to not be afraid of change. I also would advise against working for someone who is dumber than you – and, if you find yourself in that position, it’s probably time to move on. I found myself in that position, which is partially how I ended up in the vended laundry industry.
What are your business goals for 2020?
My main business goal is to continue remodeling my stores and to continue to make them the best laundromats they can be in the towns that they serve. Another goal is to increase my sales as I’ve been doing on a regular basis. In general, I plan to continue to outperform the industry averages, and continue to raise revenue and minimize costs.
What does the future of the vended laundry business hold?
I think the future for the vended laundry business is very bright. The image of our industry and our stores has improved immensely and become much more positive, particularly in just the last five years. I believe it will continue to improve, especially with the efforts of the LaundryCares Foundation and the CLA – and the publicity being generated through free laundry days, early childhood literacy initiatives and other community outreach programs.
Although the 2020 election is looming, I have high hopes for the self-service laundry industry going forward, as long as the business climate stays somewhat the same.
What advice would you give to a new laundry owner just getting into the business?
Join the Coin Laundry Association. Read PlanetLaundry. Go to the Clean Show. And learn from others who are already in the industry.
Who do you turn to for advice – on business and life?
The number-one person I turn to for advice is my wife, Juli. I also run things by my kids – my son, Andrew; my daughter, Nikki; and her husband, Brian.
I also turn to some of my close friends. One is my former college roommate. Another very dear friend of mine who I turn to for business advice is still in the food industry and owns about a dozen stores. I also talk to a family friend who is a life insurance agent, and to my financial adviser, my accountant, my lawyer and my banker, all of whom I have personal relationships with. And, of course, I also get advice from some of my laundry suppliers, manufactures and distributors, with regard to various industry issues and topics. Lastly, I get great advice from other laundry owners, the friends I’ve made through the CLA, as well as some retired employees from ASC.
What has been the most gratifying aspect of your life in the vended laundry business?
The most gratifying aspect has been being able to see my business grow and mature, while improving my laundromats for my customers – as well as providing a good living for myself and my employees’ families.