Originally posted – Sep 12, 2012
I get calls from laundry owners all across the country about how to handle garments that either have been through fires or damaged by flooding. And, personally, I’ve done a good deal of work with a number of fire and water restoration companies.
So, I thought this month I would share with you this potentially profitable niche market for self-service laundries.
There are several national companies that specialize in doing laundry for fire and water restoration companies. In general, the process works like this: a homeowner or business owner has fire or suffers water damage, and he or she finds a company to come in and handle all of the issues with the affected dwelling or business.
Typically, the companies overseeing the cleanup process are construction-based businesses; therefore, they will hire subcontractors to tackle specific work. For instance, some companies focus strictly on refurbishing electronics (computers, stereos, etc.) after smoke or water damage.
Of course, there also are companies out there that specialize in fire and water restoration work for garments and upholstery. And a lot of those companies are drycleaners or former drycleaning companies that got into the restoration side of the business.
This type of work is similar to doing drycleaning, even though technically it is considered to be bulk laundry. It’s definitely different from doing traditional wash-dry-fold or commercial laundry.
A company doing this type of work will go into the house or business and take a thorough inventory of the garments and other items collected. For that, they’re going to charge the insurance company a significant amount of money – sometimes as much as $5 apiece for T-shirts and other garments. The majority of that cost is due to the numerous times the items will need to be touched during the process.
They’re going to touch the garments in the house or business. And, in fact, sometimes those facilities – usually after fires – are in such a volatile condition as to require those going into the buildings to wear some type of a hazmat suits.
Clearly, workers for the restoration companies are going to touch the items again at the plant – re-inventory them, tag them, sort them and separate them. And they’ll probably touch them a few more times during the processing of the items, as we normally touch all of the garments that we process in our business.
At the end of the process, they’ll more than likely delivery the finished items. And, for hanging garments, they’ll probably even hang them back in the closets of their clients.
On top of that, companies involved in this work may have had to absorb the costs involved with those garments for up to a year in a bonded storage facility while the homeowner or business owner gets his or her property restored.
So, there are a number of costs involved with this type of work. However, often a lot of that business includes only very lightly damaged garments that is technically quite easy work to handle.
Getting Your Foot in the Door
There are several ways to get this type of work. One of the best ways is to take on the “overflow” work for one of the full-time fire and water garment restoration companies. Quite often, these companies will get so backed up, especially during certain seasons, that they’ll need someone to process some of their bulk laundry. This is a perfect opportunity for a self-service laundry that knows how to handle wash-dry-fold orders, as the items are typically comforters, blankets, sheets, T-shirts, jeans and similar garments.
Often, the garments will be from houses that weren’t heavily damaged. As a result, the items may have some slight smoke residue or a little bit of mildew that can easily be taken care of.
Another way to get into the restoration business is to develop a relationship directly with the insurance companies. Let them know that you are seeking this type of work and can handle lightly soiled garments for their clients.
You also can solicit the construction companies that oversee the entire restoration process. After all, these companies are going to be on site first, and they’ll know if it’s a lightly soiled job that you could handle or a more serious situation requiring fire and water garment restoration professionals.
At my store, we’ve gotten this kind of business each of these ways.
Once you land a job, price it right. Typically, I charge the same rates as I do for my wash-dry-fold service. However, there are exceptions, depending on the customer.
For example, if I’m doing work directly for an insurance company, I will raise my prices. In fact, I’ve raised my rate as high as $2 a pound for an insurance company, versus doing the work for another company, where I will I maintain my normal per-pound rate.
The reason for raising my rates when dealing directly with insurance companies is simple – one of the risks of doing this kind of work is that you bring the finished garments to the client and the client has the last say on whether or not they want these garments back. Ultimately, some of these clients will tell the insurance company they don’t want them back because they’re no longer the same; they’ll want them replaced.
Depending on the insurance policy and the carrier, they may have to do that. If so, the insurance company isn’t going to pay you for the work because they’re basically paying the claim for the customer, and the customer is saying you didn’t do the work you were supposed to do. In such cases, you end up getting into a potential battle with the customer, which you very likely can lose.
That is why many fire and water garment restoration companies will charge higher prices – again, sometimes as much as $5 a pound – for this type of work. They know they’re going to get stuck with a certain percentage of it.
That being said, restoration work usually means big orders that need to be done quickly. And, if you’re dealing directly with an insurance company or one of these restoration firms, you generally can get paid right after the work is done. The money can be very good and the business can be very steady. At one point, I was doing as much as $5,000 a month in business with one company, and it was consistent work because they were so backed up.
But, again, be careful. I have run into slow-paying fire and water restoration companies in the past. This type of work can be a profitable side niche for your laundry business, but be cautious of who you’re dealing with and stay on top of these accounts.
Next month, I’ll discuss how to actually launder garments that have been damaged by smoke and water.
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