There’s Never Been a Better Time to Boost Your Bottom Line with Commercial Accounts
In the laundromat business, idle machines represent missed revenue that can never be recovered. Every store operator knows that it’s all about “turns per day.”
And no one understands this thought process better than Robert Maes, who owns the Express Laundry Center chain in Houston.
“We decided to first pursue commercial laundry as a way to maximize our return on our laundry equipment investment,” Maes explained. “Quite honestly, because we opened right after the 2008 financial crisis, we needed every potential revenue stream we could find just to survive. Today, commercial laundry has become one of our most profitable business segments – and it’s growing rapidly.
“Commercial accounts business represents about 15 percent of our gross revenue and about half of our service work, with the other half being traditional drop-off laundry.”
Clearly, before you can start filling up your washers and dryers with revenue-generating commercial loads, you have to single out the markets you’d like to serve – and, more importantly, the types of accounts you’ll be able to tackle effectively and profitably.
In general, commercial business can be broken down into three broad, separate segments: industrial, institutional and general/personal.
Experts Only: Industrial Accounts
Industrial-type laundry is probably the most difficult type of commercial account for most laundromats.
This commercial category includes such clients as manufacturing plants of all types, distribution facilities, assembly plants, auto and truck repair businesses, and print shops.
Some of the items to be washed within this category are shop towels, uniforms, overalls, mops, gloves, masks, floor runners, etc. In addition, most of the stains in the industrial category are greases, oils, chemicals, inks and some heavy soils.
Because of the types of stains required to be removed and the types of laundry and finishing equipment needed, this type of commercial account isn’t a great fit for most laundry owners, unless they have a separate facility attached to the laundromat. The washing procedures require water temperatures above 140 degrees, programmable washers, larger dryers, specialty chemicals for washing, and finishing equipment such as ironers, hot-head presses and steam boilers.
If you decide to pursue commercial work in this category, you will need, at the very least, hotter-than-normal water temperatures, a built detergent emulsifier, bleach, softener and a sour. Also, some additional boosters may be necessary, depending on how heavy some of the soils are.
Industrial laundry can be quite difficult for laundromats. Therefore, if you seek this type of account, be sure it’s on a small scale, and build up the business as you become more proficient at it.
Before you make any proposals, check the types of stains you will encounter. Make sure you can remove them and find out what type of finishing will be expected.
Some Experience Required: Institutional Accounts
Institutional-type laundry is much easier to handle within a laundromat environment than the industrial business.
This category includes such clients as schools, hotels, motels, day spas, small nursing homes, retirement homes, doctors’ and dentists’ offices, restaurants, rehabilitation facilities and tanning salons.
The type of laundry these accounts generate usually includes facial towels, bed linens, kitchen towels, kitchen uniforms, mops, table linens and bar towels.
The items washed in this category require less stringent chemicals, lower water temperatures and, in some cases, less finishing equipment. It depends on how deeply you want to delve into this specific category. When just starting out, you might need only a small press for finishing.
Also, the chemicals and washing procedures in this category are generally more compatible with a laundromat. There will still be problems with removing grease and oils from the restaurant foods and butters. However, restaurant laundry by far is the most difficult type of laundry in this particular category.
Some larger institutional clients will require more elaborate finishing procedures, thus necessitating the purchase of ironers, hothead presses and steam boilers.
Again, as with industrial laundry, be sure to investigate the types of stains you’ll be asked to remove – and be certain you can remove them in a reasonable manner.
The linens and towels in hotels, motels and retirement homes will contain urine, lipstick, fecal and body stains. Therefore, you will need oil and grease removers for spotting, along with quality-grade detergent, chlorine bleach to be used on whites, oxygen bleach for colors and softeners.
Beginners Welcome: General/Personal Accounts
This is the easiest commercial category for laundromat owners. General/personal accounts can be found at retirement homes, large apartment buildings, colleges and some hotels that offer permanent residency.
In fact, you’re probably already doing this type of personal laundry as part of your wash-dry-fold business. The only difference for some will be the pickup-and-delivery aspect, and some additional supply items, such as laundry bags for pickups and handling equipment like laundry carts and baskets. The equipment, water temperature and chemicals you are already using should be sufficient to handle this type of business.
If you want to branch out from this category into some specialty work, such as pressing shirts or pants, consider buying a bantam press that features a self-contained boiler in the unit, which is ideal for light to medium work.
As with all commercial business, it’s important to build an efficient pickup-and-delivery route with these types of accounts. What’s more, professional, eye-pleasing packaging is crucial, similar to your wash-dry-fold service.
Tools of the Trade
No doubt, being in the commercial accounts business is not the same (or even close to the same) as being in the laundromat business. There are different types of garments and other items to launder, different types of stains to combat, and as a result, some slightly different equipment and supplies requirements.
The first place to look is at your washers. Typically, large-capacity equipment is a plus when dealing with most commercial accounts. Furthermore, it helps to have machines with flexible programs for different wash and rinse cycles – and possibly chemical injection – to tackle various stain classifications. Also, if you’re going to launder sheets and pillow cases, you’ll need an ironer.
Next, water temperature is a key component of a successful commercial accounts operation. If you want to wash restaurant or any type of foodservice items, shop uniforms, medical uniforms or similar garments, you must be sure to have a water temperature of at least 145 degrees. By contrast, most self-service laundries have water temperatures in the 110- to 120-degree range.
This is a critical point, because hot water accelerates the chemical action in detergents and bleaches, which is needed for the removal of grease and oil.
It may seem obvious, but bags and other packaging materials also are needed to run the commercial segment of your laundry business. You’ve got to have bags to get the soiled items to you, and then you’ve got to have some means of packaging it to bring it back to the customer.
Of course, the vast majority of commercial clients are going to require you to pick up and deliver their laundry items. As a result, you’ve got to have some sort of efficient, designated means for getting the loads from Point A to Point B (and back again).
The pickup-and-delivery equation is one of the hottest topics in the industry today. There are a number of vendors serving the industry that can help you with this crucial portion of your commercial business. Although the finer points of pickup and delivery could be the subject of an entire series of articles, for now simply understand the importance of being consistent.
No matter what problems arise, be sure to stay on schedule. If your client is expecting a pickup or delivery on a certain day at a certain time, and you’re not there – it’s a major black mark on your record and a critical blow to your business’ reputation.
It’s not impossible to run a commercial accounts business without a computer. And, yes, there a probably still a few stubborn laundry owners doing it that way somewhere. Don’t be one of them. With so many quality technology companies in the industry these days, don’t even consider attempting to lure commercial business without a first-class POS system and the latest computer software to help you track your billing, as well as process your invoicing and manage your monthly statements and receivables.
Lastly – but maybe do this first! – be sure your facility has adequate storage space for separating, tagging and storing commercial items until they are ready for delivery.
Serious Business
This month, some highly successful laundromat owners who have gotten quite serious about their commercial accounts business share their stories and impart some hard-earned advice:
Rob Maes
Express Laundry Center
Houston
Initially, our commercial accounts literally walked through our doors. But we quickly learned that not all commercial accounts can be treated like traditional drop-off customers. So, when future commercial opportunities presented themselves, we knew we needed to be better prepared – with regard to the types of detergents used for cleaning, the logistics for handling the laundry, the invoicing system, the pickup and delivery, and so on.
We don’t have dedicated laundry equipment for commercial accounts, nor do we have the economies of scale that giant laundry plants enjoy. We wanted to utilize our existing laundry equipment in order to optimize our return on investment.
Because we don’t have dedicated equipment for commercial work, we’ve had to find markets where we can create value. The good news is there are plenty of opportunities. In fact, some of our commercial accounts have lease limitations, which preclude them from operating washers and dryers even if they wanted to.
Some examples of creating extra value include how frequently we service a particular commercial account; how we package the finished laundry; our willingness to wash customer-owned items, as opposed to insisting on renting linens to the client; and thoroughly soaking items in an attempt to truly clean them, rather than just “ragging them out.”
The key to success with a value-added approach is to identify opportunities and have patience. Once you establish your laundry business within the commercial market, you should start to see referrals that will grow the business. The other key is to have a strong online presence so that, when commercial customers go looking for help, they find your business first.
For us, one of the primary benefits of commercial accounts are that they tend to be regular and predictable. Of course, the COVID-19 pandemic made most businesses – especially service businesses – extremely unpredictable. But, thankfully, business and life is now returning to normal.
Typically, the flow of commercial laundry volume can be controlled through your pickup-and-delivery schedule, so you will know, for example, that what was picked up on a Monday must be ready for delivery on a Thursday.
The other benefit of commercial laundry is volume. One commercial account may equate to 10 to 20 drop-off wash-dry-fold customers. If you utilize existing laundry equipment for your commercial work, you have no additional capital outlay, thus providing you with more flexibility to weather any economic slowdowns or anomalies, such as the pandemic, without additional risk.
Perhaps the biggest drawback with commercial laundry is that most businesses will require invoicing, so there is always the risk that some clients may stop paying or even go out of business. Also, the potential for work-related losses or insurance losses due to the increased exposure of pickups and deliveries always exists. In addition, with the current worker shortage, keeping our commercial accounts operation properly staffed has been a challenge.
Best Advice for Laundromat Owners:
- Train your attendants how to identify commercial accounts opportunities that may literally walk into your laundromat.
- Partner with a detergent/chemical supplier that will help you learn to clean just about any stain you encounter with the equipment you have to work with.
- Be patient, but be prepared so that when a large opportunity presents itself you can manage it.
- Make sure you have the space to logistically handle commercial laundry volume.
- Target markets where you can create value so that you don’t have to directly compete with “mega factory laundries” that boast stronger economies of scale.
- Know your limitations so that you don’t waste time pursuing opportunities that may be hard to service.
- Likewise, know your costs.
- Develop a strong online presence to capture commercial accounts opportunities that virtually may fall into your lap.
Amanda Martinez-Monfort
Tampa Laundry Company
Tampa, Fla.
Some of the best opportunities for store operators looking to get into or grow a commercial accounts business are smaller hotels that are too small for huge laundry and linen services, but too large to actually do the work themselves. Reach out to those businesses within your marketplace; if nothing else, you never know when their laundry equipment will go down, and they will need to outsource.
Also, with COVID-19 restrictions easing, gyms, spas and fitness centers are reopening – and with a renewed focus on cleanliness and customer service. These businesses can provide great commercial laundry opportunities.
Best Advice for Laundromat Owners: Walk into local businesses like small hotels, gyms and spas; introduce yourself; and leave your business card. And don’t get discouraged. After all, “not now” doesn’t mean not ever!
Bruce Walker
Wash It Kwik
Denton, Texas
Full-service laundry, including pickup and delivery, represent 68 percent of our overall laundry business. We have several small commercial accounts and one huge one.
Our leading commercial account is a warehouse that handles frozen food. We launder their insulated coveralls. Quite honestly, it’s a very easy account, because the items come to us with practically no stains on them. We simply use regular detergent.
The biggest challenge this account presents is the volume. The frequency is twice daily, and the coveralls take up one-third of the laundromat, seven days a week.
The cost breakdown for this account is $275 a day for labor, $90 a day for mileage, $30 a day for gas, and $30 a day for utilities and soap. I’m able to charge $1.90 per pound, which gives me a good margin of about 75 percent.
Another interesting commercial account for us is a weekly one that handles long-term corporate housing. They found us on the internet and reached out, saying they have a lot of laundry. So, I asked, “What’s a lot?”
They said that, when they pull up to a laundromat, they take up the entire store. So, obviously, I told them I could be there in an hour!
Best Advice for Laundromat Owners: If you don’t have a good staff, you’ll be at a huge disadvantage. Take the time and effort to build a strong team.
Kent Wales
Happy Laundry and Dry Cleaning
Spokane, Wash.
Currently, commercial accounts represent 50 percent of our overall laundry business by dollar volume. However, our residential wash-dry-fold service is growing at a good clip.
Our leading commercial accounts include massage therapists, a retirement community, a university and a restaurant. So, some of the items we’re typically washing for these clients include massage sheets, table linens and napkins, bedding, kitchen rags and towels, and rugs – with common stains such as massage oils, kitchen grease and food stains.
We also handle the firefighter gear and sleeping bags for our local Bureau of Land Management.
To tackle some of these stains, we use six different chemicals in our injected soap setup, as well as three to four spotters and an enzyme detergent that we use for certain orders.
I have to admit that the “degree of difficulty” on some of these accounts – based on stain treating, processing requirements, etc. – is at the expert level. Fortunately, I’ve worked with a wonderful chemical specialist over the years who has helped me develop my skills in that regard.
As far as scheduling, we go from once-a-day to weekly deliveries, depending on the customer. And we also lease linens to some clients. The key is learning the particular needs of each specific business. For example, the best time to pick up and deliver at a massage therapist is usually quite different than that of a restaurant.
The frequency of service is a great advantage of commercial accounts work. It makes it easy to get into a rhythm. However, many businesses are open 365 days per year, including holidays – so you must have a plan for uninterrupted service to these types of commercial clients.
For laundromat owners, I believe the greatest opportunity for growth within commercial accounts are by reaching out to those businesses that are not being well-served by the large linen companies. These businesses either have a variable need, or they need a higher quality finished product than the big linen services can provide.
Best Advice for Laundromat Owners: Be patient, steadily increase your chemistry knowledge and build a great team. The best way to tap into commercial business is through networking, your website, getting your business cards well circulated – and then answering the phone.
