Laundry Owners Reveal Their Utility-Saving Initiatives – And the Bottom Line Results
Utility costs. It’s a topic guaranteed to get every laundry owner in the room talking.
After all, water, natural gas and electricity are the lifeblood of every self-service laundry business. And, collectively, they traditionally comprise the single greatest expense an operator will face on a monthly basis.
For years, laundry owners could expect their stores to gobble up utilities at costs representing 25 percent to 35 percent of their businesses’ gross revenues. But that’s changing.
The fact is that, for a variety of reasons, vended laundries – like other businesses – are moving toward “green.” Sometimes it’s because it is simply a good business practice. Other times it is because of the scarcity of resources. Still other times, the motivating factor is social conscience.
And sometimes, it’s all three. No matter – the byproduct of this green movement that’s taken hold of the industry is that owners no longer need to automatically fork over at least a quarter of their gross revenues to utility companies. In some cases, the amount is much less.
This month, we’ve rounded up some successful laundry owners – whose utility costs have dipped below the mythical 25 percent mark – and asked them to share exactly how they’ve achieved their energy savings:
Waste Not, Want Not
Perfect Wash – Express Laundry Center
Huntington Beach, Calif.
Percentage of gross sales that utility costs represent: 10.5% to 11.5%, for self-service revenue only. With wash-dry-fold revenue included, the percentage drops to single digits.
My store was constructed in 2014-15 with all the current industry best practices and latest technologies that were readily available at that time. We pride ourselves on being the cleanest and most efficient laundry around. With our high-speed, soft-mount machines, excellent dryers and tankless water heater, our customers have come to realize that their laundry is going to be cleaner in a shorter period of time, while using a fraction of the utilities as some other laundries.
These types of sustainable practices are important for any business. If you don’t keep up with best practices, you’re dead. It’s that simple. With the rising costs of utilities and the pace of new store building and retools, if you have an older store, you have to adapt to today’s standards – not just because it will increase your profits, but because your very survival may count on it.
I’m a huge believer in high-speed equipment. It’s better in every way. It uses less water, less electricity, less detergent, less time, cleans the laundry better and generates greater revenue. Water heaters and lighting also will lower costs and increase the value of a store.
The biggest factor, I believe, is that, if you don’t tighten it up and become more efficient, how are you going to attempt to compete when someone like me comes to your town and isn’t afraid to open near an older store? Where will your customers go?
And you’re not just competing with where customers will wash their laundry, but you’re also fighting the battle called “running a business.” Costs are rising just to stay open. Utility prices are volatile, to say the least, and we have inflation looming on the horizon. Labor costs are a hot issue and have already begun to rise rapidly, not to mention any other costs that may be tied to them; and that’s not just for you but your suppliers as well, who will become increasingly more expensive, too. Every business in every industry will have to fight this battle.
I feel fortunate to be in the laundry industry, which has a great head start and several tools to help owners adapt and innovate.
My equipment acquisition decisions are absolutely the number-one reason my utility cost percentage is where it is. I spent the capital upfront to save the difference over the not-so-long-term. In addition, with the increased throughput, my washers are capable of generating higher revenues through a higher number of possible turns per day.
Next, my vend prices are fairly competitive compared to the surrounding markets. I’m not the “expensive laundromat” yet, but I am adding to my vend prices little by little.
Lastly, my water rates aren’t as bad as some other municipalities, but electric costs can be a bear during the summer. And although natural gas could be worse, it’s currently my most expensive utility.
Besides the “green” aspects of my equipment, I try to reuse what I can, and not toss out trash bags if they can be used a second or third time. We have recycling bins near the trash cans. We reduce out lighting usage whenever possible, while always providing enough light for our customers to do their laundry. All of our lights are on timers, and some are programmed with the sunrise and sunset to be practical and resourceful. I also make bigger shopping trips to my further suppliers and keep a stockpile nearby to reduce the number of trips necessary.
In addition, we’ve installed solar tubes, or tubular skylights – an idea I picked up from another laundry owner. Essentially, they are round skylights with no hot spots, and they allow natural light into my store. During the long summer days, these solar tubes provide enough natural lighting to not have to use any overhead electrical lighting until dusk. Plus, that natural light is soothing and adds to the decor and ambiance of the store – because immediately before dusk, you really feel like you’re outside.
I’m also very excited about the potential of moisture monitoring in the dryers, especially as an add-on. In a forward-thinking store, like mine, moisture monitoring offers the greatest saving potential for anything under my roof. I don’t think I could fully comprehend just how much savings can be gained from natural gas use reduction by shutting down the heating element in the dryers after moisture is no longer detected, but I believe it will be substantial – and it will all fall to the bottom line.
“Being Green” vs. The Bottom Line: I have never been an outspoken advocate for “green.” I’m not a fan of catch phrases or bumper stickers. With that said, I’ve been raised to be resourceful and not to waste. I believe in doing my small part in not taking more than I should, and making the most of what I have.
When I decided to go into business for myself, I knew I needed to apply those convictions if I were to be successful. And this is one of the major factors that intrigued me about the laundry industry. Since its renaissance, it had these resourceful, or “green,” practices built into its new business model.
I think we all realize that green practices come with price tags, but they can also come with an immediate partial payback and an acceptable breakeven period. These are practices that savvy businesses will invest in. These are practices that won’t break a business because it’s just “a good idea.” It’s easy to get caught up in the frenzy of new ideas and technologies; however, at the end of the day, there still must be a surviving business to pay the bills.
Advice to Other Laundry Owners: The most important concepts that I will always advocate for are research and preparation. It’s paramount to try to understand this industry before entering it. Don’t underestimate what you’re about to undertake. The laundry industry has evolved and now includes many more moving parts than it did even 10 years ago.
You also need to realize what role you can play in it, how you can add to it or better it. When it comes to considering “green,” I think we all have a responsibility to understand how that is implemented in our industry, and what the costs and benefits are. Don’t try to reinvent the wheel, without knowing the definition of a circumference. Do your homework and learn what is smart and advantageous in your market – and how it shakes out in the long term, as well as what positive impact you are truly having toward your desired result. You can – and must – be passionate, but you also must be a steward to your checkbook.
Taking the Long View
The Washboard Laundry
San Diego, Calif.
Percentage of gross sales that utility costs represent: Approximately 16%. However, Blair plans to close the retail, self-service portion of his laundry business, which he predicts will lower the percentage further.
Water is a precious resource, and we better start doing a better job of managing this resource. People need to understand that water rates directly affect vend prices – the higher the cost of water, the higher the vend price.
At our store, we try to be green. However, customers seem more concerned with a clean laundry with amenities than with saving the environment.
With that said, we’ve achieved our relatively low utility rate percentage through energy-efficient equipment, reasonable vend prices and a strong wash-dry-fold business. We’ve dialed down the water in the machines and charge accordingly. We also try to use as many eco-friendly products as possible.
In addition, there is a water valve on the market that supposedly cuts your waters bills by about 40 percent. It measures the water at the meter differently, and we’re currently looking into that.
“Being Green” vs. The Bottom Line: I’m very environmentally aware of the impact of laundries, especially in Southern California, where we hear about the drought daily. Water is only going to get more expensive, so the wiser we can utilize it, the better.
Advice to Other Laundry Owners: Be patient. Much of the public hasn’t really caught onto the green movement yet, but they are certainly becoming more and more aware of the issues. For now, the costs of going greener can be harder to recoup, since nearly anything you do to make your laundry more eco-friendly is expensive. So, plan for the long term.
Flirting with Single Digits
Jeff and Annette Freking
Perry Creek Laundromat
Sioux City, Iowa
Percentage of gross sales that utility costs represent: Just under 11%
Going forward, I believe that energy will play a much bigger factor than it already does. Margins will get much tighter, and if you’re not prepared, it’s going to be tough to survive.
I would consider Perry Creek Laundromat to be a green laundromat, based on our utility costs percentage. And I think it’s important to be eco-friendly, from a standpoint of sustainability and protecting our environment.
The store is only two years old, so it’s well-insulated, with a high-efficiency HVAC system and cost-saving LED lighting. We also feature high-extract washers.
In addition, I try and stay on top of any issues that might be creating more energy waste. For example, I replace the filters on the HVAC unit every six weeks and clean the dryer lint vents at least once, if not twice, a day. We also clean the dryer outlet vents once a year repair any water leaks immediately. Plus, we do a lot of vacuuming – wall, vents and the interior of the dryers. I look to improve on anything that might be wasting energy.
With the cost of utilities today, it doesn’t take long to pay for modern, high-efficiency equipment – especially if it means that your utility costs will go from representing 25 percent of your gross revenue down to 11 percent. Our payback was a little over a year.
Of course, I don’t know how my utility rates compare to other markets across the country, so this may have something to do with my lower percentage.
Serving an Eco-Conscious Market
Chris and Josie Asanya
Clothes Quarters Laundromat
Percentage of gross sales that utility costs represent: 18.75%
I don’t consider our laundromat to be a “green business” in the true sense of the word, because a true green business operates in a way with no negative impact on the local or global environment, the community, or the economy. We still have our water dumped into the sewer system and not recycled. However, we are marching toward becoming a greener and more sustainable laundry business.
And I think it’s important for self-service laundries to try to be green in areas that they can, because every step – however small – is a step toward reducing our impact on the environment.
Our equipment is one of the larger steps we’ve taken – it’s new, energy-saving and extremely water-efficient. As for our store’s lighting, we have mainly LED bulbs throughout the facility, both inside and outside. Also, our area’s lower utility rates currently play a key role in keeping our percentage where it’s at.
Beyond some of the obvious steps we’ve taken, we also encourage our customers to use “dryer balls,” in lieu of dryer sheets, along with a locally made organic laundry detergent called Seventh Generation. Vermont is one of the leading states with regard to encouraging and promoting an eco-friendly lifestyle, as well as sustainable products. So, for us, it’s much easier for our customers to buy into it. Down the road, we’re also planning to install a system that will recycle and reuse our wastewater.
I believe having the right equipment specifications are is critical to achieving a green agenda. With the technology available today, many laundry equipment manufacturers offer simple but key features as options on their machines that can help laundry owners go green. Features such as extra water inlet valves, multiple drains, powerful microprocessor controls, added insulation, appropriate seals, high-speed extract, reversing cylinders and heat recirculation when selected and integrated properly can produce remarkable results. In my opinion, it all starts with having the right equipment.
Our customers who are environmentally conscious always appreciate the fact that our machines are energy-efficient, especially when they see the amount of water that’s actually used during the “washing” phases – and the fact that their clothes still turn out much cleaner than they’ve ever been. Most certainly, marketing our business as energy-efficient has positively impacted our business.
“Being Green” vs. The Bottom Line: We’ve invested in energy-efficient equipment, which is much more expensive, both out of concern for the bottom line and personal conviction. We wanted to set ourselves apart from any other laundry in our marketplace. In essence, to borrow from marketing author Seth Godin, we wanted to be a “Purple Cow.”
Advice to Other Laundry Owners: Based on my limited experience, if I were to advise anyone who is considering going green – or greener – I would encourage that individual to invest in energy-saving equipment. They tend to be very expensive, but the savings to your bottom line and the environmental impact is priceless.
Upgrading a Long-Time Family Business
Rob and Julie Bos
Walnut Plaza Launderland
Percentage of gross sales that utility costs represent: 18.9%, including the business’ wash-dry-fold revenue
This laundromat has been in our family since 1980. We have three other laundries, but Walnut Plaza Launderland is the largest one, at 5,000 square feet. We’ve been running it together since 2005.
We’ve recently replaced our lights and our machines. The machine upgrade was a key, because the new washers use a lot less water than the older machines we had. In fact, we reduced our water usage last year by 17.1 percent, while at the same time increasing our sales by 11 percent.
Certainly, the increased volume, coupled with the decreased water use, were two major factors in lowering our utility cost percentage.
A third factor was vend pricing. We raised prices a quarter per washer. Also, the new equipment allows for tiered pricing, so we can offer a discount for cold-water cycles – while warm water is an additional quarter, and hot water costs another 25 cents on top of that. And a fourth factor has been the fact that we’ve eliminated the pre-wash on those machines.
We’ve also replaced our boilers, installing higher-efficiency, on-demand units. This was an expensive upgrade, but in the long run, it really makes a big difference.
In addition, we’ve put our restroom lights on a motion sensor, which has helped us save on our electric bill.
We research switching to solar power for our hot water. However, the solar panels would need to go on the roof of the building, and our landlord denied that request. But, if you own the building, solar power is probably the way to go.
“Being Green” vs. The Bottom Line: I think it’s important to think about the environment and future generations. We have grown children who hopefully will have children someday, and you have to think about them.
We started thinking about replacing the machines in one of our other stores, because the water company there recommended it. With the drought in our state, the water utility would have had to fine us for over-use of water if we didn’t upgrade. The equipment was only eight years old, which is not very old, and it was functioning fine. But, once we replaced it, we realized how much we were able to save.
The more water and other utilities we can save, the better – it’s good for the bottom line and the environment. With that said, as much as we would like to be totally green, I think it’s difficult to achieve in a business such as a laundry.
Advice to Other Laundry Owners: If you have older washers, replace them. It’s expensive, but that’s what has provided the biggest savings for us.
Also, with older washers – and every laundry owner is going to know this – if something gets stuck in the drain valve, the machine will run for hours and hours and hours… just dumping water down the sewer. With today’s new machines, they sense when the drain is stuck open, and they turn themselves off. That’s a big deal.
Upgrading to an on-demand boiler and LED lighting were the other two big green changes we’ve made. And, in many markets, rebates are offered for upgrading to LED bulbs.
Go Green to Make ‘Green’
Percentage of gross sales that utility costs represent: 22%, down 3% since store renovations. (It should be noted that Marrazzo’s utility company, PECO, has among the highest rates in the U.S.)
I really don’t consider my business “green,” but there are general savings in our stores, over washing clothes at home. A savings of water and sewer, electricity, and natural gas are all very obvious. We heat water in a series of tankless commercial units at more than 90 percent efficiency. Two of the top five energy consumers in U.S. households is water heating and dryer usage – and neither is done with the efficiency of an updated self-service laundry. A real green laundry saves energy and “makes green” at the same time.
It’s certainly a responsible thing to try to comply with eco-friendly ideas, but not at the expense of common sense. Solar and alternative energy sources are worth pursuing, but not if we need to go back to beating clothes on river rocks. Retooling a store with new equipment will create larger profits, while at the same time using less utilities.
Much of our lower utility percentages have come from increased vend prices after store renovations. Another factor has been the elimination of hot water storage, due to the installation of tankless water heating. Also, washer and dryer replacements have created more revenue, less water consumption and faster dryer times, allowing for natural gas savings.
Here’s a utility usage tip: leaving dryer doors ajar after use will allow for the recycling of that dryer heat into the store’s HVAC return system.
To increase sustainability, one of our largest measures was to simply downsize our dumpsters by half, and replace that with a recycle dumpster. With all of the detergent bottles, paper and recyclable trash, we were able to reduce our trash footprint, while saving a substantial amount each month in dumpster fees. And, fortunately, our customer’s “color blindness” for our blue cans has improved after several months.
For the future, I think the next big step in energy efficiency will be quality water recycling that is clear and clean, which will make large strides in the use of water. As utility companies continue to raise their rates, U.S. technology will find a cure for gray water.
Although our customers have responded positively to our recycling efforts, I’m not sure that the water efficiency of our washers is something they really care about or recognize. Moreover, it still may be considered a bit of a negative action as far as the end user is concerned, because “more water behind the glass is better.”
“Being Green” vs. The Bottom Line: I am far from a “tree hugger,” but I do have a great respect for our environment. I’m more motivated by the “green of dead Presidents” than any minor changes that are politically correct.
Advice to Other Laundry Owners: Take a hard look at machinery older than five years. If you’re buying an existing store, consider throwing it out and starting new. I know how hard that is to do, because I did it in two stores within three months of each other.
However, such a move will set you apart from the neglected “zombie laundromats” (a term coined by CLA Board member Brian Grell of Eastern Funding) in your neighborhood. It will put extra green into your pocket, while also being ecologically responsible – that’s something that can work for you, as well as the green movement.