How to Avoid Common Errors and Make All the Right Moves When Adding a Second Store
Years ago, I met actor Dennis Hopper, who had come to New York City on the heels of writing, directing and starring with Peter Fonda in the incredibly successful release of the 1969 cult classic, “Easy Rider.” He was there to meet with film industry executives to drum up interest in his next movie project.
I was managing and booking bands for the Electric Circus, the most popular club in the city at the time. One night, Hopper and I crossed paths when he stopped in to hear some music at my club in the East Village.
Long story short, I volunteered to chauffeur him around the city for a few days while he took meetings with movie execs. So, for three days and nights, Hopper and I drove from office to office – and cocktail party to cocktail party – meeting with studio bigwigs. At the end of his trip, he had raised a ton of money for his next film and was convinced he was one of the greatest writer/directors in the movie industry.
He promptly began filming on location in Mexico, where he built an entire town as a backdrop in the movie. Needless to say, he went well over budget. And, when the final editing was complete, Hopper’s film turned out to be the worst movie he had ever made – and it took quite some time for him to regain his stature and reputation in Hollywood.
Right about now, many of you are probably thinking: “Great story, Cary. So what? I have no idea who or what you’re even talking about, or how it’s remotely relevant to me building and opening my second laundromat.”
Stay with me… let’s say that roughly a year after opening your first store, you find yourself doing far better than you had ever anticipated. You’re starting to “believe your own press clippings,” and you’re thinking, “I’m a laundry genius. I can easily do this again.”
The problem is that you’re most likely not a genius. You were simply a new investor in the laundry industry, and you meticulously followed all of the proper protocols and disciplines for your first laundromat. You read a lot of books and articles on the subject. You became a member of the Coin Laundry Association. You consulted with successful store owners, top distributors and others with years of experience. You asked every question there is to ask, and you listened to the answers. You left no stone unturned.
Now, with your second laundromat… maybe not so much.
Perhaps you’re thinking you’re a seasoned operator with one successful year under your belt, and you believe you no longer have to do all of the legwork you did as a rookie entrepreneur.
How do I know this? Because I was that guy early on in my career – and I wound up having to use profits from my first laundromat to prop up Store No. 2.
As Bill Gates once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”
I had to work my butt off until my second store finally turned around. Some of you probably know exactly what I’m talking about.
For a long while, my situation took all the fun out of being a laundry owner. I had known what to do, I just didn’t do it.
With hard work, I survived and was fortunate my bad decisions didn’t put me completely out of business. I became wiser and learned my lesson, eventually going on to open seven fully staffed laundries over 37 years.
When you begin believing, “If I build it, they will come,” you start bypassing many of the things you did right the first time around – taking shortcuts, cutting corners, and overlooking or ignoring obvious red flags. When you compromise the underpinnings of your new store, you’re already on the wrong path to developing a profitable second vended laundry.
Unfortunately, it seems to happen fairly often in this industry. I suppose it’s human nature to think highly of ourselves after building a prosperous business the first time out.
At that stage, you can remain humble, get back to basics, and continue reading, learning and doing all of the right things necessary to create a second profitable business – or, like I and many others, you can become dangerously overconfident (which is the literal definition of arrogance).
Back to Basics
Hoping that my cautionary tale has landed you squarely within the “back-to-basics” crowd, let’s look for that perfect site for your next laundromat business.
First of all, be patient. It may take a while. Do your best to stay within 20 to 30 minutes from your first laundry. This will make your life much easier, and you’ll soon discover that many of your customers patronize both stores, which will make your overall business stronger against any future competition that may enter (or consider entering) the marketplace.
Also, take the time to do what I consider one of the most effective strategies any potential owner can do – drive through the various neighborhoods in your prospective market. Look for locations near schools and parks, look for kids and look for an abundance of rental properties.
By and large, renters typically don’t own washers and dryers, and often the laundry facilities offered through their apartment complexes aren’t clean, safe or adequate.
Yes, driving your potential marketplace requires time and effort, but it’s important because it opens up the neighborhood to you visually – which you can’t get from real estate worksheets, spreadsheets, demographic reports or even photos.
By using every available means – including commercial realtors and local equipment distributors – to help you search for sites, you also should be able to find all of the existing laundromats in the area that you would consider to be competition. As you can imagine, the best markets will obviously have the highest number of laundromats.
Don’t get too excited if there are no other laundromats within a given area, which would make your store “the only game in town.” After all, there is probably a valid reason why no one else has opened a laundromat in that market. Remember, you don’t create customers simply by opening a store. People in that community are currently washing their dirty clothes somewhere else – and it’s your mission to discover where, as well as to determine if you realistically could draw them into your new laundromat and then keep them as regular customers.
While doing your research, go into as many stores as you can and wash a load of personal laundry. While there, talk with the attendants on duty. You will get a first-hand view of the overall condition of the stores in the area, the hours and days of operation, the number and size of the washers and dryers, the vend prices, the payment systems, a rough estimate of the wash-dry-fold volume, and how busy the laundries seem on the days you choose to visit.
Once you lock in on your dream location for that second store, the next crucial steps will be to contact the utilities – especially the water/sewer authority, the fire marshal, the building department, and the landlord or leasing agent to begin the process of negotiating a long-term lease. When meeting with the building officials, be sure to ask if anyone else has recently applied to build a vended laundry in the same general area.
Being mindful of the inevitable surprises, be sure to check off every box on your critical to-do’ list, from finding a site right up to your grand opening. You’re now well on your way toward building and opening your second successful laundromat.
By the way, Dennis Hopper’s cinematic flop right after “Easy Rider” was called “The Last Movie.” It’s an ironically appropriate title, seeing as it very easily could have been the last flick the Hollywood legend ever made.
So, do your homework, be patient – and make sure your next store isn’t your “Last Laundromat.”
