Originally posted – Nov 24, 2014
At a presentation on commercial accounts that I conducted for the Southern California Coin Laundry Association, one of the most popular questions from the audience was about pickup and delivery vehicles. When should you by a van? What kind of van should you buy? How do you make those decisions?
Whenever this issue comes up, I always tell the story about my friend Ron Lane, a laundry owner Sacramento, Calif., who has grown a booming commercial accounts business over the years. However, in the beginning, Ron’s “company vehicle”was his wife’s Lincoln Continental, which he used to pick up from and deliver to his commercial accounts.
He wore that car out – that is, until his wife told him he could no longer use it for work. And, of course, that’s what led him to acquiring his first delivery van.
Another laundry owner in Texas joined the industry just five years ago, buying a couple of laundromats. He and I talked back and forth for several months, discussing ways in which he could build a commercial accounts business. And, today, he’s got four vans on the road, picking up and delivering thousands of pounds of commercial laundry every day.
The point is that, in order to grow your commercial business, you need to have a solid plan – and that plan, at some point, is going to involve company vehicles and drivers.
After all, we know that doing commercial laundry requires pickup and delivery. Like Ron Lane, when you’re just getting your commercial accounts business off the ground, you most certainly can make the pickups and deliveries yourself in your own personal vehicle. In fact, that is perhaps the best way to go when just starting out.
However, eventually that segment of your laundry business is going to grow, and you’re going to need the added load capacity a company van can provide. Plus, as the commercial accounts side of your business expands, you’re also likely to need a professional driver to handle all of the pickups and deliveries.
Buying a Company Vehicle
Let’s start with your company vehicle. Personally, I believe you should always start with a used van. In fact, the first two delivery vans I bought were used Ford Econoline vans; however, Chevrolet makes very nice cargo vans as well. And, if you can swing the right deal, you can get lease return vehicles that are maybe only a year to 18 months old.
There are so many vans out there that you typically can purchase one with plenty of capacity and about 15,000 miles or less on them for approximately $15,000 to $16,000.
This is definitely the way to start out. These types of vans generally feature larger engines, because they’re designed to haul plumbing or electrical fixtures or some other types of heavy mechanical equipment. Of course, the downside is that they’re not particularly the most fuel-efficient vehicles on the road. Then again, replacement parts are fairly common, and thus repair work on them is not incredibly expensive. All in all, it’s a great “intro”into the pickup and delivery side of the industry.
Clearly, you’ll need to make some simple modifications to whatever van you purchase so that it’s fully functional for whatever type of delivery service you offer. There are a number of companies that make quality inserts for vans, which will enable you to accommodate hanging items – and these inserts typically cost only a few hundred dollars. Of course, if you choose to do so, you also can build your own clothes racks and other customized fixtures to modify the back of your company van.
As my commercial business grew, my next step up the company vehicle ladder was an energy-efficient model. I purchased a Ford Transit Connect with a high top. I actually bought this vehicle new, rather than used, because it was so inexpensive – just $20,000.
A great aspect of the Transit Connect is that it costs literally half the money to operate, versus the Econoline. Where the Econoline may average $100 a week in fuel, the Transit Connect will average $50 a week.
Also, the tires on the Transit Connect are smaller and less expensive, and oil changes cost less, too. Just all around, it’s a less expensive vehicle to operate, and that becomes a key factor as your commercial business grows.
Today, we use that Transit Connect for most of our runs, while our original Econoline vans are used mainly to service some of our larger accounts.
I know laundry owners who started out with a smaller, economical van like a Transit Connect. However, it’s important to point out that, in my business, we can’t use the smaller van for our big commercial accounts because it simply doesn’t hold the needed capacity.
We use the smaller vehicle for most of our running around now, especially to hit the accounts that are close. To keep our staff busy, we’re doing more out-and-back runs close by, and then we’ll do some “outskirts runs”during the latter part of the day. We try to get our laundry filled up with work in the morning with shorter runs.
If you’re just picking up some laundry here and there and your accounts are close enough to your store to where you can bounce back and forth, a smaller, fuel-efficient van like the Transit Connect is a good choice.
At this point, my business is averaging about 14 hours of driving time per day – so not quite two full vehicles. However, I envision that, within the next few years, my commercial accounts will grow to the point of needing a third full-time van.
As your commercial business grows, it becomes more important to balance fuel efficiency with load capacity. For instance, the laundry owner in Texas who I mentioned earlier is now running UPS-style delivery vans because his business requires that kind of capacity.
As you expand the distance of your accounts farther away from your laundromat, you need to be able to get all of the accounts picked up or delivered before you or your driver have to come back in – you want to be able to complete the entire loop. Therefore, it’s an important consideration to match your vehicle size and capacity with the work you’re doing, because it’s really all about efficiency.
One final note about delivery vans: they make awesome billboards. Your company’s vehicles are driving throughout your marketplace all day every day, so don’t waste this golden opportunity to promote your business. Vans have a lot of empty space on the sides and the back, so be sure to get your laundry’s information on there and use those vans as marketing tools. This will add credibility to your commercial service. When your customers see your van pull up, it’s going to deliver a message – and you need to have that message out there.
Hiring a Driver
Once you’ve matched the proper vehicle to your specific laundry business, the next step is to find the right driver – and this, like your choice of vehicles, will depend on what type of commercial service you provide.
Over the years, I’ve had a few different types of drivers. Initially, I hired a driver who was more of a salesperson. I hired him because he was younger. He was going to school in the evenings, and we were even able to work around his schedule with our pickups and deliveries so that he could take a few classes during the day.
He was aggressive and took great care of the customers. When you’re first growing your commercial business, it’s often a nice fit to hire someone in their mid-20s, who will be a more responsible driver than someone just out of high school or still in college, yet still young and aggressive. You want them to get their work done but not be unsafe while doing so.
Another type of person to start with as a driver, especially if you’re not transporting a lot of very heavy loads, is an older retired person. They can be a great option, because this type of person tends to be friendly and good with the customers. Although they might not move as quickly or be able to haul heavy laundry loads, they’re typically reliable and consistent – and, for the most part, they’re safe drivers who will represent your laundry and your business well.
However, as with your vehicles, eventually your commercial business will outgrow these types of individuals, and you’re going to need a professional driver – someone who can handle being in a vehicle eight hours a day. Once you’re grown your business, you want the person who just gets in and out of your accounts efficiently and professionally. That’s the kind of driver I’m looking for today; that’s what we’ve grown to.
Again, it’s a progression. Initially, you want a friendly salesperson picking up and delivering – but, as you acquire more accounts and larger accounts, you want professionals behind the wheel because you need those vans to be as efficient as possible.
Choosing Insurance
Last but not least, it’s critical to have the proper insurance coverage. Not only do you need the correct coverage for your vehicles, but you also require adequate workers’ compensation insurance.
For example, I once had a driver claim a back injury and this case went round and round for more than six months. If your workers’ compensation policy is incorrect or inadequate, you may discover that a particular claim is not coverable – and that can become a real problem.
As a result, you must be absolutely certain you have the proper coverage for both your fleet of vehicles and your drivers. And the best place to begin your research into this aspect of your business is CLA Insurance (coinlaundryinsurance.com; 800/346-8424) – they offer great rates on commercial vehicles and workers’ compensation insurance for the self-service laundry industry.
And – with the right van, the right driver and a little bit of planning – the sky’s the limit for your commercial accounts business.
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