Originally posted – May 22, 2012
Complacency may well be the number-one enemy for self-service laundry owners – and the easiest to overcome.
As I review the performance of my laundries and talk to other operators, it seems that we have become convinced that three turns per day is now a satisfactory standard. But, when I first entered the business in the late 1970s, most stores were topload-equipped, and four to five turns per day was very common.
Frontload washers and stack dryers changed everything, making it possible to double the capacity of existing laundries by installing new equipment. This retooling created the opportunity to increase net income dramatically. However, many of us became complacent long before the full potential of our new investment was reached.
Our industry is unique in the respect that most of the costs associated with operating a coin laundry are fixed. The rent, property taxes and insurance remain the same regardless of the gross revenue of the laundry. Portions of utility costs such as air conditioning, lighting and even water heating, to some extent, are fixed. Even the expense related to an attendant will not change dramatically as net profit increases.
The net revenue of a coin laundry can often be doubled by increasing the turns per day from three to four. A 33 percent increase in gross revenue will often result in a 100 percent increase in net profit. If we are to continue to build and operate great laundries, they must be profitable.
Many veteran operators are aware of this possibility but have become complacent. Some are working to achieve a better net, and I commend you. And some operators will find this information interesting and motivating. Regardless of where you are, achieving this goal will not be easy. However, it is entirely possible with good advertising, a good spring cleaning and good attendants.
An attendant’s main function is to represent the owner of a laundry by keeping the store clean and making customers feel welcome and appreciated. An attendant with a poor attitude will easily offend at least one customer a week, costing more in lost revenue than their salary. As a result, hiring a new attendant may very well be all it takes to double your net profit.
Some of this additional profit should be invested up front in advertising and improving the overall appearance of your laundry. A new bulkhead cover or wall covering is fairly inexpensive and will greatly improve an older laundry’s appearance. Simply repairing or replacing broken carts and chairs also improves a store’s appeal. These are simple things that we are all aware of, yet we have just become complacent in many cases.
The coin laundry business is changing rapidly. I am convinced that now is the time to start accepting credit cards, if you are not already doing so. There are some good systems available today. There are costs involved in credit card acceptance, but customers are now willing to pay a higher vend price for this convenience.
Lastly, adding a couple of super high-capacity washers to a small to medium-sized laundry can greatly increase the net profit. In fact, I have seen laundries increase their net profit substantially by adding just a few new machines.
The point is that many of us have other interests and are overlooking the potential of our laundries by being complacent. Let’s put aside old conceptions of this industry and look to the future. I continue to see a bright future for those involved in this industry, and being a CLA member has contributed greatly to my success.
Being a member of the CLA, a group of positive people, can benefit each of us. Don’t assume that someone else will contribute their time and talent to the CLA and make you successful – be a part of the team.