Originally posted – Jul 18, 2014
When I first got into the laundry business, I was skeptical as to whether or not I needed to write a business plan. However, it was something the SBA required (or at least strongly encouraged), so I went through the process of creating one.
Until I actually began to run my business, I didn’t realize how my business plan would help me make decisions on a daily basis. However, several years later, I can attest to the fact that it’s been invaluable to me and my business.
A business plan defines the specific details of just what your business is, who and what your competition is, and what your strategies are for building your business.
It gives you the ability to look at your business and understand every possible aspect of it so that, as issues arise, you’re better able to make sound decisions.
Although important for strictly self-service laundries, business plans become even more critical for owners looking to branch off into wash-dry-fold or commercial accounts, due to the increased complexity of these business segments.
Identify Your Business
The first step in creating your business plan is to identify your business and what it means to you. This is where you identify exactly what you want to do and put it into words.
It’s more than saying, “I want to do commercial laundry,” or “I want to do wash-dry-fold.” Be as detailed as possible, as far as the specific needs you plan to address with your business.
When I did my original business plan, I said I wanted to be the best wash-dry-fold operator in the market and really cater to residential customers. I didn’t even consider commercial accounts initially, because I didn’t want to deal with pickup and delivery.
I identified what I needed to do to be the best wash-dry-fold operator. And, for the first year and a half, I focused on having the best wash-dry-fold service in the area, because this is what I said I wanted to do in my business plan and because I knew it was critical to the growth of my first store.
Without that focus and knowing how I was going to go about it, I wouldn’t have taken the steps I’ve taken, and I probably would have been all over the place businesswise. Identifying your focus makes identifying the other elements of the business plan much easier.
During this part of your plan, you’re also going to want to identify your competition. How do you do that?
Do some competitive shopping. Find out what products and services other owners are offering. Then, basically, conduct a SWOT analysis of strengths, weaknesses, opportunities and threats.
At this point, you can say, “OK, that’s what my competition is doing. Here’s what I will do to set my business apart from the rest.”
If you don’t conduct a SWOT analysis or honestly look at your position within your marketplace, you can’t accurately define what’s going to separate you from everybody else. What’s going to make you different? What’s going to entice customers to do business with you?
Market Your Business
The second crucial element of your business plan is identifying what you’re going to do to promote and market your business. You’ve identified what your business is, now you have to communicate that. Obviously, part of your marketing plan is to identify what’s different about your business, but you also have to effectively get the word out about those differences.
This speaks to how you present your products and services, how you present your store, and how you present your advertising messages – you want them all to be consistent. Without a defined program or clear direction, you’re likely not going to be consistent in your marketing message.
Customers respond to consistency. Think of the big brands – from Proctor & Gamble to McDonald’s. Their brands are consistent. You need to create the same thing, only on a smaller level.
What is your brand going to be? How consistent are you going to be? It’s all part of developing the image of your business, which is a critical part of your business plan.
Understand Your Costs
The next step is to identify your costs. What is the price of being in business? Clearly, this is an important (and evolving) section of your plan – and one you should revisit on a regular basis.
After all, costs change – everything from utility costs to labor costs. And those costs are important factors in how you will operate your business. Without a solid business plan behind you, you won’t have the ability to adapt to changing costs, nor will you fully understand the long-term impact of those changes on your overall business.
A realistic budget and a clear understanding of your costs are critical to your business plan. Without a basis for understanding the financial aspects of your business, you don’t have a good starting point or the knowledge necessary to make any needed adjustments. In fact, you should go over the numbers in this section of your plan at least once a month.
So, in a nutshell, those are the key elements of a business plan – knowing exactly what your business is and how you propose to differentiate it from other laundries in the area, planning a consistent marketing message, and understanding the costs involved in running the business.
What Not To Do
Sometimes, more than anything else, a business plan can help you say no to “opportunities” that come your way, for which you’re not ready.
In the past, I’ve stayed away from restaurant accounts, because (thanks to my business plan) I knew I didn’t have the tools I needed to handle such work. I also understood my competition, so I knew what they were charging for restaurant linens and I knew I couldn’t be competitive.
Of course, without having done all of that evaluation for my business plan, if a restaurant called me and asked me to bid on their linens account, I might have said, “Sure, I’d love to do that!” And I might have even gotten the account and then done it too cheaply, which would have ended up costing me money over a period of time.
There are all kinds of little “catastrophic” events that can occur over the life of a retail operation – from a new competitor moving into your market to a city renewal plan that tears up the street directly in front of your laundromat for six months. And, without the solid, grounded information from a well-researched business plan, your reactions might not always be the wisest.
A business plan truly is the best tool (and the best process) for making good business decisions on a daily basis.
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