Here’s How to Control Costs and Prioritize Your Self-Service Customers, While Building a Strong Wash-Dry-Fold Business
Perhaps you returned from the recent Clean Show in Atlanta with a renewed interest in getting into the wash-dry-fold business, or maybe now you’re motivated to try going after those commercial accounts you’ve been thinking about.
Then again, maybe you’re just looking for general ways to grow your laundry business or, like me, you’re a laundry owner who already offers a wash-dry-fold service, but now you’re looking for ways to increase your profits. In any case, I have learned that the most profitable way for me to run my wash-dry-fold service is “in the margin.”
Quite simply, what I mean by “in the margin” is developing your wash-dry-fold business within the confines of your existing self-service laundry business. The premise for this approach is (1) that you invested in your laundry to primarily take care of self-service customers, and you want to change your business as little as possible to service drop-off laundry customers; and (2) by managing your wash-dry-fold business within the confines of your existing self-service business, you will minimize your investment to get into the business – and maximize the profit for any wash-dry-fold business you take on.
And, if you think this approach is too limiting, let me just say we have successfully managed our wash-dry-fold business “in the margin” for more than five years, and we still have room to grow!
Perhaps you’ve been thinking about getting into the drop-off laundry business but have decided against the idea until now because it’s too expensive or too complicated to train your employees. If you run your wash-dry-fold business “in the margin,” I maintain that you don’t need a point of sale system or programmable washers, which may or may not require extra hot water and/or extra rinse cycles. In addition, you won’t require a delivery van or a website to promote your service. Also, you won’t need to hire extra labor or to pay your current employees a bonus for the clothes they wash.
Granted, each of those features is nice to have and could make life easier, especially as your business volume grows; however, they are not required and most likely will not make your drop-off business any more profitable, due to the initial investment, training and payback period. The comparison I like to make is to that fancy metal driver in your golf bag – it may look nice and sound great when you strike the ball, but at the end of the day, an old beat-up persimmon wood driver will achieve the same result if you know what you are doing and hit it right.
Therefore, what you do need to run your wash-dry-fold business “in the margin” are all of the basics, and what I mean by “basics” are exactly that. Here’s the list of what you should have:
• A receipt book.
• A log book to track the receipts.
• A high-quality laundry soap with some type of a booster, such as OxiClean.
• Two effective spotters – one for organic stains and the other for inorganic stains.
• A soaking barrel for difficult stains.
• A 40-pound scale.
• Fabric softener, dryer sheets and vinegar to soften the laundry.
• Some type of packaging in which to place the finished products – preferably clear plastic bags with clear packaging tape.
• A personal vehicle with non-company hired auto insurance coverage, if you decide to offer a pickup and delivery service.
• Some form of inexpensive advertising – such as in-store signage; a strong web search presence on Yelp, Google Places, YP.com, etc.; and perhaps a few promotions you may decide to run on Craigslist.
And that’s it!
But, after this relatively small investment, what will truly make your wash-dry-fold business successful is how well you can manage it “in the margin.”
I like to divide my wash-dry-fold costs into three categories: labor, utilities, and all ancillary costs such as soap and packaging – and I try to manage “in the margin” along the same lines. Please note that all of these costs are variable, since we are working within the confines of our existing self-service business, and the better we can manage them the more profitable our wash-dry-fold service will be.
Over the last five years, I have determined my wash-dry-fold utilities and ancillary costs to be 10 cents per pound each, while labor costs me nothing. As a result, with a typical sales price of $1.20 per pound (99 cents per pound for clothing and $15 per piece for large items like blankets, comforters and sleeping bags), this works out to a pre-tax profit of $1 per pound.
I know what you’re thinking: “No labor! No way! It’s impossible to do wash-dry-fold without labor.”
But it’s not “in the margin.”
Our stores are attended 15 hours per day, and employees are an integral part of our self-service business model. In particular, our attendants are expected to help customers and keep the store clean – and we allocate these costs accordingly so that anything else they do on an incremental basis has no cost.
As a result, the way to manage labor “in the margin” for our wash-dry-fold business is to assign and prioritize just enough drop-off laundry work so as to not interfere with the first two priorities of helping customers and cleaning the store. The fancy term we like to share with our employees to achieve this result is “multi-tasking” – and, yes, it does take some training and not all new hires are capable of multi-tasking, but we can usually make this approach work.
Again, over the last five years, we have found employees can multi-task and complete 20 pounds of wash-dry-fold laundry per hour on top of their regular duties of helping customers and keeping the store clean. Assuming your store is open 15 hours per day, the capacity for wash-dry-fold business “in the margin” with zero labor cost is 300 pounds per day, or 9,000 pounds per month. That’s a lot of wash-dry-fold!
Of course, managing employees is more of an art than a science, and getting wash-dry-fold work done “in the margin” may at times be a challenge. For example, employees will inevitably be more concerned with a wash-dry-fold deadline than their first priorities, which are helping customers and keeping the store clean. We try to put this dilemma into perspective by reminding our attendants that we invested in our laundromat to take care of the many self-service customers in the laundry, rather than the one drop-off customer with a deadline.
We also have found that some employees like to “settle in” to a particular task, and you will inevitably discover that some attendants are better at cleaning while others are superior at washing and folding clothes, for example. We try to play to these strengths within reason without overlooking any one priority. Needless to say, we do not offer bonuses on how much wash-dry-fold laundry gets done, because helping customers and cleaning the store are higher priorities, and we don’t want to create a conflict.
To better manage the flow of wash-dry-fold volume and to make it manageable at a rate of 20 pounds per hour, we require a 24-hour minimum on the work we do. Buying this time also allows us more time to wash and soak the clothes, if necessary, to remove all stains.
Through experience, we have learned that most stains can be removed with Espro Sports Stain Remover, which is fast acting on organic stains such as food and dirt; and Laundry TarGo, which works well on inorganic stains such as ink, shoe polish, makeup and lipstick.
Also, rather than using elaborate wash programs with extra rinse cycles, for example, we have found that simply washing heavily soiled clothes twice will achieve the same result without any changes to the washers. When we run into an extremely difficult stain, we find time is our best friend, and we will soak these stubborn stains in a 55-gallon plastic barrel with a quality detergent with a booster like OxiClean and enzymes, which will literally “eat” the stain overnight.
If a customer insists on same-day wash-dry-fold service, we charge double the normal rate to make it a higher priority, which is not very often. If a significant amount must be washed and folded, we simply ask the customer for more time to get it done, such as 48 hours instead of 24 hours.
Offering free pickup and delivery is another great way to control the flow of wash-dry-fold laundry because you determine when to get it and when to return it to the customer. Yes, there is the cost of your own time to offer this type of service, but I have found that my SUV (with more than 170,000 miles on it) does just as well as a shiny new cargo van – and, if I manage my time “in the margin” by incorporating the trips into my own trips to and from the store, the cost is negligible. Most likely, you can limit pickup and delivery service “in the margin” to large volumes with commercial accounts, apartment building with many customers or large families.
Obviously, there are many different ways to manage your wash-dry-fold business, and with time your volumes or customer needs may change and require you to alter how you run your wash-dry-fold business. However, I have found that the most profitable way to do so – up to a volume of 9,000 pounds per month – is by utilizing my existing resources and managing my wash-dry-fold business “in the margin,” without altering my self-service business and first taking care of self-service customers and keeping the store clean.
The end result is that we take care of our self-service customers first, yet we still make a good profit on the wash-dry-fold business we do.
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