Originally posted – Jan issue/2012
Here’s How Four Laundry Owners Diversified Their Operations with Commercial Accounts
In the laundry business, an idle machine is a missed chance to gain needed revenue – and it’s an opportunity that can never be recovered.
Perhaps no one understands this better than Chris Balestracci, who owns Super Wash Laundry in East Haven, Conn., and has been building a strong commercial accounts service for years to supplement his self-service business and keep his washers turning.
“A commercial account we’ve had for a long time is a private boarding school,” Balestracci explained. “However, it began with them regularly bringing their students, along with a teacher supervisor, to my laundry to do their clothes. Unfortunately, every time they came to the laundry, my other customers complained about the kids’ behavior and started to stop coming on the nights the kids came.
“As a result, I spoke with the school’s headmaster and asked him to stop bringing the kids, which was difficult because we needed the business. But, during our discussion, he asked if I would be willing to pick up and deliver the students’ laundry. It wasn’t something we were doing at the time, but after a couple of discussions, we worked out a plan that was win-win – and the school has been happy for many years with our service. We use different color bags for each dorm – picking up the boys’ laundry on Monday and delivering it on Wednesday, and picking up the girls’ laundry on Wednesday and bringing it back on Friday.”
Ron Lane, who owns The Oasis Laundry in Sacramento, Calif., also has built a thriving and quite varied commercial business to boost his bottom line.
“For me, some of the most unique commercial projects have been one-off events, such as doing the laundry and drycleaning for the cast of Cirque du Soleil when they came to Sacramento,” Lane said. “I have a good relationship with the people at the Power Balance Pavilion, which is where the Sacramento Kings play. So, I’ve done the laundry for some of the concerts at the arena; I’ve done everything from Van Halen and the Eagles to Madonna to Britney Spears. I’ve also done the laundry for film crews shooting movies here and staying at the local hotels. It requires a quick turnaround.”
Like Lane, Paul Pettefer knows all about churning out pounds and pounds of commercial laundry in a timely manner. Located in the port city of Lake Charles, La., he handles the linens for many of the ships that dock in the city.
“When a U.S. flagship comes in, they bring me bags of linens,” Pettefer said. “I’ll need to do 500 to 600 pounds in eight hours. In fact, today, we’ve got a Mississippi River cruise boat; we’re doing about 2,000 pounds of their stuff and pressing all of their table linens. I’ve got 75 trash bags full of laundry that we just hauled over here.”
Clearly, there is a wide range of commercial business out there – for those willing to go after it. Below, Balestracci, Lane, Pettefer and Gina Villi of Salem 22 Laundromat in Delmont, Pa., provide some insight into their own commercial laundry ventures for those of you who have decided that 2012 is the year to grow your business into the commercial sector.
Super Wash Laundry
East Haven, Conn.
Top accounts: A private boarding school, a national car dealership, health clubs and an annual international tennis tournament.
Percentage of your business commercial work represents: Between 12 percent and 15 percent.
What businesses make the best accounts: I believe some of the best commercial accounts are hairdressers, nail salons, gyms, massage therapist and physical therapists.
However, some accounts – such as hotels, motels and nursing homes – can be very labor- and rules-intensive. For any account that deals with bodily fluids, you must know the government regulations dealing with the correct water temperature, detergents, and length and segregation of washing.
Equipment and chemicals: We use the same washers and dryers for our commercial accounts, our wash-dry-fold service and our regular customers. We also use the same soap, sodium perborate and softener that we use for our drop-off laundry customers.
Employees and training: We have an extra person on for the a.m. and p.m. shift to do the pickup and delivery, and commercial work. Since the commercial work is done the same way as our wash-dry-fold, the employees are interchangeable. We train them using an employee manual and a shirt folding form we purchased from a national laundry supplier, which is the same one use by many department stores. We also have a separate driver to handle deliveries on Mondays, Wednesdays and Fridays.
Advertising and marketing: We market our pickup/delivery service using e-mails blasts, our website, supermarket register tapes and direct mail. We also solicit new accounts with a brochure we created through the CLA’s DIY Direct program.
Costs and pricing: Extra costs include our van, vehicle insurance, gas money, additional employees, extra hangers and extra polybags. We also spend more money on advertising to promote this service.
Our pricing is $1.20 per pound. We don’t price per piece.
Common mistakes: Don’t overpromise – be sure your employees can handle the workload and do a quality job. Commercial accounts will not be as lenient as a wash-dry-fold customer. They want it on time and perfect every time. Be sure you can deliver what you promise.
Also, do your homework as to what your costs will be. You really need to make sure you have a critical mass to cover your fixed expenses.
Advantages: The biggest advantage is that it keeps my machines running and my employees fully employed. It’s a nice, steady, weekly income.
The Oasis Laundry
Top accounts: Hair salons, small hotels, doctors’ offices, day spas, churches, a wedding and event planner, catering services, a national sporting goods chain, a landscape company, a health club, an auto body shop, a local public television station, a local beer distributor and the Sacramento Police Department.
Percentage of your business commercial work represents: It’s getting close to 20 percent.
What businesses make the best accounts: Some of the most common are salons, massage therapists and hotels – businesses that use sheets and towels. It all depends on whether or not you want to specialize. I’m more of a generalist; I take almost anything that comes through my door.
My accounts are based more on geographical location than on the type of account. I try to get them in clusters. If someone is located where I don’t have any other accounts, I will be reluctant to take it. I don’t want to push out my trade area too far.
Equipment and chemicals: You need larger machines, at least 50-pounders. I do my commercial work early in the mornings, before we open up for business. This way we can get those loads into the dryers before the self-service customers arrive.
I don’t use any more chemicals than I do for our wash-dry-fold laundry. However, we do a little more spotting, especially with tablecloths.
Employees and training: I have several attendants, and I add employees as the workload increases. My son and I do all of the pickups and deliveries. You have to play to your strengths. Some owners will do a lot of the laundry themselves, whereas I don’t do that at all.
Advertising and marketing: We have a Facebook account. I advertise in the Yellow Pages, and through that I have a link on the internet. I also get a lot of word of mouth. I think a lot of my marketing has to do with giving good service and just talking to people.
Pricing: I charge $1.20 a pound for both my commercial work and my wash-dry-fold service. But I offer commercial clients free pickup and delivery.
Common mistakes: When I first got into it, I had a 10-pound minimum policy for my commercial account, but it didn’t pencil out. I’d get salons wanting three pickups a week, and each pickup was only 10 or 11 pounds. So, now I have a 30-pound minimum on pickup and delivery. If you’re going to offer free pickup and delivery, you’ve got to have a large enough minimum.
Also, a lot of owners don’t treat the commercial side as a separate business, and you have to. It’s not the same business. It’s a totally different business. You’ve got a retail business, and you’ve got, essentially, a wholesale business, and they are two separate businesses, almost like two different balance sheets. You can’t run it on the same percentage of labor, and you can’t handle the customers the same way.
Advantages: Commercial clients never see your laundromat, unlike wash-dry-fold customers who are dropping off and picking up laundry. For a drop-off business, you must be located in an area that type of clientele will frequent. With commercial business, your location doesn’t matter because you’re getting the laundry and bringing it back. You can develop commercial accounts in a store that might not be able to develop a wash-dry-fold business.
Another advantage is that self-service customers can leave you anytime that want and you’ll likely never know it. It’s the same with wash-dry-fold; they just don’t show up. But when you’re doing commercial work, you’ve got a business that’s going to be stable, so you tend to keep that customer a lot longer. And, if they decide to leave, you have a chance to talk to that client and find out why – and maybe even work something out to keep them. At least you have that conversation.
Probably the biggest advantage of doing commercial work is the fact that you have two separate businesses. It diversifies your risk. Let’s say you’re doing 50 percent of your business in your coin laundry and 50 percent in commercial accounts. If a new competitor come in and takes 20 percent of your walk-in business, that’s really only a 10 percent decrease to your business.
It’s another business under the same roof for the same rent. It brings more potential profit down to the bottom line.
Lake Charles, La.
Top accounts: Restaurants, a table linen rental company, corporate housing, a physician’s office, a spa, an MRI lab, an airplane repair business and a janitorial service.
Percentage of your business commercial work represents: 10 percent to 15 percent.
Equipment: I have a separate section for my commercial business. I’ve got 40- and 50-pound OPL washers with chemical injection, OPL dryers and a flatwork press.
An OPL machine or perhaps some sort of hybrid having certain OPL characteristics can be valuable. It gives you some flexibility to be able to program a 20-minute bath, for instance.
Advertising and marketing: I built a nice website, where customers can schedule their pickups right on the site. Also, I’m very active in the city. I’m on the board of directors of about four different social service groups, and I was a banker here for 10 years. So, a lot of my marketing is grassroots, people to people.
Pricing: We’re at $1.08 for clothes, and $1.35 for bedding and comforters. If it’s pickup and delivery without a minimum, I’ll raise the price a little bit.
I’ve kept the commercial pricing the same as our wash-dry-fold because that keeps it simple for the staff.
Common mistakes: Trying to tackle accounts you can’t handle and then not being able to get the items clean. Also, it’s a mistake to not fully factor in the aspect of pickup and delivery. My lifestyle puts me in the car. I’m traveling to meetings and I’m also a pastor in a church, so I run around all day. For me to do three or four pickups and deliveries a week isn’t enormously troublesome.
Advantages: It’s something you can do proactively. I can’t create activity to generate more self-service customers. So, it’s just another chance to utilize what I do, which is laundry.
Salem 22 Laundromat
Salem 22 Linens
Top accounts: Airlines, restaurants, colleges, universities, caterers, banquet halls, hotels and specialty linen rental companies.
Percentage of your business commercial work represents: 85 percent.
What businesses make the best accounts: The best types of businesses to approach are established, locally owned businesses. They are COGs (customer-owned goods). One example is a specialty linen rental company.
Equipment and chemicals: In order to service commercial accounts you need to have the right equipment mix I have the following in my laundromat:
Six 30-pound frontloaders, one 60-pound frontloader, 12 toploaders, eight 30-pound stack dryers, one 50-pound dryer, one 66-inch finish ironer, and several folding tables.
At my 3,000-square-foot plant, I have:
One 100-pound hard-mount washer, one 50-pound washer, three sealers, five large tables for folding linens, a plastic wrap roll to wrap linens when completed before transporting them, one 110-inch Ironer, two 75-pound dryers, one 30-pound stack dryer, four three-tiered shelving units, and 13 rolling bins
As for chemicals, we use a bright powder detergent, oxybleach, a chlorine destainer, a fabric softener and a citrus degreaser. You should have your chemical salesperson look at your equipment and conduct water testing to see which chemicals would be best for you. Also, consider adding automatic pumps to your washers, rather than manually adding the chemicals.
Advertising and marketing: Find your niche, develop a marketing brochure, and then do some heavy cold calling to area businesses. You may want to join your local Chamber of Commerce, go to their monthly meetings and network with others. Another good way to advertise is in the Yellow Pages.
Common mistakes: Some of the popular pitfalls to be avoided when it comes to commercial accounts are:
• Taking on large accounts that you don’t have the equipment to service.
• Promising delivery times that you can’t meet.
• Not keeping yourself and your staff current on the latest technologies, materials, and industry regulations and standards.
Advantages: In today’s market, when you deal with established commercial accounts, the biggest advantage is getting paid – and getting paid in a timely fashion.