Laundry Industry Veteran Stephen Gramaglia Discusses His New Life as a First-Time Store Owner
After more than 20 years of helping would-be laundromat owners finance their entrepreneurial dreams, Stephen Gramaglia has opened his own vended laundry business – CleanFresh Laundromat in Yonkers, N.Y.
Gramaglia recently shared with PlanetLaundry what it was like to open his first-ever business venture at the height of the COVID-19 pandemic, as well as discussing the surprises he encountered getting his business up and running, the keys to operating a successful laundromat in 2020 and his plans for the future.
You have an interesting background, in that you arrived at laundromat ownership from the financing world. Let’s talk a little about your professional background, and how you eventually got to be a laundromat owner.
I started working at Eastern Funding, which is an independent, bank-owned equipment finance company. They specialize in laundromat financing, new equipment, acquisitions, refinances and so on. I started working there in 1999.
At Eastern, I was in charge of operations. I actually held a plethora of positions there, but for the most part, I was managing all of the operations, dealing with H.R., dealing with infrastructure, handling small vendors’ contractors, and managing key relationships with some of the manufacturers in the industry.
I was there for 21 years, and I retired from Eastern Funding on June 30. I’m now a full-time laundromat owner. It was an interesting sort of background and way into the business. It was a great situation for me.
Have you owned other businesses prior to CleanFresh Laundromat?
This is my first time owning a business.
What made you decide to open a laundromat, as opposed to some other type of small business? What advantages did a laundromat business offer you?
Ideally, I wanted to do something that I knew, rather than venturing out and having to learn some brand new skill. I’ve wanted to own my own business for years. I think my experience in financing laundromats all of those years and speaking to store owners across the country and learning from them – as well as dealing with the equipment manufacturers, the distributors and some of the contractors – made me comfortable that a laundromat was a business I could manage.
I also like that fact that it’s a recession-proof business. People have to do laundry, and now we’re sort of living proof of that. We opened CleanFresh on May 9 of this year at the height of the pandemic.
My customers appreciate everything that we’ve done. We’ve created a space that is safe, comfortable, spacious, clean and sanitary. And that type of laundry business didn’t exist before in this marketplace.
With COVID-19, these certainly are challenging times for all business owners. What have you done to adapt and cope with this difficult business climate right now?
We hadn’t opened prior to the pandemic hitting, so we didn’t need to change anything. My wife, Sarah, and I – who are both full time in the business – had anticipated opening for a long time, and we hit a lot of snags in actually getting the business open. We had a business plan and certain things we were going to do. Of course, once this pandemic hit, we started to think about the day that we would actually open the doors.
Fortunately, we had the benefit of being members of the Coin Laundry Association, receiving PlanetLaundry magazine and being active in all of the industry Facebook groups. So, we had the benefit of seeing what best practices were being used in the industry by the best operators. Also, my experience and contacts through Eastern Funding were a huge help.
We opened our doors knowing what we needed to do for our customers to be safe and to feel safe. Obviously, we practice social distancing. We’ve offered curbside pickup and delivery of wash-dry-fold orders. We’ve utilized a card-operated payment system that enables customers to register their phone numbers to the cards, and the washers and dryers will text the customers when the laundry is done – so the customers can safely wait outside in their vehicles. In addition, we have a covered sidewalk outside and benches that we’ve spaced six feet apart, so customers also can wait on those. In fact, even on busy days, the store never feels crowded.
Of course, we also have a lot of space. The store is 5,400 square feet, so we have wide aisles. We have 60 washers and 70 dryer pockets, which enable customers to space themselves out from one another even on the busiest days.
We sanitize all day long. Our attendants, my wife and I are constantly wiping down laundry carts, folding tables and seating areas – and our customers see this, and it adds to their comfort level.
What’s more, we have antimicrobial laundry carts, which feature a coating that prevents the spread of germs and viruses, so that’s another layer of protection. And, of course, we all wear protective masks. We enforce the New York state ordinance that anyone who comes into the store must wear a mask. We enforce that, and it makes our customers feel safe.
In a sense, we were fortunate to not have to really change anything, because we opened up in the middle of this whole thing, so we started off on the right foot.
Your new store is in Yonkers, N.Y. What made you decide to open at the location you chose?
Sarah and I had been looking for a location for about two years. We had looked at a couple of other locations that didn’t pan out for various reasons – and then my local distributor, Metropolitan Laundry, called me with this location.
It’s only six miles from our house, which is ideal. We wanted to be close to home, if only just for ease of management. I’ve dealt with a lot of customers during my years at Eastern Funding, and many of them became fatigued by the travel. It can drain you. If you’ve got to drive an hour or more to get to your laundromat or drive through horrendous traffic, it can be draining. And we’re famous here in New York for our traffic.
Plus, we were targeting the Yonkers market. For those unfamiliar, Yonkers is the first city north of New York City. It’s just over the Bronx border. It’s got a large and diverse population. This particular location is surrounded by apartment complexes, which all have laundry rooms – but, then again, in the midst of this pandemic, some laundry rooms may not be ideal; they are small, don’t have a lot of machines or large-capacity machines, and some aren’t maintained that well.
I know it sounds strange, but we opened at an ideal time and in a location where the competition was light. We have a lot of apartment dwellers and multi-family housing in the area. And, with our advertising, we’ve been able to draw from the Bronx, from other parts of Yonkers, from other parts of lower Westchester.
All in all, we just really liked the demographics in this part of Yonkers.
Was the location an existing store, or did you build it from the ground up?
It was a vacant space. We built from the ground up. It was an L-shaped shopping center, anchored by a CVS Pharmacy and an Outback Steakhouse restaurant. The space that we occupy is on the end, and it used to be a Lucille Roberts fitness center that had been closed for about two or three years before we signed the lease. It was a fresh build.
Were there any surprises, snags or interesting anecdotes that you care to share about the building/renovation process?
It went smoothly at times, and then not so smoothly. Despite my many years of experience in the industry, all of my contacts, being a member of the CLA and talking to many operators, you still can’t foresee all of the issues that you’re possibly going to have to deal with. We ran into several different issues with the construction, with permitting and with inspections. Then, obviously, during the last few months before we opened the pandemic held us up tremendously.
The first time you do something, you make some mistakes and you learn from that. I thought I knew how to do it all, but I was humbled by the experience of building out a big location. The bottom line is that we were able to get open, and we’re really happy with how the space turned out. It’s a beautiful space, and we’re happy to be able to serve the community and give our customers a great place to do laundry.
How long did that process take?
It took about five months to get the city to approve the plans. They put shovels in the ground in April 2019, and the laundromat was ready to open in December. So, the actually construction took seven to eight months, and then it took us another five or six months to get the final approval to open the location. It took longer than we expected, but some of it was beyond our control.
How much did this project cost, including the equipment?
The total project – equipment, construction, all the rent – cost just over $1.5 million. It’s a very large location with a lot of equipment. And it’s New York, so the prices tend to be inflated.
How would you describe the clientele/demographics at your laundromat?
It’s a very mixed, melting pot type of area. However, the demographic that really appealed to us was the percentage of renters in the area, versus the percentage of single-family homeowners.
We looked at the demographics of all of the apartments and multi-family housing in the area. The income levels are actually a bit higher than I would typically want to see for a laundromat, but we recognized that those apartment dwellers, regardless of their income, have to do their laundry – and, especially now, they have to do it in a safe, clean, sanitary and spacious environment.
When we were looking – pre-pandemic – at the percentage of renters in the market that we could target, we looked at all of the apartment buildings, and the laundry facilities are just inadequate for the number of renters. It was a perfect fit for us.
How many competitors do you have in your marketplace?
There are two laundromats within walking distance. But I think our real competition are those apartment laundry rooms.
How does your laundry business differentiate itself from the other laundromats in the area?
We’re different in our technology, our large space, the way we run the store and our parking availability. We’re in a shopping center, so we have about 75 dedicated parking spots, because we’re on the endcap. We have some tremendous advantages, beyond what you’d normally see.
Once you opened your laundry, were there any surprises?
There were definitely some things that I couldn’t predict, especially being a first-time business owner. I heard for years from customers at Eastern Funding that it’s harder than one thinks. And that’s true. It’s definitely a lot of work. People who get into this business and think that it’s an absentee-owner business and that it runs itself are wrong. It’s possible to run a store that way, but not if you want to be successful – and not if you want to be the market leader.
It takes a lot of management. We’re open 24 hours, seven days a week. We have seven employees, not including my wife and myself. I was challenged to find the right employees, especially in the middle of the pandemic. It was a challenge to train them, and it’s challenging to run a business that’s open 24 hours a day. You can’t prepare yourself for that.
We’re here every single day, for a lot of hours. It requires constant, hands-on management, in terms of dealing with the issues that come up and dealing with customers.
Once of the big challenges is how to deal with a customer who has an issue. There’s no rule book for it. You’ve got to figure it out, and our business philosophy is that the customer is always right.
As a result, when our customers have an issue, we take responsibility. For example, if they take clothes out of a washer and those garments still have soap on them, even if it’s not our fault, we will rewash those clothes for them. We’ll fix those issues that come up, because our customers are everything. And the challenges that exist are learning on the job.
Some nice surprises we’ve experienced are how grateful our customers are, and they tell us that constantly. They thank us for building a space they can come to and feel comfortable. In fact, our customers will spill soap, and they will ask for a rag to clean it up themselves. They want to keep this store clean.
Overall, thus far it’s just been a great experience.
Are wash-dry-fold services or commercial accounts part of your business model?
We have offered wash-dry-fold services from Day One. In this area, it’s a necessity. Since we’re 24/7 and fully staffed, it’s something that we planned for, and we take great pride in the quality of wash-dry-fold that we provide.
We take great care when washing people’s clothes. We treat those items as if they were our clothes. We separate all of the garments. We spot-treat them. We use high-quality detergents. We ask our customers how they want their clothes washed and dried. And we’ve had tremendous repeat customer business already from customers who love the way their clothes come out, as well as the way we package it and treat those clients.
Our wash-dry-fold business is a big piece of the puzzle, and it’s actually growing very nicely.
Initially, we were going to try to pursue some commercial accounts. But, once our open date got pushed back because of COVID-19, we decided not to pursue that business.
Most of the commercial accounts in our area would be motels and hotels, which are not open or don’t have much business now. Gyms and fitness centers are still not open in New York. Most restaurants in New York are only partially open for indoor dining. So, we decided not to focus on it.
Personally, what are your business strengths?
I use the skills that I’ve used for 21 years at Eastern Funding. I think a lot of them translate to running this laundromat.
At Eastern, I was in operations. I dealt with customer relationships – manufacturers and end-users. At CleanFresh, I do all of the hiring. I also handle all of the human resources aspects of the business, and I pay the bills.
Fortunately, Sarah complements me extremely well. She deals with the actual management of the employees, including the training. She makes sure that our attendants are doing things the way we want them done and doing so consistently. She also handles all of the equipment repairs. That’s not my forte. I’m the first to admit that I’m not very handy.
Combined, we complement each other very well, and we work well together. We make a good team.
What are the keys to a successful laundry business in 2020?
It’s not complicated. You have a limited amount of inventory. The machines do all of the work. It’s an essential business, and it’s recession-proof – people have to wash their clothes.
In my opinion, the main key to running it successfully is keeping the store clean. That’s always been the case. People don’t want to wash their clothes in a dirty store – and now more than ever that is so critical. Our store is spotless. We are constantly cleaning it.
That’s the biggest issue right now. Your store has to be spotless so that your customers feel safe.
In your experience, when a laundry business fails, what is the most common reason for that failure?
Operator error… 100 percent. For 21 years at Eastern Funding, lending money to thousands of laundromat owners, I would estimate that more than 90 percent of the problem loans were due to the operators not running the store, not paying attention to it, letting the employees run it, and so on. It really was all operator-related.
Most locations are good locations, if run properly. It’s a fairly straightforward business to run, but you’ve got to run it – and you’ve got to be there. You’ve got to take care of your customers. If you don’t do that, they’re going to go elsewhere.
What are your top business goals for the rest of 2020 and into 2021?
Our main business goals are just to keep ramping up the store and to keep building on the early success that we’ve enjoyed. We want to keep it going. There is a tremendous potential in this market, as we’ve already seen.
We’re drawing from a much larger radius than we thought we would. We’ve got customers coming from a bit farther away than expected. I think we can continue to draw and continue to provide an oasis for people to fulfill this essential basic need that they have, which is to do their laundry and to be clean and sanitary doing so.
So, our goal is to continue to build up business, keep the store clean, and manage and run the laundromat the way we would want it run if we were customers. That’s our overall business goal – to provide a place to do laundry where we would want to do our own laundry.
Do you plan to open any other laundromats in the future?
This is keeping us busy, for sure. Anytime you have a start-up business, it requires a lot of attention. However, my plan is to continue to grow this location, but also to look for other locations and opportunities that may be out there. Our goal is to own five to seven laundromats within the next three years.
Is the laundromat business still a good business for entrepreneurs to get into?
Yes… 100 percent. It’s a great business. After all, if we can open up at the height of a global pandemic, the likes of which we haven’t seen in 100 years or more, and start out strong – it’s definitely a good business to get into.