Here’s How Linen Rental Can Be a Profitable Addition to Your Full-Service Laundry Business
One of the easier and more profitable opportunities for vended laundry owners who service commercial accounts – which a number of operators, including myself, have ventured into – is the linen rental business.
In this column, I hope to provide you with a few ideas as to why linen rental might make sense for you and your laundry business.
I’ve always said that, if I were to start a full-service laundry business (as opposed to a strictly self-service operation), I would begin in the commercial laundry sector, rather than with a wash-dry-fold service where I’d be dealing with personal laundry. That’s because commercial accounts are something you can count on every week and around which you can efficiently plan your labor.
Starting a small linen rental business is a great way to get into this segment of the laundry industry. Clearly, since your facility is not a truly industrial laundry, you’ll need to focus on some specific commercial markets. Two profitable opportunities in many areas are cleaning mop heads for small office complexes and laundering sheets for light-duty medical practices or massages therapists – neither of these require elaborate chemistry to get clean.
Many of businesses own their own mops and sheets, but some of them might want to rent them. And, in fact, some municipalities require that massage therapists have their sheets professionally cleaned.
Of course, as you drive through your store’s neighborhood with your “laundry goggles” on, you’ll no doubt discover several businesses that have laundry needs. Focus on those businesses that are located close to your store and that are so small that – if there is a large industrial linen company in your market (which most of us have) – they’re not going to be a huge target for these big laundry companies.
Keep in mind that, as a small laundromat owner, you don’t have nearly as many expenses as a large linen supplier, so you can be quite competitive. For example, you most likely can service a $50-per-week account that’s located close to your store much more profitably than a professional linen company.
In fact, some linen companies won’t even consider stopping their trucks for less than $100. However, if they do, they will charge these small customers very high prices, or they may try to get them to accept less-frequent stops, such as once a month.
An infrequent pickup/delivery schedule may not work for a lot of commercial customers, who might require fresh linens every week. A perfect example are mop heads, which will begin to smell after not too long if they’re not regularly cleaned. Most businesses that are mopping their own floors prefer fresh mops every week or two.
With regard to pickup and delivery, the linen rental business tends to be quite efficient for vended laundry owners; however, it also can be less efficient from a product storage standpoint. After all, with linen rental, the linens are yours – you own them, and you’ve got an inventory of them.
Then again, it doesn’t have to be a 2-to-1 proposition. In other words, for each customer, you more than likely won’t need two sets of linens – one at the customer’s place of business and one at your store being washed.
For instance, let’s say you’ve got a 500-sheet linen rental business – 10 customers, each requiring 50 fresh sheets a week. You don’t need 1,000 sheets. Theoretically, you could run this business with a total inventory of just 600 sets of sheets. It would be tough, but you could do it.
With those 10 customers, you would stop at two of them each day of the week. You would need 100 sheets per day – 50 sheets per client. You’d have an extra 100 sheets at your laundromat that you’d be cleaning. You’d bring 100 sheets to your two Monday customers, bring the 100 sheets you pick up from them back to your store, clean those 100 sheets, and then deliver them to the next two customers on Tuesday, and so on.
Just 600 sets of sheets for such a scenario probably isn’t very realistic. Some weeks your clients aren’t going to use all of their sheets, and some weeks they might need extra linens. A more realistic number might be 750 sets of sheets. If you have a weekly, 500-sheet rental business, having 250 extra sheets might be closer to what you would require. The key point is that you wouldn’t necessarily need 1,000 sets of sheets – two sets for each customer.
One of the advantages of linen rental is that you’re continually turning your inventory – and, because of that, you’re only making one trip to generate revenue. By contrast, when you service commercial accounts with customer-owned goods, you have to pick up the laundry, bring it to your store and clean it, and then return it to the client. With linen rental, you’re saving a step each time. In fact, over time, it’s almost as if the sheets are free, thanks to continually eliminating that step in the delivery process.
The takeaway here is to look for small businesses where you can be competitive on pricing and provide better service than the large industrial linen companies. As a small-business operator, you should be able to connect with these potential clients and develop a stronger rapport with them than the corporate linen suppliers can.
A small linen rental segment of your laundry business can provide you with steady, “low-hanging fruit.” Typically, it’s not hard work, and it’s business around which you can plan your labor.
So, if you plan to be in New Orleans for the Clean Show, my advice would be to carve out some time in your schedule to learn something about the linen rental business.