Understanding and Leveraging This Concept Will Elevate Your Laundromat Business to New Levels of Success and Profitability

What if I told you that you could increase your prices anywhere from 25 percent to 100 percent and end up with a stronger, healthier business.


Think about it… what is more important in a laundromat – value or price?

I bet you said “price.”

Now, what if I challenged you and said that what you used to think, or perhaps even currently assume, is all wrong?

We all know what “price” means. But what exactly is “value,” in terms of business and the way that you operate? And which is more important?

If we always make sure that we’re the cheapest in price, isn’t that the best way to compete? For my first four years in the laundromat industry, I believed the answer was “yes,” but now I know for sure that the answer is a definitive and resounding “NO!”

It’s all about the “value proposition.” For me, learning what it is and how to use it made my laundry businesses stronger. And leveraging the value proposition can do the same for you. It will change your life, your business and, most likely, the communities you serve.

What is a Value Proposition?

The formal definition for value proposition is “an innovation, service or feature intended to make a company or product attractive to its customers.”

OK, that’s simple enough, right?

Put into practice, I’ve taken four “ZombieMats” from old, broken-down and unprofitable to near the top of our industry by doing one thing – obsessing over providing the best value proposition in my marketplace. In the end, the value proposition is how customers decide which businesses to patronize… and, believe me, every little thing matters.

Question: Are all steaks the same?

Have you ever had a tough, gristly steak at some greasy diner? What about a ridiculously high-quality filet mignon from a high-end restaurant?

Did both pieces of meat cost you the same amount of money?

No, of course not. And no one would expect them to, because we value one product and experience higher than the other.

You can get a $10 steak at a low-end restaurant, or you can enjoy a $110 steak from a fine dining establishment. Although they’re both steaks, they’re definitely not the same thing.

Are those two restaurants competitors? Absolutely not – and they both know it. So, why do so many laundry business owners not understand this principle?

Next, let’s walk through how the value proposition specifically impacts you, as well as how you can elevate your laundromat business to a completely different level by focusing on your value proposition.

How do store owners determine what their prices should be in their specific markets?

Unfortunately, it’s quite common right now for many laundromat operators to merely look at a few of their competitors to see what these other owners are charging. If they deduce that their store is better, they may charge a quarter or 50 cents more than the competition, and that’s that. In other words, they let others decide how much they can charge, rather than letting their own value proposition and the marketplace decide this.

When I’m working with fellow laundromat owners, I always encourage them to take a deep dive into the value that they bring to their particular markets and to charge accordingly, with no significant ceiling. If your value proposition is three times that of your competitor, you can easily charge double the vend prices. I know, because I do this at all four of my locations.

Because many store owners keep their prices depressed, they often determine that they “can’t afford” to make certain investments in their businesses – such as new washers and dryers or perhaps adding an ozone option – because they don’t have the revenue coming in. I propose that this is completely backwards and that, as an industry, we are all selling ourselves short when we approach the business this way.

Every month, I review my stores and try to look at them through the eyes of a new competitor. I always ask myself the same three questions:

  • What is my value proposition?
  • If I were a competing laundromat owner, what would I do to beat me?
  • Who are my customers?

Do you think Chick-fil-A makes any money?

They are the highest-priced fast-food restaurant on the planet – and, in my opinion, their business plan is genius. While all of their competition beats each other up over price with “dollar menus” and so on, they are focused like a laser on value proposition. And they win the battle every single day!

Did you know that Chick-fil-A has the best reputation, the best facilities, the best operations and, yes, the highest prices as well?

Guess what it also has? Chick-Fil A has some of the highest profit margins in the fast-food industry.

Of course, all things being equal, who wouldn’t want to pay less, but that’s the caveat – things are never equal. If you have never had a chicken sandwich from Chick-fil-A, you’re missing out. They are amazing – always cooked perfectly and always served with a smiling face and a sincere “my pleasure.”

I know that many within the industry think that the laundromat business is different. But I’m here to challenge us all and to suggest that maybe we aren’t that different. If we want to elevate our businesses, it starts with letting go of that myth.

Shattering the Myth

There’s an age-old myth that the laundry industry is somehow unique and quite different from every other industry out there. Simply put, we don’t give ourselves enough credit. We are a vital resource in every market and, quite frankly, our communities want better from us.

The myth out there is that the only people who use laundromats are lower-income individuals and that the only thing they care about is price.

This is completely and totally false.

The top of our industry serves lower-income people, but these are predominantly those who appreciate cleanliness, safety, service, experience, comfort and so on.

We also serve the American middle class. Whether those customers are lower middle class, middle class or upper middle class, we serve them as well. Maybe these individuals have in-home washers and dryers, but not every type of garment or item can fit in those smaller machines. Also, when residential machines break down, service appointments must be scheduled, parts must be ordered, etc. During this downtime, those homeowners are left without washers and/or dryers.

Where do all of these people go when these issues occur? If there’s a clean, modern, quality laundromat nearby, they will go there. If there’s no such store nearby, they’ll drive 10 to 15 miles or more to find one. Trust me, I see it daily in all of our stores.

Understand that I’m not talking in theory. I’ve successfully run most types of laundromat models out there. I started out with “plain Jane,” unattended laundromats with limited expenses. Over time, I built a staff to partially attend my business and then eventually invested in a fully attended operation – and all were very profitable.

At one point, my laundromats were nothing special to look at, but everything worked and was clean. Then, I slowly reinvested in the business as I could. I increased employee salaries so that I could hire better quality staff members. I invested in training, management and repeatable systems – along with such amenities as Wi-Fi, comfortable seating, immaculate restrooms, soothing background music, ozone systems, children’s areas, wider aisles, new equipment, excess folding tables, modern payment systems, air conditioning, televisions with more than 200 cable channels, new flooring and LED lighting.

And, when I made these investments, my business increased in both gross sales and profits.

As my costs increased through these reinvestments, I raised my prices aggressively at times. Although you may be thinking my volume went down, it didn’t – it also increased, along with my margins. Over approximately five years of heavy reinvestment, the dividends were enormous. My margins went from 20 percent to nearly 40 percent, and my gross sales increased anywhere from 50 percent to 120 percent over a few years.

The same thing happened with my wash-dry-fold business as I improved my operations. We hired and trained a stronger, more professional staff. We improved our sorting, washing, drying, folding and packaging processes. We added a high-quality POS system so that we could run a truly professional drop-off service, rather than relying on outdated three-part tickets to keep track of the WDF orders.

We evolved from using generic products and providing just one way of processing orders to using all high-end products and offering a fully customizable service. That means we do the customers’ laundry the same way they would do it – no questions asked. Our new POS system enables us to easily and professionally manage and track every customers’ preferences without having to ask them over and over.

Then, guess what we did next?

Yep, we raised our prices. In three years, we raised wash-dry-fold prices from $1.10 per pound to $1.25, then to $1.50, and just recently raised them to $1.80. And our volume has exploded every step of the way.

Lastly, we upped our game a third – with our laundry pickup-and-delivery business. As we’ve improved and reinvested in taking our delivery business to another level, our value proposition skyrocketed, and we now do nearly double the revenue in pickup and delivery that we do in the self-service segment of the business.

Can you imagine adding another revenue stream to your self-service laundry that isn’t “ancillary” – another revenue stream that generates nearly twice the revenue of your self-service business… without one interfering with the other?

So, when someone tells you that the laundromat industry is “OK” but that it’s just really a job and not a true business, don’t listen to them, because they’re selling “a $10 steak.” When they tell you they can’t afford to do this or do that, remember that they’re verbalizing their limitations, not yours. The truth is that, with the right value proposition, the laundromat business is the best business in America, hands down!

Here is my challenge to you: What can you do differently within your laundry business to raise your value proposition?

The truth is that most of society appreciates and will pay more for the best value proposition. So, look at your business through the eyes of potential customers – not the customers you already have, but the consumers who you wish to attract.

Ask yourself the same three questions on a regular basis. Make it your mantra:

  • What is my value proposition?
  • If I were my competitors, what would I do or change to exceed this value?
  • Who are my customers?

After asking yourself those three questions, you’ll know where you are in your laundry business, as well as where you need to go and exactly what types of customers you’re trying to attract.

One final point: Don’t forget to charge for your services. Charge for the value that you bring to the table. Of course, this means completely and totally ignoring that “competitor” who isn’t really even a competitor at all.

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