The Four Most Prominent Story Lines Impacting Owners in 2021<\/h2>\n

If this were a typical year, we\u2019d likely be using these pages to recap a successful Clean Show.<\/p>\n

However, 2021 \u2013 much like its predecessor \u2013 was anything but typical. Early on, it became apparent that Clean \u201921 would become Clean \u201922, as the lingering pandemic pushed the industry\u2019s showcase event into the following year.<\/p>\n

Not that this year was uneventful. From rising natural gas prices to the continued coin supply disruption to ongoing COVID-19 protocols, laundromat owners faced a slew of important issues in 2021.<\/p>\n

However, at PlanetLaundry<\/em>, we felt that four specific story lines topped them all with regard to their overall impact on today\u2019s laundromat owners.<\/p>\n

Help Wanted: The Labor Crisis<\/h3>\n

Although the labor pool was tightening even before 2020, the pandemic definitely compounded an already-bad situation \u2013 during a time when our economy is hungry for recovery.<\/p>\n

\u201cSo many segments of business in North America are primed for a strong comeback but have been compromised due to an unavailable workforce,\u201d said Joel Jorgensen, vice president of sales for Girbau North America. \u201cIn laundry segments specifically, many of our growth opportunities are in new, more premium services \u2018spurred on\u2019 and discovered by new customers and demographic groups during 2020.\u201d<\/p>\n

These opportunities, according to Jorgensen, include full-service wash-dry-fold, pickup and delivery, and commercial contract work \u2013 all demanding labor, equipment and mostly unskilled hourly workers.<\/p>\n

\u201cThis worker segment is challenging to find, hire and retain at sustainable wages,\u201d he added. \u201cIt\u2019s a sad testament when \u2018no-show\u2019 interviews and \u2018ghosting\u2019 the first work day become the norm.\u201d<\/p>\n

\u201cI\u2019m no longer a laundromat operator, I\u2019m a job interviewer,\u201d half-joked Mike Gregory, who owns two laundromats in the Denver area. \u201cIf you can even get people to fill out an application, the interviews are now filled with no-shows, or they\u2019re late. Plus, even training shifts are 50\/50 no-shows.<\/p>\n

\u201cThe only thing I was able to do was increase pay. I already paid $14 an hour, but I\u2019ve begun starting employees at $15 an hour now. And I have one staffer who makes more than $20 per hour.\u201d<\/p>\n

Bryan Donegan, who just opened Laundry 24 in Evans Mills, N.Y., in May explained that the labor crisis has severely impacted his new business.<\/p>\n

\u201cI\u2019m not lacking interest from workers,\u201d he corrected. \u201cI\u2019m lacking interest from quality workers. I have no issue paying more than the minimum wage to those who actually work and don\u2019t have their noses stuck in their phones or their eyes on a clock.\u201d<\/p>\n

Donegan has reacted to this hurdle by \u201cmaking it happen.\u201d No matter the time of day or night, he explained that he\u2019s at the store to pick up whatever slack there may be, due to the lack of a full employee schedule.<\/p>\n

\u201cI also have taken on an unorthodox approach to how I hire,\u201d he said. \u201cI stopped advertising for employees. I want people who are hungry and who want to work. I\u2019ve had better results by hiring those who inquire on their own.\u201d<\/p>\n

Alex Harris of Professional Laundry Systems in Deer Park, N.Y., noted that the increases in the minimum wage across the country have created opportunities for laundromat employees to seek more favorable jobs elsewhere.<\/p>\n

\u201cLooking ahead, we should start to create a model similar to the fast-food chains, offering additional perks to attract new employment opportunities to our laundromat workforce,\u201d he said.<\/p>\n

\u201cThe labor crisis of the past year has been particularly challenging for our company, as it has been for most laundromat owners as well,\u201d explained Craig Dakauskas, senior vice president of North America Commercial for Alliance Laundry Systems. \u201cIn the laundromat world, it\u2019s meant owners often are covering shifts for attendants and taking on wash-dry-fold duties just to get orders out the door.<\/p>\n

\u201cUnfortunately, there doesn\u2019t seem to be much relief in sight in the near future.,\u201d he continued. \u201cLaundromat owners need to understand the competitive landscape of staffing. Thus, it\u2019s important to do all they can to provide incentives and flexibility to attract and retain the best employees.\u201d<\/p>\n

For Luke Williford of The Wash House Laundromats chain in North Carolina, it\u2019s all about connecting with the employees.<\/p>\n

\u201cWe have worked extremely hard to stay in close connection with all of our more than 60 team members to make sure we are serving them well,\u201d he said \u201cWe even hired a customer service manager who handles all training and onboarding of new staff, as well as being a big part of our retention by staying connected with our staff.<\/p>\n

\u201cWe\u2019ve increased wages, and since we missed our company Christmas party in 2020 due to COVID-19, we held a mid-year party, team-building and appreciation day in June \u2013 where we trained, thanked and gave a hug and bonus to every staff member.\u201d<\/p>\n

At Texas-based laundry delivery service The Folde, the demand for labor is variable, which creates variable staffing needs.<\/p>\n

\u201cWe have a strong base of orders that we know will be in production every day,\u201d explained the company\u2019s Mark Vlaskamp. \u201cWe staff our full-time W2 workers to fill this demand. However, increases in demand come at a moment\u2019s notice.\u201d<\/p>\n

To help fill this demand during a time when labor is expensive and the hiring process is time-consuming, The Folde has opted to work with on-demand labor temp agencies.<\/p>\n

\u201cI strongly believe these on-demand labor marketplaces are the future of traditional blue collar labor,\u201d Vlaskamp continued. \u201cInstead of workers searching for blue collar jobs, we\u2019re finding more workers are searching for blue collar gigs. They want a one- or two-day commitment with the freedom to walk away when the gig is done. They\u2019re looking for a side hustle, not a career and the restrictions that come with it.<\/p>\n

\u201cInstead of fighting this, we\u2019re leaning into it. Simplify the product, make onboarding easier and get really good at training temps. If this is the new world of blue collar labor, there\u2019s no need to fight it. Instead, let\u2019s make it a win-win for us and the workers looking for side hustles.\u201d<\/p>\n

Ross Dodds, co-owner of Wash on Western in Los Angeles, sees the labor issue becoming a \u201cdead horse\u201d topic.<\/p>\n

\u201cIt\u2019s getting worse, and it\u2019s affecting everyone,\u201d he explained. \u201cWe are making huge adjustments that, in the past, we had been able to implement much more slowly \u2013 such as increasing prices very aggressively across the board\u2026 and all at once! We\u2019ve seen labor go up $2 to $3 per hour to try to stay competitive, and we are about to go up another $1 to $2 for some of our basic entry hires, which is substantial.\u201d<\/p>\n

\u201cFrom all reports, this appears to be a national, all-industries-wide problem,\u201d explained Art Jaeger, who owns Santa Clarita Laundry in Santa Clarita, Calif. \u201cWe are now making our plans assuming this may be the new way of job life going forward.\u201d<\/p>\n

At Jaeger\u2019s business, work schedules are being prepared with more built-in flexibility. The production loads are being monitored not to take on more business than the team can handle while still maintaining the company\u2019s standards for customer service and return times. And prices have been increased to reflect the added cost of compensation, including bonuses and overtime that have arisen from this worker shortage.<\/p>\n

\u201cI\u2019ve never seen such a tight labor market in the 53 years I\u2019ve been operating businesses,\u201d said Larry Adamski, who owns Muskegon Laundromat in Muskegon, Mich. \u201cOur employee turnover increased dramatically in early 2020, and by mid-2021, I had increased our starting wage by 20 percent to attract new employees.<\/p>\n

\u201cDespite the wage increase, most candidates came with so much baggage that they were either unteachable or intolerable. And so it went, time and time again, as we struggled to maintain our standard hours of operation. My only encouragement was knowing that some local big-box retailers were hiring employees that were even worse than some I had hired.\u201d<\/p>\n

Of course, labor is not going to just show up when we flip the calendar page into the new year, cautioned Matthew Conn, global marketing director, commercial laundry product development and marketing at Whirlpool Corp. But he was optimistic.<\/p>\n

\u201cI don\u2019t think it will continue to be as big of a problem over time,\u201d Conn predicted. \u201cIt\u2019s just going to take time to work itself out.\u201d<\/p>\n

In High Demand: Supply Chain Woes<\/h3>\n

On top of the labor crisis, 2021 has served up a perfect storm of supply chain disruptions, logistics issues and chip\/technology shortages \u2013 all against the backdrop of high demand for laundry equipment.<\/p>\n

Beyond everything else, the pandemic has exposed the frailty of our global production, supply and delivery channels. And, within the laundromat industry, demand for equipment has outstripped supply in many marketplaces.<\/p>\n

\u201cI will not go so far as to say that the huge demand for laundry equipment was spurred on by the supply chain challenge,\u201d Jorgensen said. \u201cI feel this huge demand for equipment is more likely a result of delays to plans and market uncertainty through 2020, that now has spurred into more of a \u2018feeding frenzy\u2019 for upgrades, expansion and to capitalize on new business opportunity and market demand.\u201d<\/p>\n

\u201cThe signals we\u2019re seeing certainly don\u2019t predict an end to these challenges in the year ahead,\u201d Dakauskas said.<\/p>\n

As a result, Alliance Laundry Systems has \u201cfocused on counseling customers on the opportunity costs of waiting for the perfect option,\u201d as opposed to taking delivery of an available machine.<\/p>\n

\u201cOur commitment to open communication with our distributors and end-user customers is our greatest asset in navigating the uncertainty of these current challenges,\u201d Dakauskas noted.<\/p>\n

\u201cGetting our hands on microchips is no different for us than anyone else,\u201d explained Conn, with regard to Maytag\/Whirlpool production. \u201cWe do our best to make sure we get the parts we need to be able to build machines, as well as having service parts available for our customers.\u201d<\/p>\n

Conn was quick to salute his company\u2019s frontline workers.<\/p>\n

\u201cThe people at our facility during this time period have stepped up like I\u2019ve never seen,\u201d he marveled. \u201cThe work they\u2019ve done has been remarkable. To keep building in the face of so much uncertainty and managing the supply outages is remarkable. On some days, we\u2019ll think we have parts \u2013 and then, all of sudden, a supplier may not come through, and we\u2019ve got to scramble.\u201d<\/p>\n

On the transportation side, Conn pointed to the current difficulty in obtaining a sufficient number of vehicles.<\/p>\n

\u201cThe drivers aren\u2019t on the roads as readily,\u201d he said. \u201cYou may get a 20 percent bump in demand, but you\u2019ve still got the same number of trucks on the road. You can\u2019t just flip a switch and add extra drivers to get products delivered to laundromats. So, the trucking shortage has been key and impacts laundries directly.\u201d<\/p>\n

Jaeger noted that the recent popularity of laundromats as solid business investments has played a role in equipment delays.<\/p>\n

\u201cBeing designated an \u2018essential\u2019 business has made our industry more attractive to investors and developers,\u201d Jaeger suggested. \u201cAside from the difficulties and stoppages to production lines attributable to COVID-19, it also has increased the demand for stores, particularly from developers, that has led to longer lead times and delivery schedules. I believe that some manufacturers and distributors have attempted to take advantage of investor demand \u2013 thus, diverting equipment to outfit company-owned stores, franchise operations or speculative development.\u201d<\/p>\n

New owner Bryan Donegan experienced the supply chain woes first-hand while trying to get his laundromat built.<\/p>\n

\u201cThe greatly increased demand for laundry equipment, spurred on by the current supply chain challenges, impacted my business somewhat significantly in 2021,\u201d Donegan explained. \u201cConstruction for my project began in November 2020 \u2013 so I felt the supply chain issues from the beginning. During my construction phase, everything had to be planned and executed according to my deliveries \u2013 and I had to be ready to receive my equipment, which was going through some delays.\u201d<\/p>\n

During his first week in business, Donegan\u2019s store was a cash-only operation, due to microchip\/electronics delays that affected some of the features on his new equipment.<\/p>\n

In April, Gregory considered ordering six 80-pound washers, and was told it would take a minimum of six months, with no set delivery date.<\/p>\n

\u201cSpending $100,000 with no delivery date made me reconsider,\u201d he said.<\/p>\n

Dodds noted that he and his husband and business partner, Russel Pinkard, have resorted to a two-part remodel\/retool strategy for their more recent laundry projects, due to the long delays for equipment.<\/p>\n

\u201cI have named it \u2018Lipsticking the Pig,\u2019 while we wait up to eight months for equipment,\u201d he explained. \u201cMany of the opportunities to purchase are in great need of a complete remodel and retool. We come in and replace the ceiling tiles, paint the ceiling rails, replace all lights to LED panels, paint the walls to our colors, rip out the old tile, replace vending machines, repair and clean up all existing machines, and remove any toploaders. We also upgrade restrooms and sink areas, and add air conditioning or swamp coolers. Then, we have to stop and let it run as is, because the new equipment is not here. And we\u2019re seeing those delays get longer and longer as of late.\u201d<\/p>\n

At The Folde, the current supply chain issues and price increases have led the company to more closely examine its operations and look for ways to trim any fat.<\/p>\n

\u201cIn good market conditions, it\u2019s easy to justify all the bells and whistles,\u201d Vlaskamp said. \u201cHowever, we\u2019re not there right now. These tough market conditions bring the unnecessary bells and whistles to the forefront. We\u2019re consolidating the products and services we offer, while making sure we\u2019re not causing any additional labor or supplies to go into the process.\u201d<\/p>\n

For example, The Folde has eliminated options for hangers and the poly-wrap that goes along with it. In addition, it has minimized detergent options and similarly condensed its bag size offerings. And, according to Vlaskamp, these tweaks have combined to help decrease the number of payroll hours per order, and eliminated approximately 10 inventory SKUs that are no longer needed to be kept in inventory.<\/p>\n

\u201cWe adapted to the equipment shortage by placing orders much further in advance than we typically would,\u201d Williford explained. \u201cWe forecasted our needs and placed orders as soon as we had leases signed, and even a few before our RE purchases, acquisitions or leases had been agreed upon.<\/p>\n

\u201cIn a few locations, we decided to run the existing equipment. We acquired several locations with existing equipment that was in good shape and met our capacity needs. In the past, we would have liquidated all of it and replaced it. However, due to demand and supply chain issues, we decided to run this equipment, and it\u2019s all worked out well.\u201d<\/p>\n

Despite the current challenges, A C Power Co., headquartered in Ivyland, Pa., is doubling down on its distribution operation.<\/p>\n

\u201cWe\u2019ve managed the increased demand by doing the same as our customers, reinvesting in our business,\u201d said Matthew Gibbs, president of A C Power. \u201cWe\u2019ve recently added new vehicles, tools and procedures to expedite our installations and service. We\u2019re also in the process of adding new technology and software to our operations to further streamline our scheduling, shipping and inventory control. We didn\u2019t want our employees to have to sacrifice time with their families, so we\u2019ve found ways to accomplish more in shorter windows by comprehensively planning projects and working more efficiently.<\/p>\n

\u201cAs we approach 2022, I don\u2019t think that feeling of heightened demand will relent until manufacturers are able to catch up with production.\u201d<\/p>\n

Understanding that this is the case requires an approach that relies heavily on forward planning, a strong and honest relationship with your distributor, and an even greater reliance on maintenance and equipment appearance than ever before, according to Jaeger.<\/p>\n

\u201cWe also have incorporated the \u2018domino effect\u2019 into our planning \u2013 carefully laying out a full and complete plan for incorporating new equipment when it arrives on the true delivery date, prompt installation, plans for the equipment being replaced, vend pricing and a marketing plan for success.\u201d<\/p>\n

[The second part of this feature article will appear next week.]<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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