CHICAGO — What does it really mean to run an “efficient” laundry? A good number of you may simply equate efficiency with new equipment. After all, energy efficiency is what equipment manufacturers are stressing.
Several industry representatives speak out about what it takes to have an efficient laundry. The answers vary somewhat. However, everyone agrees on one thing: there are ways to reduce your coin laundry expenses — and run an efficient operation.
FOURTH STORE IS THE CHARM
Art Jaeger has only been in the coin laundry business since 2003, yet he has operated four stores. His first three stores, which he sold, were a learning experience, he says.
His current store, Santa Clarita Express Laundry Center, Santa Clarita, Calif., opened in January. The 5,400-square-foot card store is fully attended.
“I believe that savings start by having the most utility-efficient equipment that you can buy,” Jaeger says. “I sold my first three stores because I wanted to reduce my utility bills and natural gas prices were starting to rise. I got lucky.”
Lucky in his case also meant developing a relationship with Continental Girbau Inc., an equipment manufacturer, as they were coming out with their E-Series washers. Jaeger says he met with the company’s engineers, made some suggestions (which they incorporated, he adds) and he was selected to be a “test” store for the new equipment. In addition to the E-Series 20-, 30- and 40-pound washers, his store has five 75-pound washers and six 80-pound, single-pocket dryers to go along with 23 30-pound stack units.
“I reduced my water and gas bills by half. I’m now experiencing total utility costs of less than 15 percent.” His past stores had 25 to 27 percent utility costs.
“Everything works together well. I also have a new water-heating system, and that has made a major contribution.”
Jaeger says becoming an efficient operation was primarily achieved through a three-pronged attack: adding washers, dryers and a water heater. But little things also contribute to efficiency. With dryers, for example, he stresses the importance of having good ventilation, having good make-up air and doing daily cleanings.
“I thought my past stores were good. But after operating them for some time, you could see things that could have been done better.” Here are some of Jaeger’s efficiency practices:
* He uses a timer on his water heater. It goes on at 5 a.m. and goes off at 9:30 p.m. “It saves a few dollars.”
* He also utilizes timers on his lights. “There are four bulbs on each fixture (two outside, two inside). The two outside lights come on from 6 in the morning to 11:30 p.m. The two inside lights come on at dusk and stay on until one hour after the last wash. This also signals the people to get it together.”
* Are you familiar with drop-down tile ceilings? Jaeger uses thick, inch-and-a-half dry board tiles. He has also placed eight-inch insulation on top of the tiles. “The whole store has ceiling insulation, which keeps it cooler in the summer and warmer in the winter. I’ve used this on all my four stores.”
* Jaeger uses evaporative coolers with thermostats. “My new store has seven of them; with the weather conditions in the West, you can use them. It’s a fraction of the cost of air conditioning.” Each of the coolers can cool or heat about 2,000 square feet of space, he says. “They aren’t expensive to run, so I put a couple of extra units in. I overcompensated and located them carefully. I put them over spots where most of the customers congregate.”
* Dryers are always cleaned. He also urges people to make sure their washers aren’t leaking.
* Check your water heater’s temperature setting. “Each degree you lower your water for washer usage is a huge savings. What’s interesting is that you may find someone who sets the water heater at 140 degrees, but the washer they’re using is factory set at 120 degrees. What a waste! People think they have to be at 140 degrees to clean clothes, which is not true. Generally speaking, you don’t need to be above 114 degrees. Lowering your water heater can be as easy as pie and can save you hundreds of dollars.”
Jaeger credits Sparklean Laundry Systems, Santa Fe Springs, Calif., his distributor, with being incredibly supportive of the new things he wanted to try.
Jaeger says the industry still needs to raise vend prices and lower drying times, although he also understands that price-sensitive competitive areas exist. “There are still 75-cent prices for top loaders and 25 cents for 10-minute dryer prices.”
Looking ahead, he believes multi-vend pricing (charging different amounts for different types of washes) and marketing this concept will lead to more efficient stores in the future. “This is about what customers need and want.”
PLENTY OF EXPENSES TO CUT
David Horton, vice president of new business development of PWS — The Laundry Company, looks at the efficiency question in a slightly different manner.
“If you’re going to cut expenses, you need to list your expenses,” Horton explains. “Start by going down the line-item expenses you have. Some expenses are variable and you can have some impact on them, others you can’t do a damn thing about, but you might be able to do a little something about them.”
Rent is a good place to start, he says. “There are some things you can do with a lease. Pay attention to the triple net charges. Make certain that you are being fairly charged and are not paying maintenance fees on top of maintenance fees. Make sure there’s no double-dipping. Check all charges. You may not have a lot of leverage with your landlord but it can help to double-check everything.”
Horton urges operators to shop around for the best insurance deal. “Get the best deal on the best policy. The cheapest policy is not always the best policy.”
Horton invokes the same sentiments when it comes to security devices. He emphasizes that you might spend more for a certain security system but in the end it might be the most cost-efficient solution for your store.
When it comes to hiring employees, Horton says some operators will make attendants independent contractors. “It can be risky. This may seem profitable but a good lawsuit will knock the hell out of the profits you might make.”
Even little things like where you buy your vending products can affect your bottom line. “Is there a cheaper place to get your products, maybe purchase greater quantities at a lower price?”
While it’s good to watch your dollars, Horton says operators shouldn’t get carried away. Don’t turn some of your lights off during the day, because this just drives away customers, he says.
For those with older stores, a highly efficient water-heating system (98 percent efficient) will give you huge savings, he believes. “Don’t go cheap here. If you do, it will cost you more money in the long run.”
Operators might not be aware of rebates offered by utility companies for installing energy-saving equipment, Horton says. “In parts of California, you could replace all of the lighting in the store, and the utility company would pay for the whole thing. You get new lights and someone else pays for it. In San Diego, you could replace a water-heating system for little if any charge through rebates. This is a no-brainer.”
Where do operators stand today? “The big thing is that washer manufacturers have reduced water usage. There may be some improvement down the line with soaps and chemicals. We have seen the top of the curve in water-heating systems, but many people in the industry are not taking advantage of this.”
ALL TYPES OF EQUIPMENT AFFECT EFFICIENCY
George Pierce looks at efficiency from two different perspectives. He’s a distributor (Pierce Commercial Laundry Distributors, Mandeville, La.) and also operates two coin laundries in Louisiana.
Don’t be shortsighted when it comes to using new equipment to reduce expenses, Pierce advises. “When you have a chance to get a washer that uses half the hot water of another machine, you’re crazy not to take advantage of this,” he says. “Also, most operators don’t think about upgrading their air conditioning or their water-heating systems; all of this affects utilities.”
Today’s equipment contributes in different ways, Pierce believes. For example, with inverter microprocessors on washers, the amp draw is controlled, he adds. “Cutting utility costs on washers only used to focus on the amount of hot water used. Now, we look at washers in terms of how we can cut down on electrical consumption. There’s also spin speeds and spin times. The microprocessor-controlled equipment allows you to do these things.”
He says that the industry hasn’t reached its limit in terms of energy-efficiency advances, and adds that different equipment and new applications will change things for laundry operators.
“Additional equipment will be the future of the industry — things like water reclaiming, solar heating and even putting the hot dryer air to use in some way will put us far ahead of where we are now in 10 years. For years, I believed that we couldn’t do much more with a dryer, but now the dryers of today are far more efficient than the ones we had five years ago. I believe, right now, in the world economy, efficiency of all mechanical devices is the key.”
Properly maintaining equipment will always help keep costs down. “Pay more attention to equipment maintenance. If you do, you will have less problems when it comes to servicing — which means you don’t have to pay a repairman.”
Is it time to upgrade your equipment? “The decision to upgrade shouldn’t revolve around how long you plan to stay in business. Regardless of your intentions, your store’s sale price is determined by a multiplier of net income, which is directly affected by costs such as utilities, repairs, parts, etc. That being the case, you need to always be thinking about investing in new equipment.”
Pierce is encouraged by how operators are reacting to today’s “efficiency challenge.” “I find that operators are responding when they are made aware that new equipment can reduce their utility bills significantly. New investors are the easiest to convince when it comes to adding new equipment to reduce expenses.”
Sometimes, though, there are different challenges when it comes to paring down expenses. “For example, older operators know that top loaders may not be efficient, but they also know that some of their customers love them. We have to think about this. We have to balance equipment efficiency and customer satisfaction.”
BENEFITS TO PONDER
It all revolves around gas, says Dick LaMaina, Equipment Marketers, Cherry Hill, N.J. “Gas is what people are looking at, then water and sewer. The most glaring expense is gas, half of it being used to dry and the other half to heat water.”
However, dryer innovations have helped out. LaMaina talks about advancements such as insulated dryer doors. “You keep the heat in the dryers, then you won’t need your air conditioning to do as much work.” He also stresses the importance of having proper ventilation and make-up air. “Don’t chintz in these areas.”
On the washer side, water usage is always a concern. One solution, he adds, is rigid-mount machines, which have lower water usage and are designed to clean clothes better. “Just lowering the water usage is not enough, cleaning the clothes is key.”
LaMaina suggests contacting your utility company. “[The utility company] may survey your store and give you tips on how to better insulate it. It’s the same with lighting. You can often get credits for adding low-usage lighting. Your payback can be great and you may even get credit from your utility company on top of that.”
It also doesn’t hurt to shop around when it comes to looking for a gas provider. “There are alternative places to buy gas in some cases.”
LaMaina urges operators to look over their stores and see if they are losing heated and cooled air. “This is a big part of the problem. Look at your windows and doors. Watch for that make-up air not going in the right place. Watch for poor ventilation.
“Start really looking at your store — open your eyes. It can be the lighting, etc. All of the expenses can be reduced.”
LaMaina also believes that there are other ways to fight this battle. “People in my area have tried to save on efficiency but have also raised vend prices to maintain profit margins. There’s no other way to go if costs keep going up. You have to bring in more money. There’s a fine line between raising vend prices to keep your profit margin and chasing people away.
“However, often if you provide a good, comfortable store, you can attract people even if you have a higher vend price than the store down the street. Proximity is part of it, but there’s also what you offer. If you are closer for people, but lack amenities, people will go to somewhere that is farther away.”
When it comes to the future, LaMaina is optimistic. “The soft-mount machines coming out have high extract that pre-dries clothes. They are more expensive, but go in places where the normal rigid-mounts won’t go. With the high extract, it cuts way down on the drying time and also gives a better wash performance.
“The manufacturers, all of them, have enhanced machine performance while using less utilities. Companies recognize that utilities are being vended through the machines and they want to stay competitive. Look for more insulated dryers.
“This industry continues to evolve in terms of energy efficiency. The solar stores haven’t worked well yet, but they probably will.”
In the end, LaMaina says the equipment will help, but don’t forget to be proactive. “Operators must be aggressive. You can use the most efficient machine, but if you don’t have it plumbed right, vended right or have the wrong make-up air, it will waste utilities. Your equipment must be installed properly and maintained properly. The onus will always be on the operator. The good business people will survive, the bad business people won’t.”