GULF BREEZE, Fla. — When you come down to it, the vended laundry business is really pretty simple. At its root is maximizing resources. That means from the time the “open” sign is switched on to when it is switched off, you want all of your machines turning. Like I said, pretty simple.
You’re paying for electricity, heat in the winter and air conditioning in the summer. It’s important to make sure those expenses are being offset by solid revenues. That starts with establishing a large customer base to fill your laundry. But what happens when you have some slow times? How do you keep your machines turning? The answer for many owners is filling those periods by offering drop-off service.
I like drop-off service because No. 1, it can be an excellent revenue generator and No. 2, if you have an attendant, you are maximizing that resource as well. I have customers who pull a higher percentage of their store’s income from providing this service than the vended portion. But I will note, these stores are owner/operator and thus possess highly motivated labor.
Owners can view drop-off service several different ways. Some see it as a way to pull extra income by utilizing their attendant without much added expense (they’re already paying this person to be at the store).
Other owners may turn drop-off service over to a separate party to run. They keep the profits, but the storeowner benefits from the machine turns as well as a small space rental fee for housing the amenity. Each scenario has pros and cons.
THINKING THINGS THROUGH
Whether you put the service in your attendant’s hands, or turn it over to a separate party, your store needs to have the storage space to handle the service. If you are running it with your attendant, you must view it as a separate business. As such, it comes with additional administrative work and supply costs (soap, purchase of a scale, billing software, etc.).
Don’t underestimate the challenge of motivating your employees to not just sell the service but deliver finished results on time as promised. Be conscious of the fact that your business is shifting from one in which labor is provided by customers to one where you are doing the work. Make darn sure you can deliver results on time.
So, how do you motivate your staff? Jim Kell stated in the March Coin-Op 101 column that laundry owners often start out offering staff too large a percentage of the income generated by the drop-off service. When the business grows to a high level, owners realize the error in thinking, and end up readjusting the percentage. That usually results in hard feelings. I agree with Kell.
Look ahead. My advice is to look at your long-range projections and don’t give away more than you are comfortable with. Remember, this is your business, and you are in business to maximize returns on your investment.
But also realize that giving employees a stake in the rewards of their hard work increases accountability as well as productivity. That’s why drop-off service or commercial accounts tend to be more successful when staffed by the owner/operator.
WHO DOES THE WORK?
Turning drop-off service over to a third party who operates as an independent business within your laundry can work, but it also comes with some issues. How will these people interact with your vended laundry customers? Are they helpful or do they adopt a my-business-first mentality? What about damage to the items? Who is responsible for ruined items? Third-party workers provide the service, but may blame your equipment if problems develop.
With the right attendant and compensation agreement, I believe providing drop-off service in-house is the best course. Before launching into the service, however, owners should do their homework. They must investigate whether their market will support the additional offering.
Likewise, do you have the machinery and time to make this venture work? Set a road map for your store by forecasting a set percentage of gross to be obtained from vended laundry customers and the remainder through drop-off. This will help guide you through the decision-making process. In the interest of maximizing resources, it’s a good idea to set a minimum weight of at least 10 pounds for the service.
If your store operates currently without an attendant, hiring someone for drop-off service offers the additional benefits of better security and improved customer service. Both are key components to a successful vended laundry.
You may even be able to build on drop-off service. For example, laundries in busy metro areas may see value in providing ironing service as well. Drop-off service is successful because people are busy and spending a couple of hours of their free time doing laundry isn’t appealing. These customers likely are also willing to pay a premium for having shirts and slacks ironed.
Again, owners should understand that operating a vended laundry successfully requires active management — perhaps more than they anticipated — from the start.
In addition, they also should be aware that adding drop-off service only increases the amount of management. Drop-off success will be due in part to demographics and a need in the marketplace. But it also will be built on solid management practices, including hiring quality people to further the types of relationships that keep customers coming back.