CHICAGO — We are going through a transition phase, I believe. New owners are coming in; some of the smaller coin laundries are disappearing. What does the future hold for the industry?
There are plenty of questions to ask. Will there be more or less stores in the near future? What about new store construction? Can franchises make an impact? What new extra services may take hold in stores? Will the emphasis ever change to more drop-off service than people actually doing their own wash? How will the stores in the next five to 10 years differ from what we see today? What technical advancements might we see in the next five to 10 years? What will happen to home washing? Will there be more or less of it? I’m sure you might even have a few more questions.
While it’s uncertain what answers we’ll get to those questions, all we really can do is manage our own businesses the best we can. That means carefully reviewing our financials to ensure continued profitability in planning for our own futures.
Now that the new year has settled in, it's not uncommon to want to look back at last year. More importantly, we see our past decisions in the context of the future. Were they right or wrong? And if they were wrong, how can we avoid making the same mistakes again?
As for our financials and volume, were they the same or did they drop? Did we actually make a reasonable return on our investment?
Some say, “My coin laundry is paid for,” or “I own the building, so I don’t need to make a lot of money.” Truth be told, return on investment is the single most important factor in deciding whether staying in this business, expanding a current location or building a new location is worth the time, effort and money.
I believe that most current storeowners don’t even consider what that means and if they did, would not have a course of action to help themselves.
I want to make a few predictions. Maybe we’ll check these predictions out near the end of 2007.
* We all will be enduring higher utility costs.
* We all will have to pay more for labor.
* New equipment prices will go up.
* More new coin laundries will be built.
* Small coin laundries will close down.
* There will be more governmental interference in business.
* Taxes will go up.
Come to think of it, we don’t need to wait to December 2007 to see how accurate I was. I guarantee these predictions will come true!
Does Dion Marcionetti really have access to a crystal ball? He made plenty of predictions for 2007, or did he? Marcionetti claims the "predictions" are actually things that happen every year. Are you ready for them?
No, I’m not a seer. You see, these things happen every year. These things impact all businesses. The difference is that most other businesses have a plan to deal with these things. We, unfortunately, are in a business that is fairly simple to run and we let too many things fall between the cracks.
When we read that crude oil goes up, don’t we automatically expect gas to increase in price? When they tell us not enough rain fell in a certain area where coffee grows, don’t we, as coffee drinkers, expect to pay more for our coffee? There are thousands of examples of increasing costs that we know will be passed on to us as consumers of these goods and services. We accept the price and go on about our lives.
There is no joy in doing the most business unless you’re making more money. In fact, some coin laundries that do a lot of volume and don’t have the right profit go out of business.
Things sometimes build up slowly, and owners do not see them coming. Maintenance starts to slide, housekeeping deteriorates, hot water is no longer as it used to be, and dryers’ temperatures are turned down, all because there is no profit to pay the bills.
All of this translates into unhappy coin laundry customers. These customers will visit a different coin laundry, one that has everything you used to have. Remember, we are in a service business and the first thing that goes when financial viability slips is service.
I challenge all who have viable coin laundries to look at your financials and see where you stand. Are you making a reasonable return on your investment? If you are, that’s great. However, if you’re not, take a long, hard look at your business and make a decision on what the future will bring to you and your operation.
This may result in you asking yourself some questions. Do I sell? Do I remodel? Do I close the doors?
In the end, it’s all about doing something. Don’t let your coin laundry die a slow death. Make a decision and move forward to your benefit, and the benefit of the coin laundry industry.