INDIANAPOLIS — A lot of coin laundries use extra profit centers to bring in extra revenue, but Mike Gilley, owner of the Laundry & Tan Connection in Indianapolis, has not only incorporated tanning into his coin laundry operation, but made it an integral part of his business model.
It wasn’t an overnight success, however. Gilley started small in the laundry business, and had to discover the ins and outs the hard way.
“I got into the business 15 years ago with a very small store, and basically if there was a right way and a wrong way to do it, I did it the wrong way the first time,” he says. “But I learned from those mistakes over the years.”
The situation today is much different for Gilley, as he now has his business model down to a science and a clear idea of what works and what doesn’t.
“I’ve probably owned 30 coin laundries over the years. Back in 1996 I built the first combination coin laundry and tanning salon, and ever since then that’s basically what my focus has been on,” he says. “[I build] super-sized stores in the 6,000- to 8,000-square-foot range that are combination coin laundries and tanning salons.”
UPDATING TO MATCH THE TIMES
The newest Laundry & Tan Connection location, which, after being built new and opening in June of last year, is the largest one yet, measures a whopping 8,000 square feet. This store was built on the same basic principles as Gilley’s previous stores, but incorporates a more modern design.
“This was the largest store I’ve ever built, and over the years – through the 90s – everything was very branded, and everything always looked the same,” he explains. “When I went to build this store in 2006, I wanted to change my image and change the way the stores looked.”
The new store fills a lot of the available space with equipment, including 35 top-load washers, 21 18-pound front loaders, 12 35-pound front loaders, 12 50-pound front loaders, four 80-pound front loaders, 32 stack dryers, and eight 75-pound dryers. The store also has three bill changers, one bill-to-bill machine, assorted vending machines and arcade games, and 10 tanning beds.
The layout, including the size of the aisles, hasn’t changed much in the new store, but other things got a complete overhaul.
“I started using stainless steel equipment. I used to use pink, purple and teal as colors, now I’m using orange, purple and yellow. I used to use ceramic tile floors, now I’m using an epoxy-painted floor finish,” Gilley explains. “I used to put these stair-step things in the drywall, and now I’m putting some overlays of drywall in the walls to give them a source of texture, to make it look better. I’m just trying to aesthetically update the stores to look more modern.”
FOLLOWING THE PLAN
Running a tanning salon out of the same building is a central tenet of Gilley’s business plan, but it’s not like you can just throw in some tanning beds and be done with it. He’s worked it into his overall business plan, along with every other aspect of the store.
“I was basically the pioneer in the tanning industry for building combination stores, and I’m a distributor of tanning equipment,” he says. “I’m actually UltraSun’s largest distributor in North America of tanning equipment, and I specialize in selling tanning equipment to coin laundries and helping people to increase their profit potential by developing an additional profit center for them.”
Some aspects of the tanning operation are a natural extension of the coin laundry. “In a lot of cases, they have additional space, they already have enough electricity, they have employees there. It’s a way to generate additional cash into their facility with existing infrastructure,” he says. “It’s all marginal income for them, and that’s what made my business successful.”
The Laundry & Tan Connection is open from 7 a.m. to midnight seven days a week, with a mixture of five or six full-time employees and three or four part-time. Gilley estimates that about 7,000 square feet is dedicated to the laundry and about 1,000 square feet is dedicated to tanning.
“I built that location to cater to a coin laundry market,” Gilley says. “I’ve got some other locations where the space is a little more equal between the coin laundry and the tanning, but each location is different based on the demographic makeup of the location.”
Even with the design overhaul, the new store still fits into Gilley’s business model. The large size of the store fits into it as well as combining the laundry with tanning.
“I just like the economies of scale of the larger stores,” he says. “We are not a company that is driven solely on price. We attract our business based on providing the customer the best experience that we can. We are not the cheapest coin laundry in town, but we aren’t the most expensive either.
“Demographically, I’ve chosen locations that can support a large-format store. My business model has been to build in areas that are more demographically dense.”
The final piece of the business model falls into place with marketing, which includes a Hummer painted to match the store’s colors and theme. “We use it for promotions. We do a lot of radio and TV advertising, and if we do a radio remote, we’ll bring it to that,” Gilley says. “I drive the hummer around every day. When we open new stores, I park it there for 30, 60, 90 days – until someone tells us we have to move it. It’s just another form of advertising.
“We spend a lot of money every year in marketing the business, and that’s why we aren’t the cheapest, but we probably do the best job of marketing. We try to provide a quality product at a fair price, and make a profit doing it.”