CHICAGO — Are you one of those operators who likes to track every nickel? Or are you one of those operators who doesn’t obsess over expenses as long as business remains steady?
Regardless of which camp you’re in, it never hurts to review some of the factors that can make your operation more energy- and cost-efficient. There are many paths that lead to becoming a more energy-efficient store.
Dick Ruel, national sales manager, Maytag Commercial Laundry, offers a host of ways to bring down your energy costs.
HOW DO YOU RATE?
What is your store’s utility cost (as a percentage of the gross)? “The national average is 15 percent to more than 35 percent,” says Ruel. “Over the last three years, the median figure is 26 percent. With new stores and new equipment available, I would hope to see this figure decrease over the next few years. Five years from now, I would be very disappointed if the figure is not lower.”
Here’s another question: If your expenses have increased, but you haven’t increased vend prices, how are you surviving?
Keeping a close eye on energy efficiency can substantially reduce your costs. When constructing a new store, the owner can take immediate advantage of energy-efficiency opportunities such as proper insulation, windows, ventilation and makeup air, etc., in addition to energy-efficient washers and dryers.
The battle against rising utility costs starts with your equipment, Ruel says. Having efficient washers and dryers makes up about 70 percent of the formula for an efficient operation, he estimates.
Some operators are holding out, waiting for their washers and dryers to break down before replacing them. Older, multiload washers last about 10-15 years, and top loaders about eight years, Ruel says. “People hang on to dryers forever. The life expectancy is 15 to 20 years and longer.”
The credit crunch also caused some people to postpone equipment purchases or hold back on opening new stores.
With some older dryers operating at 100,000 Btu, and some newer models at 55,000 Btu, it’s easy to see how owners can save money with new dryers. “Independent testing shows dryer-utility reductions of up to 33 percent being possible.”
If you’re one of the owners saying, “I can’t afford new equipment,” maybe it’s time to rephrase that to, “I can’t afford not to replace equipment,” Ruel suggests.
Don’t just focus on equipment prices and turn away, he says. “Investigate, and work out the numbers. Any distributor can help. Call the utility company and ask for an energy survey of your store. [The utility company] can tell you about rebates and extrapolate costs for you. Creative financing is available. Manufacturers have rebates, and there are tax advantages [to buying equipment].”
Ruel makes the case for new washers and dryers:
Some operators fear raising vend prices, yet Ruel has a different take on raising prices. “People think pricing is their biggest concern, yet, in reality, every survey I’ve seen has pricing [ranked] six or seven out of 10 why a person buys or shops at a certain store.”
Owners have pricing options when it comes to new equipment. “If you can only put a couple of dryers in, increase the vend prices to make more on the new equipment. Or you can go the other way: Increase the price on the older equipment because it costs you more to operate. Then, use the profits to buy new equipment.”
What needs to be changed first, washers or dryers? There’s no standard answer, Ruel believes. “It depends on the market. Demographics change. More retirees or students lead you to smaller-capacity machines. The larger machines do generate more return on investment per square foot. You need to re-evaluate your market every few years. Also, see what your competition is doing.”
While there is no set number when it comes to how many new machines need to be added, Ruel says it doesn’t make any sense to replace one piece at a time. “If, for example, you have 24 top loaders, you might think about adding 12 front loaders.”
The owner’s obligation doesn’t end when the new equipment is installed, he cautions. First, there’s marketing. “Promote your stuff. You would be surprised at how many operators don’t advertise. Sixty percent of operators don’t market at all, research shows. You’re committing an injustice to yourself [if you don’t market].”
Don’t forget that there is a learning curve with new equipment. “Give your customers a bit of training. Front loaders don’t operate like top loaders. Machines could shut down if used improperly, such as if you use too much detergent in front loaders. Front loaders don’t need as much detergent.” Also, using too much detergent can affect the next customer’s clothing, he adds.
The training also extends to dryers. Some customers are used to opening the door every 10 minutes or so to see if the clothes are dried.
Old habits die hard; proper customer training can help the owner take full advantage of new, energy-efficient equipment.
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Please check back Thursday, March 3 for Part 2 of this story.