CHICAGO — The recession has hurt many industries. But the self-service laundry business has weathered the storm better than most. In fact, changing demographics have played in our favor offering owners an opportunity to expand and capture new business.
There’s a new breed of customers who require laundry service. During the past two years, financial pressure has reduced home ownership and increased residency in multihousing communities — many of which don’t offer common laundry areas. Many people who owned home equipment have simply held off on performing the necessary maintenance to keep it running. Others have stopped purchasing machines when the old ones wore out. And, in some areas, the transient population increased due to families relocating from areas hit by man-made and natural disasters, or from the temporary workers involved in the associated cleanup and rebuilding.
Despite these factors, success won’t come to those operating the “old-school” way. Successful owners will have to become more sophisticated, building or updating their businesses to resemble a modern space that will attract these new customers and retain existing customers. Owners will need to offer a variety of amenities and employ attendants with excellent customer-service skills. Stores will need modern, efficient machines.
CUSTOMER SERVICE AND TECHNOLOGY
The profile of the self-service laundry owner is changing. Many new owners are experienced business people who own franchises, are shopping-mall developers or are investors in a variety of other businesses. These individuals are poised to take business from those who have been in the game for some time but haven’t done much to meet the changing needs of customers. The new owners are sophisticated marketers and will make their stores a destination rather than a place their customers dread visiting. We are already seeing customers looking for laundries that are better run and cleaner, with efficient and updated equipment.
This is a market-share business, and one of the best ways to distinguish a store and grow the business is by enhancing the customer experience. Most customers are women, with children, jobs and plenty of stress. They want to come to a store that’s clean, comfortable and safe. Your attendants play a significant role in providing this atmosphere. Store attendants should be clearly identified — either by uniform or with name badges — allowing customers to recognize who they can approach if they’re having problems.
The attendants should be empowered to represent the owner and resolve customer issues. For example, if a customer comes to an attendant with a problem, such as the machine skipped a cycle or their clothes didn’t dry properly, the worker should be able to restart the machines at no additional cost. Customers will appreciate the courtesy, building loyalty and contributing to positive word of mouth about your store. Attendants should also maintain the facility, making sure machines are operating properly, bathrooms are clean and garbage is where it belongs.
Offering small amenities will go a long way with customers and help make their visit more pleasant. Something as simple as free coffee or satellite radio can make a difference. Many stores offer a family area for children. These areas usually feature a TV, a variety of books and magazines, and different types of toys. I have found that electric, sliding doors are a huge benefit because carrying loads of clothing to vehicles while trying to manage children can be challenging.
Technology will play a pivotal role in the stores of the future. We are already seeing a move from coin to card in many markets. And advanced controls provide new tools for managing stores by sending e-mail or text updates to owners if there are issues with their machines. Eventually, customers will be able to leave their loads and receive a similar message telling them their laundry is ready for pickup or for drying. These sophisticated control systems reduce the amount of time business owners have to spend at their store and are especially beneficial for the owner operating multiple businesses.
As we’ve seen throughout history, government can create as many challenges as it resolves. In our industry, dealing with a municipality’s sewer-tap fee can be a significant barrier to entry. Municipalities stand on the idea that laundries create a major impact on the city, county or state water and waste system, and they levy those businesses accordingly. Experienced owners can sometimes argue successfully that their store will have a lesser impact and negotiate lower fees. It is often easier to acquire an existing laundry where sewer-tap fees may be grandfathered in with the former owner’s contract. This reduces start-up costs significantly. For newcomers, your distributor is a valuable resource to help navigate the fee negotiation. Another tip is to build relationships with other store owners. The more you know going in, the better your chances are for a successful negotiation.
Can we expect more or less government interference? The answer is twofold. In the near future, the burden of sewer-tap fees will only get worse. Many municipalities are struggling right now, so generating money from commercial laundries is one way to substitute the loss of revenue. But in the long run, laundries will incorporate more and more energy- and water-saving equipment. This equipment will be able to accurately monitor the store’s impact and prove the reduced impact to municipalities. That, coupled with public pressure for adequate laundry options, will cause the fees to decrease, allowing easier entry into the business and greater profit.
It’s important to remember that no business is recession-proof, but the self-service laundry industry is certainly recession-resistant. The current climate, while offering challenges, also offers great opportunity.
In many ways, this is an ideal time for those looking to enter the self-service laundry industry or grow their current business. The number of people needing laundry service is expanding. Technology is also making it easier to run a business and turn a profit. And, while financing may be problematic in today’s credit-crunched economy, there is ample real estate available. The savvy businessman can negotiate a favorable lease or sales terms, and take advantage of extraordinarily low interest rates. If you have the capital available, and love the action and vibe of the self-service laundry world, there has never been a better time to get into the business.