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May 16, 2013
Going Industrial: Quality Linen Makes the Leap from Coin (Conclusion)

SALISBURY, Md. — Multi-store owner moves commercial business into newly constructed industrial laundry facility

SALISBURY, Md. — By successfully serving small commercial accounts from one of his two coin-operated laundries, Mitch Wyatt nurtured a reputation that today has him handling the laundry needs of major hospitality, healthcare and food and beverage clients. Recently, to meet increasing production needs, Wyatt moved his commercial business into a newly constructed industrial laundry facility here.

The Quality Linen Services building turns out 1,700 laundry pounds per hour, using minimal labor, water and energy — giving Wyatt the opportunity to draw new clients and boost profits.

PROGRAMMABLE BY CUSTOMER

Each of the Girbau Industrial TBS-50 Eco-Tunnel’s seven modules is programmable for duration of the wash cycle, water temperature and levels, bath partitions, rapid draining, chemical injection, mechanical action, closing parameters and more.

“We’ve preprogrammed the computer by customer and all of the items they use,” says Wyatt. “This is vital with customer-owned goods because we can separate each customer’s linens by color code in the system and track them throughout. They don’t want to lose their linens.”

One of Wyatt’s hospital clients, for example, has 20 items, including bed pads, sheets, gowns, scrubs, blankets and towels. “Each item, one through 20, is programmed differently,” he says. Similarly, hotel items—sheets, pillowcases, towels and mats—are each programmed differently. At any time, the Quality Linen staff can see where items are in the cleaning process: the Eco-Tunnel, conveyor, press or dryer.

HOW IT WORKS

From a touch-screen station, one employee runs the Continuous Washing System. He or she selects a customer number and program on the Eco-Tunnel’s central computer screen and loads the tunnel conveyor, which automatically weighs each 110-pound load. The conveyor moves the goods up an incline, where they are automatically loaded into the first module of the tunnel washer. Every 110-pound load travels through seven modules, and each module is programmed to perform a function for four to six minutes, such as pre-wash, wash, rinse, etc. After the programmed time duration, the load is automatically transferred to the next module.

The Eco-Tunnel uses less than a gallon of water per laundry pound and completes even the dirtiest 110-pound load in 42 minutes, according to Wyatt.

“I like everything about it,” he says. “It operates off of steam, has a drain-water heat reclaim system, filters, and then reuses 60 to 70% of the water.” As the central component of the Continuous Washing System, the tunnel reuses rinse and extracted water for pre-wash. Because water is recycled, less water is used and heated, lowering associated costs.

Once a load travels through every tunnel module, it enters the press, where it’s pressed—and water is extracted—until linens resemble a condensed “cake.” Via another conveyor system, each cake is loaded into an open dryer. Sheets are quickly separated in the dryer and run through the ironing line still damp, while towels are completely dried and subsequently run through the laundry’s automated folding and sorting systems.

IRONING LINE

Once the cakes—sheets, pillowcases, tablecloths and napkins—are separated in the dryers, they are run through an ironing line while damp. Two attendants feed the ironer, processing 80 feet of linen per minute. Ninety percent efficient, the gas ironer is also programmable to meet specific needs, according to Wyatt, and automatically adapts cylinder speed according to linen type and moisture content. This eliminates the need to dry linens before running them through the ironing line, which saves natural gas and production time.

“We can finish 400 sheets per hour using this ironer,” he says. “To have a piece of equipment finish so many different item types is amazing.” Once ironed, the various napkins, tablecloths, sheets and pillowcases are automatically folded.

FOLDING DRY GOODS

Meanwhile, dry goods, such as towels, gowns, robes and bath mats, are fully dried and put through an automatic folder, which processes 1,200 items per hour. A variety of items are fed into the folder one after another, where they are automatically folded according to pre-programmed fold specifications, sorted and stacked. “The folder allows us to wash and dry different items, like hospital gowns, towels and bath mats, in one load,” says Wyatt. “It eliminates the need for up to two operators.”

PRODUCTIVITY, EFFICIENCY, SERVICE

Thus far, Quality Linen is processing 100 pounds of laundry per operator hour (PPOH), but Wyatt hopes to improve that number by 20%. “Quality and productivity are so much greater,” he says. “We were getting good quality before from our Continental washer, but from the Eco-Tunnel, we are getting superior quality.”

The facility is capable of processing 95,000 pounds of laundry per week using one shift, or, using two, processing 190,000 pounds. Simultaneously, Wyatt maintains he’s able to properly serve a variety of customers.

“We have clients with customer-owned goods who rely on us to provide superior service,” he says. “Because of our advanced technologies and equipment, we can clean, finish, and track virtually any item, according to our clients’ specific needs.” And that, Wyatt says, is what sets Quality Linen apart.

May 15, 2013
Survey: Cleanliness is Fundamental to Coin Laundry Success

CHICAGO — Roughly 60% of respondents believe unattended store cannot be considered “great” laundry

CHICAGO – Many factors can contribute to a coin-op laundry’s success, but a majority of operators (54.5%) surveyed in this month’s American Coin-Op Wire survey say that store cleanliness is the first thing that comes to mind when it comes to having a “great laundry.”

While other factors such as equipment mix/number and customer comfort received equal shares of respondents’ votes (9.1%), a store’s size (4.5%) and aesthetics/decor (0%) garnered little to no support for being the dominant aspect of a “great laundry.”

Next to cleanliness, operators attribute the friendliness of the owner/employee(s) (13.6%) to store success, while the remaining 9.1% believe that all aforementioned qualities were important in judging a store’s greatness.

Roughly 60% of those surveyed believe that an unattended store cannot be considered a “great” laundry, while 36.4% say that it can be and 4.5% are unsure.

When asked what factor is most “overrated” when judging a store, the top three features cited by store owners were store size (36.4%), equipment mix/number (27.3%), and aesthetics/decor (22.7%). Roughly 5% chose “other.” No one taking the survey singled out customer comfort or cleanliness.

In terms of what they believe is their store’s best feature, operators responded with a mixed bag. While some gave themselves credit for their employees’ customer service and their store’s cleanliness and atmosphere, one operator highlighted that his/her machines were never out of order.

How do you think the industry’s image has changed since you first opened your store? Roughly 45% of respondents thought positively, saying the image is either “somewhat better” (31.8%) or “far better” (13.6%). Half of respondents said it is unchanged, and 4.5% believe it is “somewhat worse.” No one who took the survey sees the industry’s image as being “much worse.”

While American Coin-Op’s Wire survey presents a snapshot of the audience’s viewpoints at a particular moment, it should not be considered scientific. Subscribers to Wire e-mails—distributed twice weekly—are invited to participate in an industry survey each month. The survey is conducted online via a partner website, and is developed so it can be completed in less than 10 minutes.

The entire American Coin-Op audience is encouraged to participate, as a greater number of responses will help to better define owner/operator opinions and industry trends.

May 14, 2013
Going Industrial: Quality Linen Makes the Leap from Coin (Part 1)

SALISBURY, Md. — Multi-store owner moves commercial business into newly constructed industrial laundry facility

SALISBURY, Md. — By successfully serving small commercial accounts from one of his two coin-operated laundries, Mitch Wyatt nurtured a reputation that today has him handling the laundry needs of major hospitality, healthcare and food and beverage clients. Recently, to meet increasing production needs, Wyatt moved his commercial business into a newly constructed industrial laundry facility here.

The Quality Linen Services building turns out 1,700 laundry pounds per hour, using minimal labor, water and energy — giving Wyatt the opportunity to draw new clients and boost profits.

DEVELOPING COMMERCIAL ACCOUNTS FROM COIN LAUNDRY

“I serviced five hotels, two assisted-living facilities, one university, and two restaurants out of one washer at my coin laundry,” says Wyatt. “We used a 55-pound-capacity Continental E-Series Washer that would maintain a temperature of 140 degrees and stay at that temp. I was getting stuff so clean, my clients were amazed.”

Once cleaned, tablecloths, linens and napkins were pressed and finished using a Continental Flatwork Ironer. Wyatt’s staff then folded, stacked and delivered the items to clients.

PRODUCTION NEEDS SURGE

All went smoothly until Wyatt secured a five-year contract with a local hospital. “I knew I needed significant industrial equipment to fulfill growing production requirements,” he says.

So, he sought help from Operations Manager Doug Colonna, who holds 15 years of industrial laundry experience; Deke Sheller of Fowler Equipment, a laundry equipment distributor in Baltimore; and Joel Jorgensen, vice president of laundry equipment manufacturer Continental Girbau.

The 10,000-square-foot industrial facility required careful planning, a partnership of experts, and a mix of highly efficient industrial laundry equipment engineered for bolstered productivity, according to Wyatt.

DEVELOPING AN INDUSTRIAL LAUNDRY FROM SCRATCH

“We worked with the engineer constructing Quality Linen’s building and all elements of laundry design, construction and utilities,” says Jorgensen of the project. “We went on to define specific laundry production needs, the equipment mix, and solidified financing over an eight-month period.”

In the end, the new building featured a Girbau Industrial Continuous Batch Washing system capable of processing 13,600 pounds in an eight-hour shift.

The facility’s powerhouse is its seven-module Girbau Industrial TBS-50 Eco-Tunnel with four-stage water reclamation, water filtration and drain-water heat recovery. Complementing equipment includes a Girbau Industrial ICP3 Incline Loading Conveyor, SPR-50 Press, Dual-cake Delivery Shuttle, three ST-100 Dryers, a PSN 80 single-roll gas thermal ironer, FT-LITE Folder, AP LITE Stacker and an FT-MAXI triple-sort dry goods folder.

Two Continental Girbau CG-120 Dryers, and two Continental E-Series washer-extractors (55 pounds and 90 pounds, respectively) round out the lineup.

CONTINUOUS BATCH WASHING

The system not only boosts laundry productivity to 95,200 pounds per week using a single shift, according to Wyatt, it takes just one employee to operate and manage, is stingy on water, and produces high-quality results.

Key to Wyatt’s equipment decision was his need to properly manage and process laundry for a variety of accounts. “Unlike most of our competitors, we provide rental service, as well as service for clients with customer-owned goods,” he says. “We required equipment programmable by customer, so items would be properly cleaned according to each client’s unique needs.”

Check back Thursday for the conclusion!

May 8, 2013
Falling Crude Oil Prices Push U.S. Regular Gasoline Retail Price Down

WASHINGTON — But natural gas spot prices projected higher this year and next

WASHINGTON — Falling crude oil prices continue to push the U.S. regular gasoline retail price down, according to the U.S. Energy Information Administration’s latest Short-Term Energy Outlook (STEO), while lower natural gas working inventories are sending projected spot prices higher for this year and next.

The U.S. regular gas retail price reached a year-to-date high of $3.78 per gallon on Feb. 25 but had fallen to $3.52 per gallon by April 29. EIA expects the price will average $3.53 per gallon over the summer (April through September), down 10 cents per gallon from last month’s STEO. The annual average is projected to decline from $3.63 per gallon in 2012 to $3.50 per gallon this year to $3.39 per gallon in 2014.

EIA warns that energy price forecasts are highly uncertain, and that the current values of futures and options contracts suggest that prices could differ significantly from the projected levels.

After increasing to $119 per barrel in early February, the Brent crude oil spot price fell to a low of $97 per barrel in mid-April and then recovered to $105 per barrel on May 3. EIA expects that the spot price will average $104 per barrel over the second half of 2013 and $101 per barrel in 2014. The projected discount of West Texas Intermediate (WTI) crude oil to Brent, which increased to a monthly average of more than $20 per barrel in February, fell to below $9 per barrel in April. EIA expects the discount to increase in the near term and average $13 per barrel in 2013 and $9 per barrel in 2014.

Natural gas working inventories ended April at an estimated 1.82 trillion cubic feet (Tcf), about 0.80 Tcf below the level at the same time a year ago and 0.13 Tcf below the five-year average (2008-12).

EIA expects the Henry Hub natural gas spot price, which averaged $2.75 per million British thermal units (MMBtu) in 2012, will average $3.80 per MMBtu in 2013 and $4 per MMBtu in 2014, about 27 cents per MMBtu and 40 cents per MMBtu higher than forecast in last month’s STEO, respectively.

The projected increasing cost of natural gas relative to coal contributes to higher levels of electricity generation from coal. The share of total generation fueled by coal is forecast to increase from 37.4% in 2012 to 40.1% in 2013. Conversely, the share of generation fueled by natural gas declines from 30.4% in 2012 to 27.8% in 2013.

May 7, 2013
Now Hiring: Keep Those Interview Questions Coming

PEMBROKE, Mass. — Ask litany of questions to draw the real person out, see how they think on their feet

PEMBROKE, Mass. — You need to hire a staffer, but how do you go about the process so that you employ a good person who will stay for a bunch of years? To get someone who will do the work, be attentive to customers, and get along with you? It’s not easy, as most of you can probably attest.

How many times has someone looked good on paper and been hired, only to begin coming in late, calling in sick, and not performing up to standard? The individual has to be terminated, and you are back to where you started. This has happened too many times, I’m sure.

As a starter, set up an interview; never hire off the application or from recommendation. You want to meet the person, size him/her up, and get a feel for your relationship. It could be that the individual is perfectly competent and understands the business but rubs you the wrong way (he is a know-it-all or a chronic complainer, for example). That dynamic wouldn’t work out.

Having said that, look over the application and ask questions. Why did you only last a year and a half in your last job? Why did you move from industry to industry, and never stick in one field? What was the reason for your recent termination? Why didn’t you graduate high school? What exactly did you do in your last job?

On paper, what you would like to see is steadiness, someone who has held a few jobs of some duration. That means the person was steady, stable, and did a good enough job that the boss was satisfied. What you don’t want to see is a candidate with a checkered work history.

Keep the questions coming. What do you expect this job to be like? Do you have any mechanical aptitude? What is your personal life like? What are your obligations to family members? What is your transportation situation?

The point of your questions is to get the individual to talk, which then gives you an opportunity to evaluate. Now, you have to ask yourself some questions: Is this candidate steady enough, and stable enough? Does she need a job or is she only casting about? Is this job right for her, or is it just something she will do for a few months and then move on as soon as she finds something more appropriate?

Can I see this person working for me for a long time? Does she have the kind of personality where I can mold her into a company person, or is there friction already building? Does this candidate have a chip on her shoulder? Is she mentally stable?

Next, ask your candidate a series of prepared questions: What is your best strength? What is your worst weakness? What type of people do you like to work for? What type of people rub you the wrong way? Why is it important to be at work on time? Why should one never call in sick? The purpose of these questions is to pin down the candidate’s work habits.

Now it’s time to explore the hypothetical. If a machine broke down and the customer started to yell at you, how would you handle it? If it was snowing, and you couldn’t get your car shoveled out to drive to work, how would you proceed? What would you do if the boss asked you, at the last minute, to work overtime?

If the boss yelled at you for a mistake you made, and you feel you didn’t deserve it, how would you react? If you weren’t getting along with your shift replacement, what would you do to change the situation? If you promised a customer his order at a certain time and then see later that it will not be ready, what would you do?

The purpose of these concrete examples is to calibrate how well the candidate thinks on her feet. Can she make sensible decisions quickly? Also, it shows the candidate what’s in store.

Ask the individual if she has any questions, then answer her concerns frankly. If you are dishonest or deceptive, it will come out. For instance, if she asks about opportunity for promotion and you operate just one attended Laundromat, the chance for promotion is not high. You can offer her a stable position, and she must realize that. Otherwise, a year later, she will want to move out of her slot, and there will be nowhere to go. The way you answer might be her opportunity to determine if she wants to work for you or not.

Look the candidate in the eye. See that she makes eye contact. Continue to stare. Perhaps you will see something—a desire to work, a need for a break, a yearning for steady work. Or perhaps your stare will get the individual to say something, anything that might help or hurt her case. Once I did this, and the candidate blurted out, “Of course, I must check with my husband and see if he approves,” which cancelled everything she had said and made me realize that she didn’t really want the job.

Always check one or two references. They could be the candidate’s friends and offer bland platitudes, but they might say something insightful. Once, I got a former employer to admit he fired the candidate because she stole money. That did not go down well in my evaluation. Still, don’t automatically accept everything you hear.

Never decide on the spot; think about the candidate(s) overnight. Review in your mind what she said. Peruse her application. Note the reference comments. Sleep on it. Then go with your gut feeling. Hopefully, you’ll get it right.

There are many ways to hire staffers. Some interviewers talk about themselves and their positions, but I think that forcing the interviewee to discuss herself or himself is a better way to get a sense of who they are and what they can bring to your business.

May 6, 2013
Clean Show Preview: ‘Be There’ or Be Square

NEW ORLEANS — Hotel reservation, show preregistration deadlines approaching

NEW ORLEANS — The Ernest N. Morial Convention Center will host the world’s premier textile care expo for a fifth time when the 2013 Clean Show—officially the World Educational Congress for Laundering and Drycleaning—arrives on Thursday, June 20, for a three-day stay through Saturday, June 22.

It will mark the first time since 1981 that the Clean Show has been scheduled for three days instead of four, reflecting a “more concise and efficient” format designed to give exhibitors and attendees alike a better value for their investment, according to the Clean Executive Committee.

The Clean Show has been convening every other year since 1977 to present new technology, educational sessions and networking opportunities to all segments of the dry cleaning, laundry and textile care industry. This year’s event is expected to draw 10,000 trade attendees, according to Riddle & Associates, the show’s longtime manager.

“I am constantly asked why should I come to the Clean Show or why should I exhibit,” says John Riddle, president of Riddle & Associates. “There are many reasons. You will see the newest equipment, learn about new services, see working demonstrations and have access to outstanding industry education.

“In today’s world of electronic communication, it is nice to have the opportunity to communicate with someone eye-to-eye, face-to-face and talk with them about industry issues. It’s a great chance to renew old friendships and make new ones. These are just several reasons I think making this trip is worth the time, effort and money. We encourage you to ‘Be There’ and take advantage of this opportunity.”

Approximately 400 companies and organizations are scheduled to be represented on the exhibit floor, covering roughly 200,000 net square feet. It’s possible that more exhibitors will be added in the final weeks leading up to the event.

The exhibits will open following a brief 10 a.m. ceremony on Thursday, June 20 (distributors are granted exclusive access from 8 to 10). Exhibits will open at 9 a.m. on subsequent days, and they will close each show day at 5 p.m.

Some of the Clean 2013 sponsors, as well as several other industry associations, will offer approximately 40 hours of education over the show’s three-day schedule. Most of the seminars will occur in on-site meeting rooms between 8 and 10 a.m. daily, but in a change this year, some sessions have been scheduled for each afternoon on the exhibit floor itself.

The Clean Show has released a new, free mobile app for Apple iOS- and Android-based smartphones that offers features such as locating exhibitors, planning a personalized show itinerary, and connecting with others via social media. The free app can be downloaded from an individual’s device in the App Store or Market, and is fully integrated with the Clean Show website, and with LinkedIn and Twitter.

“In the age of technology, offering a smartphone app just makes sense,” says John Riddle. “We want our attendees and exhibitors to be able to stay connected before, during, and after the show and be able to do it while on the go.”

Attendees who do not have a smartphone can still maximize their time at the show by using CleanShow.com’s “My Itinerary” feature. Visitors can store in a personalized “Briefcase” their schedule of educational sessions and booths they wish to visit, as well as print out their “Itinerary” to bring with them.

Another show change is the relaxation of certain rules regarding the convening of affiliate groups during trade show hours. In the past, meetings were restricted to hours outside education and exhibit hours, but now exhibiting companies and industry associations can schedule their sales, distributor or group meetings during educational sessions or between the hours of noon and 2 p.m.

Attendees can easily register for the Clean Show online at its website for the discounted rate of $99 a person through May 31 (on-site registration will be $149 per person). All registrations can be made with credit card, check or money order.

Registration hours at the convention center will be 1-5 p.m. June 19, 7 a.m. to 4:30 p.m. June 20, 7:30 a.m. to 4:30 p.m. June 21, and 7:30 a.m. to 4 p.m. June 22.

Reservations for official Clean Show hotels can be made on the show’s website until May 17 (special show rates are available only through the Clean Show Housing Bureau).

Complimentary shuttle buses will transport attendees between official hotels and the convention center mornings and afternoons during the show.

The Clean Show is sponsored by five industry associations: Association for Linen Management, Coin Laundry Association, Drycleaning & Laundry Institute, Textile Care Allied Trades Association, and the Textile Rental Services Association of America.

April 25, 2013
North Dakota Fracking: A Gold Rush of Coin-Op Opportunities (Conclusion)

WILLISTON, N.D. — Laundry facilities serving oil field workers pose special challenges for store owners

WILLISTON, N.D. — A four-hour drive northwest from Bismarck, N.D., will lead motorists to the city of Williston, where a modern-day gold rush has incited oil miners to flock to the area to mine for natural gas trapped beneath the state’s water table in the Williston Basin.

While the oil business has brought a financial boom to the Williston area, a new necessity has emerged, roused by the influx of workers and their families: “greaser” laundry facilities.

In the past year, The Minnesota Chemical Co.’s Terry Anderson has had a hand in answering the area’s laundry needs by designing and building two laundries: one in neighboring Watford City (population 1,759) and the other in Tioga (population 1,230), each about an hour’s drive from Williston.

DESIGNATED MACHINES

For greaser laundries, it’s important that certain machines are designated specifically for greaser use, according to Anderson. “You can’t have somebody do their greaser laundry, and then somebody comes [after them] and puts their white sheets, towels and regular clothes in, because greaser laundry machines can never get all of [the grease cleaned].”

At his Suds Laundry in Watford City, N.D., Robert Trupe has designated two machines for his attendants to process commercial accounts, and six for self-service, specifically for greaser laundry.

“In the wash/dry/fold area, we just have two of them that we put big, yellow labels marked ‘Greasers’ so the attendants know which machines to use for greasers,” says Trupe. “And then we put the same type of signs out on the self-service side for the customers.”

Considering the blend of mud, oil and grease that covers workers’ uniforms and garments, what cleaning procedures are needed? Many of the garments face a variety of washes, Anderson explains, that are adjusted at different settings than traditional laundry loads.

“What you need to have [is] a pre-wash and a wash where you can inject detergents,” says Anderson. “Normal clothes can have a wash-dry-spin in about 24 to 30 minutes. These, you might set the water levels a little higher, and then extend that wash cycle longer.”

“The greaser machines are programmed for longer wash cycles [or] additional rinses, so they all have two washes and two rinses,” says Trupe of his store, adding that those machines use water at 140 F.

Despite all this, there are times when garments have to be re-washed because of the condition they are in, he adds. “Once in a while, if you get a really heavy load, some of the oil is pretty tough to get out because it’s thoroughly saturated with this heavy grease that they use in the oil fields.”

Employees at Charles Barton’s Clean Jean’s Express Laundry in Tioga, N.D., have had to re-wash garments as well, despite the pre-soak and different washes that they use to process garments. “We do our best to run several types of cycles through them, depending upon what the grease is. Sometimes we have to extend the wash cycle, sometimes we have to soften the water. Sometimes we have to use more soap than what you ordinarily would use, sometimes we use a different mixture than what we’d ordinarily use.”

Barton’s chemistry background as a consultant for pharmaceutical companies comes in handy at times, but he also learns from his employees which combinations of industrial detergents work best. “We’re refining the process,” he says.

Trupe has also used trial and error in finding which detergents to use at his store. “Finding the right mix of chemicals [is] a little bit of trial and error until you get all of your machines [and] cycles set up. It’s taken us a few months to get it down [but] we have help from Minnesota Chemical and some other vendors that were able to help us get the right mix of chemicals.”

As a safety precaution, Trupe requires his employees to wear rubber gloves and face shields while handling the strong detergents.

EQUIPMENT MAINTENANCE

Equipment in greaser laundries endures a heavy toll, what with the concoction of grease and industrial-strength detergents on top of hot temperature settings and numerous cycles run daily.

“If you don’t clean them, it’s not good on the equipment [and] certainly it won’t last as long,” says Barton. “We take quite a bit of pride in regards to our equipment, so we clean it on a routine basis.”

In addition to wiping and cleaning machines multiple times throughout the day, Barton also practices running a no-load cycle to ensure that washers are thoroughly cleaned. “Oftentimes we’ll have to run a special concoction […] through the washers to make sure that they’re all clean. And we also clean the [dryer] filters on an everyday basis.”

For its part, Minnesota Chemical sends out technicians to service machines on a regular basis, Anderson says. And to ensure that store owners know how to properly take care of their machines, the company hosts educational sessions on maintenance standards.

“We have these service schools [where] we talk about the things [owners] need to do [for] preventative maintenance to make sure [the machines] are cleaned out and make sure everything is working,” says Anderson.

Besides the maintenance requirements, greaser laundries face another challenge: the lingering odor of grease in dryers.

Trupe says that using certain chemicals helps reduce the smell. “There are a couple of different chemicals that we use depending on the application. There are deodorizers, but then there are other chemicals that we can add that [are] additional cleaning agents that have a nicer smell.”

INVESTMENT AND EXPANSION

Regardless of the special needs that their facilities present each day, Trupe and Barton both say it was worth moving into the area.

“We’ve been hearing a lot of good things,” says Barton. “We certainly wouldn’t be at the level that we are in, particularly with our wash-and-fold business, if we didn’t provide high-quality service.”

In addition to growing Clean Jean’s wash/dry/fold service, Barton is in the process of opening an Internet cafe and gourmet coffee shop at the front end of his facility.

Trupe says opening Suds Laundry has “definitely been a good investment.” Though he’s considered looking at neighboring towns for other business opportunities, he says he would first like to establish his Laundromat before pursuing other ventures.

“We don’t want to expand until we get our systems and processes nailed down in this facility,” he says. “Once we make sure that this thing can run completely smooth, then we can take the systems and processes [and] plug them into the next business.”

April 24, 2013
StatShot: Three of Four Regions Post Higher Coin Laundry Sales in March, First Quarter

CHICAGO — Midwest leads way in March with 5.2% gain; Northeast’s 3.6% increase tops first-quarter performances

CHICAGO — Three of the four regions posted healthy gains in both March coin laundry sales and first-quarter sales, according to the recent AmericanCoinOp.com StatShot unscientific survey.

Leading the way in March was the Midwest, which posted a 5.2% gain compared to March 2012 and a 2.8% gain for the first quarter compared to one year earlier.

“[I’m] improving my store, keeping it clean and the equipment well-maintained,” says a store owner from the Midwest. “My competition is not doing this, and I’m benefitting.”

March sales were also up in the Northeast (3.8%) and West (3.0%) from the prior year. Both regions also saw gains in first-quarter sales—3.6% for the Northeast and 2.1% for the West—compared to January-March 2012.

Despite seeing an increase in recent sales, many store owners in the West report they are seeing little change in market conditions while the costs to operate their business increase.

“Conditions for my business are about the same as ever, but utilities and taxes are on the rise, so prices have to keep going up … to keep up,” says a store owner from the region.

“Market conditions are unchanged for the last three years,” echoes another. “People aren’t spending on anything that isn’t necessary.”

The South was the only region to report declining coin laundry sales, down 4.2% from March 2012 and 6.0% from first-quarter 2012. One store owner there attributes the lack of sales to local “tree farms going out of business.”

But while one industry has slowed coin laundry business there, another is contributing to a more positive outlook.

“After a very slow second half of 2012, and a terrible first quarter of 2013, things seem to be picking up,” says a respondent from the region. “Local construction has resumed, and as a result, so have drop-offs.”

AmericanCoinOp.com’s StatShot includes information on sales, wages, costs or other financial data based on anonymous survey information provided by industry owners and operators.

Audience members are invited to participate in these unscientific surveys, which are conducted anonymously online via a partner website, on a regular basis. Self-service laundry owners and operators are encouraged to participate, as a greater number of responses will help to better define industry trends.

April 22, 2013
Whirlpool Earns Honors for Reputation, Corporate Citizenship

BENTON HARBOR, Mich. — Recognized as 2013 Top 50 Best Corporate Citizen by CR magazine, and one of world’s Most Reputable Companies by Forbes magazine and Reputation Institute

BENTON HARBOR, Mich. — Whirlpool Corp., the parent company of Maytag Commercial Laundry, has been recognized as a 2013 Top 50 Best Corporate Citizen by CR magazine, and one of the world’s Most Reputable Companies by Forbes magazine and the Reputation Institute.

The company made the 100 Best Corporate Citizens list for the 11th consecutive year and the Most Reputable Companies list for the sixth straight year.

Considered the top corporate responsibility ranking based on publicly available information, CR magazine’s Best Corporate Citizens List ranks Whirlpool at No. 42. The company climbed 27 spots this year, with its highest scores coming in the corporate governance, environment, and climate change categories.

Whirlpool also ranked No. 43 on the Most Reputable Companies list with a score of 70.03 on the Reputation Institute’s RepTrack™ Pulse, the world’s largest study of corporate reputation.

“Whirlpool Corp. has long been known for its unique sense of responsibility in the way it operates,” says Jeff M. Fettig, chairman and CEO. “Being once again recognized by some of the most respected organizations in the world for this commitment speaks to the dedication of our employees and the work they do. We are proud of these achievements and will strive to continue conducting our business with integrity and purpose.”

April 18, 2013
Calvary Laundromat: Attendants and Atmosphere Energize Customers (Conclusion)

RALEIGH, N.C. — David Makepeace creates inviting store built on friendly staff, sophisticated equipment, colorful décor

RALEIGH, N.C. — The yellows, blues, greens and shades of red at Calvary Laundromat in Raleigh are decorator-designed to create an inviting atmosphere, says owner David Makepeace. But the intangible atmosphere, the one that customers find welcoming, is created by his staff.

Makepeace says he’s “extremely” happy with sales at the 3,000-square-foot laundry, located in a small shopping center in the midst of large apartment complexes. “The success of it depends on the people you hire,” he says. “I have wonderful attendants.”

He names several other contributing factors, including the technological sophistication of its 30 front loaders and 28 dryers.

STARTING ON GOOD FOOTING

Makepeace is a former commercial banker in Charlotte and Raleigh who decided 13 years ago that “I wanted to go out on my own, to find a business and learn it and eventually buy it.” He was drawn to a cleaner/laundry because “It’s not going to go out of fashion like the buggy whip. Everybody’s going to need to get their clothes cleaned.”

He approached the then-owner of Medlin-Davis Cleaners and proposed, “You train me, and I’ll buy it from you.” Over the years, he rose to president, supervising three cleaning plants, three pickup and delivery routes and nine stores in Raleigh and neighboring towns, plus one small coin-op in the long-established Cameron Village shopping center in Raleigh.

Four years ago, unsure about the owner’s intentions of selling, he determined to start his own laundry while continuing to supervise Medlin-Davis. His wife Lee offered her full support.

It was at the beginning of the recession, but some businesses, including laundries, do well in that environment, he believes.

To financially strapped customers who need to clean their clothes, “This is a very affordable way to do that, rather than going to Lowe’s or Home Depot to purchase a washer and dryer.”

He’d worked with Medlin-Davis’ 1,500-square-foot laundry so he “had a general feel of how they operate.” Plus, T & L Equipment Sales gave him the specific knowledge he needed.

Makepeace discovered the Coin Laundry Association and joined immediately. “They had an absolute wealth of information they could give me.”

Co-owner Lee worked as full-time attendant the first six months, and David gives her credit for starting the laundry off on a good footing. “She did a wonderful job of establishing relationships.”

In 2010, he bought the part of Medlin-Davis that operated in Raleigh and the nearby town of Wake Forest: two cleaning plants, four dry cleaning stores, three pickup and delivery routes for cleaning and wash/dry/fold, and the Cameron Village coin-op.

His wife became head of accounting and administration, while he functions as head of operations. They have 60 employees.

Wash/dry/fold work for the routes is done at one of the cleaning plants. Wash/dry/fold work for the Cameron Village coin-op, which is unattended, is processed at Calvary along with its work.

Makepeace is a firm believer in keeping up not only equipment but appearances. Four-year-old Calvary has already been repainted once, and the checkerboard of floor tiles there is stripped and waxed every quarter, he says. Recently, some floor tiles were replaced, and a chair rail was added. “It’s very important that we keep up with wear and tear.”

At the 1,500-square-foot Cameron Village coin-op, Makepeace renovated everything: floor, walls, ceiling. He replaced all the machines with new ones after he found, “Stuff was always breaking down. I was losing business.”

Once again, he turned to his wife’s decorator friend for a color scheme. This one is more subdued—lots of pale blues and browns—in keeping with the supposed preferences of the retirees and North Carolina State University students who are its customers.

He added a large-screen TV, Wi-Fi, and new furniture.

He’s now enlisted the help of a marketing firm in designing not only a marketing plan but a logo, revamped storefronts for the cleaners, and even “the lettering on our vans.” And he says he wouldn’t mind having another coin-op.

After a 10-year apprenticeship and now four years of ownership, Makepeace believes he knows “what it takes to be successful.”

April 15, 2013
Former Laundromat Owner Indicted on Charges of Stealing Natural Gas

BOSTON — Multi-store owner accused of tampering with gas meters, failing to file income tax returns

BOSTON — The former owner of several Massachusetts Laundromats has been indicted in connection with allegedly tampering with gas meters and stealing natural gas valued at approximately $214,000, Attorney General Martha Coakley’s Office announced Thursday.

A statewide grand jury indicted Steven R. Bankert, 56, of North Attleboro, Mass., on charges of larceny over $250 (six counts), willful injury or interference with gas meter or other property (10 counts), and failure to file income tax returns (six counts).

“We allege that this defendant tampered with multiple gas meters at Laundromats he operated,” Coakley says. “He allegedly manipulated the meters in order to bilk utility companies out of hundreds of thousands of dollars.”

Her office began investigating Bankert in August 2011 after Columbia Gas filed a complaint. The company suspected tampering and theft of gas after detecting low and erratic consumption patterns.

The investigation determined that from 2008 to 2012, Bankert, who is a licensed electrician, allegedly tampered with 10 gas meters at six Laundromats he owned in Attleboro, Brockton, Lawrence and Worcester for the purpose of stealing gas from Columbia Gas valued at approximately $205,000 and from Nstar valued at more than $9,000.

Investigators also allege that Bankert has not filed income tax returns for the years 2006 to 2011.

He is scheduled to be arraigned at a later date.

April 10, 2013
Annual Survey: Latest Numbers Reflect Continued Year-to-Year Improvement (Conclusion)

CHICAGO — How do you think your self-service laundry business compared to others in the industry last year? Did you have a good year or a bad year in 2012? How does your pricing compare to others?

CHICAGO — How do you think your self-service laundry business compared to others in the industry last year? Did you have a good year or a bad year in 2012? How does your pricing compare to others?

American Coin-Op’s annual State of the Industry survey offers you the opportunity to compare your operation to others in the industry. It focuses on 2012/2013 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

In instances where respondents were asked about 2012 business results, they were given the opportunity to state their results were up, down or unchanged. This is a departure from surveys compiled in 2011 and earlier, when they were asked only if their business results were up or down. Keep this in mind as you are making comparisons to previous years’ polls.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores. Some percentages may not equal 100% due to rounding.

ADDING EQUIPMENT IN 2012

Approximately 48% of respondents purchased at least one piece of equipment (washer, dryer, water heater, vender or changer) in 2012. In 2011, that figure was approximately 45%.

Here’s a breakdown of 2012 purchases:

  • 12.7% of respondents purchased at least one top loader. The average purchase was 5.4 machines. In last year’s survey, when a single operator’s reported purchase of 97 machines was excluded from the calculations, the average purchase was 9.1 machines.
  • 26.3% of respondents purchased at least one front loader (a breakdown by capacity follows below).
  • 16.9% of respondents purchased at least one dryer (regular or stacked). The average purchase was 7.4 machines. In last year’s survey, when a single operator’s reported purchase of 97 machines was excluded from the calculations, the average purchase was 5.1 machines.

And we break it down further by front-load wash capacity:

  • 16.1% of buyers purchased at least one machine with a capacity up to 25 pounds. The average purchase was 6.0 machines.
  • 29% of buyers purchased at least one machine with a capacity of 25 to 50 pounds. The average purchase was 4.8 machines.
  • 35.5% of buyers purchased at least one machine with a capacity of more than 50 pounds. The average purchase was 2.6 machines.

(Editor’s note: Some respondents didn’t identify machine sizes, so the front-loader breakdown doesn’t include their purchases. Also, the percentages do not total 100% because some buyers purchased equipment in multiple equipment categories.)

SHOPPING IN 2013

Respondents were asked if they have bought, or plan on buying, any new machinery this year. Approximately 36%—the same percentage from last year’s survey—intend to add something (washer, dryer, water heater, vender or changer) to their mix, or have already done so.

  • 8.5% of respondents have purchased, or plan to purchase, a new top loader this year. The average purchase is (or will be) 8.8 machines.
  • 22.9% of respondents have purchased or plan to purchase a new front loader this year. (A breakdown by capacity follows below.)
  • 12.7% of respondents have purchased or plan to purchase a new dryer this year.

And we break things down further by front-load wash capacity:

  • 29.6% purchased or plan to purchase at least one machine with a capacity up to 25 pounds. The average purchase is 10.8 machines.
  • 29.6% purchased or plan to purchase at least one machine with a capacity of 25 to 50 pounds. The average purchase is 4.9 machines.
  • 25.9% purchased or plan to purchase at least one machine with a capacity of more than 50 pounds. The average purchase is 2.0 machines.

(Editor’s note: Some respondents didn’t identify machine sizes, so the front-loader breakdown doesn’t include their purchases. Also, the percentages do not total 100% because some buyers purchased equipment in multiple equipment categories.)

PROBLEM AREAS

What problems cause you the most grief? Here are the top-five industry problems, according to this year’s survey:

  1. High cost of utilities
  2. Dealing with employees
  3. Equipment maintenance/repair issues
  4. Competition
  5. A lack of customers

Gone from the top five is the economy, although it was mentioned on a number of surveys.

TURNS PER DAY

Turns per day refers to the number of cycles (turns) that each of a store’s machines experiences each day. You can calculate that figure using total top-loader cycles for a one-week period divided by the total number of top loaders, then dividing that number by seven.

According to this year’s survey, the average turns per day for top loaders are 3.1, up slightly from last year (3.0). The average turns per day for a front loader is 4.0, also up from last year (3.8).

UTILITIES COST

We asked operators about their utilities cost (as a percentage of gross). The responses ranged from 6% to 75%. The most common response was 25% or 30% (tie). At the time of our survey in February, operators were paying an average of 24.1% for utilities (as a percentage of gross). That number is identical to last year’s poll.

Nearly half of respondents (47%) say utilities is the largest of their store’s expenses. The smallest of their expenses, according to 56.9%, is insurance.

2013 BUSINESS FORECAST

Slightly more than 46% of respondents expect their 2013 business to be better than it was in 2012. Approximately 38% expect business to be about the same this year, and 16.2% expect their business to not perform as well this year as it did in 2012.

April 8, 2013
Annual Survey: Latest Numbers Reflect Continued Year-to-Year Improvement (Part 2)

CHICAGO — How do you think your self-service laundry business compared to others in the industry last year? Did you have a good year or a bad year in 2012? How does your pricing compare to others?

CHICAGO — How do you think your self-service laundry business compared to others in the industry last year? Did you have a good year or a bad year in 2012? How does your pricing compare to others?

American Coin-Op’s annual State of the Industry survey offers you the opportunity to compare your operation to others in the industry. It focuses on 2012/2013 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

In instances where respondents were asked about 2012 business results, they were given the opportunity to state their results were up, down or unchanged. This is a departure from surveys compiled in 2011 and earlier, when they were asked only if their business results were up or down. Keep this in mind as you are making comparisons to previous years’ polls.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores. Some percentages may not equal 100% due to rounding.

WASHER PRICES

American Coin-Op asked respondents about their current washer prices, and if they increased prices this year or planned on doing so by the end of the year.

More than 85% of respondents offer top loaders. The price range for a top-load wash is $1 to $4. The most expensive top-load wash was 50 cents more that last year’s top price.

Here are the most popular top-load prices, followed by the percentage of respondents using them:

  1. $2 (30.9%)
  2. $1.75 (16.5%)
  3. $2.25 and $2.50 (14.4% - tie)

There really isn’t much change in top-loader prices from a year ago. The $2 price remains the most popular, followed by $1.75. The only difference reported in this equipment type is in third place, where $1.50 and $2.25 were tied in last year’s survey.

An extremely small share of operators continue to charge $3 or more for a top-load wash. This is the third straight year that there have been multiple prices topping $3 reported in the survey.

The most popular prices for some of the small front loaders are:

  • 18 pounds: $2
  • 20 pounds: $2.50
  • 25 pounds: $3

The lowest price reported in the above grouping is $1.25 (18-pound washer) and the highest is $6 (25-pound washer). Overall, the most popular small-front-loader prices reported in this year’s survey are comparable to last year’s.

The price range for a 30-pound wash is $2 to $6.50. Here are the most popular 30-pound prices, along with the percentages of respondents using them:

  1. $3.50 (25%)
  2. $3 (19.1%)
  3. $3.75 (11.8%)

There was a tie between $3.50 and $3.75 for the most popular price for a 35-pound wash. Next in order are $4.50 and $3. The price range for a 35-pound wash is $2 to $5.50.

The most popular price for a 40-pound wash is $4, but $4.50 and $4.25 aren’t far behind. The most popular 50-pound wash price is $5, followed by $5.50 and $6. There was a three-way tie for the most popular price for a 55-pound wash: $5, $5.50 and $7.

The most popular price for a 60-pound wash is $6, unchanged from last year’s survey. The price range for an 80-pound wash is $5.75 to $13.50, with $8 and $8.25 tying as the most popular price.

Other prices reported were $9.75 and $15.25 for a 90-washer, $9.50 for a 100-pound washer and $14.99 for 125 pounds.

The operators to our survey vary year to year, so prices tend to vary. But the survey consistently has shown that operators offer a wide variety of front loaders (prices for 15 different capacities were logged in this year’s survey) with a broad price range.

Roughly 44% of respondents have raised or plan to raise washer prices this year, and 26.9% are undecided. The remaining 29.4% have not raised prices nor intend to do so.

DRYER PRICES

Raising dryer prices is something that operators have tended to shy away from, choosing instead to focus on washer price hikes. But it’s worth noting that some operators indicated that they have shortened cycle times in the past year. While customers in those stores aren’t paying a higher price, they are getting less drying per cycle.

Here are the most popular dryer prices, followed by the percentage of respondents using them:

  1. 25 cents/5 minutes (19.1%)
  2. 25 cents/7 minutes (18.3%)
  3. 25 cents/6 minutes (13.9%)
  4. 25 cents/8 minutes and 25 cents/10 minutes (10.4% - tie)

The No. 3 price from last year’s survey has jumped to No. 1 in this year’s. Seven minutes of drying time returned to the No. 2 slot after being bumped to No. 4 last year, while eight minutes of drying time fell from No. 2 last year to No. 4 this year, where it shared the spot with 10 minutes of drying time.

The 25-for-10 price, which was once an industry staple, picked up a couple of percentage points on last year’s result but still remains well down the list.

Once again, there was a wide variety of dryer prices reported. The most expensive (and longest) cycle was $1.75 for 35 minutes.

Roughly 18% of respondents have raised or plan to raise dryer prices this year, and 20.2% are undecided. The remaining 62.2% have not raised prices nor intend to do so.

PAYMENT TECHNOLOGY

More than 83% of respondents operate coin-only stores, 7.6% operate card-only stores, and 9.2% have operations that offer both payment types.

ATTENDED OR UNATTENDED?

Nearly 48% of respondents say their stores are fully attended. Roughly 29% say their stores are partially attended, and the remaining 23.1% say their stores are unattended.

DROP-OFF SERVICE PRICING

Drop-off-service pricing ranges from 70 cents to $3 per pound. Here are the most popular drop-off-service prices (per pound), followed by the percentage of respondents using them:

  1. $1 (36%)
  2. $1.25 (16%)
  3. $1.10 (9.3%)

The drop-off-service prices remain similar to 2012 prices, and there is a wide variety of prices charged for the service. There were 20 different prices charged per pound in the responses to our survey.

Two-thirds of the respondents offer drop-off service, which is identical to last year’s survey.

Check back on Wednesday for the conclusion: Equipment Purchasing Trends, Turns Per Day, Common Management Problems, and more

April 2, 2013
Store Traffic: Finding a Better Balance

PEMBROKE, Mass. — Manage your store’s traffic with inducements and persuasion

PEMBROKE, Mass. — Sometimes, your store is overly busy. Other times, it is underutilized. You don’t want your customers walking into your facility, seeing it so busy and turn around to leave. You also don’t want customers coming in at odd hours and being so freaked out by the empty facility that they dare not enter your premises.

The perfect balance is to have eight customers in your store during every hour of operation each week. Of course, no one achieves this perfection. But one should try to better align customer use, which I call balancing traffic.

But your customers want to do their laundry at their own convenience. That’s why self-service laundries are open, on average, from 7 a.m. to 10 p.m. seven days a week. Let’s say that Saturday is a madhouse in your store. The suppertime hours are almost completely dead. Weekday mornings are steady, but afternoons crawl along with almost no one in the store. For some reason, Monday and Wednesday nights are quiet. How do you correct this imbalance?

Manage your store’s traffic with inducements and persuasion.

PROMOTIONS AND SPECIAL EVENTS

First, act only if you think there is a problem. Say your Saturday volume is so busy that customers trip over themselves. Children can’t play because every toy is in use and all the spaces are taken. Heavy use causes too many of your machines to break down. Customers walk around, their faces tense with aggravation. This is the perfect scenario to call for balancing traffic.

You would like to convert a number of customers to come in Sundays after 1 p.m. But how do you get these individuals to change their habits? Hand out a $1 coupon to every Sunday-afternoon customer. Do that for 10 weeks, and you’ll have more business in that time slot.

The good thing is that you don’t have to do this permanently. Ten weeks will be enough time to create a larger base of customers who will stay even when they are no longer receiving the $1 inducement. Or perhaps 80% of the changeovers will stay; they will have gotten used to their new hours. Of course, this coupon redemption requires an attendant on duty. If you don’t use an attendant, arrange for someone to be there at designated coupon times.

How much would this effort cost? Suppose you had 30 customers coming in on week one and now have 100 customers coming in on week 10. Splitting the difference, the average customer base is roughly 70 per week. That’s $70 “paid out” each Sunday multiplied by 10 Sundays for a total cost of $700. Is the traffic-aligning worth the cost? You probably will have won 40 to 50 more Sunday-after-1 regular customers. This frees up a busier time slot, plus you’ve earned some customer goodwill. They appreciate the $1. You have better balanced your customer traffic. Yes, it is worth the cost.

You can use this sort of tactic with any time period. Hang a sign in your store that reads, “Earn $1 if you clean your clothes after 1 p.m. on Sundays.” Use all of your marketing efforts to promote the offer. If a customer asks how long the dollar inducement will be in effect, be frank. Tell them you want to even out business, so the promotion will be in effect a minimum of six weeks but could continue for as long as a year. In fact, you are going to end the inducements after 10 weeks.

Another tactic is to have a musician come in and play/sing on a slow night. For instance, the musician plays from 7 to 9 on Wednesday night. You might pay him or her a token amount, and customers could be encouraged to tip the performer. This opportunity might be the inducement for a talented young man or woman to come in and reach a new audience. Of course, you or a staffer will have to be there to manage the traffic flow, keep out undesirables, and keep the music to an acceptable decibel level. In a short amount of time, Wednesday nights at your store could become the neighborhood event, a can’t-miss for the locals. Business will thrive.

Still another approach is to schedule a weekly drawing on a slow business day. The rule is that a customer must wash his/her clothes on that designated day to be eligible to win. Offering an attractive prize—free dinner for two, or a gift certificate to a local store—might shift traffic.

POWER OF PERSUASION

This approach simply asks customers to switch their washing day. This must be done by a knowledgeable person (you?), and it involves greeting customers and quietly talking to them. It could be accomplished simply by pointing out that the facility opens at 7 a.m. and one could get their clothes cleaned in only an hour at that time because most of the machines are available. Everybody wants to save time and avoid hassle. That information might just get them to try the early slot.

Or, you might be more aggressive. Say you have an overly busy Monday night. You might casually go up to several customers and speak to them. “You know, it is awfully busy around here Monday nights. Tuesday or Wednesday evenings are much less hectic, and customers can get any machine they want. They get in and out much quicker.” Everyone wants to save time. That might just plant the seed. Next week, you might see one or more of your Monday regulars on Wednesday night.

Another thing you might pitch during these conversations is the wash/dry/fold service you offer (if you do). It doesn’t hurt for you to sidle up to a customer and say, “Did you ever think about using our wash/dry/fold service? You’d bring clothes in the morning and pick them up that same night. You might spend $5 more a week, but, heck, your time is worth more than that.” Anybody you convince to use the wash/dry/fold service helps to balance store traffic.

Balancing traffic is another way to make your operation more efficient. Don’t ignore this tool.

March 26, 2013
Taking Advantage of Opportunities to Upsell

ADDISON, Ill. — Distributor highlights opportunities to upsell without putting pressure on your customers

ADDISON, Ill. — Super-size it. Would you like peppers? Would you like to add cheese?

This is a common concept adopted by restaurants nationwide. Although the phrasing may differ, “upselling” is a familiar concept to American consumers. Most restaurants offer a good product without the extras, but eateries and other businesses have found that consumers like being given the option to make their own choices about the type of product or service they want. This in no way means the original product or service is inadequate without the add-ons.

What does this mean for our industry? Let’s take a look.

Although there have been many Laundromat innovations in recent years, the two most valuable, in my opinion, were:

  1. The ability to offer additional service options on vended washers and dryers.
  2. The ability to offer an alternative payment method such as card systems and its effect on the industry.

I would like to focus on these and explain how they tie together.

UPSELLING IN THE LAUNDROMAT

Several years ago, washer manufacturers introduced the ability to offer additional services to customers for additional vend price. Long before that, they offered the ability to sell hot and cold washes for a different cost. Competitors that did not have these sophisticated machines kept their prices low, ultimately reversing customers’ perceptions of the new pricing structure. Today, we have the ability to offer a quality wash, and customers who feel they will benefit from an extra wash or extra rinse will pay more for what they perceive is a superior wash result. This is upselling with no pressure on the customer to pay more money unless he or she chooses to add services.

This is a powerful tool to increase volume. For many years, we in the industry have been trying to figure out how to increase our revenue by giving customers choices they want, which increases revenue without the perception of increased pricing. I will show what this means in dollars and cents when we talk about the card systems.

Most manufacturers have an ability to offer these options, but each does it in a slightly different way. Additional service options have to be made easy to understand and easy to use, but this doesn’t mean you provide less service and make it up in add-ons. We have to learn from industries that are successful in marketing upselling options. We need to offer good results at a fair price, plus the ability to let our customers decide if they want to spend more. It’s their choice.

CYCLE OPTIONS + CARD SYSTEMS = MORE REVENUE

Another way to add choices into the Laundromat is by utilizing a card system. These systems, which began as an alternative to accepting coins, have been available for many years. They have come a long way. Card systems are used today by owners who want to operate their businesses with all the advantages that most retail businesses offer. I’m going to touch on a few of these advantages, but this is really just a small representation of the benefits of managing a card-operated laundry.

First, card systems build loyalty. Once a customer uses a card and leaves a balance on it, they will more often than not come back to your Laundromat. The ability to accept credit cards and to use penny incremental pricing helps keep your vend prices in line with your utility costs. There are a variety of marketing programs available to help increase your volume. Coupon programs give laundry owners the ability to offer rewards directly to the customer without an attendant and without fear of coupon fraud.

Card systems can also provide the ability to account for revenue and employee hours. Reports are available that reflect business revenue totals, individual usage, customer information, income by the hour, equipment usage, and average money spent per visit. This is just a small sample of the information that is available.

I have been able to gather reporting to solidify the value of the extra-wash and extra-rinse options. My family owns and operates three laundries with equipment that has these add-ons available. The stores are located in different geographic areas and have differing ethnic demographics. A report from one of our stores shows equipment usage over a five-month period.

The numbers focus on extra-wash/extra-rinse usage and what it means in terms of additional revenue.

  • The 80-pound washers processed 4,112 loads, of which 1,498—or about 36% of the total number of loads—used an “extra” button. At a 50-cent upcharge per load, an additional $749 was collected from the six machines.
  • The 30-pound washers processed 13,180 loads, of which 2,908—or about 22% of the total number of loads—used an “extra” button. At a 35-cent upcharge per load, an additional $1,017 was collected from the 16 washers.
  • The 40-pound washers processed 10,999 loads, of which 2,859—or about 25% of the total number of loads—used an “extra” button. At a 40-cent upcharge per load, an additional $1,143 was collected from the 14 machines.
  • The 20-pound washers processed 11,877 loads, of which 2,662—or about 22% of the total number of loads—used an “extra” button. At a 30-cent upcharge per load, an additional $798 was collected from the 12 washers.

That adds up to $3,707 in additional revenue for this store in five months. Extrapolate that to a year and the added revenue comes to $8,899. The numbers speak for themselves, and that’s on top of the normal vend prices! Keep in mind that these were customer choices; they made them of their own free will. That’s upselling.

In my experience, that kind of additional revenue (80%) goes to the bottom line. Without a card system, our stores would not have the tools to properly evaluate those numbers and help make any future equipment purchases.

Talk to your distributor about the options that are available. Evaluate this information to see if these innovations will work within your budget. In today’s business climate, any advantage that will help a business grow must be seriously considered.

I have heard many excuses for not moving forward with new innovations. The list would be so long, it would take another article to cover them all. The reality is, without these advantages, your business may struggle. Your choice.

March 21, 2013
Mac-Gray Delivers Increased Profitability Despite Flat Total Revenue

WALTHAM, Mass. — Hurricane Sandy cost company more than $600,000 in equipment replacement in Northeast

WALTHAM, Mass. — Mac-Gray Corp. recently announced its financial results for the quarter and year ended Dec. 31, reporting greater profitability despite flat total revenue.

Mac-Gray Corp. saw its net revenue for fourth-quarter 2012 decrease slightly to $82.2 million from $82.7 million for the same period in 2011. Net income increased to $2.6 million compared to $102,000 in fourth-quarter 2011.

For the 12 months ended Dec. 31, Mac-Gray reported net revenue of $322.1 million, compared to $322.0 million for 2011. Net income for 2012 increased to $4.3 million compared to $3.2 million in 2011.

“Mac-Gray concluded 2012 with a solid fourth-quarter performance,” says Stewart G. MacDonald, the company’s CEO. “We improved our operating margins, achieved a higher level of adjusted EBITDA and more than doubled our adjusted earnings. In addition, for the third consecutive quarter, we increased our profitability despite flat total revenue.”

While the effect of Hurricane Sandy on Mac-Gray’s revenue was less than originally feared, MacDonald says, it cost the company more than $600,000 in capital expenditures to replace damaged or destroyed equipment in the Northeast.

“Overall, we invested $6 million in capital expenditures in the fourth quarter, bringing our year-to-date total to $36.9 million, compared with $32.5 million in 2011. The 14% increase in annual capital spending reflects our expectations of achieving continued profitable growth in our core business in 2013.”

Mac-Gray derives its revenue principally through the contracting of debit-card- and coin-operated laundry facilities in multi-unit housing facilities. The company manages laundry rooms located in 43 states and the District of Columbia. Mac-Gray also sells and services commercial laundry equipment.

March 14, 2013
Natural Gas Costs Still Higher Than Last Year, but Gasoline Prices Falling: EIA

WASHINGTON — Henry Hub spot price pegged at $3.41 per MMBtu in 2013

WASHINGTON — The Henry Hub natural gas spot price is expected to average approximately 65 cents higher per million British thermal unit (MMBtu) this year, while natural gas working inventories ended February at a level below the same time one year ago, according to the U.S. Energy Information Administration.

EIA expects the spot price to be $3.41 per MMBtu in 2013 and $3.63 per MMBtu in 2014. It averaged $2.75 per MMBtu in 2012.

In other energy news, the weekly U.S. average regular gasoline retail price fell in early March for the first time since mid-December. The March 11 average was $3.71 per gallon, down 7 cents per gallon from Feb. 25.

EIA expects that lower crude oil prices will result in monthly average regular gasoline prices staying near the February average of $3.67 per gallon over the next few months, with the annual average retail price declining from $3.63 per gallon in 2012 to $3.55 per gallon in 2013 and $3.38 per gallon in 2014.

U.S. crude oil production exceeded an average level of 7 million barrels per day in November and December, the highest volume in more than 20 years.

EIA warns that energy price forecasts are highly uncertain and that the current values of futures and options contracts suggest prices could differ significantly from its forecast.

March 13, 2013
Alliance Laundry Holdings Reports Record Revenues for 2012

RIPON, Wis. — 2012 net revenues totaled $505.5 million, an increase of 10.4% from the previous year

RIPON, Wis. — Alliance Laundry Holdings LCC, the parent company of Alliance Laundry Systems, saw overall revenue growth for the year ended Dec. 31, according to its financial results for 2012. The company’s net revenues for the year totaled $505.5 million, a $47.5 million increase over 2011’s reported net revenue of $458 million.

“2012 was a tremendous year, with net revenues increasing 10.4% year-over-year,” says President and CEO Michael D. Schoeb.

The company attributes its net revenue growth to increases in United States and Canada revenues of $40.2 million; Latin America revenues of $4.9 million; Asia revenues of $6.8 million; and Middle East/Africa revenues of $2.0 million. Those increases were offset by a decline in Europe revenues of $6.4 million.

“In 2012, we achieved record revenues in all regions of the world, with the exception of Europe, where the economy continues to struggle,” Schoeb says.

While the company reports an increase in net revenue for the past year, its net income for 2012 decreased $7.0 million, falling to $16.4 million from 2011’s reported $23.4 million.

Despite this, its adjusted EBITDA (net income before interest expense, income tax provision, depreciation and amortization) increased $10.5 million, going from $83.9 million in 2011 to $94.4 million last year.

Schoeb anticipates another profitable year in 2013. “The steps we have taken to improve our competitive position over the last several years gives us confidence, and we expect continued sales and profitability growth in 2013,” he says.

Alliance Laundry Systems designs, manufactures and markets commercial laundry equipment under the brand names of Speed Queen, UniMac, Huebsch, IPSO and Cissell.

March 12, 2013
Survey: Laundry Owners Weigh Best and Worst About Their Stores

CHICAGO — What’s your most popular washer? Best revenue-generating season? The worst thing a customer has done to or at your laundry?

CHICAGO — They say you have to take the bad with the good. And so it is that American Coin-Op asked readers to list the best and the worst things about their store in this month’s Wire survey.

POPULAR WASHERS

Thirty-three percent of respondents say a 40- to 50-pound front loader is their store’s most popular washer, followed by a 27- to 35-pound front loader (30%) and an 18- to 25-pound front loader (23.3%). Equal shares (6.7%) chose a 55- to 60-pound front loader and a 70-pound-plus front loader as most popular. No one who took the unscientific survey said a top loader was their store’s most popular washer.

SLOWEST DAY, BEST SEASON

Wednesday is the slowest business day (38.7%), edging out Tuesday (29%) and Thursday (25.8%). Summer is the best revenue-generating season (35.5%), followed by winter (32.3%), spring (22.6%), and fall (9.7%).

QUENCH THAT THIRST

Soft drinks, by far, are the best-selling food/drink item at laundries. Roughly 52% of respondents say soft drinks are the No. 1 seller, followed by snack chips (19.4%) and water (6.5%). Approximately 13% of respondents say they don’t offer vended items in their laundry.

BUT IT’S GOTTA BE DONE

Doing repair/maintenance work (32.3%) is the least favorite task for owners, followed by “solving customer problems” (25.8%), collecting (12.9%) and cleaning (12.9%). Only 9.7% selected “supervising employees” as being least favorite.

A CUSTOMER DID WHAT?

Respondents were asked to name the worst thing a customer had done to or at their laundry. Answers were varied, and some were downright disturbing. Incidents of theft (money, a toilet seat) and vandalism (poured beverages on floor, ripped off washer door) were most common. Following are examples of the rest:

  • “(Customer) brought in laundry with dozens of roaches in it. When I walked in, the bugs were crawling everywhere in plain sight: all over the washers, in and out of her laundry basket, etc. I told her not to ever bring her laundry back here. My attendant and I spent hours killing roaches and, of course, I also had an emergency exterminator visit.”
  • “One blew ours up a few years before we bought it. He was washing greasers (oil field clothes) and he poured some gasoline into the washer with the clothes. It was a gentle explosion, though. It didn’t seriously injure any of the customers.”
  • “Take clothes off and wash them.”
  • “Butchered a manta ray on one of our tables, then put (it) into one of our dryers, turned it on high, then left.”
  • “Had a bowel movement in the middle of the store because the restroom was busy. Then used others’ clothes to clean himself.”
  • “Washed old, rubber-backed carpets, clogging the washers drain and flooding the store.”

While the Wire survey presents a snapshot of readers’ viewpoints at a particular moment, it should not be considered scientific.

Subscribers to Wire e-mails—distributed twice weekly—are invited to take the industry survey anonymously online each month. All self-service laundry owners and operators are encouraged to participate, as a greater number of responses will help to better define operator opinions and industry trends.

March 11, 2013
Learn How to Protect Your Laundry from Spring Weather Threats

WASHINGTON — Learn some low-cost, efficient steps to make sure your business, customers and employees are safe in months to come

WASHINGTON — Winter snows are sometimes followed by floods. Severe storms—sometimes in the form of deadly tornadoes or massive rainfall—can wreak havoc across the United States during spring.

There are many low-cost, efficient steps that a coin laundry owner can take now to make sure their business, customers and employees are safe in the months to come. At 2 p.m. EDT Tuesday, the U.S. Small Business Administration and Agility Recovery will present a free webinar on best practices for mitigating spring weather risks, based on real-life recovery experiences from business owners.

Space is limited, and interested parties can register here.

Additionally, the SBA has partnered with Agility to offer business continuity strategies through its “PrepareMyBusiness” website. Visit preparemybusiness.org to access previous webinars and for additional preparedness tips.

March 6, 2013
ADC Reveals Newly Engineered Marketing Campaign

FALL RIVER, Mass. — Blueprints for new marketing plan focus heavily on digital platforms, social media channels, and advanced SEO tactics

FALL RIVER, Mass. — American Dryer Corp. (ADC), which has manufactured products for commercial coin-operated, on-premise and industrial laundry markets for more than 50 years, is undergoing a complete remodel of its marketing campaigns, the company reports.

The blueprints for the new marketing plan focus heavily on digital platforms, social media channels, and advanced SEO (search engine optimization) tactics.

“We want customers to easily connect with ADC by giving the brand a definite voice,” says CEO Joe Bazzinotti. “Maximizing the value of ADC is priority. We want our marketing to be just as advanced and well-engineered as the products we continue to provide for more than half a century.”

The new face of ADC will include a total revival of all messages via sales and marketing collateral, distributor portfolios, newsletters, blogs, and web and print advertisements.

Not only is ADC launching a new message and new perspective, the company reports it is yielding excellent product discovery and development. EcoWash washer-extractors entered the market in 2012 as ADC’s newest addition and first line of commercial washers.

ADC has been working on a long-term strategy to separate the sales and marketing divisions. With this shift, Stacey Hodges, vice president of employee and customer relations, has assumed responsibility for the marketing division while continuing in her other roles. Senior Vice President of Global Sales Tony Regan continues to oversee the ADC sales team.

To further strengthen its marketing efforts, ADC recently named Andrea Ferreira marketing director. Also, a graphic designer has been added to optimize product marketing.

“Bringing in new talent will help form new perspective and creative ideas to move ADC to the next level” says Bazzinotti. “In the coming months, consumers will notice a total redesign of ADC’s website, including content, layout, streamlined navigation and functionality.”

March 5, 2013
Alliance Laundry Systems Recognized for Market Leadership

MILWAUKEE — One of eight companies honored out of 58 nominated in statewide awards program

MILWAUKEE — Alliance Laundry Systems, manufacturers of commercial laundry equipment under the Huebsch, IPSO and Speed Queen brands, last week received a special award for “Market Leadership” as part of the Wisconsin Manufacturer of the Year program recognizing outstanding achievements in manufacturing in 2012.

Alliance was one of eight companies honored out of 58 nominated in the statewide awards program, now in its 25th year. Bruce Rounds, chief financial officer, and Jay McDonald, vice president of business development, accepted the award for Alliance during a black-tie ceremony at the Pfister Hotel.

“Alliance’s story started more than 100 years ago when two Ripon hardware store owners figured out how to mechanize hand-powered washing machines,” notes Alliance CEO and President Mike Schoeb. “Now, we are the largest manufacturer of commercial laundry equipment in the world. Our continued success is driven by that same spirit of innovation, the dedication and work ethic we find in the local labor force, our world-class distribution network, and the competitive advantages and positive business climate of Wisconsin.”

In addition to the “Market Leadership” award, the Wisconsin Manufacturer of the Year program handed out four grand awards to companies categorized by the number of employees – small, medium, large and mega. Alliance, nominated for the first time in 2012, competed in but did not win the Mega category.

Nominees were judged in such areas as financial growth or consistency, technological advances, product development, environmental solutions and sustainability, operational excellence/continuous improvement, commitment to employees, and effective research and development.

The awards program is co-sponsored by Baker Tilly, one of America’s largest accounting and advisory firms; Michael Best & Friedrich LLP, a leading Midwest-based law firm; and Wisconsin Manufacturers & Commerce, Wisconsin’s largest business association.

March 4, 2013
Access to Small-Business Loan Programs to Expand Under Proposed Rule

WASHINGTON — Borrowers of SBA-backed loans gain greater access to capital, have less paperwork under proposed rule changes

WASHINGTON — Borrowers and lenders of U.S. Small Business Association-backed loans will have greater access to capital and less paperwork as a result of a proposed regulation aimed at streamlining the application process while strengthening oversight and program integrity.

“Streamlining and simplifying has been a key focus of our agency over the last few years,” says SBA Administrator Karen Mills. “The changes are the latest steps to reduce paperwork burden, with our eye on the larger goal of expanding access to capital and giving entrepreneurs and small-business owners the financial resources to grow and create jobs.”

The SBA proposes the new measures after extensive consultations with lenders and borrowers to identify the greatest challenges they face and find ways to reduce barriers to making and accessing loans, while still maintaining strict oversight.

Among the proposed changes are:

  • Eliminating the Personal Resource Test — A borrower will no longer be required to obtain a maximum level of personal finance resources for a 7(a) or 504 loan. This will streamline the loan process by eliminating complicated regulations used to determine the amount of collateral required.
  • Revising the Rule on Affiliation — Revising this rule will open access to SBA loans to businesses that, under current rules, would not qualify as a small business under SBA’s size standards by virtue of their association with other companies. It also would streamline 504 loan applications and reduce paperwork requirements for 504 and 7(a) loan applications.
  • Eliminating the Nine-Month Rule for the 504 Loan Program — This will remove a restriction that limits a business to include in its 504 project only expenses incurred nine months prior to submitting the loan application. The new rule would allow inclusion of expenses incurred at any time (e.g., projects put on hold for more than nine months due to a natural disaster).

Visit the SBA website for comprehensive information on the new rules and their potential benefits for your vended laundry business.

The full text of the proposed rule published in the Federal Register is available here.

February 28, 2013
Over the Fiscal Cliff for Tax Savings (Part 2)

ARDMORE, Pa. — Package renews more than 50 temporary tax breaks through 2013

ARDMORE, Pa. — The so-called “fiscal cliff” tax package recently signed into law renewed more than 50 temporary tax breaks through 2013, saving individuals and businesses an estimated $76 billion. For the owners and operators of small- and medium-sized laundry businesses, there is good news and bad news contained in the fiscal cliff tax laws.

First, the good news: greater certainty in taxes. The owners and operators of laundry businesses have grown used to many longstanding tax breaks but they also have had to get used to the uncertainty of whether they will be renewed each year.

On the downside, in addition to a 3.8% Net Investment Income (NII) tax and a 0.9% Additional Medicare tax that, thanks to the Health Care and Education Reconciliation Act of 2010, began in 2013, many laundry owners discovered they are subject to new taxes. Single individuals with incomes above the $400,000 level and married couples with income higher than $450,000 will pay more in taxes in 2013.

TAXING IT ALONE

Single individuals with incomes above the $400,000 level and married couples with income higher than $450,000 will pay more because of a higher 39.6% income tax rate and a 20% maximum capital gains tax. Of course, for other individuals, the alternative minimum tax (AMT) has finally been indexed for inflation.

Ironically, the AMT was created to ensure that wealthy individuals, not middle-income households, would pay some kind of income tax. The new law increases the 2012 exemption amounts to $50,600 for unmarried individuals and $78,750 for couples filing jointly. For 2013, the AMT exemption amounts are predicted to be $80,750 for married couples filing jointly and $51,900 for single individuals.

ESTATE TAXES NEVER DIE

Always of significant interest to family-owned businesses, the estate tax has long been a bit of a mixed bag. The $5 million-per-person exemption was kept in place (and indexed for inflation). The top rate was increased, however, to 40% effective Jan. 1, 2013. This change is expected to increase government revenues from 2012 levels by $19 billion. Other good news for estate planning: portability is kept in place and estate and gift taxes remain unified, i.e., the $5 million stays in place for gift-tax purposes as well as estates. And, best of all, it is all permanent.

PLANNING OPPORTUNITIES ABOUND

The majority of laundry businesses operate as pass-through entities, such as partnerships and S corporations. Profits are passed through to their individual owners and therefore are taxed at individual income tax rates. Some business owners might be considering switching to a regular C corporation with its top rate of 35% rather than doing business through an S corporation, LLC, etc., subject to a top rate of 39.6% on the pass-through income.

But it’s important to look much deeper than the tax rates. With a pass-through entity, the shareholders are taxed only once on the income. With a regular C corporation, distributions would first be taxed at the corporate level and once again at the shareholder’s level for an additional 15-20%, plus the 3.8% net investment income tax.

That double taxation becomes even more significant on the sale of the laundry business. Although there are provisions in the tax law that allow all or a portion of the gain on the sale of a business to be excluded or ignored, they are limited.

Another consideration, particularly for small businesses, is that any expenses disallowed by an IRS auditor will only result in increased income to the pass-through entity. When doing business as a regular corporation, disallowed personal expenses increase the income of the corporation and are taxed as constructive dividends to the shareholders. The same is true for unreasonable compensation of shareholder/officers.

Keep in mind that if a switch from an S corporation to a regular C corporation is made, a switch back to an S corporation can’t be made for five years—unless permission is received from the IRS. If an LLC or partnership is incorporated, there can be expenses and potential tax consequences.

The increase in the top tax rates, the AMT relief provided for the 2012 tax year, and the hidden taxes all combine to make it possible for many small- and medium-sized businesses ineligible for business credits thanks to AMT limitations in 2011 to potentially be able to take advantage of these dozens of credits. It is, in essence, a back-door opportunity for small businesses, similar to when Congress expanded eligibility for credits for 2010.

Although it is not the grand bargain as envisioned by lawmakers, many popular but temporary tax extenders relating to businesses were included in the American Taxpayer Relief Act: the Code Section 179 small-business expensing, bonus depreciation, and the Work Opportunity Tax Credit. Unfortunately, the new law is effectively a stopgap measure designed expressly to prevent the onus of the expiration of the Bush-era tax cuts from falling on middle-income taxpayers. Congress must still address spending cuts and may even tackle tax “reform.”

The time is now—before filing the laundry operation’s 2012 tax returns—for every laundry business owner to consult with their accountants and/or tax professionals to focus on the potential savings offered by these newly revised, extended and expanded business credits, deductions and tax write-offs.

Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult a financial adviser for advice regarding your particular situation.

February 26, 2013
Over the Fiscal Cliff for Tax Savings (Part 1)

ARDMORE, Pa. — Package renews more than 50 temporary tax breaks through 2013

ARDMORE, Pa. — The so-called “fiscal cliff” tax package recently signed into law renewed more than 50 temporary tax breaks through 2013, saving individuals and businesses an estimated $76 billion. For the owners and operators of small- and medium-sized laundry businesses, there is good news and bad news contained in the fiscal cliff tax laws.

First, the good news: greater certainty in taxes. The owners and operators of laundry businesses have grown used to many longstanding tax breaks but they also have had to get used to the uncertainty of whether they will be renewed each year.

On the downside, in addition to a 3.8% Net Investment Income (NII) tax and a 0.9% Additional Medicare tax that, thanks to the Health Care and Education Reconciliation Act of 2010, began in 2013, many laundry owners discovered they are subject to new taxes. Single individuals with incomes above the $400,000 level and married couples with income higher than $450,000 will pay more in taxes in 2013.

EQUIPMENT WRITE-OFFS FOR PROFITABLE OPERATIONS

The American Taxpayer Relief Act extended through 2013 the Tax Code’s Section 179 first-year expensing write-off for equipment and business property purchases. Now, the higher expensing limits in effect in 2011 have been reinstated for 2012 and extended for expenditures made before Dec. 31, 2013. Thus, a laundry business can expense or immediately deduct up to $500,000 of expenditures in 2012 and 2013, subject to a phase-out if total capital expenditures exceed $2 million.

The tax break that allows profitable laundry businesses to write off large capital expenditures immediately—rather than over time—has long been used as an economic stimulus by our lawmakers. While 100% “bonus” depreciation expired at the end of 2011, today the new law allows 50% bonus depreciation for property placed in service through 2013.

Some transportation and longer-lived property are even eligible for bonus depreciation through 2014. If bonus depreciation had not been extended, the 2012 tax year would have been the final year in which substantial first-year write-offs for buyers of business automobiles and light trucks were available.

To be eligible for bonus depreciation, property must be depreciable under the standard MACRS (Modified Accelerated Cost Recovery System) and have a recovery period of less than 20 years. Section 179 first-year expensing remains a viable alternative, especially for small businesses. Property qualifying for the Section 179 write-off may be either used or new, in contrast to the bonus depreciation requirement that the taxpayer be the “first to use.”

Leasehold improvements and building improvements generally must be depreciated over 39 years. The tax law provides a special 15-year, straight-line depreciation break for qualified leasehold improvements, restaurant property, and retail improvements. Naturally, there are quite a few restrictions, such as the lease must between unrelated parties.

Qualified leasehold improvements also qualify for the 50% bonus depreciation. In fact, qualified leasehold improvements, restaurant property, and retail improvements up to $250,000 may qualify for Section 179 expensing. And, best of all, these provisions have been extended for property placed in service before Jan. 1, 2014.

MORE, MORE AND MORE

The Work Opportunity Tax Credit (WOTC), which rewards employers that hire individuals from certain target groups, has extended to Dec. 31, 2013, and applies to individuals who begin work for the employer after Dec. 31, 2011. Under the revised WOTC, laundry businesses hiring an individual from within a target group are eligible for a credit generally equal to 40% of first-year wages up to $6,000.

An S corporation is a pass-through entity and not usually subject to income taxes. It is, however, liable for the tax imposed on built-in gains or capital gains. The tax on built-in gains is a corporate-level tax on S corporations that dispose of assets that appreciated in value during the years when the operation was a regular C corporation.

The new law extends a relaxed version of the provision limiting the “recognition period” to five years, but only for “built-in gains” recognized in 2012 and 2013. Thus, if a laundry business elected S corporation status beginning Jan. 1, 2007, it will be able to sell appreciated assets it held on that date without begin subject to a hefty tax bill.

Check back Thursday for the conclusion!

Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult a financial adviser for advice regarding your particular situation.