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April 30, 2012

CHICAGO — Maintenance schedules and other opportunities

CHICAGO — The specter of ever-rising utility costs should be enough to spur the average laundry owner to track this expense and explore ways to minimize it.

In response to a series of questions from American Coin-Op, Gary Dixon, national sales manager for Huebsch, and Kent Walters, national sales manager for Maytag® Commercial Laundry, discuss the role that tracking energy usage and maximizing its effectiveness plays in a successful self-service laundry, and offered some important tips for corralling costs.

Often, the battle against rising utility costs starts with your equipment.

Q: What is the average life expectancy of today’s washers and dryers?

Dixon: Life expectancy will vary depending on machine usage, installation, preventive maintenance and other factors. However, it is not uncommon for laundry owners to get 12-15 years of life out of their machines.

Walters: The average life expectancy of today’s single- and multi-load washers is seven to 10 years. As a result of fewer moving parts, single- and multi-load dryers typically have a slightly longer life expectancy of 10 to 12 years. If washers or dryers are used more or less frequently, life expectancy fluctuates.

Q: How much impact can following a regular equipment maintenance schedule make in a store’s efficiency?

Walters: Store owners who want to maximize equipment performance must regularly perform proactive and preventive maintenance tasks. In washers, cleaning equipment and surrounding areas, tightening bolts that hold machines in place, and looking for leaks, checking belts, bearings, and seals for standard wear and tear, etc., are important. By performing regularly scheduled maintenance, store owners are less likely to incur a major breakdown, costing them additional money for parts and downtime. When maintaining dryers, it is critical to keep vents clean and make sure the dryers have enough make-up air.

Dixon: By following a recommended maintenance schedule, the laundry owner is ensuring that their equipment is operating at optimum efficiency. This translates to lower utility costs and keeps down time to a minimum. The result is happier customers and more profit.

Q: If a store’s energy efficiency begins to decline, where should the owner first look to make changes?

Dixon: The first place to look is in the washer-extractor control software. Are the water levels set where you wanted them? Is the water temperature different than where it was? Is the software notifying you of potential leaks?

Walters: If energy efficiency begins to decline, the first place a store owner should investigate is the dryers. Specifically, an owner needs to ensure all ventilation is free of lint, which can cut down on the amount of air getting to the dryer, as well as make-up air.

Q: Does water usage impact energy efficiency, and vice versa?

Walters: Yes, water is a big expense for store owners and using newer, low-water-use washers can save a lot of money in both water and sewage savings. High-spin-speed washer-extractors are necessary to maximize cleaning performance by spinning out additional water from laundry so dryers don’t have to work as hard to dry the load.

Dixon: It most certainly does. The amount of water in each bath and the number of baths in a cycle has a direct impact on water and sewer costs. Equipment designs that minimize wasted water below the wash cylinder will also have a favorable impact on water usage. Water-level adjustability is critical for optimizing water settings at a minimum level that is still acceptable to your customers.

Q: How can a store owner “train” their customers and attendants so their laundry’s energy efficiency is optimal?

Dixon: In any business, the culture and message that is communicated comes from the top down. If you are adamant with your employees about maximizing efficiency and provide a mission statement and guidance to them for realizing your goals, you will create the culture. This will, in turn, be communicated to your customers.

Walters: Having a trained attendant who can show the customers the proper way to use the equipment is always the best. Signage is another great way to train customers and attendants on use of machines, proper amount of detergent, operating instructions, etc. Signage should include simple-to-follow instructions located in easy-to-read places.

Q: Besides laundry equipment choice and usage, where are some other opportunities to shore up energy efficiency?

Walters: Store owners should obtain an energy analysis of the store through their local laundry equipment supplier to help determine areas that need improvement. In addition to equipment, owners should consider incorporating energy-efficient options, such as high-efficiency water heaters, T-8s, electronic ballasts, light sensors and task lighting.

Dixon: There are many variables that impact energy efficiency. Some things to consider: alternative sources for energy needs, type of water heaters, choice of lighting and fixtures, window tinting, the thermostat setting, and even landscaping are just a few things to look at.

Q: To whom may a store owner turn for assistance in improving their store’s energy efficiency?

Walters: Whether shopping for new equipment, looking to upgrade existing equipment, or needing some assistance related to a store’s laundry operations, it is important to connect with a reliable, established distributor for guidance. The best laundry distributors are those that have a long history in the business and have received positive reviews for the customer service they provide.

Dixon: The relationship a laundry owner has with their local distributor can pay dividends into the future. The local distributor is well versed in what is available from the equipment manufacturer. They also have an intimate knowledge of the area they serve.

Q: Do you have any other comments to add regarding energy efficiency in the self-service laundry?

Dixon: Over the past several years, many laundry owners have postponed upgrading their equipment to products that are more energy-efficient; this is certainly understandable. However, when the time comes and it makes good business sense to do so, it is important to not just look at the price of the products. It is also important to look at the cost of ownership of the equipment and energy efficiency is a major factor in this cost.

Click here for Part 1!

April 26, 2012

CHICAGO — Tracking energy usage and maximizing effectiveness

CHICAGO — The specter of ever-rising utility costs should be enough to spur the average laundry owner to track this expense and explore ways to minimize it.

In response to a series of questions from American Coin-Op, Gary Dixon, national sales manager for Huebsch, and Kent Walters, national sales manager for Maytag® Commercial Laundry, discuss the role that tracking energy usage and maximizing its effectiveness plays in a successful self-service laundry, and offer some important tips for corralling costs.

Often, the battle against rising utility costs starts with your equipment.

Q: How may a coin laundry owner track their operation’s level of energy efficiency?

Walters: Owners looking to determine their store’s level of energy efficiency need to compare the cost of utilities vs. revenue. If the cost of the store’s utilities is above the industry average—20-25% of total revenue—a store owner should investigate ways to decrease the cost of utilities, starting with equipment.

Dixon: First, I would suggest that the laundry owner establish a baseline. Many manufacturers, along with the local distributor, can provide an estimated energy usage per turn. The laundry owner could then adjust these calculations to reflect their specific energy costs and turns per day.

Second, compare utility bills after every change that is made to the store’s operation. If utility rates and the number of turns remain constant within the period in question, but you notice the bill increasing or decreasing, it is a quick indication that the changes you made may have had a negative or positive impact.

Q: Is tracking energy efficiency as simple as comparing this month’s utility bills to last month’s?

Dixon: It can be, but you will always have to wait for the bill to arrive. However, control technology has really advanced over the last five years. There are features such as advanced leak detection that can help you get an early jump on problems before they impact your utility bills.

Walters: No, comparing month to month isn’t the recommended way to determine a store’s energy efficiency. Usage varies by time of year and other factors. It is better to look at your utility bills over time and compare them to the net income and what percent of revenues the utilities make up.

Q: In your experience, how likely is it that a laundry owner is tracking his or her store’s efficiency?

Walters: Those who have become owners in the last four or five years seem to better understand the need to track a store’s energy efficiency, and how it affects the bottom line. The more efficient the operations, the greater the revenue for the store owner. The significant increase in utility costs has also caused long-time owners to pay attention to the costs.

Dixon: In the April issue of American Coin-Op, survey results indicated that “utilities” topped the list of problems causing business owners the most grief (State of the Industry: Operators Soldier On Amidst Lagging Economy, Increasing Costs). So, based on that feedback, I believe the majority of store owners are cognizant of the impact that utilities have on their bottom line. Yet, many are not tracking their store’s efficiency. I don’t believe it is because they do not want to, but more about how they can utilize available tools to do it effectively. Here is where a good relationship with a local distributor can be priceless.

Q: Why is it even important to track this?

Dixon: There are two reasons: first, there is the obvious impact on a store’s profitability. We can probably expect utility costs to continue to rise. Therefore, tracking a store’s efficiency is a variable that is important to monitor. The second is customers.

Again, in the April issue, survey results indicated that “lack of customers” and “equipment maintenance/repair” were on the top-five list of problems causing business owners the most grief. A great story to differentiate a business may be to announce that it is concerned about natural resources and is going “green.” This may attract customers who are like-minded. In addition, this may require the purchase of newer equipment that will allow the store owner to track and tweak energy consumption. Newer equipment certainly is more energy-efficient and may attract customers to a location. In addition, newer equipment tends to command a higher vend price.

Walters: Tracking energy efficiency is essential for store owners looking to increase revenue and improve their bottom line. By educating themselves on utility costs and what percentage of their current revenue is going toward energy, water, etc., an owner can determine the store’s energy efficiency.

Q: Discuss some of the laundry equipment features that contribute to greater efficiency today. What features have been improved over the years?

Walters: Regarding dryers, a tempered glass door, better seals, and a solid dryer drum help keep warm air in the drum, which forces more heated air through the load to reduce dryer use. Fast-drying axial airflow system, increased insulation and double-paned windows keep heat contained in the dryer basket, enabling clothes to dry more quickly with a lower Btu output.

Looking at washers, a higher spin speed, or G-force, removes water from clothes. The more water extracted during the spin cycle, the less time (and energy) is needed to dry a load of laundry.

Meeting energy- and water-efficiency standards (i.e. Modified Energy Factor (MFE), CEE Tier, Water Factor (WF) and ENERGY STAR® requirements) play a considerable role in washer energy efficiency.

Dixon: Laundry equipment has and will continue to evolve as technology becomes available. Today’s products use less electricity and Btu. Some of these changes have been mandated by government regulation, but most have been developed by manufacturers to offer product differentiation. However, the real excitement is in the control technology.

It is now possible to regulate up to 30 different water levels, the temperature of the water, spin speed and detect leaks. Auditing software makes it possible for the laundry owner to make changes quickly if necessary. You no longer need to wait for the utility bill to arrive to discover that you may have a problem.

Check back Monday for Part 2!

April 25, 2012

CHICAGO — Operators in South enjoy gains approaching double digits

CHICAGO — March sales in three of the four regions were up, according to the most recent AmericanCoinOp.com StatShot unscientific survey. Results for the first quarter were somewhat similar to the March sales results.

Self-service laundry operators in the South reported the largest collective increases—8.6% for March 2012 compared to March 2011 and 9.9% for first-quarter 2012 compared to the same period last year. “Better” was the word that kept popping up in comments offered by operators from that region.

“Our word of mouth continues to grow and we’re more aggressive in building commercial accounts,” says one. But not everyone is experiencing improvement. “Not seeing much change. Still weighing my options on what to do. Utility costs are killing me.”

In the Northeast, March year-to-year sales were up 5.9%, while quarter-to-quarter sales rose 4.4%, yet most of the comments received were somewhat gloomy.

“The market appears to be somewhat worse,” wrote one Northeast operator. “I’m trying to maintain the quality of my operation despite the downward trend.” Another said things were getting worse because of increasing gas prices.

Operators in the Midwest saw March sales rise 2.9% while first-quarter sales were 2% higher than first-quarter 2011. Several respondents said they thought conditions in their region were getting better.

The West was the only region to see sales drop. March 2012 sales fell 1.7% from the prior March, and first-quarter sales were down 2.8% compared to the same three-month period last year. Most operators who commented said their market conditions were unchanged or were getting worse. Again, gas prices were mentioned several times.

The 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 online via a partner website. Self-service laundry operators are encouraged to participate, as a greater number of responses will help to better define industry trends.

April 19, 2012

CHICAGO — Be willing to listen and make changes

CHICAGO — Many times we think we have everything figured out, that all is good because we have owned our laundry businesses for a few years and there is some cash flow. Let me tell you, that’s going be the downfall to being able to successfully sustain and maintain a business lifeline.

I am seeing businesses, in many cases, barely getting by month to month, scratching for cash because they either do nothave a business plan or refuse to listen to advice. They will not adapt like a chameleon and rethink their business plan in an ever-changing marketplace.

Do You Want Pennies or Dollars?

That’s the decision you need to make as you are running in circles trying to manage people, customers and your business. If what you are doing is not really making you and your family real money, then why are you not changing, listening to advisers or paying attention to all the red flags around you? Simply because you have had moderate success is not really being successful.

People go into business because they want to live the American dream, right? If you’re not in the financial position you desire, pick up the phone and seek advice from someone who has already been there and done it, someone with a successful track record in the industry who can help you re-think or create your business plan.

Do You Want to Be a Player or Not? 

In my 22 years of industry experience, I’ve learned that the people who are successful business owners are willing to listen, to make changes, and to build a solid team. They are willing to regularlytake meetings with their employees, be on-site to feel the pulse of what’s really happening, and then take the necessary steps to push their business over the top.

I released my first book more than four years ago and it has since gone international. I share this not to try to impress you but to empower you. I was willing to seek out and follow the advice of others who walked before me.

So ask yourself, do you want to be a player or not?

April 11, 2012

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with others?

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with 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 2011/2012 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores.

ADDING EQUIPMENT IN 2011

Approximately 45% of the respondents purchased at least one piece of equipment (washer, dryer, water heater, vender or changer) in 2011. In 2010, that figure was 47%.

Here’s a breakdown of the 2011 purchases:

• 23.6% of respondents purchased at least one top loader. The average purchase was 17.1 machines (it should be noted that this statistic includes a single operator’s reported purchase of 97 machines; when excluding that operator, the average purchase is 9.1 machines).

• 28.9% of respondents purchased at least one front loader (a breakdown by capacity follows below).

• 12.4% purchased at least one dryer (regular or stacked). The average purchase was 11.3 machines (it should be noted that this statistic includes a single operator’s reported purchase of 97 machines; when excluding that operator, the average purchase is 5.1 machines).

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

• 42.9% purchased at least one machine with a capacity up to 25 pounds. The average purchase was 8.9 machines.

• 48.6% bought at least one machine with a capacity of 25-50 pounds. The average purchase was 4.2 machines.

• 37.1% purchased at least one machine with a capacity of more than 50 pounds. The average purchase was 1.8 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 capacity categories.)

SHOPPING IN 2012

Respondents were asked if they have bought, or plan on buying, any new machinery this year. Approximately 36% intend to add something (washer, dryer, water heater, vender or changer) to their mix, or already have done so. Last year, this figure was 47%.

• 6.6% of respondents have purchased or plan to purchase a new top loader this year. The average purchase is (or will be) 10.4 machines.

• 21.5% have purchased or plan to purchase a new front loader this year. (A breakdown by capacity follows below.)

• 14% plan on buying, or have already bought, a dryer in 2012. The average purchase is (or will be) 7.0 machines.

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

• 34.6% purchased or plan to purchase at least one machine with a capacity up to 25 pounds. The average purchase was 6.0 machines.

• 30.8% bought at least one machine with a capacity of 25-50 pounds. The average purchase was 4.1 machines.

• 23.1% purchased at least one machine with a capacity of more than 50 pounds. The average purchase was 2.5 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 capacity categories.)

WE’VE GOT TROUBLE…

What problems cause you the most grief? Here are the top-five industry problems, according to the survey respondents:

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

Gone from last year’s list is rent, although it did pop up on a number of surveys.

TURNS

The average turns per day for top loaders are 3.0, up slightly from last year (2.9). The average turns per day for a front loader is 3.8, also up from last year (3.4).

UTILITIES

We asked operators about their utilities cost (as a percentage of gross). The responses ranged from 5.6% to 50%. The most popular response is 25%, followed by 20%.

Operators are paying an average of 24.1% for utilities (as a percentage of gross).

2012 BUSINESS FORECAST

Slightly less than half of the respondents (47.5%) expect their 2012 business to be better than it was in 2011. Approximately 42% expect business to be about the same this year, and 10.8% expect their business to not perform as well this year as it did in 2011.

Click here for Part 1.

Click here for Part 2.

April 10, 2012

CHICAGO — Thirty-seven percent have brought firearm to store

CHICAGO — How safe do you consider the neighborhood where your laundry is located? Do you think your customers or employees feel safe in your store while doing laundry or working there?

Nearly three-quarters of respondents to this month’s AmericanCoinOp.com Wire survey describe their neighborhood as “somewhat safe.” Roughly 19% say their neighborhood is “neither safe nor unsafe,” and the remaining 7.4% describe theirs as “extremely safe.”

No one who took the survey described their neighborhood as “somewhat unsafe” or “not safe at all.”

Yet, more than 40% of operators say they, an employee or a customer have been a victim of crime at their laundry. Most of these incidents involved burglaries or robberies. An employee was threatened with a knife in one case, while an attendant was pushed to the ground in another.

A surveillance system is the most popular safety-related feature or practice utilized by respondents (77.8%). Other popular choices are employees/owner watch store (48.1%), alarm system (44.4%), signage (33.3%) and some type of weapon (29.6%).

Thirty-seven percent of operators who responded to the survey have brought a firearm to their laundry. Among those who haven’t, 35.3% said they would consider carrying a firearm while there.

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.

To sign up for the Wire, click the “Subscriptions” button at the top right-hand corner of this page and follow the instructions.

April 9, 2012

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with others?

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with 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 2011/2012 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores.

WASHER PRICES

Respondents were asked about their current washer prices, and if they increased prices this year or planned on doing so by the end of the year.

Eighty percent of respondents offer top loaders. The price range for a top-load wash is $1 to $3.50. The most expensive top-load wash was the same price last year.

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

1. $2 (25.8%)

2. $1.75 (20.6%)

3. $1.50 and $2.25 (14.4% - tie)

5. $2.50 (11.3%)

The biggest change is that $2 jumped from No. 3 last year to No. 1 this year. This moved last year’s No. 1 $1.75 into No. 2. Tying for third were $1.50 and $2.25.

A handful of operators continue to charge $3 or more for a top-load wash. This is the second 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-pound washers: $2.50
  • 20-pound washers: $2.50
  • 25-pound washers: $3

The lowest price in the above grouping is $1.75 (20-pound washer) and the highest price is $5 (also a 20-pound washer). Overall, this year’s most popular small front-loader prices are a bit more expensive than last year’s prices.

The price range for a 30-pound wash is $2 to $5.50. Here are the most popular 30-pound prices, along with the percentages of respondents using them:

1. $3.50 (34.8%)

2. $4 (10.9%)

3. $3, $3.25 and $4.25 (8.7% - tie)

The most popular price for a 35-pound wash is $3.50, followed closely by $4.50. The price range for a 35-pound wash is $3.25 to $5.25.

The most popular price for a 40-pound wash is $4.50, but $4 and $5 aren’t far behind. The most popular 50-pound wash price is $5.50, followed closely by $5.

The most popular price for a 60-pound wash is $6. The price range for an 80-pound wash is $6.25 to $13, with $8 being the most popular price.

The most popular prices for the largest front loaders (125 pounds) are $14.99 to $15.50.

Because the group of operators who respond to our survey is different each year, prices tend to vary. But the survey consistently has shown that operators offer a wide variety of front loaders (prices for 20 different capacities were logged this year) with a broad price range.

DRYER PRICES

Operators have historically tended to shy away from raising dryer prices, choosing instead to focus on washer price hikes. The average store owner continues to operate under the belief that customers will be upset by tinkered-with dryer prices but less apt to complain about washer price hikes.

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

1. 25 cents/6 minutes (23.1%)

2. 25 cents/8 minutes (18.5%)

3. 25 cents/5 minutes (16.7%)

4. 25 cents/7 minutes (13.9%)

5. 25 cents/10 minutes (8.3%)

The No. 1 price remains the same as last year, but fewer operators are using it. Seven minutes of drying time dropped from second last year to fourth this year, and the 25-for-8 and 25-for-5 prices each moved up a spot from last year. The 25-for-10 price—once an industry staple—remained fifth at practically the same percentage as last year.

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

A handful of respondents reported they offer free dry in their stores.

DROP-OFF SERVICE PRICING

Drop-off-service pricing ranges from 75 cents to $2 per pound. Here are the most popular drop-off-service prices (per pound), followed by the percentage of respondents using them:

1. $1 (34.9%)

2. $1.20 and $1.25 (10.8% - tie)

4. 90 cents (6%)

5. $1.10 (4.8%)

The drop-off-service prices remain similar to 2011 prices, and there are a greater variety of prices charged. There were 21 different prices charged per pound amid the operators who took our survey.

Slightly more than two-thirds of the respondents offer drop-off service, which is down from last year’s survey.

PRICE HIKES?

We asked operators if they have already raised washer and/or dryer prices in 2012 or intend to do so before year’s end.

Approximately 50% say they have raised washer prices this year or intend to raise prices by the end of the year. Roughly 31% of respondents say they are not planning to raise washer prices this year, and 19% are undecided if they are going to hike prices in 2012.

Regarding dryer prices, 17.8% have raised dryer prices this year or intend to do so later in the year. Roughly 64% don’t plan to hike dryer prices this year, and 17.8% are undecided about raising their prices.

In 2011, only 34% said they raised washer prices or intended to do so by the end of that year, and 13% said they raised dryer prices or intended to do so before that year’s end.

Check back Wednesday for Part 3: Equipment Purchasing Trends, Plus Common Managerial Headaches

April 5, 2012

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with others?

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with 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 2011/2012 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

In instances where respondents were asked about 2011 business results, they were given the opportunity to state that their results were up, down or unchanged. This is a slight departure from previous surveys that 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.

2011 BUSINESS VS. 2010 BUSINESS

In 2011, nearly 45% of respondents saw their overall coin laundry business increase from 2010.

More specifically, 44.8% of operators reported an increase in business (gross dollar volume) in 2011 compared to 2010. In last year’s survey, 42% reported an increase in business, and two years ago, 40.2% reported a bump in business.

The average 2011 business increase is 11.5%, up from 10.8% in 2010. Other past increases were 7.9% (2009), 14% (2008) and 12.2% (2007).

Here’s a closer look at the 2011 business increases (these figures relate to those reporting an increase, not all the respondents):

  • Operators with a business increase of less than 10%: 40.4%
  • Operators with a business increase of 10-14%: 38.5%
  • Operators with a business increase of 15% or greater: 21.2%

The largest single increase in 2011 was reported to be 50%.

Approximately 35% of respondents saw their business decrease (in gross dollar volume) last year. In our survey of 2010 business, 58% saw a drop in business. The percentage was 59.8% in 2009.

The average 2011 business decrease is 10.2%, down a bit from last year’s figure (11.2%). Previous averages were 13.7% in 2009, 14.3% in 2008 and 13.2% in 2007.

Were the losses consistent last year or did they vary? Here’s a closer look at the 2011 business decreases:

  • Operators experiencing a business reduction of less than 10%: 56.1%
  • Operators experiencing a business reduction of 10 to 14 %: 17.1%
  • Operators experiencing a business reduction of 15 % or greater: 26.8%

The largest reported decrease in 2011 was 50%.

Approximately 20% of operators reported their 2011 business was unchanged compared to their 2010 results.

Overall, these results continue to reflect year-to-year improvement on average. The number of operators reporting an increase in business was up slightly from last year, as was the average business increase.

The average business decrease (10.2%) was a percentage point lower than the prior year. In addition, the number of operators suffering a large business reduction (15% or greater) shrunk from 31.7% in 2010 to 26.8% in 2011.

DROP-OFF-SERVICE BUSINESS

In a culture built on saving time and intent on finding ways to free up that precious commodity, drop-off service would look to be a popular choice for self-service laundry customers. But do the numbers bear that out?

Did drop-off service improve in 2011 or do customers still consider it a bit of a luxury?

Approximately 32% of respondents reported drop-off-service business (gross dollar volume) increased in 2011. For 2010, approximately 47% reported business increases.

The average drop-off-service business increase is 17.3%, four points higher than 2010’s increase of 13.3%. It should be noted that a handful of respondents reported an increase of more than 20%.

Roughly 24% saw a decrease in drop-off-service business. That is much lower than in 2010 (53%), but that could be attributed at least in part to survey-takers’ ability to list their drop-off service business as being unchanged.

The average decrease is 18.1%, down a bit from 2010’s figure (18.8%). In 2009, the average drop-off-service decrease was 24.2%.

Nearly 45% of respondents said their drop-off service business was unchanged from 2010.

Two-thirds of respondents offer some type of drycleaning service. Only 17.5% reported a business increase. The average business increase is 10.4%. The average business decrease is 15.1%.

VENDING RESULTS

Roughly 35% of the respondents had an increase in vending sales in 2011, slightly lower than 2010’s reported one-third. Approximately 31% saw their vending sales decrease in 2011, and 34.2% saw vending sales remain unchanged.

The average vending gain is 11.2%, up a bit from 2010’s figure (9.2%).

The average decrease in vending business is 11.0%, compared to 12% in 2010.

Check back on Monday for Part 2: Washer, Dryer and Drop-Off Service Pricing

March 28, 2012

CHICAGO — Drop-off service sales also rise in year-to-year comparison

CHICAGO — Self-service laundry sales were up in all four regions for a second straight month in February, according to the most recent AmericanCoinOp.com StatShot unscientific survey.

February sales in the South were up 6.8% (compared to February 2011 sales). Sixty percent of the respondents reported an increase in sales, while 20% reported a decrease. Sales were unchanged for 20% of respondents.

Sales in the Midwest rose 5.6% compared to February 2011 sales. Roughly 64% reported year-to-year sales increases, while 14.3% reported decreases. Sales were unchanged for 21.4% of respondents.

“My customer count is up 15% over last February,” a Midwest operator reported.

In the West, February sales were up 3.6%. Fifty-five percent of respondents reported a bump. “Coin sales very spotty,” reports an operator there. “Have added credit card readers to one-third of the Laundromat, which resulted in better results.”

February sales were up 2.4% in the Northeast, where 57% of respondents reported increases.

Despite the rise in sales overall, many operators offered gloomy comments. Some said their local markets are suffering because of the economy.

  • West — “Not good. Nearby businesses are dropping their rate to 75 cents per top loader!”
  • Midwest — “Maybe fair at best. The national media keeps reporting the economy is in the upswing, but I do not see or believe it.”
  • West — “The economic slowdown did not impact our rural area as quickly as most of the nation but is affecting us now. I had the lowest income in 14 years during November-January.”
  • Northeast — “Too much competition, but I am the best.”

Respondents were also asked about drop-off-service sales for February (compared to February 2011). Every region reported sales were up, but there was quite a bit of difference in two of the regions compared to the others.

In the Midwest, where 71.4% of respondents have offered drop-off service for two years or more, sales were up 7.1%. Twenty-one percent don’t offer drop-off service, and 7.1% didn’t offer drop-off service last year but they do now.

Southern operators saw their drop-off-service sales rise 6% in February from the previous year. Eighty percent of the respondents have offered this extra-profit service for at least two years.

Sales increases were much less in the Northeast (0.5%) and the West (0.4%). Fifty percent of Northeast operators have offered drop-off service for at least two years, while 58.3% of West operators have offered the service during that time.

“Coin laundry flat, but oil drilling clothes for drop-off is great income,” says a Midwest operator.

“We ran a great promo in February that really boosted drop-off,” adds another. “Drop-off is thegrowth segment for our business.”

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 online via a partner website, on a regular basis. Self-service laundry operators are encouraged to participate, as a greater number of responses will help to better define industry trends.

March 13, 2012

CHICAGO — Next major change for industry is predicted to be

CHICAGO — The self-service laundry industry has some work to do on its image, based on the results of this month’s AmericanCoinOp.com Wire survey.

Nearly half of the respondents to the unscientific survey—47.4%—don’t believe the self-service laundry industry presents a good image. Roughly 26% do believe the industry presents a good image, and the remaining 26.3% are unsure.

Sprucing up of stores by their operators would be the best thing to happen to the industry in 2012, according to 50% of respondents. Another 27.8% believe having fewer stores would be best. Roughly 17% think implementing industrywide price hikes would be the best thing that could happen.

As far as naming the next major change in this industry, 47.4% of respondents believe there will be no major changes in the next several years. Technology will play a greater role in their businesses, according to 31.6% of respondents.

Approximately 26% say that smaller laundries will gradually die out, while 15.8% believe that laundries will offer a broader array of services. None of the respondents see the emergence of a strong franchise operation.

Respondents also had the opportunity to comment on what they expect from their business in 2012. Several comments related to increased growth (at least two operators hope for 10% increases) while other operators just hope they can weather the economic storm and withstand what they believe will be a tough year. One operator wants to improve his/her customer service.

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

Subscribers to Wire e-mails—distributed twice weekly—are invited to take a brief 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.

To sign up for the Wire, click the “Subscriptions” button at the top right-hand corner of this page and follow the instructions.


 

February 29, 2012

CHICAGO — While overall sales results were positive, respondents’ comments were more varied

CHICAGO — Every region of the country reported small sales increases in January, fresh off a year that saw coin laundry sales rise more significantly compared to the prior year, according to results of the latest AmericanCoinOp.com StatShot survey.

Sales in January were modestly higher compared to January 2011 figures. The Midwest enjoyed the largest upswing at 3.7%, followed by the Northeast at 1%, the South at 0.9% and the West at 0.3%.

The 2011 numbers were much glossier when compared to 2010 results. Here, the South led the pack with a 9.6% sales increase, followed closely by the Northeast at 7.6%. Sales rose 6.5% in the West compared to 2010, and the Midwest saw a 2% increase.

Nationally, self-service laundry operators who responded to the unscientific survey averaged a 1.4% sales increase in January compared to January 2011 and a 6.5% sales increase in calendar year 2011 from 2010.

While the overall sales results were positive, respondents’ anonymous comments about their local market conditions were more varied.

Some of the good:

  • West: “Business has noticeably picked up. I also see a lot of new faces. I did add cable TV, but could that have made that big a difference?”
  • Midwest: “Slow just like everywhere else, but laundries are doing fine.”
  • Northeast: “I think people that do not regularly use the (Laundromat) are using them more for large items. Also, there are more people living in apartments in our area.”
  • South: “Houston has replaced all jobs lost since the beginning of the great recession and the labor market here continues to improve every month!”

Some of the bad:

  • South: “Slow.”
  • West: “Soft at best. Local mines are running but over half the population depends on a government check.”
  • Northeast: “Loss of customers.”
  • Midwest: “Stagnant and iffy.”

The 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 online via a partner website. Self-service laundry operators are encouraged to participate, as a greater number of responses will help to better define industry trends.

February 22, 2012

CHICAGO — Phil Arvin and his two partners opened their first Maytag-equipped coin laundry in Memphis, Tenn., last March. The 5,000-square-foot attended store is equipped with new energy-efficient 60- and 80-pound washers that are much larger than those in competing stores and thus could command a higher vend price, Arvin says.

But the group followed the suggestions of distributor Justin Laundry and established prices that are comparable to the laundries nearby, Arvin says. “Even though we’re offering a much higher quality product, we didn’t want to be perceived as the higher priced place.”

This is just one example of how the market can influence a laundry’s pricing strategy. But other factors are at work, too, and there are some basic premises that the self-service laundry operator should keep in mind when establishing or changing vend prices.

Your Competitor Has Undercut You – Now What?

And whether it happens intentionally or not, there is likely to come a time when a competitor will undercut you in price. Then you have a decision to make.

“If an owner is convinced that for the type of wash and dry they’re offering, the atmosphere, the other services, that they’re charging fairly, they should probably make the decision to give it some time and see if customers recognize that value and come back,” says Kevin Hietpas, vice president of sales and marketing for Dexter. He suggests giving it a month before acting.

Like any battle, a price war requires a strategy, Gauthier says. Neutrality is one strategy that allows the store owner to focus on their strengths while letting the competitor take the financial hit. But, neutrality isn’t always an option.

“Strategies are best developed after understanding a competitor’s strengths and weaknesses,” says Gary Gauthier, national sales manager, vended laundries, Milnor Laundry Systems. “For instance: Is their equipment mix weak? Maybe offering—and promoting—the right size machines for your market is the key. In a margin-based industry like vended laundries, price decreases should only be considered as a last—and short-term—step.”

“A store owner needs to provide his customers with assurance that they are getting the best service, equipment and experience money can buy,” says Kent Walters, national sales manager for Maytag/Whirlpool Commercial Laundry. “If a competitor in the area is charging less for a similar service, the store owner needs to tout the reasons why his/her store is worth spending the extra money.”

In this type of situation, the opinion of a neutral third party is invaluable, he says.

“Ask someone to visit your store, talk to the customers and provide feedback. Why would a customer pay more for your coin store? What are the perks of your store vs. the competition? This information can help an owner accurately illustrate the experience customers receive at his/her store.”

Click here for Part 1.
Click here for Part 2.

February 21, 2012

CHICAGO — Phil Arvin and his two partners opened their first Maytag-equipped coin laundry in Memphis, Tenn., last March. The 5,000-square-foot attended store is equipped with new energy-efficient 60- and 80-pound washers that are much larger than those in competing stores and thus could command a higher vend price, Arvin says.

But the group followed the suggestions of distributor Justin Laundry and established prices that are comparable to the laundries nearby, Arvin says. “Even though we’re offering a much higher quality product, we didn’t want to be perceived as the higher priced place.”

This is just one example of how the market can influence a laundry’s pricing strategy. But other factors are at work, too, and there are some basic premises that the self-service laundry operator should keep in mind when establishing or changing vend prices.

Should You Announce a Price Change?

How should a laundry owner approach the topic of pricing with his customers? Should he alert them prior to implementing a price change?

Kevin Hietpas, vice president of sales and marketing for Dexter, says he’s seen many owners have good luck increasing prices when they are up front with their customers. For example, if you’re planning to raise prices due to higher utility rates being charged by your municipality, post a couple of articles from the local newspaper about that topic. “Customers, as much as they may not like it, understand that kind of stuff,” he says.

“As consumers, we routinely respond to price increases with little or no advance notice from the stores or makers of the products we buy,” says Gary Gauthier, national sales manager, vended laundries, Milnor Laundry Systems. “Consumers in vended laundries are no different. Store owners and their staffs should be ready to carefully respond to customer questions about the higher costs. But the vast majority of the store owners that I’ve spoken to hear very little feedback when a modest price increase is enacted.”

He recommends raising prices on different types of machines at different times, instead of implementing a sweeping, storewide increase all at once. “This puts the owner in the position of continually assessing vend levels while customers aren’t shocked when costs go up.”

“The most important thing to address regarding a change in price is why,” says Kent Walters, national sales manager for Maytag/Whirlpool Commercial Laundry. “Customers need to understand why prices are fluctuating. Typically, price increases can be attributed to the cost of utilities. Store owners have to stay ahead of the cost of doing business, especially in the laundry industry that depends heavily on the use of utilities.”

“The owner ends up explaining it one way or another,” Hietpas says. “That’s why I think it’s better to address it on the front end with as many facts as possible rather than feel like they’re playing catch up by explaining it on the back end.”

Shifting Prices Too Frequently?

Vending technology has enabled owners to change prices on equipment easily—during slow hours or days, for example—but care should be taken to not change prices too often. This can turn off customers, Walters says.

“Yes, altering vend prices often is not a good practice for owners looking to be successful and grow their customer base,” he says. “If customers are unsure what price to expect on a regular basis, they will look for a store that’s more consistent.”

Consistent pricing makes things easier on your customers, Hietpas says.

“A lot of customers are very good at doing the basic math in comparing between (machine) sizes,” he says. “If (one machine is) twice the size of a machine, it should be roughly twice the vend price. A lot of owners like to have rational multiples between machines to make it easier for customers to make decisions about which machine they might want to use.”

Customers are more sensitive to how long it took and how much it cost to dry than they are to small changes in wash prices, Hietpas says. “It’s the last piece they interact with, so it just seems to stick in their memory a little more.”

Tomorrow: Your competitor has undercut you – now what?
Click here for Part 1.

February 16, 2012

CHICAGO — Phil Arvin and his two partners opened their first Maytag-equipped coin laundry in Memphis, Tenn., last March. The 5,000-square-foot attended store is equipped with new energy-efficient 60- and 80-pound washers that are much larger than those in competing stores and thus could command a higher vend price, Arvin says.

But the group followed the suggestions of distributor Justin Laundry and established prices that are comparable to the laundries nearby, Arvin says. “Even though we’re offering a much higher quality product, we didn’t want to be perceived as the higher priced place.”

This is just one example of how the market can influence a laundry’s pricing strategy. But other factors are at work, too, and there are some basic premises that the self-service laundry operator should keep in mind when establishing or changing vend prices.

Criteria for Setting Price?

Upon what criteria should a laundry owner base his or her wash and dry vend prices?

“It really comes down to two issues,” says Kevin Hietpas, vice president of sales and marketing for Dexter. “No. 1 is what’s happening to his costs. How have costs impacted the viability and profitability of his business? Owners should have a good sense of where their business is tracking from a performance standpoint.

“No. 2 is where is he competitively. None of us exist in a vacuum, so you want to understand, ‘I might want to get to a certain point, but as of right now the market won’t let me go there all at once.’ That’s a secondary concern, because I think if the owner is providing good value, it’ll be reflected in his costs. He’s not going overboard with what he’s charging, nor is he under pricing for his service.”

“We have a lot of ‘rules of thumb’ in this industry,” says Gary Gauthier, national sales manager, vended laundries, Milnor Laundry Systems. “When it comes to pricing, it’s typically recommended that gross monthly receipts from washer/dryer revenues should be at least four times the monthly rent and at least five times the monthly utility expenses.”

A store owner needs to be aware of and factor in the competition’s prices when determining his or her own washer and dryer pricing, says Kent Walters, national sales manager for Maytag/Whirlpool Commercial Laundry.

“The owner’s goal should be to produce the best experience for the customer from ambiance to equipment and services—and the costs associated with washing and drying play a large part in this equation,” Walters says.

How Do Your Front-Load Prices Compare?

American Coin-Op surveyed its e-mail subscribers about their November 2011 front-load vend prices — their lowest and highest, and whether the prices had changed since the previous November. Those polled were not asked to identify machine capacities.

Results from the anonymous, unscientific StatShot survey show the lowest and highest prices varied quite a bit among the four regions.

In the West, customers could get a front-load wash for as little as $1.50. The lowest-priced front-load washes ranged from $1.50 to $3.75. Nearly 88% of these prices were unchanged from November 2010. The remaining 12.5% of respondents had raised their lowest-price wash during the 12 months.

The price range for the most expensive front-load washes in the Western region was $2.75 to $7.89. Every respondent reported these prices were unchanged from a year earlier.

Low-end front-load prices in the South ranged from $1.75 to $4.25. Approximately 62% of respondents had kept the same low price since November 2010, and 31.6% had raised the price. Just 5.3% had lowered the price.

Southern customers faced the widest price range of all regions — $2 to $17.50. Nearly 58% of operators reported having raised their high-end price since November 2010, and the remainder were unchanged.

In the Northeast, the most inexpensive front-load prices were $1.50 to $5.50. Just 6.7% of operators had raised their prices in the previous 12 months, while the remainder had kept the prices unchanged.

When it came to the most expensive wash, Northeastern customers were paying $2.25 to $8 in November. Approximately 21% of respondents had raised this price compared to November 2010, while the remainder had stood pat.

The most inexpensive front-load prices in the Midwest ranged from $1 to $4.50. Just 5.9% of operators had raised their prices since November 2010, while another 5.9% had lowered them. The remainder had kept prices unchanged.

On the high side of front-load prices, Midwestern customers faced a range of $2.50 to $8.79 in November. Some 12% of respondents had increased prices, with the remainder keeping the status quo.

Tuesday: Should you announce a price change?

February 15, 2012

CHICAGO — It brings me great pain to witness landlords choking their tenants with escalating rents and offering no relief during these tough times.

I have witnessed more laundries close their doors in the past two years than I have in the past 22 years served in the coin laundry industry. Owners are faced with the potential of losing their businesses and, in many cases, their life savings because business is down and they cannot afford to pay their rent.

If you’re one of those owners, take this message as a call to action. Renegotiate your rent if you plan on surviving in this industry. Consult with your attorneys and get the help you need before it’s too late.

I’ve spoken with some landlords who are making rent concessions to avoid seeing their tenants close their doors and produce no rent at all. This is a good move—a win/win for everyone!

Of course, there are those landlords who will tell you “the lease is the lease.” Again, I suggest you get legal advice to provide the direction you need to protect you and your family.

Now is the time to buckle down and look for ways to cut your costs. Here are some suggestions for trimming the fat:

  • Lower the heat in the laundry during the winter months.
  • Make sure you are not wasting resources (water, gas or electricity). Working with an energy broker could save you a large percentage of what you might be paying.
  • Consider subletting space in your laundry to create more revenue.
  • Consider working additional hours to lower employee payroll.
  • Make sure you have energy-efficient washers, dryers and water heaters.
  • Consider acquiring refurbished or rebuilt machines when making replacement purchases.

Don't be one of the owners who will close their doors in 2012. Now is the time to take action to protect your Laundromat businesses.

February 14, 2012

CHICAGO — When a new coin laundry opens in the area, more than one-third of operators (35.6%) fear that the new store will be more attractive or larger than their own, according to the results of this month’s AmericanCoinOp.com Wire survey. Roughly 29% of operators surveyed say they don’t fear competition.

A new store offering cheaper vend prices is the worst fear for 13.3% of operators. Roughly 11% fear a store with a better equipment mix, 6.7% fear one that offers higher-quality equipment, and 4.4% fear a store that is cleaner than theirs. No one polled fears a store with all of its machines in working order.

When going head to head with a competitor, 31.8% of laundry owners consider the cleanliness of their store to be their greatest strength. Equal shares of 15.9% lean on 1) reasonable prices and 2) having every machine up and running. Another 11.4% rely on the size and/or layout of their store.

Smaller shares look to having the ideal machine mix (6.8%) or plenty of customer amenities (4.5%). None said “good marketing” is their greatest strength. Among the 13.6% who selected “other,” they named things such as customer service or having an attended store. Still other respondents said every option was their greatest strength.

Roughly 53% admitted they would take a “mild hit” if a “good” laundry opened in their area this week, with another 22.2% saying they would suffer a “major hit.” Approximately 13% would lose little, if any, business, and another 2.2% would lose no business. The remaining 8.9% was unsure.

Approximately 61% of respondents believe there are too many self-service laundries in their respective areas. Roughly 34% don’t believe there are too many stores, and 4.5% are unsure.

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

Subscribers to Wire e-mails—distributed twice weekly—are invited to take a brief 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.

To sign up for the Wire, click the “Subscriptions” button at the top right-hand corner of this page and follow the instructions.

January 30, 2012

CHICAGO — Al Lautenslager is a Certified Guerrilla Marketing Coach who believes the No. 1 reason that customers leave a business is because the business in question doesn’t pay them enough attention.

Making efforts to reach customers and prospects was at the heart of his message at a Drycleaning & Laundry Institute-sponsored educational session during the last Clean Show.

Based on Lautenslager’s theory, you’re not just a self-service laundry owner, store manager or store attendant. “You’re all marketers of the business you’re associated with,” he says.

And so it is that he offered a series of suggestions from his book, what he called “a step-by-step blueprint for how to put one foot in front of the other, from a marketing standpoint.”

Develop a Guerrilla Marketing Mindset

“Every single day, whether I’m traveling on the road or working in my office, I think about this question: How am I building the awareness of my prospects and clients through the marketing that I’m doing?”

Before he goes about the work of each day, Lautenslager spends time doing three to five marketing-related things. It might be handwriting a thank-you note to a customer, brainstorming a tagline, or coming up with an idea for a new direct-mail campaign.

“You do that for three weeks and it becomes a habit, and a marketing habit is a great mindset to have in your business.”

Define Purpose for Marketing and Your Goals

“What specific activity do you want customers to take as a result of your marketing? Do you want them to call you on the telephone, visit your website, come into your place of business, enter a contest?”

Marketers define these as “calls to action.”

“Every single brochure, website, sign, sales pitch, on-hold message ought to have a call of action associated with it,” Lautenslager says. “Prospects need to be told what to do. Do not leave it to chance that they’ll know what to do as a result of your marketing.”

Identify Your Target Market

“Targeting is pretty much what you think it is. Who buys what? Where do they buy it? Why do they buy it?”

Whatever specifications you put around that target market, there exists a list for those specifications, and your list is your market, Lautenslager says. “Maybe you’re targeting a certain income level, a certain family size and a certain subdivision. There’s a list that exists for those specifications.”

Do a web search for “list broker” in your city to find companies that provide that kind of service.

Your best prospect to target is a current customer, and second best is a previous customer, Lautenslager advises.

Position Your Business

This refers to creating a “position” for your business in a customer’s mind. According to Lautenslager, Positioning authors Al Ries and Jack Trout say, “Positioning is not something you do with a product or service, it’s what you do in the mind of a prospect.”

“We want people to think of us if and when they need our products or service,” Lautenslager says.

In the Chicago area where Lautenslager lives, the freezing and breaking of water pipes during winter, especially in the middle of the night, is a real possibility. So how does Expert Plumbing position itself? By promoting the fact that “We never close.”

And don’t be afraid to promote your expertise in providing laundry and/or dry cleaning services.

“Everybody in this room is an expert in something. It’s OK to say that. Customers like to buy from experts. They trust experts. They have confidence in experts’ work. Go ahead and say that.”

Point Out Your Competitive Advantages and Benefits

Customers and prospects don’t care about you, Lautenslager says, they care about themselves and how your service will benefit them.

“So, you’d better be talking to them,” he advises. “That mean you’ve got to talk about benefits, not features. Write this down: features tell, benefits sell.”

They’re looking for benefits like convenience, time savings, organization, ease of access, immediacy, reduction of resources required, and reliability.

“At some point in time, make a list of the benefits you offer your customers and prospects. And then I suggest that you make a list of the benefits that your competition offers. If those two lists are identical, neither one of you have a competitive advantage.”

And if you don’t know what your benefits are, ask your customers. They’ll tell you.

Do Some Business Networking

“Everybody in this room, believe it or not, knows between 150 and 250 people each,” Lautenslager says.

On his website is a free report explaining how to instantly add 50 people to your network. These people include neighbors, your banker, your favorite bartender, your travel agent, etc. Lautenslager’s favorite on the list: the parents of your child’s sports teammates.

Plan for the networking events you will attend and set some goals (meet X number of people, receive X number of business cards, etc.).

“Arrive early and leave late,” Lautenslager says. “Some of the best networking happens before the meeting and after the event.”

Take Advantage of PR Opportunities

Editors love news but hate promotion, Lautenslager says, so connect your business with current events to increase relevancy.

“I suggest you do a press release every other month,” he says. “Establishing a relationship with an editor is just like establishing a relationship with a customer.

“Anytime you have a new product or service, win an award, have a new employee, new strategy, new location, editors deem that as news.”

In the end, whatever type of marketing you choose to pursue, launch what is comfortable for you and your business.

“When I say comfortable, I don’t mean just comfortable financially, I mean comfortable emotionally. You can’t do everything that I’ve talked about today. I can’t do everything I’ve talked about today. But you can pick one, two or three things you’re comfortable with and implement them.”

Click here for Part 1.

January 26, 2012

CHICAGO — In 2001, when Boeing was looking to relocate its headquarters from Seattle, Al Lautenslager’s suburban Chicago printing company offered to print free business cards for Boeing’s employees if the aircraft maker would set up shop in the Windy City.

If Boeing chose to move to Chicago, it would need new stationery, brochures, etc., all services for which the huge corporation would presumably turn to a local printer. Lautenslager issued a press release announcing the unorthodox offer.

“We wanted to get Boeing’s attention,” he says. “We wanted to market to Boeing. We wanted to create awareness, we wanted to get our foot in the door, and we wanted to beat our competition.”

A suburban newspaper printed a brief mention, while the Chicago Sun-Times’ much broader yet critical coverage characterized the offer as a bribe.

“I’m going to tell you that any PR is good PR, unless it’s an obituary,” Lautenslager says.

Four months later, Boeing decided to relocate to Chicago. Lautenslager issued a second press release: “Was it the $78 million in state tax incentives or the free business cards that got Boeing to come to Chicago?”

Nine newspapers, two radio stations and one TV station aired stories about it. One newspaper featured it on the front page.

“We generated tens of thousands of dollars of PR, of marketing and awareness, just by using a little bit of time, a little bit of energy, and a whole lot of imagination with that second press release headline.”

Lautenslager is a Certified Guerrilla Marketing Coach who believes the No. 1 reason that customers leave a business is because the business in question doesn’t pay them enough attention.

Making efforts to reach customers and prospects was at the heart of his message at a Drycleaning & Laundry Institute-sponsored educational session during the last Clean Show.

Everyone a Marketer

So what is guerrilla marketing? Jay Conrad Levinson coined the term in his 1983 book, Guerrilla Marketing, when discussing unconventional marketing methods that rely on effort and imagination rather than spending a large budget. Lautenslager co-wrote Guerrilla Marketing in 30 Days with Levinson in the 1980s, and a second edition was published in 2009.

“How do I know they’re proven?” Lautenslager says of the marketing strategy ideas he was about to present. “I proved a lot of them. I was a small-business owner for 15 years. I had to market. I had to create the awareness. I had to get new customers to stay in business.”

Based on Lautenslager’s theory, you’re not just a self-service laundry owner, store manager or store attendant. “You’re all marketers of the business you’re associated with,” he says.

And so it is that he offered a series of suggestions from his book, what he called “a step-by-step blueprint for how to put one foot in front of the other, from a marketing standpoint.”

Monday: The blueprint...

January 25, 2012

CHICAGO — Self-service laundry sales rose in the West, Midwest and Northeast in December, while Southern operators saw sales drop for a second straight month, according to the most recent AmericanCoinOp.com unscientific StatShot survey.

The Northeast saw the biggest month-over-month sales increase (compared to December 2010) of 8.4%. The Midwest and West each posted 4.4% increases. The South was down 6.5%, after having been down 0.7% the previous month.

One Western operator raised prices 10%, with turns per day unchanged. Wash-dry-fold sales were up 26%. “I have only laundries in county of 30,000. I think WDF (is) up because of subcontractors here for restart of copper mines.”

“Construction in the area has brought in out-of-state workers with drop-off laundry” amid an improving economy, a Midwestern operator reports.

Respondents were also asked about their 2011 fourth-quarter sales (compared to 2010 fourth-quarter sales).

Fourth-quarter sales rose 7.4% in the Northeast, 4.5% in the West, and 3.7% in the Midwest. Southern operators experienced a 7.1% decrease in the final quarter of 2011.

“(We) used coupons more this year, and less snow meant less days closed to weather,” says one Midwestern operator who also reported increased theft of laundry carts, presumably for metal scrap value.

“My sales were up, I believe, because first we expanded and added another 15 washers and 20 dryers, and we got a better mechanic to fix our machines so we have way less ‘out of orders’ than before,” reports a Western operator.

A Southern operator reported having a record quarter for wash-dry-fold business, up more than 30% from the previous best quarter.

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 online via a partner website, on a regular basis. Self-service laundry operators are encouraged to participate, as a greater number of responses will help to better define industry trends.

January 10, 2012

CHICAGO — Nearly half of the laundry operators who responded to January’s AmericanCoinOp.com Wire survey say they raised their washer or dryer prices in 2011.

Roughly 46% raised washer or dryer prices (raised vend price or reduced the cycle time) last year, while 53.6% did not.

Based on what laundries in their area (including their own) are charging, 42% of respondents believe that vend prices are too low. Approximately 28% believe that operators are charging a fair price.

Some 17% aren’t sure if the pricing is too high or low, and 10.1% say pricing in their area varies too much to make a general statement about it. Just 2.9% say that vend prices are too high.

How important is pricing to customers? Nearly 48% of respondents say it’s among the two or three most important factors, while 37.7% believe customers think it’s no more important than things such as cleanliness, comfort and equipment mix.

About 9% believe it’s only really important when competitors are low-balling prices, and 2.9% say that pricing is the No. 1 factor to a customer when choosing a laundry. The remaining 2.9% aren’t sure of the importance of pricing to customers.

When the operators who were polled raise vend prices in their stores, 74.6% say they explain the move to their customers.

Thirty-two percent of respondents anticipate having to increase vend prices if utility bills are what they expect this winter, while 39.1% say they don’t. The remaining 29% are unsure.

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

Subscribers to Wire e-mails—distributed twice weekly—are invited to take a brief 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.

To sign up for the Wire, click the “Subscriptions” button at the top right-hand corner of this page and follow the instructions.

January 4, 2012

CHICAGO — The cost of iron for new products is going up dramatically. Meanwhile, increasing utilities cost and escalating rent are eating up laundry profits.

I have been researching the best way for you to maintain your existence in this industry. When purchasing machines, you must seriously look at refurbished washers and dryers as an option.

The cost to purchase refurbished equipment is well under 50% versus buying new. The average “life cycle” for most owners to stay in this industry is three to five years. What’s the point of digging yourself into a hole you may never be able to dig yourself out of?

Now, the newer machines are more energy-efficient and offer warranties, which is important. But if the refurbished or rebuilt machines are purchased from a reputable company that stands behind the quality of its work, you will come out ahead, bottom line.

Recently, I did some consulting for an investor who decided to go 100% refurbished for his remodel. He saved about 58% of the total cost of going new, or more than $165,000.

Now, if you do the math and calculate what your monthly payment would be on the additional expense of buying new equipment, you are looking at eating right into your bank account big time.

Many laundries are closing across the United States, mainly due to high rents that need to be adjusted. If you’re just getting into the game, you’d better plan on doing some good negotiating to get your rent reduced to a level that will help keep your business going.

If you’re looking to stay in the game long term, and this is going to be your new life, then I recommend that you look at new products, especially if you’re planning on building a new Laundromat.

December 28, 2011

CHICAGO — Self-service laundry sales were a mixed bag in November, with two regions reporting increases and the other two lamenting drops, according to the most recent AmericanCoinOp.com unscientific StatShot survey.

November sales in the Northeast were up 5.3%. Fifty-three percent of the operators experienced an increase in sales, most of them double-digit increases.

Sales rose 1.4% in the West, where about half of the operators had increases.

In the South, sales fell 0.7%. Operators reported having been impacted by increasing utility costs, a recently passed immigration law, layoffs among NASA clientele, and bans on the local fishing trade.

The Midwest saw the country’s biggest sales decline, 2.2%, for November. “Still very flat here in Michigan. People put more in each load and come in less often,” says one operator.

“The market is pretty bad,” adds another. “Most self serves are starting to move into the commercial sector to stay afloat.”

Respondents were also asked about November 2011 front-loader prices — their lowest prices, highest prices, and whether the prices had changed since the previous November. The lowest and highest prices varied quite a bit.

In the West, customers can get a front-load wash for as little as $1.50. The lowest-priced front-load washes range from $1.50 to $3.75. Nearly 88% of these prices were unchanged from November 2010. The remaining 12.5% of respondents have raised their lowest-price wash in the last year.

The price range for the most expensive front-load washes in the Western region is $2.75 to $7.89. Every respondent reported these prices were unchanged from a year earlier.

Low-end front-load prices in the South range from $1.75 to $4.25. Approximately 62% of respondents have kept the same low price since November 2010, and 31.6% have raised the price. Just 5.3% have lowered the price.

Southern customers face the widest price range of all regions — $2 to $17.50. Nearly 58% of operators reported having raised their high-end price since November 2010, and the remainder were unchanged.

In the Northeast, the most inexpensive front-load prices are $1.50 to $5.50. Just 6.7% of operators have raised their prices in the last year, while the remainder has kept the prices unchanged.

When it comes to the most expensive wash, Northeastern customers are paying $2.25 to $8. Approximately 21% have raised this price compared to November 2010, while the remainder has stood pat.

The most inexpensive front-load prices in the Midwest range from $1 to $4.50. Just 5.9% of operators have raised their prices in the last year, while another 5.9% have lowered them. The remainder has kept prices unchanged.

When it comes to the high side of front-load prices, Midwestern customers face a range of $2.50 to $8.79. Some 12% of respondents have increased prices, with the remainder keeping the status quo.

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 online via a partner website, on a regular basis. Self-service laundry operators are encouraged to participate, as a greater number of responses will help to better define industry trends.

Click the “Subscriptions” button at the top right-hand corner of this page and follow the instructions to sign up for the free e-mail service.

December 27, 2011

CHICAGO — The general structure of chairs and tables typically found in coin laundries today really hasn’t changed much in recent years, but the palette of colors and textures that are available has become quite expansive, according to some manufacturers of such furnishings.

Caco Mfg. has been making Solomatic® fiberglass seating and folding tables for coin laundries since 1960.

“We’re still using the same molds that we have for 50 years,” says Caco Mfg. CEO Randall Chaffee. “It holds up, a good design. But the colors and the textures have certainly changed.”

Chaffee says his company can now create granite-type finishes commonly seen on countertops. “It used to be just solid color, gel coat. Anymore, I’d say 70-80% of our business is the granites.”

If someone is looking at the high-pressure laminate furniture made by High Mark Mfg. for their store, they’d better be prepared to spend some time studying color samples. The company has more than 500 different colors from which to choose.

“Laminates have come such a long way, we’ve got laminates that look like granite, stone, stressed,” says High Mark Mfg. President Peter Valconesi, whose company produces fiberglass and laminate furniture, both standard and custom in design. “You can get anything you want in a laminate these days.”

Beyond standard-size tables and benches, High Mark makes custom furniture ranging from folding tables to wrap-around bulkheads. It will soon begin distributing stainless steel folding tables in response to market demand.

“They’re trying to match the equipment with the tables by going stainless and stainless, or they’re going to our laminate,” Valconesi says of his laundry customers. “We provide a lot of other products for the stores, such as bulkheads, countertops and shelving units, then they’ll match the tables to that stuff.”

RJ Papalini is celebrating its 50th year of manufacturing furniture for drycleaners, coin laundries, gas stations and mini-marts. Its product offerings include tables, chairs and benches, both standard and custom in design.

The company is accustomed to seeing coin-ops utilize bright color schemes to attract customers, but President/CEO Richard Pennington says he is seeing slight changes in that trend.

“Depending on which geographical area you’re talking about, the owners still want to have bright colors and really stand out,” he says. “In places that are not quite as economically challenged, they’re looking at softer colors, browns and earth tones.”

Where once they may have slapped a coat of white paint on the walls and been done, some laundry owners are going to great lengths to create a comfortable environment.

“A lot of these new Laundromats, they’re even at the point where they’re hiring decorators to come in and help them choose their colors and choose the space,” Chaffee says.

But any time spent discussing accents, balance, or motif will be a waste of time if the furniture doesn’t stand up to the rigors of laundry life.

“It’s function first,” Chaffee says. “They have to have tables there for their patrons to fold clothes on. They have to have an easy and durable break area for them to sit down.

“It has to be tough,” he continues. “Laundromat customers are tough customers, especially in unattended stores. There’s very little that will hold up as well as fiberglass.”

A coin laundry owner may be tempted to purchase mass-market chairs or tables from a retail outlet or a home improvement store, but it’s really only a short-term solution.

“We see it all the time, but two or three years later, they come back to us because that stuff just doesn’t hold up,” Chaffee says, adding that you have to “put the right kind of furniture in there or it disintegrates.”

“If you buy that stuff and put it in your Laundromat, it’s not designed for a Laundromat,” Valconesi says. “It’s gonna last you six months, then you’re going to buy in again.”

“The old adage is ‘You get what you pay for,’ and spending a few extra dollars now is going to definitely pay off in the long run,” says Pennington.

December 22, 2011

CHICAGO — You’ve come to a point where you’re considering opening a new coin laundry. But should you build it from the ground up, or should you look at rehabilitating an existing store? What are the pros and cons of each?

“There are great arguments for both sides, but there are some catches that you want to look at, whether you’re buying a new store or retooling a store,” says J.D. Dixon, owner and president of National Laundry Equipment, a Huebsch distributor based in Nashville, Tenn. “Both can be great investments.”

Robert Renteria, president of Midwest Laundries, Chicago, and a regular contributor to AmericanCoinOp.com, says he’s seen more “born-again” laundries than ever before in the past year. “The key now is to find laundry locations that are in operating condition but in need of a facelift, or that are closed but have an up side when the competition and demographics are taken into account.”

Setting the laundry apart from its competition has to be at the heart of the decision-making process, advises Carl Graham, vice president of coin sales for Scott Equipment, a Dexter distributor based in Houston, Texas. “Unless you build a bigger, better burger, they’re not going to come.”

Location

Choosing to rehab a store means you’re locked into that location, Dixon says, while building new gives the prospective owner the flexibility to select the best site for his/her business needs.

Whether new or rehab, Graham asks his clients if they’re comfortable with the location. “You’re the one who has to go there all the time, so it needs to be in an area you don’t mind going to.”

Risk and Regulation

Building a new store means taking on more financial risk than you would if rehabbing, plus it’s generally more expensive, Dixon says. “Like starting any new business, you have more pre-revenue time. You have a lot more time before you bring in dollar one.”

When choosing to rehab, Renteria favors fixing any machines that still have useful life, then looking to buy rebuilt or refurbished machines. “This will cut your expenditures about 50% and make for a much better ROI at the end of the year.”

Buying and rehabbing an existing laundry often means the new owner can avoid some expenses and some bureaucracy.

“A lot of times, you can avoid impact fees and code restrictions, which are huge,” Dixon says.

For example, Davidson County, Tenn., where Nashville is located, charges an impact fee of upwards of $3,000 per washer, Dixon says. The impact fee charged in Houston is $1,500 to $1,700 per washer, Graham adds.

“If you buy existing, you’re grandfathered, so those fees are paid,” Graham says. “That’s a pro for refurbishing an existing store. And you don’t have to go through as much red tape either, unless you do a complete rehab of a place.”

“If you buy [an existing store], someone has already gone through that process,” Dixon says. “You still have to pull permits, but it’s a whole lot easier to pull a permit to put in new equipment or upgrade electrical or do something like that than to build a new store.”

Building Customer Base

One potential benefit for choosing to rehab an existing laundry is that it already has a customer base. You have the opportunity to speak to the store’s customers and get ideas for how you can develop the business and attract more people.

With a new store, you must build that customer base from zero, Dixon says.

“You’ve got to be thinking about how to get your message to the people in your area,” he says. “You want to think very hard about within a 1-2 mile area, but you also want to think about miles three to five away from your store. How do I reach the people one to two miles from me in an urban setting? In a rural setting, it could be 15 miles.”

Which is Easier?

“It depends on what part of rehab you have to do,” Douglas says. “I prefer new, because you go by all the new codes. And you can build it the way you want to built it, the most efficient way.”

“It’s a case by case basis. A lot of times, in a retool situation, you get into working with the current business owner and negotiating and all that rigamarole that you have to go through to actually buy the business in the first place. Once you own the business, the retool would be easier, because there are (fewer) levers to pull, (fewer) variables to think about.

“But there are things about building a business that are easier as well, because you can build from that blank canvas.”

Click here for Part 1.