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Content about Kent Walters

November 20, 2012

The Year in Review

CHICAGO — If you happened to miss a story along the way, then you might appreciate this brief recap

CHICAGO — American Coin-Op covered a variety of topics this year. If you happened to miss a story along the way, then you might appreciate a brief recap. Here’s a quick look at some of the more informative articles presented this year.

BUILD NEW OR REHAB?

When considering opening a new coin laundry, do you build from the ground up or look at rehabilitating an existing store? Setting your laundry apart from the competition has to be at the heart of the decision-making process, says Scott Equipment’s Carl Graham.

When building new, you can start from the ground up to create a clean, modern infrastructure so it can handle the laundry equipment you plan to install, says National Laundry Equipment’s J.D. Dixon. And you can eliminate any concerns about infrastructure issues with new construction. Choosing to rehab a store means you're locked into that location, while building new gives the prospective owner the flexibility to select the best site for his/her business needs.

New construction provides the opportunity to design a store that is highly efficient and thus equipped to get customers in and out in the shortest time possible. But what works in one store may not work in another. For example, you might choose a color scheme for a Miami store that you wouldn't for a store in Lexington, Ky.

Building new also means a much more extensive project than a rehab, taking on greater financial risk, plus it's generally more expensive.

When choosing to rehab, consultant Robert Renteria favors repairing any machines that still have useful life, then looking to buy rebuilt or refurbished machines.

Buying and rehabbing an existing laundry can save the new owner some expenses, and may allow them to avoid bureaucracy such as impact fees and code restrictions. Another benefit for choosing to rehab an existing laundry is that it already has a customer base. With a new store, you must build that customer base from zero.

LAUNDRY FURNISHING OPTIONS EXPAND

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 Sol-O-Matic© fiberglass seating and folding tables for coin laundries since 1960. CEO Randall Chaffee says his company can now create granite-type finishes commonly seen on countertops.

High Mark Mfg.’s high-pressure laminate furniture is available in more than 500 different colors, says President Peter Valconesi, whose company produces fiberglass and laminate furniture, both standard and custom in design.

RJ Papalini is celebrating its 50th year of manufacturing furniture for the industry. The customer is accustomed to seeing coin-ops utilize bright color schemes to attract customers, but President/CEO Richard Pennington says he’s seen that trend change in places “that are not quite as economically challenged.” Operators there are looking for softer colors, browns and earth tones.

Any time spent discussing coin laundry décor will be wasted if the furniture selected doesn’t stand up to the rigors of laundry life. Resist the temptation to purchase residential-grade chairs or tables from a retailer or home improvement store, because that’s just 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.

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.”

A store owner needs to be aware of and factor in the competition’s prices when determining his or her own 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 customers, from ambiance to equipment to services—and the costs associated with washing and drying play a large part in this equation,” he says.

While customers may not react warmly to a price change, they will understand if you explain the reason behind the change, such as higher utility rates. Hietpas believes that customers are more sensitive to how long it takes and how much it costs to dry than to small changes in wash prices.

Vending technology has enabled owners to change prices on equipment easily—during slow hours or days, for example—but avoid changing prices too often, as the practice can turn off customers.

BECOMING A MULTI-STORE OWNER

When you’re thinking about opening a second store, it’s important to go back to the basics and look at everything from location to equipment and store naming, advises Pittsburgh Laundry Systems’ Sonny Rogalla.

Carve out an area of no more than an eight-mile radius from your original store and use that as your market. Having your stores in close proximity—no more than 45 minutes from each other—allows you to easily more between stores.

Make sure to continue cultivating your relationship with the distributor that assisted you in building your original store. Distributors typically have information on existing Laundromats coming up for sale and will approach you to judge your interest. And the distributor can easily identify whether a laundry is a potential good investment.

Whether rehabbing a store or building one from the ground up, rely on what you’ve learned from your first store. You already know what works—now it’s time to make it even better. Look at the machines your distributor offers; there are probably new advances since you last purchased equipment. It may also be time to look at investing in advanced controls if your previous store doesn’t have them; these controls can be a great resource for multi-store owners.

Financing through a laundry manufacturer is better than using a bank, Rogalla believes, because manufacturers understand the industry better and can tailor a financial solution to meet an owner’s needs.

ONE LITTLE IDEA AT A TIME

Little changes over time can make a difference for your business, advises columnist Howard Scott. Here are a number of little ideas he’s seen in different Laundromats, or been told about, or that just popped into his head:

Hang a purple neon sign in your window
Put a sandwich board sign on your front sidewalk
Announce that you offer high-quality equipment
Place a wooden bench out front
Sell three sizes of laundry bags
Offer a deal for wash-dry-fold service
Hang a large clock in your store
Give machines names, not numbers
Sell a value card
Paint a mural on your exterior side wall
Set up a glass display of your merchandise for sale

TRACKING ENERGY EFFICIENCY

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. Owners looking to determine their store’s level of energy efficiency need to compare the cost of utilities vs. revenue, says Maytag’s Walters.

If the store’s utilities cost is above the industry average of 20-25% of total revenue, the owner should look for ways to decrease this cost, starting with equipment. Look in the washer-extractor control software, Huebsch’s Gary Dixon advises. 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 says 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.”

Store owners who want to maximize equipment performance must regularly perform proactive and preventive maintenance tasks. “By following a recommended maintenance schedule, the laundry owner is ensuring that their equipment is operating at optimum efficiency,” Dixon says. “This translates to lower utility costs and keeps downtime to a minimum. The result is happier customers and more profit.”

EXTRA CREATIVITY, EXTRA PROFIT

Extra profit centers provide a variety of additional revenue opportunities, and some require little extra work from you and your employees, says Todd Santoro of Clean Wash Laundry Systems. Try partnering with a local dry cleaner. Establish a program where customers can drop off at your location for both services; work with the cleaner to determine the timeline and revenue split.

Pick-up service is another way to adapt wash-dry-fold to suit your business. Set a delivery radius around your store, up to 20 miles, and charge per pound to accommodate the increased costs. Pick-up is particularly important for growing your commercial laundry revenue to include clients such as spas, catering companies and salons.

Ancillary profit centers allow Laundromat owners to be creative with their offerings. An example is offering U-Haul trucks for rent. Store owners receive commission from the rentals, and attendants also set up reservations for other locations, which also nets owners a percentage of the rental.

There are many other services that a laundry can offer, but remember, consider your target demographic. Services that are quick and helpful will best serve them and you.

To read the original stories in their entirety, click the following:

Store Creation: Build New or Rehab? (Part 1)

Store Creation: Build New or Rehab? (Part 2)

Trends in Laundry Furnishings

Coin Laundry Pricing Strategies (Part 1)

Coin Laundry Pricing Strategies (Part 2)

Coin Laundry Pricing Strategies (Part 3)

Expanding Your Business: How to Become a Multi-Store Owner

Grow Your Laundry One Little Idea at a Time

Energy Efficiency: Battle Against Rising Costs Often Starts with Equipment (Part 1)

Energy Efficiency: Battle Against Rising Costs Often Starts with Equipment (Part 2)

Extra Creativity Can Lead to Extra Profit (Part 1)

Extra Creativity Can Lead to Extra Profit (Part 2)

April 30, 2012

Energy Efficiency: Battle Against Rising Costs Often Starts with Equipment (Part 2 of 2)

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

Energy Efficiency: Battle Against Rising Costs Often Starts with Equipment (Part 1 of 2)

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!

February 22, 2012

Coin Laundry Pricing Strategies (Part 3 of 3)

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

Coin Laundry Pricing Strategies (Part 2 of 3)

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.