Content about Pembroke

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

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

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

Manage your store’s traffic with inducements and persuasion.

PROMOTIONS AND SPECIAL EVENTS

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

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

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

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

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

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

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

POWER OF PERSUASION

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

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

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

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

PEMBROKE, Mass. — You open a letter from the IRS: You are being audited. A shock goes through your body. Your hands begin to shake. The timing couldn’t be worse. You’ve got a half-dozen projects going on. “Why me?” you ask. Then your mind pictures what it would be like to languish in jail.

Don’t panic. An audit doesn’t necessarily mean there is suspicion that you aren’t being forthright. Furthermore, an audit doesn’t mean that you will have to pay a large bill. About 25% of audits result in dismissal. Satisfy the auditor and you probably won’t be bothered for many years.

Having said that, there could be cause for alarm. If you are deliberately inflating expenses or understating revenue figures, the auditor will seek to discover these untruths. Reducing revenue is considered fraud and could result in criminal prosecution. Overstating expenses is bad, but one could argue that the books were messed up, the bookkeeper was incompetent, that the computer system malfunctioned, or that you just didn’t understand what was required.

The simplest audit is a correspondence audit. You are asked to clarify one or two issues. Responding with a letter that includes proof backing your position will end the inquiry. Office audits require meeting with an IRS auditor.

Most office audits specify areas of concern. Speak frankly to your accountant or CPA. Together, evaluate the magnitude of the audit. If it is over a few areas, and your books are in order, you might want to handle the matter yourself. If you prefer, your accountant can represent you. Of course, the accountant will want to be paid; his or her fee might run $3,000 to $5,000, between preparation time and representation. Any lawyer, accountant or enrolled agent can represent you, providing he/she did the taxes of that year’s return.

“I prefer to do all the talking,” says H&R Block’s Stuart Campbell, a longtime audit representative, “although I involve the client a bit to establish credibility.”

Organize your records. Make sure you can back up every figure on your tax return. That means making copies, updating logs, and putting everything in sequential order. If there is no backup, prepare a written explanation of the deduction. If the books aren’t in order, get them in order. This task involves a lot of work, but it will make you knowledgeable about your situation.

Do not go into the meeting acting like an angry bull or a fawning sycophant. Remember, you’re dealing with a human being. Be professional and business-like. Let the facts and figures do the talking. You’ll go over item by item. The auditor might say that an expense is disallowed. Do not argue. Go on with the proceedings.

Let’s consider a few examples. If you have no backup, come up with an explanation of why there is no documentation. For example, you remodel your wash-dry-fold area, but do not have the receipt because the contractor disappeared after he was paid. The auditor might go along since it is a reasonable expenditure.

If your cost of supplies is significantly above the regional average, say 35% of revenue instead of 25%, prepare an analysis that explains the discrepancy. Water in this community is high, my machines are old, I recently switched to gas so there are installation costs, I leave my lights on 24/7 to advertise, that sort of thing.

If you purchased an at-home computer for $1,400 that you say is for business use only but the auditor argues that computer use can’t be limited to business only and will only give you a $700 Section 179 deduction (50% of cost), don’t argue. Let the $700 go. He’s being a stickler. Don’t fight the small potatoes.

Don’t try to outsmart the auditor. Come clean with all major discrepancies up front, especially revenue figures. Most likely, the auditor has the proof in front of him in the form of bank statements. Also, don’t ignore IRS letters. One operator who let the letters go resulted in the IRS assessing him $135,000 based on what they figured for his obligation. Divorce, bankruptcy and home foreclosure followed.

At the end of the session, the auditor will add up the adjustments and disallowances and come up with an assessment. Any penalties and interest will be tacked on. It is possible to counteroffer, which is called an offer in compromise. The auditor will be more inclined to go along if you are close to insolvent. But you never know when he or she will be willing to bend.

You may challenge the assessment, dealing with an appeals officer, and then you may go to tax court. If there are legal points at stake, you might hire a tax attorney. On the other hand, it might be less stressful to swallow hard, pay the bill, and make sure you keep detailed books in the future.

PEMBROKE, Mass. — Let’s examine a delicate subject: the bathroom for customers in your store(s). You have four choices. You can have no public restroom, and let them use the employee bathroom when they plead. (Of course, some cities require that all establishments serving the citizenry have public bathrooms, so this alternative might not be possible.) You can have a filthy bathroom, which will discourage patrons from ever using your bathroom again. You can have a clean bathroom, which requires regular maintenance and periodic updating. Or you can have an interesting bathroom. Yes, you read correctly: I said “interesting.”

Let’s go over the choices one by one.

None

You will be able to tell stragglers that there’s no bathroom to save on toilet paper, but be real. Do you want your customers, who might spend an hour and a half to two hours on your premises, to have no place to go to the bathroom and wash their hands? Must they be required to ask the attendant to use the employee restroom? Even worse is forcing them to go home to use their own facilities. These options are not professional. Any restaurant that didn’t have a public restroom would soon be out of business. A Laundromat should avail its customers of this service on an up-front basis.

If your laundry is unattended, having a bathroom is a bit more problematic. Vandals might make the facility less than palatable. A compromise is to let customers use the employee bathroom when a staffer is there.

Dirty

You know the one—a filthy frosted-glass window covered with cracks, the stained linoleum floor curled and chipped at the edges, grungy toilet with a cracked top, dirty sink with permanent water stains and grimy shards of soap, rusty overhead pipes, wall surfaces that haven’t been cleaned in decades, and an empty paper towel rack above the overflowing wastebasket.

Many Laundromats have this sort of facility. It’s awful, but it’s a bathroom. To recount a line from The Odd Couple, fastidious Felix says to disheveled Oscar, “I’ve seen gas station toilets cleaner than your bedroom.” He could replace gas stations with Laundromats. The advantage here is that you can offer your customer a toilet without doing much work. You can check off the box, even though your customer might not appreciate the effort.

Clean

Here, we have relatively new fixtures, including the toilet, sink and vanity. The corner table is presentable, with contact paper carefully applied to the top. The place is cleaned every day, and the linoleum floor has been recently wet-mopped. The overhead lighting fixture casts a bright, full light. The vanity mirror is smudge-free. Maybe, there is a soap dispenser to minimize the mess. It’s pleasant, clean and up-to-date.

You are doing your job in providing a clean, presentable bathroom. Of course, you don’t want the privilege to be abused. The bathroom is intended for customers, and a sign on the door reads “For Customer Use Only.” If attended, you might require a key that can be obtained from the staffer.

If someone comes in and asks to use the restroom, you must have developed an approach to separate the customers from non-customers.

Ask if he or she is a customer. “Not today, but I use you occasionally.” Ask how often. Ask the person their name and consult a book entry (or pretend entry). If there is no entry (or you don’t recognize the person), say, “This isn’t a public bathroom, you know. If I let everyone off the street use my bathroom, it wouldn’t be fair to my customers.”

Depending on how the person reacts, decide if he or she can use the bathroom. You’ve established guidelines for usage. Next time, the individual will be less likely to stop in your place. At the same time, you’ve been polite enough to avoid offending a real customer. Have your staffers memorize the formatted approach, and you will not be bothered by excessive use.

Tomorrow: What is an interesting bathroom?

PEMBROKE, Mass. — At almost every Laundromat I stop at these days, I hear roughly the same thing: “These are tough times. The country has 12% unemployment. Business is lousy. It’s the economy.”

Well, it’s good that there’s so much agreement. Except for one small point: there are opportunities in tough times that good operators take advantage of to maximize their profits. Even with declining sales, a sharp businessman can creatively reduce expenses, tighten his nut, eliminate marginal sales, cut unprofitable sidelines, emphasize profitable aspects, and come out ahead.

The universal law of business is that inflow must be greater than outflow. So, when sales are down, a good manager cleverly manipulates the variables.

Here are just a few ideas for the expense side of the equation:

Request a rent cut

These are tough times, especially for landlords. Businesses are being shuttered every week. Nothing looks worse than an empty storefront. You are a good tenant, and you’ve been in the same spot for several years. Furthermore, you pay the rent on the first or second day every month. The landlord doesn’t have to worry about you. You’ve told him that when your lease expires in three years, you want to renew.

So, ask for a temporary reduction in rent, just until the lease is up. You could possibly negotiate a $200 lowering. Point out that there’s been construction in the street, and the neighborhood is changing, and you haven’t quite figured out how to win a sizable proportion of the newcomers. Note that new competition moved in several blocks away, but you’re confident they’ll be gone in two years. In short, you need a break now. As a good, reliable tenant, you deserve a break.

One store owner wrangled a $6,000 annual rent deduction by agreeing to do some landlord functions, such as plowing the parking lot when it snowed, cleaning the front, patching the roof and doing plumbing repairs. It helps that the owner’s brother does snowplowing as a sideline and that the owner is handy enough to do most of the chores himself.

Cut employee hours

Yes, this is a drastic move, but sometimes it is necessary. You have a target profit to make, and if you’re below target, then cut hours. Don’t wait until you’re at break-even, because you should never be at break-even. Reduce full-timers (40 hours) to 35 hours while maintaining full benefits, and cut part-time hours from 20 to 17. Giving the employees a few extra hours for themselves is not a terrible thing, particularly if you explain why it is necessary—so that your company can continue to operate.

To make the most of those reduced hours, eliminate one supplier pickup a week, close one hour earlier at night, have no store coverage during the slowest times of the day, and process commercial work using in-store staff rather than hiring someone to help. Whatever needs to be done needs to be done, for profit is king.

That doesn’t mean that you don’t take care of customers. Customers are the driving motor of profits. But, within that framework of obligation, you must always make money (profit), and you can be clever in achieving it, without alienating your customer base.

Demand better prices from vendors

Demand price reductions. Take advantage of deals. If you own the building, fight for a tax rebate, based on the fact that your property value has gone down $150,000. Petition the utilities to secure better pricing.

You say fighting the utilities is like stopping Niagara Falls, but how do you know if you don’t try? Go and speak to someone and plead your case. Make the case that if the utility can’t deliver favorable terms, it’s entirely possible that your business will close, and then the utility will be left with one fewer customer. Perhaps you could obtain more favorable rates by pre-paying.

Possibly the utility officer can point out some saving factor. Maybe there is an experimental delivery method that you would be willing to try out in exchange for lower utility costs.

As for vendors, the iron law of buying is that there is no bottom. Just when you think the lowest prices have been reached, the discount center comes along. Then Walmart comes into the marketplace, killing all existing prices. Then Costco, Sam’s Club, BJ’s, the bulk retailer, appears. Ask the vendor for a menu of prices that is 5% lower. Failing that, insist that at least one product have “super” pricing. Negotiate a 2% discount for prompt payment, and take advantage. As an incentive, talk up your loyal patronage, and how his dealing you a better hand will strengthen the relationship. Ten years from now, the vendor will have recovered multifold.

Draw less money yourself

This shows that you are willing to put company profit above personal welfare. It will go a long way toward convincing employees to take lower paychecks. But it also forces you to be disciplined. I hope your lifestyle allows you to cut back, namely that you aren’t living on every cent that comes in the door and then some.

Reduce your newspaper subscription from seven days to four days (just Thursday to Sunday). Cut back your cable TV subscription. Cut the grass yourself rather than hire a service.

Make your child work in the summer and contribute $5,000 each year to help pay for college, plus get a work-study job during the school year to fund spending.

Encourage your spouse to get a part-time job (even at McDonald’s—something is better than nothing). Have your elderly mother move into the spare bedroom and take a piece of her Social Security.

Sell the Lexus and buy a second-hand Volkswagen (you don’t need to impress anyone). Cut out eating in expensive restaurants. Alter your health insurance to include a $2,500 deductible and stay healthy. Drop that gym membership and exercise at home.

Do most of these things, and you’ve reduced your nut by $25,000 a year. A pay reduction is a snap. Such modifications show your workers that you are willing to share in the pain. This goes a long way when asking them to accept reduced hours.

Tough times require toughness. Start today to dig in and bulldog your way to profits.

PEMBROKE, Mass. — “Why should I spend money on an identity when I spell out exactly what we are?”

That’s the question one store owner asks as he’s standing in front of his store sign that reads, “Laundromat.”

As an afterthought, he says, “Everybody knows who we are.”

That’s true, but perhaps it’s not true on a deeper, more subconscious level.

Perhaps there are improvements an owner can make in creating a more readable, more identifiable name that engraves his/her existence in the customer’s mind and minimizes the presence of competition.

Expanding Your Influence

In practical terms, and depending on how many stores are crammed in a small area, your store will always be the Laundromat of choice in the 1-mile diameter encircling you. But there is a second circle, 2 to 4 miles out, where many customers have options.

These customers can patronize XYZ Laundromat at the border of the next town, or ABC Laundromat in the next town on the opposite side. Moreover, your commercial accounts have even more discretion of whom they will use to handle their laundry. It is this segment that could be swayed by an improved identity.

Here’s a personal example of how a visual wordplay creates impact. When I owned my business, I put the words “Tempus fugit, so do we” on the front and back of my trucks. This translates from Latin to, “Time flies, so do we.”

About twice a week, someone called my company asking what the words meant. My drivers would be endlessly kidded about the wordplay. When I visited a customer, someone might say, “Here’s Mr. Tempus Fugit” or “It’s the Latin scholar.” One time, I was asked to visit a radio station and explain the wordplay. This received big play.

See how the words expanded into something big? They created attention.

Identity matters. The late Joe Selame, principal of Selame Design in Boston, wrote, “Identity is the cornerstone of a successful firm.” Selame gave identities to many area institutions, including Stop & Shop, CVS, Fenway Franks, Goodwill Industries, Massachusetts General Hospital, Zoots and Veryfine Juice Products, as well as countless hundreds of smaller organizations.

Selame’s wisdom includes: “No company is too small to have an identity makeover.” “Every company can be improved by an identity.” “A good name helps a company stand out from the pack.” “A company without a symbol is like a country without a flag.”

His formula was pretty simple:

• Get at the essence.
• Create something that people remember.
• Keep it simple.
• Come up with a different identity that will stand the test of time.

Go To It

Here is how you go about creating an identity without spending a small fortune. Sit down with your company name on the top of a piece of lined paper. Play around with the name. Look at the initials and see if it spells something out. Maybe the town could be added into the wording. Is there a flow to the words? Is there a shape that appeals to your eye? Perhaps the three-word name can be one word on each line, the second and third words indented, to create a step effect. You might create a one-word, upward-tilting script format that would be pleasing to the eye.

Is there some logo you might incorporate into the name? How about a washing machine outline, and the center is the letter “O,” representing the machine door? What about using a stack of shirts representing finished product alongside your name? How about a linked circle of different clothing silhouettes in black, from socks to shirts to pants, encircling the copy. It’s all about brainstorming.

Consider adding a slogan, such as “Clean clothes every day.” “The friendly Laundromat.” “Wear clothes well and long.” “Cleanliness is next to Godliness.” If you are on a corner, you might try “The Corner Laundry.” Might “The Neighborhood Laundry” work? Some might go bold and try something far out, such as “The Laundress with Mostess.”

After you’ve puttered around for a bit, bring your ideas to a product-identity expert. You might go to a company like Selame Design if you don’t mind spending $10,000. But if that’s a bit too rich for your blood, hire a product-design student who might charge $500 or so for the opportunity to work on a real-world challenge.

Or even better, submit this challenge as a class project. The creator of the winning entry receives a reward. This way, you’ll receive a few dozen submissions. You and the instructor can choose the winner. Even better, you can incorporate different ideas into your identity.

So now you have a new identity. What should you do with it? Over time, convert the old into the new. Order business cards to reflect the new you. Have a banner made of your new identity and hang it in the store.

Put up a sandwich board in front of your store and in the parking lot. Order a newspaper ad introducing the change. If your overhead sign needs updating, redo the sign. If you need a new delivery truck, add the image to the exterior. When you run out of invoices or stationery, add the new identity to the new forms.

What can you expect from your identity efforts? Nothing will happen on day one. A few customers might say, “I like the banner.” Hopefully, no one will say, “That’s awful. I can’t read it.”

Over time, people will grow to trust you a bit more. Long-time customers as well as new patrons will feel more comfortable in your store. When someone asks someone about a Laundromat, there is a good chance that your store will be mentioned.

If you are a multiple-store owner, it will become clearer that you’re a chain. If you do cold canvassing, you’ll have more confidence handing out business cards.

You will see new faces in your store. You’ll attract new commercial accounts. And, finally, one day, you’ll realize that your business is expanding more than ever before.