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

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

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

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

PROGRAMMABLE BY CUSTOMER

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

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

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

HOW IT WORKS

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

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

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

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

IRONING LINE

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

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

FOLDING DRY GOODS

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

PRODUCTIVITY, EFFICIENCY, SERVICE

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

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

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

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

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

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

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

DEVELOPING COMMERCIAL ACCOUNTS FROM COIN LAUNDRY

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

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

PRODUCTION NEEDS SURGE

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

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

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

DEVELOPING AN INDUSTRIAL LAUNDRY FROM SCRATCH

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

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

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

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

CONTINUOUS BATCH WASHING

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

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

Check back Thursday for the conclusion!

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

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

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

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

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

TAXING IT ALONE

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

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

ESTATE TAXES NEVER DIE

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

PLANNING OPPORTUNITIES ABOUND

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EQUIPMENT WRITE-OFFS FOR PROFITABLE OPERATIONS

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

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

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

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

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

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

MORE, MORE AND MORE

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

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

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

Check back Thursday for the conclusion!

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

December 20, 2012
U.S. Census Bureau Projects Slower-Growing, Older, More Diverse Nation by 2060

WASHINGTON — U.S. hispanic population projected to more than double during period

WASHINGTON — The U.S. population will be considerably older and more racially and ethnically diverse by 2060, according to projections released this week by the U.S. Census Bureau. The projections of population by age, sex, race and Hispanic origin, covering the 2012-2060 period, are the first set based on the 2010 Census.

“The next half century marks key points in continuing trends — the U.S. will become a plurality nation, where the non-Hispanic white population remains the largest single group, but no group is in the majority,” says Acting Director Thomas L. Mesenbourg.

Furthermore, the population is projected to grow much more slowly over the next several decades, compared with the last projections released in 2008 and 2009.

The population age 65 and older is expected to more than double by 2060, from 43.1 million to 92.0 million, and will represent just over one in five U.S. residents by the end of the period.

Baby boomers, defined as persons born between 1946 and 1964, number 76.4 million in 2012 and account for about one-quarter of the population. In 2060, when the youngest of them would be 96 years old, they are projected to number around 2.4 million and represent 0.6% of the total population.

The non-Hispanic white population is projected to peak in 2024, at 199.6 million, up from 197.8 million in 2012. Unlike other race or ethnic groups, however, its population is projected to slowly decrease, falling by nearly 20.6 million from 2024 to 2060.

Meanwhile, the Hispanic population would more than double, from 53.3 million in 2012 to 128.8 million in 2060. The black population is expected to increase from 41.2 million to 61.8 million over the same period. The Asian population is projected to more than double, from 15.9 million in 2012 to 34.4 million in 2060.

Among the remaining race groups, American Indians and Alaska Natives would increase by more than half from now to 2060, from 3.9 million to 6.3 million. The Native Hawaiian and Other Pacific Islander population is expected to nearly double, from 706,000 to 1.4 million. The number of people who identify themselves as being of two or more races is projected to more than triple, from 7.5 million to 26.7 million over the same period.

All in all, minorities, now 37% of the U.S. population, are projected to comprise 57% of the population in 2060. (Minorities consist of all but the single-race, non-Hispanic white population.) The total minority population would more than double, from 116.2 million to 241.3 million over the period.

Projections show the older population would continue to be predominately non-Hispanic white, while younger ages are increasingly minority. Of those age 65 and older in 2060, 56.0% are expected to be non-Hispanic white, 21.2% Hispanic and 12.5% non-Hispanic black. In contrast, while 52.7% of those younger than 18 were non-Hispanic white in 2012, that number would drop to 32.9% by 2060. Hispanics are projected to make up 38.0% of this group in 2060, up from 23.9% in 2012.

To review the data yourself, visit the U.S. Census website.

November 6, 2012
Offering Kid-Friendly Environment is Important, Needed Service

PEMBROKE, Mass. — Kids come with their parents into your Laundromat, but how do you get the little ones to behave?

PEMBROKE, Mass. — Kids come into the Laundromat with their parents. Often, they must hang around for an hour or two waiting for clothes to be cleaned. The question is, how do you get them to behave? Even better, how do you get them to want to come back, because if they don’t like your establishment, Mom might choose a more kid-friendly spot.

You must do something to make your Laundromat child-friendly. Children can’t sit still for two hours. If you do nothing, they might create such a commotion that they annoy other customers. Or they might “decorate” a machine front using crayons they brought from home. Or they might run around your place, trip on a wire and end up breaking a tooth. Great, now you’re involved in paying for a kid's medical care. Worse yet, the unthinkable might happen: a child could run across the street and get killed. In that case, you’re involved in a lawsuit that could send you into bankruptcy.

At a minimum, have some children's toys in a designated area. Plastic trucks, dolls, wooden trains on rails, and maybe a toy stove will do. A log cabin building set will give a youngster a lot of pleasure. A diorama for plastic soldiers will enable kids to conduct make-believe wars. They can play “house” with, you guessed it, the doll house.

Offer new toys periodically. You don’t have to buy them at toy stores. Goodwill and other second-hand stores are perfectly good sources. Yard sales are another excellent toy-buying opportunity. Spend $20 every six months, if you find something intriguing.

Without a doubt, a table and chairs so that children can color is another excellent offering. Kids love to color. An oil-based tablecloth is easy to clean. Crayons, markers and coloring books are always available at great prices at office supply back-to-school sales in August. An even better source for drawing paper is print shops, which generally have bins of used paper stock in storage; excess stock is often available for the asking.

On a nearby wall, hang a bulletin board to feature creative efforts, but do not place it within reach of children. You don’t want to see little ones getting pricked by pushpins. Mothers appreciate seeing their youngsters' Picasso efforts.

Having handheld electronic equipment isn't a good idea. Items would most likely disappear or be broken. One situation you do not want to get into is having to accuse a tot of breaking a toy. So avoid the problem altogether by not having any breakable items. Besides, generally, many children will bring their own things, which they will use to entertain themselves.

On the other hand, many Laundromats have coin-operated video games. They are a popular pastime for slightly older children, especially those in their early teens. It is beyond the scope of this article to suggest what kind of games. You can go too wrong to offer a shoot-'em-up that showcases murder-and-mayhem entertainment. Scout out video arcades in your neighborhood to see the popular offerings before deciding to buy something.

If possible, enclose the kids’ playroom with one entrance. An opening rather than a spring gate will avoid accidents. If it is in the middle of the floor, four-post fence will do the trick. If tucked in a corner, only a two-sided fence suffices. This separation is worth it. Giving the children their “own” space will keep the toys from being scattered all over. Also, the youngsters will enjoy having their private area. But always make sure to place the kids’ space in view of parents. Nothing would be worse than to have a child out of view for 10 minutes before a mother goes over and find him or her crying.

Taping posters or cutouts to the adjacent side wall entertains a child's curious mind. A map of the United States, a photo of the cosmos, images of favorite heroes—Harry Potter, cartoon characters—will do the trick.

Alongside these entertainments, set up the standard of parental obligation. Post a sign on the wall that reads, “Please Supervise Your Children.” In case something untoward happens, your attendant can always point to the sign and say, “You were supposed to keep your eyes on him.”

Train your attendants in “kid management.” If a child misbehaves, the attendant gets down on her knees and gently says, “We do not do that here.” Additionally, the attendant talks to the parent. Never, ever scold the mother or child, or you will never see this customer again.

On the other side of the behavior spectrum, it would not be a bad idea for the attendant to go inside the kid space every so often, look at the children’s creative work and say, “That’s very good.” Ditto for complimenting parents, saying, “Your child’s so good.” Mothers and fathers invariably appreciate compliments.

One Laundromat I know does this. When a kid is playing and behaving himself, the attendant sometimes comes up to the child, asks his first name, and pulls out a large-letter magnetic letter set. She creates the child’s name on a blank, and affixes it to the washing machine the mother is using. Then, with fanfare, announces that the machine has been named “Eddie” (or whatever the child's name is) for the day. Done well, this act makes the kid feel cool. Of course, the parents feel great that the kids are so pleased.

Having said how much Laundromat staffers should be kid-friendly, I offer this caveat. Be friendly, welcoming, appreciative, but don’t get involved. That is, don’t allow a gaggle of kids to speak because they will go on and on, and disrupt your work routing. When one starts, another wants in, and before you know it, 15 minutes will have elapsed. You want to respond to kids, but do not engage them. The skill of “smiling and running” is definitely something to cultivate with staffers.

Make your Laundromat kid-friendly. It is just another service you provide.

October 8, 2012
Laundromat Home to Community-Based Arts Program for Low-Income Families

NEW YORK CITY — The Laundromat Project brings art programs to where neighbors already are

NEW YORK CITY — A community-based non-profit organization dedicated to delivering art programs to low-income families uses the local Laundromat as its gathering place.

Understanding that creativity is a “central component of healthy human beings, vibrant neighborhoods and thriving economies,” The Laundromat Project brings art programs to where neighbors already are.

For example, the Project hosted Sunday afternoon drop-in workshops this summer at The Laundry Room in Harlem.

Its Work in Progress focuses on community-centered arts education through hands-on workshops and public programs. Create Change is a public art residency program; participants are charged with creating an art project that is socially relevant to their local coin-op and actively engaging neighbors and fellow laundry patrons to participate in the process.

The Project's major goal is to one day purchase a Laundromat that will function as its home and as a community arts center.

September 6, 2012
Commercial Accounts: How to Market Yourself and Grow Your Business

OMAHA, Neb. — Items of preparation: equipment mix, times of peak activity, handling of workload

OMAHA, Neb. — Every business requires a steady stream of revenue in order to be successful. In the vended laundry industry, guaranteeing a set amount of cash flow can be difficult, but adding commercial accounts can make a baseline easier to establish.

With proper preparation and marketing to neighborhood businesses, store owners can either start or grow their pickup and drop-off accounts to add revenue, providing their store with stability for the long run.

PREPARATION

Before adding commercial accounts, it’s important for store owners to look at their equipment mix. The last thing you want is to have a commercial account take up too many machines and force self-service customers to wait to do their wash. 

Another precautionary measure that a business owner should take is tracking the store activity and identifying peak times. If the store is consistently busy and there is not ample time during the day to process linen from commercial accounts, owners may want to consider adding a shift.

Another option is to add larger machines strictly for use in serving commercial accounts to a specific section of the store. This way, the commercial accounts will not affect self-service business.

After surveying what equipment you have available to dedicate to these accounts, it’s time to determine who will handle the workload.

When choosing attendants to work for your store, you want to make sure they perform their tasks to your standards. Proper training will help ensure optimal client satisfaction. For example, your attendants will need to know how to properly fold linens and how to interact with customers.

It is also a good idea to have written directions that employees can follow, especially if certain accounts have special laundering requirements.

If you plan on laundering specialty items, reach out to your local chemical supply agent. This representative will be able to ensure you have the right chemicals for specific industries, such as fire or healthcare. As with any decision, ask for a few different opinions so you can make sure to deliver your customers what they deserve.

SOLICITING BUSINESS

Once the preparations are in place to handle commercial accounts, it’s time to grow the business. One of the best ways you can go about this is by finding a niche market to serve in your surrounding community. For example, positioning yourself as the laundry specialist to service spas or providing quick turnarounds for entertainers in town is a great way to build your reputation.

An important aspect to any successful business is having and maintaining an informative website. Make sure your website is up to date and emphasizes your commercial-accounts expertise. It should be easy for potential customers to find information about your services and how to contact you. To see if your website comes up in search results, run a few searches as if you were a potential customer. If your competitors appear before you in these searches, you may need to look at optimizing your website content.

As a business owner, you must always sell your store to others. Make sure everyone you meet knows what business you offer. You never know who could become your next customer.

It’s also important to reach out to businesses within your community. For example, as an owner of five stores, I contacted human resources departments at various companies and offered pick-up and delivery services for their employees. One client uses this as a benefit to employees, and we gain an extra customer. Additionally, some of those companies may have other laundry needs, which can turn into more business for you.

Along with networking with those you come in contact with, it’s a good idea to get involved with community groups. Look for opportunities to join committees within your town’s chamber of commerce or Rotary Club; they provide great ways to meet other business owners. Remember, it all comes back to selling yourself and your business.

COMPETITION

If your community has a large population, you are bound to run into some competition. Linen services may offer customers a lower price than you, but here’s where your service and industry niche come into play. When discussing new business opportunities, it’s important to highlight what you can offer the potential customer. Many linen services do not deliver on weekends, but if you have the capacity to do this, use this as a selling technique. This is important when working with hotels that cater to weddings and large events during weekends.

SERVICE

No amount of marketing can make up for bad service. Service should be the cornerstone upon which your business is built, and this is something your employees should embody. The best referral will always come from a satisfied customer.

To accomplish great service and grow your commercial account business, make sure you have the equipment, employees and time necessary to provide superior results. These accounts can provide your store with a significant amount of dependable business and help you become more profitable.

August 14, 2012
Extra Profit Centers Big and Small (Part 1 of 2)

MOUNT VERNON, N.Y. — Extra profit centers all part of the plan at Megamat Super Laundromat

MOUNT VERNON, N.Y. — Equipment distributor Todd Santoro recently shared some thoughts about providing extra services for your laundry customers and how certain additional revenue streams require little extra work to put into place (Coin-Op 101:Extra Creativity Can Lead to Extra Profit).

Today and tomorrow, American Coin-Optakes a look at two laundries that couldn’t be more different as far as geography and demographics are concerned, and how their owners approach the offering and management of extra profit centers.

MEGAMAT SUPER LAUNDROMAT, MOUNT VERNON, N.Y.

When Conrad Cutler responded to American Coin-Op’srecent poll about extra profit centers, his list for the Megamat Super Laundromat in Mount Vernon was a lengthy one: vending machines, laundry bags, wash-dry-fold services, drop-off/commercial accounts, video games/pinball machines, moving truck rental, rug cleaner rental, ATM, and car care equipment (vacuum, air machine, and fragrance machine).

The 5,000-square-foot store located in a low-income, predominantly African-American neighborhood just north of New York City is open 24 hours, seven days a week, and is advertised as the “home of America’s largest washing machines.” (For the record, the largest machine there holds 125 pounds.)

Cutler, 22, only recently graduated from Syracuse University with a degree in supply chain management and entrepreneurship and emerging enterprises, but he’s been running Megamat since August 2009.

His family owned the property, a former warehouse, and had leased it to a tenant who installed the mega-laundry. When the tenant went bankrupt after five years, the young Cutler was called on to take over the operation so the family could avoid the accrual of real estate tax on a vacant property.

Cutler successfully renegotiated the tenant’s sizable outstanding note with the finance company and instituted a renovation plan that would take four months to complete and cost $30,000.

Expanding the breadth of services offered by the laundry was always part of his business plan.

“We took the store over in a bad situation, so we needed to do whatever we could, not only to bring up the revenue but also to increase the foot traffic in there,” Cutler says. “Diversifying the services that we offered to the community was the way in which we developed a large customer base.

“My objective in having so many different auxiliary revenue streams was not only to generate money but also to bring people into the Laundromat who might not come in there regularly otherwise.”

And that’s mighty important when you consider there are 46 coin laundries within four square miles serving 65,000 people. That’s a lot of competition, so it pays to offer services that set you apart from the rest.

All of the non-laundry equipment is serviced by outside contractors (eight, by Cutler’s count) that pay Megamat a portion of the revenue.

“The most important thing to me is that we have 100% uptime on all of our equipment,” he says. “One of the most detrimental things you can do in the laundry industry is to have equipment that’s out of service. Not only do you not make money off of it, it also makes the store look bad.”

Cutler depends heavily on a staff of six attendants to manage the around-the-clock operation when he’s not there. All are trained extensively in customer relations, equipment troubleshooting and store management, he says. The store wouldn’t be able to offer the number of added services that it does without them.

“One way that we’re able to compete so well … is because of the staff that we have,” he says. “They’ve all been in the laundry industry for a long time, way longer than I’ve been here. They know how important customer service is, not only to me but to the customers as well.”

Among the Laundromat’s most popular auxiliary services are U-Haul truck rental (it’s one of the few Northeast businesses to offer it around the clock, according to Cutler) and pay-as-you-go Internet service (at the rate of $1 per 10 minutes; most people living in and around the neighborhood don’t own a computer or have Internet access, he adds).

“I would say that the ATM, the vending machines and the (video) games are kind of just an extra. They don’t really bring in that much money.”

Megamat’s newest extra profit center is carpet cleaner rental. In the first 30 days of offering the service ($27 to rent the machine for 24 hours), just one person rented a machine. But it was a person who’d never visited the store before.

“After three months, I think you’ll be able to tell if the real estate that it’s taking up in your store, and the liability of operating it, is worth your time or not,” Cutler says. “If you see an upward trend where it’s at least doubling every month for three months, it’s worth keeping.”

Extra profit centers are a “dual-edged sword” that can just as easily hurt the operation if they’re not treated with the same level of care and concern as the laundry, Cutler says.

“You really have to make sure that you’re giving excellent customer service in all aspects to whoever walks in the door, regardless of whether they’re washing clothes or just putting 25 cents in a gumball machine,” he says. “That’s really what’s going to keep the business going is maintaining the same level of customer service for every customer.”

Tomorrow: We visit The Service Station in rural Thompsonville, Ill., where owner Nova Randolph’s business offers laundry, tanning, Internet and copy/fax services for her hometown.

August 7, 2012
Laundry Financing Can Be Had for Good Investment

PEMBROKE, Mass. — Capital-rich could be persuaded to invest in new enterprise

PEMBROKE, Mass. — Laundromateurs tell me if they only could get their hands on $100,000, they could build a great business. And I occasionally meet individuals who say, “I would love to open a Laundromat, but I just don’t have the money.” Both types are missing the boat.

As a starting point, I’m not sure existing operators would use that $100,000 effectively. That is, after using the money, their business might be more or less in the same position as before the money was spent.

Second, and this is the point of this column, I disagree with the notion that obtaining money is hard these days. Yes, even in these cautious, recessionary times, money can always be had for a good investment.

Let me tell you a story. In 1968, I was a callow young man, fresh out of college and a year in the working world, wanting to start a business. I computed that I would need $25,000. Since I only had $2,000 to my name, how was I going to raise the rest?

First, I did my research. I obtained a warehouse job at a company in the field I wanted to enter. Down in the basement, I learned about product, processing, delivery, and staffer work patterns. I learned about the guts of the business. I would submit to you that my two months of being a warehouse worker was far better experience than being an executive.

Secondly, I went to several business owners and interviewed them. I told them that I was doing a graduate thesis about the industry. These businessmen opened up, providing in some cases more than I wanted to know. I took copious notes. In the process, I learned some strategies about winning and maintaining customers. For example, I learned one businessman’s theory about giving price breaks.

Thirdly, I spoke to customers and asked what they liked about their service and what they didn’t like.

Using that research, I wrote up a seven-page business plan. Nothing fancy, but it basically explained what I needed in capital and how I was going to use it to get my business started. Then I sent my business plan out to 10 individuals. These people included successful business owners from the town where I grew up, moderately rich relatives, and one college buddy who had money. I also sent the business plan to my local banker, who I had dealt with when I was a young boy minding my miniscule savings account.

Basically, I asked for a debt and equity investment of equal increments. In other words, whether they invested $1,000 or $5,000, it had to be 50% debt and 50% equity. The equity was the individual’s ownership stake. If the business prospered, the investor’s value would be increased by the success of the business. The debt portion was a three-year loan, which would be paid back at 4% interest each year, until the balance was paid off in full.

Why this necessity of equal debt and equity? Because I would contribute my $2,000 (my life savings), and if every investor contributed equal debt and equity, then I would, by arithmetic, own more than 51% of the business and therefore have effective control. I could do what I wanted and wouldn’t have to answer to anybody.

To illustrate, say there were five investors, and each contribution went like this:

  • Ricky — Total contribution of $1,000: $500 in debt, $500 in equity
  • John — Total contribution of $3,000: $1,500 in debt, $1,500 in equity
  • Susan — Total contribution of $4,000: $2,000 in debt, $2,000 in equity
  • Mike — Total contribution of $5,000: $2,500 in debt, $2,500 in equity
  • Jose — Total contribution of $10,000: $5,000 in debt, $5,000 in equity

So, their total contribution was $23,000: $11,500 in debt and $11,500 in equity.

I add my $2,000—all equity—to reach the $25,000 required capital investment. So, my ownership stake is the $11,500 debt and the $2,000 personal contribution, for a total equity stake of $13,500. That’s 54% ownership ($13,500/$25,000).

For many years, the Ford family owned exactly 51% of Ford Motor Co., so therefore it had full control. Sure, the Fords had to share profits with the minority 49% stakeholders, but they could manage the business any way they wanted. That’s the importance of obtaining equal debt-equity contributions.

One by one, I visited these potential investors, presented my case, answered questions, and showed them how serious and determined I was. Several days went by, and nobody budged. Then one prospect called, saying he would put in $2,000 according to my stipulations. I called two others, and both agreed to put in money. In one week, I had the necessary commitments.

Altogether, nine prospects agreed to invest in my business. Even the bank came through, which I had to refuse because its interest requirements were higher than my debtors’ arrangements. In short order, I gathered my $25,000, and started to set up my business. I was 24 years old.

The point of this story is not to boast. Rather, it’s to show that there are unlimited ways to obtain funds. In my state, Massachusetts, 6% of families have more than a million dollars in capital. Many of these individuals are earning precious little on their money. A number of them could be persuaded to invest in a business enterprise.

Consider the following options:

  • Attend a Rotary meeting and present your business investment idea. Describe how investors can make money from your proposition.
  • Approach members of your family, asking them to invest a sum of money, which will be rewarded with 10% interest a year. If you believe you can take that money and put it to good use, you can certainly pay high interest. I know a woman who built a giant bus company by giving investors 20% annual interest for their $10,000 investment.
  • Visit your two wealthy retired relatives with your idea and pitch them on the debt equity deal that will make them part-owners again. Play one against the other to encourage them to invest. Or do the same with neighbors, friends, or members of the same organization you belong to.
  • Post an ad on Craigslist for a partner. Set up some sort of partnership role, without you giving up control. Who knows, perhaps some wealthy individual will become intrigued by your proposal.

If you need money to take your business to the next stage, it’s out there. Saying “I can’t find investors” is no longer acceptable.

July 31, 2012
10 Secrets to Promoting Your Laundry…Now! (Part 1 of 2)

LONG BEACH, Calif. — Make sure your message is where the people are

LONG BEACH, Calif. — Brian Wallace, president/CEO of the Coin Laundry Association, was given a daunting task: to capture the audience’s attention during the final hour of a regional dry cleaning and laundry trade show in sunny Southern California.

But his task was no more challenging than one faced by every self-service laundry operator: to successfully market his or her store(s) in an environment where potential customers have access to information almost instantaneously and from a variety of sources.

On top of all the other “hats” that a laundry owner “wears”—customer service, maintenance, production, human resources, accounting—he or she can add one more hat to that mix: director of marketing, Wallace told attendees of Fabricare 2012.

“You work incredibly hard for your business, but the fact of the matter is things have changed. … We’re all trying to reinvent ourselves on the fly, trying to deal with the new marketplace. I think that trying to come to grips with some of the new marketing techniques is really an important part of that overall process.”

You may worry about not having the time and money to boost your laundry’s marketing profile, says Wallace, but you shouldn’t.

“What I’ve found exciting about social media, digital media, web, all these different things that have come along the last couple of years, these are almost all low-cost or no-cost opportunities.”

Where is the first place that consumers look, according to Wallace, for local business information? They look to search engines (33%), printed Yellow Pages (23%), online Yellow Pages (22%), local search sites (13%), and mobile apps/social media outreach (9%).

And 77% of all users will research online before they’ll walk through a laundry’s door, he says.

“If we want our businesses to be successful, we need to make sure that our message is where the people are.”

Thus, Wallace ran down a list of ways in which a laundry operator could promote his or her business today. Here are 1 through 5:

1. CLAIM YOUR BUSINESS LISTING AT GOOGLE PLACES AND SIMILAR SERVICES

Google Places is a free business directory offered by Google, the largest search engine in the world and the second busiest website overall. Nearly three-quarters of all web searches happen through Google, Wallace says.

Google Places allows a business to create an informative page about its location, services, hours of operation, and more, using text, images and even video.

“By claiming your business, you’re essentially saying, ‘Google, that is my (laundry). I am the owner,’” Wallace says. “And once they confirm that with you, it’s a pretty easy process.”

Once a listing is established, the business has the ability to edit the presentation so that it is always accurate and up to date.

“The search engine’s job is to deliver the best possible results for the customer,” he says. “So, they’re going to put a lot more weight on a listing that’s been claimed by the business owner, that’s been fleshed out with all the pertinent information. It’s going to deliver better results.”

Once you’re created a profile for Google Places, it’s simple to “copy and paste” the data into other services such as Yahoo! Local, Bing Local, Yelp and Merchant Circle.

“Do your prospective customers a favor—the ones that want to spend money with you—help them find you.”

2. GET A WEBSITE

If your laundry maintains a business website, great. If your laundry is among the 46% of small businesses that still don’t have a website, get one.

If you don’t think it’s something that you or someone affiliated with your business can do, there are any number of companies that offer website design services with small businesses in mind.

Wallace’s association builds websites for its members for free. “We believe the best way to grow the coin laundry business is to make sure that every single laundry owner is available on the web to be found by consumers.”

3. CREATE A FACEBOOK PAGE

Facebook boasts more than 600 million active users, 50% of whom use the site on a daily basis. But, you ask, why should I market my laundry on Facebook?

  • Your customers are here
  • Competitors might be here already
  • It’s easy to create and update your page
  • You can share all types of information in almost any format
  • Being here aids in search engine placement

“Even if you think it’s garbage, even if you don’t care about your friend or your college roommate, what they’re up to, if you cut through the clutter, this is where people are finding businesses,” Wallace says. “This is where they’re getting referrals, this is where they’re finding out where their friends and family are doing their dry cleaning, and who they like and who they don’t.”

So how do you get started? Create a Facebook page, but do notcreate a personal profile (one with an e-mail address). And before you create a page, search the site for an existing “Facebook Places” page for your business and claim that instead.

4. MONITOR BUSINESS REVIEW SITES AND REPLY WHEN APPROPRIATE

In the past, when someone had a certain experience—good or bad—at your business, they told their friends and family. Today’s web-savvy customers are also likely to post a review of your laundry on sites such as Yelp, Merchant Circle and others that millions can read 24/7.

Wallace often hears from laundry owners who avoid sites like this because of negative reviews. But he says that sticking your head in the sand is not the answer.

“The genie is out of the bottle. The toothpaste is out of the tube. It’s out there. It’s happened. You don’t have a choice in the matter. Your business is already being discussed in this manner. You may lament it. You may like the old days, but they’re gone.”

He sees a negative online review as an opportunity for you to respond to a customer’s complaint, just as you would have had you received it at your business, and to promote your laundry’s benefits.

“Part of this is not only responding … but encouraging people to review you, because you run a great shop. That bad review is one rotten apple in the barrel. Most of your customers love you. They see you every week. You need to get that volume going too.”

5. CONTESTS AND A CUSTOMER DATABASE

Contests can increase community awareness of your business, plus enable you to network with customers (more personal equals more loyal). You can create repeat customers while also building a customer database for use in direct or e-mail marketing.

Every laundry should develop a customer mailing list, preferably one that includes e-mail addresses, Wallace says. Stay in touch with your customers through offers and information in order to retain their business; plot their locations on a map to help plan for future advertising.

And don’t be above “bribing” customers for information through raffles, giveaways and surveys.

Tomorrow in Part 2: E-mail newsletter, Google AdWords, foursquare, Groupon and more

May 16, 2012
DOJ: Counterfeit Document Ring Frequented Georgia Laundromat

ATLANTA — Fraud ring offered services to illegal aliens frequenting laundry

ATLANTA — Four members of a Cobb County document fraud ring that made counterfeit Social Security cards, permanent resident cards, and other fake identification documents and then sold them from a Smyrna Laundromat have been sentenced to federal prison on a charge of conspiring to produce fraudulent identification documents, United States Attorney Sally Quillian Yates reports.

The defendants, all from Mexico, received sentences ranging from nine to 28 months, plus two years supervised probation. Four additional co-defendants in the scheme have also pleaded guilty and await sentencing on various dates over the next three months.

The organization used a coin laundry located in Smyrna to facilitate the sale of the counterfeit documents and offered their services to illegal aliens who frequented the Laundromat.

Between March 2010 and August 2011, Homeland Security Investigations agents, U.S. Secret Service agents and investigators with the Governor’s Office of Consumer Protection purchased counterfeit identification documents at various locations in Cobb County, Ga., as part of an undercover operation.

The documents included Social Security cards, permanent resident cards and State of Georgia driver’s licenses. Using physical and video surveillance, agents determined the location of the organization’s counterfeit document production facility.

In September 2011, agents executed a search warrant at an apartment complex in Marietta, Ga. Agents recovered document-making equipment, including computers and printers, and recovered electronic files containing more than 2,000 images of fraudulent identification documentation, including Social Security cards, permanent resident cards, birth certificates, driver’s licenses from more than 20 states, and various other documents. Firearms were also recovered.

“Manufacturing counterfeit identification documents is a serious problem in our community,” Yates says. “These defendants ran an operation that enabled many illegal aliens to get their hands on identification that made it appear as if they were legally in the United States. This crime impacts our community in many ways, not the least of which is the negative impact on the credit history and financial well-being of people whose Social Security numbers were unlawfully used on the counterfeit documents.”

“This case demonstrates the wide-reaching effects of the manufacturing and selling of counterfeit identification documents and its impact on innocent victims and our communities,” says Reginald Moore, special agent in charge of the U.S. Secret Service Atlanta Field Office. “The importance of cooperation among our law enforcement partners remains paramount to our ability to catch those that are involved in these types of fraudulent activities.”

May 1, 2012
Family Business Can Mean Trouble

PEMBROKE, Mass. — Never forget: business is business, family is family

PEMBROKE, Mass. — As many of you don’t reside in Massachusetts, I thought I would share a cautionary tale about family businesses.

Charlie Sarkis is probably the most powerful restaurateur in the state. At the time of this writing, he owned 33 restaurants, including 15 Joe’s American Bar & Grill, 12 Papa Razzis, and his flagship enterprise, Abe & Louie’s steakhouse. All together, the company employs 3,400. Three of his children have worked for him, including eldest son Charles Sarkis, who was effectively running the firm. No longer. All three have been dismissed or have left the company. 

Father reportedly tried to get his son thrown off a Back Bay architectural board through a politically connected friend (“erase the job somehow,” Sarkis is reported to have said), and is in the process of selling the business to a private equity group despite the fact that his kids offered to buy the business for more money.

Daughter Amy, who was his events planner, told the Boston Globe, “I worked eight years for my dad, made him millions of dollars, and only had his best interest at heart. All I expected in return was the same and I am heartbroken that I didn’t get it from him.”

This isn’t the only family collapse when it comes to business. The Berkowitz family, owner of Legal Sea Foods, another major Boston restaurant chain, became embroiled in a major lawsuit between father Roger and his two sons. The Demoulas family, owner of the Demoulas supermarket chain, imploded when family members almost came to blows in court. Another Boston landmark, Grand Circle Travel, is having difficulties because the two brothers are feuding.

As these examples show, family business can mean trouble. Not always, but probably 90% of the time. There is something about money and blood that doesn’t co-mingle well. Perhaps it’s the expectations of the parent of their children. Possibly it’s that the first generation doesn’t know how to give up the reins. Maybe it’s that the qualities that allowed the entrepreneur to succeed are the very qualities that don’t make for good management partnerships.

Whatever the reasons, it is a better idea to stay away from family business. Buying the business is one thing. But running the business with one’s sons or daughters is bad policy. The kids should do their own thing. The father should hire good help to run his business.

Such advice flies in the face of many owners’ fervent hopes. Many fathers would like nothing more than to bring their son in the business and gradually let go of the reins and let him make the concern a great success. The father works hard to build up a five-store chain of Laundromats, while his son goes into a different field. Then at 35, his son decides he wants to team up with the father.

The father teaches him everything he knows. The son has new notions. He begins to implement them. The father backs off, appreciative of his son’s superior business acumen. The business expands. In five years, the business consists of two dozen Laundromats, dry cleaners, and a huge commercial laundry. There is so much money pouring in that the father decides to retire at 62. This is the ideal. 

It probably won’t play out that way. The son comes into the business, but can’t live on the initial salary the father can pay him and is resentful. The son pressures the father to open a sixth Laundromat, but they soon find that volume is below break-even, perhaps because it is too close to an existing store. Both locations suffer. Then the son wants to raise prices, and father disagrees.

Reluctantly, the father allows the son to raise prices in two locations in more middle-class communities. But the word gets around that there is price differentiation, and many regular customers are miffed. Meanwhile, the father has to go in the hospital for an operation and needs a month to rehabilitate. When he returns to the business, he finds so many loose ends that he fires his son on the spot.

Scott’s law of management is: family businesses rarely work. Don’t try it.

But if you must, live by the following rules:

Assign Separate Responsibilities to Each Family Member

Make sure that tasks are divided. One management team member does all the inside work, including maintenance and handling store issues. The other family member is in charge of marketing, hiring, and cash control. Allowing everyone to do everything invites confusion.

Give the Arrangement Time

Let one year pass before the twosome evaluates the success or failure of the merger. It takes a while for a newcomer to learn the ropes and to focus on how to improve matters. You agreed to combine forces. Now give the novice time to prove themselves.

Respect All Management Members

Yes, your son doesn’t work as many hours as you do. Yes, he isn’t as good with the customers as you are. And yes, he can’t fix a broken pencil sharpener, while you can repair almost any dryer problem. But show the person (disregard the fact that he’s your son or daughter) respect.

Give him responsibility and let him exercise it.  Who knows, maybe he is the business genius you always wanted to be. That means be civil with each other at all times. This is hard when you’ve had a frustrating day, but you must hold your tongue.

Agree in Advance on Each Member's Salary

Yes, you’re family, but there could be hard feelings if this issue isn’t resolved up-front. A good idea is to pay the newcomer a low salary to start and re-evaluate the issue a year later. That shows he’s not just doing it for the money. Second, it takes a while for a newcomer to learn the business, during which time he’s not an extremely valuable asset to the firm. During these critical months, such agreement will help determine if the combo is going to work or not.

Never forget that a business is a business and a family is a family. And if your family business works, congratulations, but you’re the exception to the rule.

March 26, 2012
Cart Maker Collaborates with E-commerce Firm to Reach Larger Market

ELBERTON, Ga. — R&B Wire Products to offer bushel transport products to larger consumer market

ELBERTON, Ga. — California-based R&B Wire Products, a manufacturer of carts widely used in self-service laundries, is collaborating with Rehabmart.com, an online commerce company that sells rehabilitation and medical supplies, to offer its bushel transport products to a larger consumer market.

“We are very pleased to offer these bushel transport solutions from R&B Wire Products to more consumers,” says Hulet Smith, founder and CEO of Rehabmart. “From wire storage baskets to hampers, privacy screens to garment racks, and utility carts to bushel trucks, we know that all of our customers will be able to find their own storage and transport solutions from the wide variety of high-quality products R&B offers through Rehabmart.

“These products are not only helpful for healthcare, hospitality and laundry facilities, but are great to use at home, too!” Smith adds.

R&B Wire Products has made wire, tubular, poly and vinyl bushel products serving the healthcare, hospitality, laundry, janitorial supply, material handling and car wash sectors since 1946.

March 22, 2012
Sudz Yur Dudz Positions Itself for Success

CHINO VALLEY, Ariz. — Two-year-old store relies on

CHINO VALLEY, Ariz. — It’s been more than two years since Heavenly Graham opened Sudz Yur Dudz. Like many Laundromat owners, Graham opened her store while pursuing another career. Owning the store offered her another revenue stream, while not taking too much time away from her janitorial business.

She approached the investment through careful planning and research. She chose a convenient and well-visited area in the Chino Valley shopping center, with favorable foot traffic.

With the location secured, Graham needed to determine which machinery would be best for her customers and her bottom line. She chose Pellerin Milnor and, through the guidance of local dealer Laundry and Cleaners Equipment Co., elected to equip the store with Milnor’s coin-operated washers and high-efficiency dryers.

In order to get financing, Graham submitted a comprehensive business plan to her bank, laying out strategies to create a positive cash flow. “The community rallied in support of a new Laundromat,” she said. “Our employees are professional, helpful and friendly, creating an excellent reputation, which will contribute to long-term returning customers.”

Using Milnor Capital to finance the equipment helped her to reduce her terms and have more funds for operational expenses.

Sudz Yur Dudz is located across Highway 89 from a senior mobile home park; many of the park’s residents rely on her store for their laundry services.

Four different machine capacities offer them and other Sudz Yur Dudz customers, including individuals and families, flexibility in choosing the right machinery based on their needs.

With approximately 1,500 square feet of retail space, there is plenty of room for customers to wash, dry and fold their laundry comfortably.

With only one other coin store in the area, Sudz Yur Dudz has positioned itself for success in this market. A few months ago, the store began offering commercial laundry services during off-hours to local restaurants, a car wash, a mid-size hotel and the local Humane Society. The program fully utilizes its equipment and maximizes the store’s revenue stream. 

September 26, 2011
Fine-Tune Commercial Service (Part 2 of 2)

CHICAGO — With large-capacity washers and dryers more common in today’s coin laundries, offering some type of commercial service seems to make more sense than ever before.

But taking on commercial accounts is a much different animal than running a vended laundry. There are staffing and equipment issues to consider, contract and billing matters to attend to, and you can’t sit back and wait for customers to come to you.

IDENTIFYING OPPORTUNITIES THAT MAKE SENSE

Someone new to commercial work might think the best approach would be to seek out any and all accounts. And while there are a variety of businesses that can benefit from hiring a laundry service, the distributors believe that a focused approach would serve you best.

“The biggest accounts out there that I see coin laundries being able to go after are on the lower end,” says Andy Wray, sales manager for ACE Commercial Laundry Equipment, a full-service commercial laundry distributor headquartered in Westminster, Calif. “We’d be looking at schools, barber shops and beauty salons, day spas, things like that. Basically towels or limited items.”

Doctors’ offices and physical therapists are other potential clients, says John Sugg, president/CEO of SAMCO, a Fayetteville, Ga.-based commercial laundry distributor serving the coin laundry, multi-housing, hotel, education and healthcare markets.

“Start off by concentrating on one type of commercial business,” he says. “People that we’ve seen be successful have keyed in on these segments. Or they will key on beauty and barber shops and just do towels.

“You can expand beyond your base, but it’s always best to identify the market you’re going after.”

You never know where opportunities may come from. Sugg recounted how a Birmingham, Ala., laundry owner solicited subcontractors staying in the area as they worked to rebuild tornado-torn Tuscaloosa 40 miles away. At its peak, the laundry was turning out about 1,200 pounds of wash-and-fold business a day.

“You can crank out pretty good business if you have the people to do it,” he says.

Some laundries have hired additional staff to work on their commercial accounts overnight, Wray says.

MAKING THE MOST OF YOUR OPPORTUNITIES

It’s not unusual for a coin laundry owner to do some marketing—store signage, ads in the Yellow Pages and the local newspaper, direct mail, etc.—but making a go at offering commercial service means taking things to a whole new level.

One of Sugg’s customers has had success by setting up a website, running specials, and accumulating the e-mail addresses of potential customers. Another customer takes a personal approach, traveling to potential clients to introduce her business to them.

“You’ve got to market it,” he says. “You can’t just hang a sign and expect people to come to you.”

“A lot of these people, just like in our industry, know each other,” Wray says of potential commercial accounts. “As long as you get in with one account, whether it be a small hotel, a day spa or something of that nature, you might do a great job for them. Word of mouth, as you know, is the best advertisement.”

Once you have landed a client, it’s important to provide them with consistent service, Sugg says.

“If you’re doing towels and you quad fold one week and the next week you roll them, that’s unacceptable to most people. Every towel should look the same every week.”

Deadlines drive commercial service. If you start offering the service but can’t deliver on time, then you’ve got problems.

“The biggest thing would be starting off slow, obtaining accounts, the pickup and delivery of the product, and not biting off more than you can chew,” Wray says.

“I’m not saying you can’t do a lot of volume. You could have 10 or 15 salons you do.”

Whatever decisions you make regarding offering commercial service, be mindful of how they may impact your self-service business, Sugg says.

“You don’t ever want to discourage your paying customers that are coming in the door. That should always be the main thrust of your business.”

Click here for Part 1.

September 22, 2011
Fine-Tune Commercial Service (Part 1 of 2)

CHICAGO — With large-capacity washers and dryers more common in today’s coin laundries, offering some type of commercial service seems to make more sense than ever before.

But taking on commercial accounts is a much different animal than running a vended laundry. There are staffing and equipment issues to consider, contract and billing matters to attend to, and you can’t sit back and wait for customers to come to you.

“(Running a) Laundromat is more of a consumer business, a retail service, whereas commercial is more business to business,” says Andy Wray, sales manager for ACE Commercial Laundry Equipment, a full-service commercial laundry distributor headquartered in Westminster, Calif.

And a coin laundry owner must be intimately involved for their commercial service venture to be successful, advises John Sugg, president/CEO of SAMCO, a Fayetteville, Ga.-based commercial laundry distributor serving the coin laundry, multi-housing, hotel, education and healthcare markets.

“You have to be hands-on,” says Sugg, who is a store owner and route operator himself. “If the owner is actively involved in that segment of the business, it can be very profitable.”

To fine-tune your commercial laundry service, it’s important to coordinate it properly from the get-go.

BUSINESS CONSIDERATIONS

You must have the proper equipment and facility to handle such an endeavor, the distributors say.

“Some of these places are so tight and cramped, to bring on any more work, they might have to adjust to (working) after hours,” says Wray, a third-generation laundry professional. “Obviously, where there’s a will, there’s a way.”

Most of the standard 40- to 60-pound washers will “get you by,” he says. “Depending on some of the cycles that you require, you can make it up a lot in chemicals, using quality products.”

Equipment design and operational capabilities also factor in, according to Sugg.

“You can’t do one size fits all and make it work,” he says. “You need versatility as far as your equipment is concerned. … If you just have a basic machine that has hot, warm and cold as a selector, then you don’t have a very effective model for doing good commercial account business.”

“It might be that you have idle machines sitting there, but if they’re all top loaders, it’s going to be difficult to do some of the requirements from some of the hotels and stuff like that,” Wray adds.

With the right equipment in play, there should be no need for you to segregate machines for commercial accounts, Sugg says.

But there are limitations to the scope of commercial service that a traditional self-service laundry can offer. When you make the decision to take on commercial work that involves ironing or other special treatment, it’s probably time for you to branch out.

“Then you really are getting into a whole other segment of business,” Sugg says. “We’ve seen it done, but at the point that you’re going to bring in a roll ironer, you probably should be looking at setting up an industrial laundry to do that.”

“When you start getting into pressing and stuff like that, you step into the commercial/industrial arena,” Wray says.

From a management standpoint, serving commercial accounts requires knowledge in contract negotiations, invoicing and other areas. You may also want to review your insurance coverage to make sure it’s sufficient for the changes you’re looking to make.

“Somebody who doesn’t have organizational tools in the first place probably should shy away from (commercial work),” Sugg warns.

Monday: Identifying opportunities that make sense...

September 14, 2011
Titus Coin Laundry Completes Laundry Center Overhaul

TUSCALOOSA, Ala. — Titus Coin Laundry Equipment Co., a turnkey provider of coin laundry systems, reports that it has completed an overhaul of the laundry center in the Forrester Gardens Apartment Complex.

Titus completed the 900-square-foot renovation in four days, installing 12 new Speed Queen washers—one of which is a high-efficiency, handicapped-accessible, 18-pound front-load model—and 12 Speed Queen dryers. Titus and Summit Housing Partners hosted an open house for the complex's residents after the project was finished.

“New properties are always exciting as we get to develop a new relationship within the community,” says Robert F. Titus, account executive. “We had an impressive turnout for this renovation’s open house, allowing us the chance to meet many of the local residents. This opportunity to interact with the actual users of our equipment provides a lot of feedback, which aids us in future system deployments.”

August 24, 2011
StatShot: July Sales Wilt in Three of Four Regions

CHICAGO – Self-service laundry operators in three of the four regions reported their sales declined in July, traditionally one of the weakest revenue-generating months of the year, according to the most recent AmericanCoinOp.com StatShot survey.

The West was the lone bright spot, posting a 6.3% sales increase when comparing July 2011 to July 2010.

In the South, month-to-month sales fell a collective 2.5%. More operators reported sales increases than not, but the double-digit losses incurred by the minority outpaced smaller gains elsewhere.

July-to-July sales in the Midwest were down 1.2%. In the Northeast, they were virtually flat—down only 0.2%.

At times when sales falter, running a self-service laundry as efficiently as possible is paramount. Operators were asked about their utilities cost as a percentage of gross. Northeastern operators fared the best, paying 16.6% for utilities in July. Western operators paid 20.3%, while Midwestern operators paid 27%. Operators in the South paid the highest percentage for utilities at 29.9%.

How did some operators keep their costs down? By repairing or updating equipment such as washers, dryers and water heaters. One operator reported installing a white insulated roof.

Some operators in the West credit cleanliness and a friendly atmosphere for helping them maintain their efficiency.

Meanwhile, one Northeast operator who reported their July-to-July sales were unchanged says that theft makes it difficult to run a laundry efficiently. “Attendant stealing is at an all-time high,” the respondent wrote. “Much of the money is missing from the inside.”

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

Subscribers to AmericanCoinOp.com’s Wire e-mails are invited to participate in these unscientific surveys, which are conducted online via a partner website and only take a few minutes to complete.

August 22, 2011
SAMCO Changes Name, Location

ATLANTA — Southern Automatic Machinery Co. (SAMCO) has changed its name and is moving today into a larger, more customer-friendly location, the company says.

The company officially changed its name to the acronym that customers already use: SAMCO.

“Our company has history in the Atlanta area, and rather than lose part of our heritage by developing a new name, we decided to become more modern and use our initials,” says John Sugg, president and CEO of SAMCO.

The company has been operating as Southern Automatic Machinery Co. since the 1940s, when it was founded. SAMCO got its name because it was located in the South, and at the time, washing machines were referred to as automatic machines.

SAMCO’s new, 10,400-square-feet facility is located at 133 N. 85 Parkway in Fayetteville, Ga.

“These changes were made with the customer in mind, and we believe it will strengthen our existing relationships while helping to forge new ones,” Sugg says. “We’ll remain the company our customers have come to know and trust, and [we] look forward to continued success as we approach 2012.”

SAMCO is a commercial laundry distributor serving the coin laundry, multi-housing, hotel, education and healthcare markets. It is the exclusive provider of Speed Queen laundry equipment and technologies in parts of Georgia, Alabama and South Carolina.

June 22, 2011
Dispelling Financing Myths (Part 2 of 2)

CHICAGO — Has the financing industry changed during the recession? What should an operator know when trying to obtain financing?

February 28, 2011
Is it Time to Raise Vend Prices? (Part 4)

January 27, 2011
One Day at a Time (Part 2 of 2)

ROCKY HILL, Conn. — When opening a self-service laundry for the first time, many owners discover the challenge of multitasking. Nancy Sousa’s challenge is maintaining a successful business while dealing with being a seven-time cancer survivor.

The Town Line Laundromat, Rocky Hill, Conn., opened in July. About seven weeks prior to the opening, Sousa, diagnosed with breast cancer in 1994, discovered that she had metastatic breast cancer in her bones.

December 20, 2010
Clean 2011 Plans More Than 35 Hours of Education

October 29, 2010
Embrace Your Customer Base