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CHICAGO — Even if you’re not a literary scholar, most of you are probably familiar with William Shakespeare’s famous phrase: “To be or not to be.” For self-service laundry owners, “To be or not to be” may come to mind when deciding whether to open an attended or unattended store.

While industry representatives have long claimed that there is no “magic” formula when it comes to the attended/unattended decision, most agree that there are basic factors that affect one’s call. For example, if you have a large store (more than 2,000 square feet) and want to offer extra services, the attended route is the way to go. The larger stores require more cleaning and have more equipment that needs to be cared for. The extra equipment also generates extra revenue, which helps pays for the attendant.

If you have a small store or two (1,500 square feet or so) and don’t want to spend time at the store(s), being unattended is an option. If you don’t have extra services or enough work for an attendant, why do you want the hassle of dealing with employees? With fewer machines there is also less revenue. Do you really want to cut into your profits by paying an attendant?

Are you thinking about opening a new store and wondering if you need attendants? Now is a great time to take another look at this age-old industry debate.

American Coin-Op recently spoke with industry representatives about the attended vs. unattended issue. The self-service laundry industry continues to evolve, and some of the following opinions may cause you to look at this question in a different light.

THE RIGHT QUESTIONS

When assisting a prospective store owner, it’s all about asking the right questions, says J.D. Johnson, president, LaundryRx, Birmingham, Ala. The company does business in Alabama, Louisiana, Georgia, Tennessee and Florida.

Besides being a distributor, Johnson has also operated an unattended laundry.

When the attended-unattended question pops up, Johnson inquires about what the new owner expects from the business (profitability) and how much time he/she wants to spend at the store. “When I know this, I get a better feel for what the owner really wants,” Johnson says.

Johnson estimates that 80% of the stores he sees are attended, but knows there is still a place for unattended stores. “First, you can’t do a 3,000-square-foot unattended store because of the work it needs. It would be ideal to have a 1,500-square-foot unattended store.”

He believes the main reason owners want attendants is to handle extra services. The importance of attendants has increased recently because owners have expanded their drop-off services and are even offering commercial work, he adds.

Johnson enjoyed his experience as an unattended store owner and believes these stores can work in most locations, but the ideal situation is opening an unattended store (as large as 1,800 square feet) in a small, rural town.

Technology had made security concerns somewhat more bearable. “Security is a concern for all stores. Of course, it’s more of a concern for the unattended owner. Remote security is the No. 1 thing to ease headaches. I feel better if I can monitor my store from my phone. It’s also great to be able to wake up at 2 a.m. and see what’s going on in my store!”

Whatever type of security you use, it’s also important to have the proper signage letting customers know that a system is in place, he adds.

Will customers boycott unattended stores? “It’s rare that customers bypass a store because it’s unattended. Actually, it can be just the opposite. Some customers don’t like attendants looking over their shoulder.”

If you are concerned about introducing new technology without having an attendant present, don’t be, Johnson opines. “First, if you have a small store, you can’t afford a card system. You just don’t have enough machines to justify the investment. So not having attendants doesn’t really hurt in this case.

“Plus, keep in mind that people are much smarter today in terms of dealing with new technology. In the past, some operators may have stayed away from high-tech equipment in an unattended store. But people today use smart phones.”

When it comes to selecting new washers and dryers for an unattended store, search for the most user-friendly equipment, he suggests.

“My No. 1 worry about an unattended store is someone tearing it up. Study the crime rate in your area to determine if it’s suitable for this type of store.”

Some of the age-old concerns can be dealt with in advance by proper planning, he explains. “Put up a store with good lighting and visibility, have a good layout and establish a relationship with the police.”

Operators must not forget that even unattended stores needs attention. “I like unattended stores, but you still need someone to open and close and clean. If you need some help, but don’t want an attendant, trying getting one of your customers to do the job.”

In the future, he believes unattended stores will stay around. If anything, with new corporate investors not wanting to deal with employees, future trends point to slightly more unattended stores, he predicts.

KEEP IT SIMPLE

Roger Idler, a 29-year industry veteran, is in a unique position to discuss the attended vs. unattended issue. Idler has five stores in the Denver area. Three stores are fully attended, one is unattended, and one is partially attended. His largest store is 4,500 square feet and the smallest store is 2,200 square feet.

Idler values attendants because they constantly monitor a store. On a scale of 1-10, he rates the value of attendants as a 7.

“Attendants can also handle your drop-off laundry and dry cleaning to pay for themselves. It’s also nice to have that certain comfort level you get by having someone in the store.”

Idler has some simple guidelines when it comes to deciding if an attendant is warranted.  If your store is 2,500 square feet or larger, you need an attendant, he advises. The size of the store is key because extra services alone may not pay for attendants. “Larger stores generate more revenue because they have more machines. This is what also pays for the attendants.”

Do a little research on the area and see if customer demographics lend themselves to supporting extra services, he adds. (Lower-income customers may not use extra services.)

Idler admits that it can be difficult to find people who want to work and can be trusted. However, the tight job market has made it easier to find employees, he says. Idler has some veteran attendants. One of his keys to success is that his entry-level wage is more than minimum wage. “I even trust [the attendants] to watch the store if I ever take a vacation,” he jokes.

If you’re considering the unattended route, remember that you still need someone to clean up and that some insurance companies won’t deal with unattended stores, he says.

Should an owner promote the fact that his store is attended? “Promoting having attendants isn’t necessary, but remember that some promotions need attendants, such as offering wash-card promotions.”

Idler says digital security is a great thing for all owners, especially unattended owners. “When I first started, I used VHS tapes with the security equipment.”

Customers also play a role in your decision. “Some customers want unattended stores. I get the impression that some customers don’t want attendants because they don’t want people looking over their shoulder. Some also may stay away from unattended stores, but that’s not my experience.”

Idler isn’t worried about having attendants introduce new technology, such as cashless equipment, because he doesn’t plan on installing it. He believes his customer base can’t handle too much technology. “Some of my equipment has text messaging, but it’s never used. Know your customers.”

His best bit of advice is to keep things simple and care for your store, regardless of whether it is attended or unattended. The little things, like handling refunds, matter.

“I even like handling refunds. You can do this at the unattended store with the proper signage. People are surprised and appreciate getting a refund in the mail.”

Idler says his situation proves that unattended stores work outside of rural areas. Unattended stores also are here to stay, he adds. “People want to invest in something, and the unattended store can work for them.”

Check back Wednesday for Part 2: Fewer unattended stores on the horizon, but you still need help

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

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

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

Should You Announce a Price Change?

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

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

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

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

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

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

Shifting Prices Too Frequently?

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

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

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

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

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

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

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

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

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

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

Location

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

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

Risk and Regulation

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

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

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

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

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

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

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

Building Customer Base

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

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

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

Which is Easier?

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

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

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

Click here for Part 1.

NASHVILLE, Tenn. — It’s no secret that millions of people, and an increasing number of businesses, interact on social media sites on a daily basis, sharing massive amounts of information.

However, the coin laundry industry lacks representation on many social media sites. And because of this, many storeowners are missing out on an effective tool to increase their business.

USING FACEBOOK

One way to increase store traffic is to offer Facebook-fan-only specials. For example, some vended laundries offer free dry when the customer tells the attendant that he or she is a fan of the store’s Facebook page. Others provide insider scoops, offering details on special rates during specific hours.

But if you want your page to be successful, posting specials alone won’t do. Look for funny video clips related to laundry, or ask your fans questions such as which laundry detergents they prefer. Your fan page will not only help you increase traffic, but by capturing the voice of the customer, it can also help you improve your store’s competitiveness.

When you set up your page, make sure you allow fans the opportunity to write on your wall. The essence of social media is to allow people to interact. If you only allow yourself to post comments, your page will be no more than a Web advertisement.

BEFRIEND THE COMPETITION

While you’re on Facebook updating your own page, don’t forget to search for your competitors. Ask your distributor for a listing, then use the search field to find out if they have a fan page.

You may be asking yourself, “Why would I want to be friends with my competitor?”

It’s simple. You always want to stay abreast of what the competition is doing. Why not get a leg up by viewing their Facebook page? And, if their page is performing well, you can get ideas on how to improve your own. Additionally, see who “likes” their page, and ask them to “like” your page.

There are a few stores using social media the correct way, whose pages you can look at to get an idea of what your fan page should resemble. The next time you’re on Facebook, check out some coin laundries that are doing it right: Morton Coin Laundry in Morton, Ill.; San Fernando Majers Coin Laundry in San Fernando, Calif.; Town Tub Coin Laundry in Waterford, Mich.; and All Clean Coin Laundry in Winter Park, Fla.

Don’t get left in the dark; start using social media today to help increase your store’s business potential.

Click here for Part 1.