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August 14, 2012

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 Randolphs business offers laundry, tanning, Internet and copy/fax services for her hometown.

March 29, 2012

PLYMOUTH, Mass. — Taking care of customers is Job No. 1 for store owner Neil King and his staff

PLYMOUTH, Mass. — At Mayflower Laundry, located in a former shopping plaza, it’s all about providing good customer service, says owner Neil King.

“We take care of our customers, that’s number one. We have a clean place. We are open seven days a week, 6 to 10. There’s always an attendant on duty. We have the right mix of machines, to let customers do their laundry in a hurry if they want to. We offer personalized wash, dry and fold. We have pickup and drop-off to offer maximum convenience.”

As a result, Mayflower takes in $360,000 in revenue annually. The company earns a profit out of that volume by keeping a rein on expenses—doing 25% of its own repairs, holding down utilities to 20% of volume, and having no debt. It helps that the operation depends little on marketing, rather relying on word of mouth to generate most of its business. Finally, rent plus fees are a reasonable 11% of volume.

The 2,000-square-foot Laundromat has a transportation company and a health club as plaza neighbors. It is right off the main road and has unlimited parking. Inside, the facility is clean, spacious, with many individual workstations. A ceramic-tiled waiting room contains padded seats, magazines, as well as children’s toys. Framed paintings adorn some walls. A glass-walled office at the entrance is where management and staff do their paper work. This placement allows close monitoring.

Two 50-pound dryers and 36 30-pound dryers, all from American Dryer Corp. (ADC), are positioned along one wall. Mayflower’s washers, manufactured by either IPSO or Continental Girbau, include two 75-pound front loaders, eight 40-pound front loaders, five 25-pound front loaders, six 25-pound high-speed front loaders, two 40-pound high-speed front loaders, and two conventional top loaders.

Several vending machines, including a soft drink machine, a snack machine and gum machines, stand alongside the seating area. “I don’t make much out of the Coke machine, but I fill my snack unit by going to BJ’s (Wholesale Club) and I do OK,” King says.

1,800 WASH-DRY-FOLD POUNDS WEEKLY

Keeping the customers happy largely falls on the shoulders of King’s manager, Michelle Ligue. She and her staff of four part-timers are responsible for maintaining clean premises, solving customer problems, and keeping the flow of wash-dry-fold work going. The staff processes 1,800 pounds each week at $1.10/lb.

“I’ve been here 12 years and I know most of the customers,” Ligue says. “And I know 90% of wash-dry-fold customers’ phone numbers. It’s important to keep up with the work, including in-store customers, wash-dry-fold work, cleaning, and the paperwork.

“I train them [her staff] to have a system, do one customer at a time, plan ahead as to which machines to use. The worst thing is to confuse orders. For this to work, it’s necessary to be a multitasker, because a staffer might have four things needing attention at once. We each do our own customers’ wash-fold-and-dry work, so we make sure their stuff comes to them the way they want it.

“For instance, I have a woman customer who owns a lot of rental property. She color-codes everything. She is very particular about the folding. I make sure I give her exactly what she wants. It makes a difference in staffers’ take, for 75% of wash-dry-and-fold customers tip.”

As for hiring, Ligue doesn’t hire anyone too young. An applicant should have some previous laundry or hotel experience and must be used to doing physical work to be considered. Ligue says she can tell if a person is going to make it based on the first hour of training. She is not opposed to letting people go after a day.

EXPANDING ON PICKUP AND DELIVERY

King is doing pickup and delivery for eight customers and is in the process of expanding that business. “It’s good business because it is priced at $1.35 a pound, and it gives us more to work with,” he says. “The key is to keep the customers bunched together and to develop an efficient route of pickup and delivery.” He is placing a series of eight ads that will run in the newspapers of nearby wealthier communities to build up clientele.

“Price isn’t a problem,” says King. “Many prospects are two-career households and they want the convenience and are willing to pay for it. We even have customers come in here who have washers and dryers at home, but use us because they can do all their laundry in an hour and a half. We focus on convenience in this portion of our business.”

Mayflower also does a big business in comforters because the bedding is too big for conventional machines. Cleaning dry mops for municipalities is another specialty.

Having a clean facility is key to a self-service laundry’s success, according to King; he believes customers won’t use a dirty Laundromat. At Mayflower, there’s a cleaning checklist for every shift—morning, noon, and night. Dryer lint traps are cleaned three times a day, because the presence of lint inhibits air circulation and retards drying.

King attributes the ability to control expenses to having new equipment. “Our utility costs run 20% of volume, which is 5% less than industry average. Newer machines are highly efficient, three-phase machines. It also helps that all dryers are powered by gas.”

King motivates his staff by paying them 20% of the wash-dry-fold business that they do. This keeps them turning out good product. Finally, it helps that everything is owned. Mayflower operates with a $50,000 equity line of credit, but doesn’t owe a cent on the investment.

With the company well positioned in the Plymouth-Kingston-Duxbury market, King has no plans to open another operation. Instead, he wants to build up drop-off and pickup service and continue relying on his staff to run the enterprise. This way, he only has to spend a few hours a day at the laundry and can devote more time to his real estate and other business interests.

“It’s a good business because you don’t have to be there, and you can still make money,” King says.

September 19, 2011

FAYETTEVILLE, Ga. — As a vended laundry owner, you know that utility costs are one of the top three expenses for your business. By replacing your out-of-date equipment with newer, energy-efficient machines and technologies, however, you can reduce those expenses and increase your profits.

Over the past decade, manufacturers have invested heavily in research and development to produce the most efficient and advanced equipment on the market today to help make your store more profitable.

Most laundry owners find that by retooling a store, they can increase profits up to 30%. Often, owners can command a higher vend price because they’ve made a significant investment in upgrading their store. Customers will frequent the laundry more often because of the newer, modern look, which will also attract new customers.

While many business owners are still hesitant to take on business improvement projects, there has never been a better time to do so than right now. By providing customers with the best equipment, your store will surely outperform the competition.

Top Loader vs. Front Loader

Washing machines have changed over the years. Many laundries are still using top-load washers. These machines typically use about 31.5 gallons of water per cycle. By switching to high-efficiency front loaders, water usage will be greatly reduced. New high-efficiency, front-load washing machines use only about 10.9 gallons of water per cycle, a 20.6 gallon decrease. The reduction in water alone will save your store at least 50% or more a year.

Replacing top-load washing machines with high-efficiency front-load machines is an easy upgrade. Front-load washing machines require the same plumbing, electrical service and footprint as a top loader.

Washer-Extractor Updates

Improvement in washer-extractors has also made these larger machines more attractive to store owners and the customers who use them. Newer machines have been redesigned to be flexible, offering significantly more options for the end-user.

For example, some washer-extractors offer a four-compartment dispenser that allows customers to add two detergents, bleach and fabric softener, all at the beginning of the cycle.

The major change is in the control platform. Washer-extractors purchased in the late 1990s and early 2000s only offered three settings—hot, warm or cold. With newer, advanced controls, these machines can be programmed to help make your store more profitable while offering customers more options. Cycle modifiers allow you to set premium prices for medium- and heavy-soiled clothing that needs to be washed longer. On average, at least 20% of customers choose premium wash cycles. This equates to a 4-5% increase in washer revenue.

Newer controls can also be programmed to give a free wash or a reduced wash after a predetermined number of cycles. This offers the opportunity to differentiate a store for marketing purposes, while also generating loyalty and excitement.

For the owner, advanced controls offer unparalleled ability to reduce water and energy costs through enhanced programmability. One of the most significant features that newer controls offer is the increased number of water-level options.

Typically, each fill within a given cycle can be adjusted on a scale of 1 to 30. You won’t want to compromise customer satisfaction, so make sure you try out different water levels to determine which ones are a good fit for your store and your customers. As utility costs continue to rise, this feature will be essential. You can adjust water levels to reduce the store’s monthly water and sewer bill.

Tumblers

A decade ago, natural gas was a low-cost commodity. But like other sources of energy, the cost of use continues to rise. Because of this trend, manufacturers have invested heavily to upgrade their dryers and tumblers to make them more efficient so that you can keep your operating expenses low.

Some single-pocket tumblers feature an axial airflow process that ensures heated air comes in contact with the load at the optimum time in the tumble process. They’re built with high-performance burners that ignite instantly, providing the desired temperature quickly and distributing heat evenly and efficiently.

In addition to the efficiency benefits, these advances also will contribute to improved throughput because customers won’t need to extend drying cycles during busy times.

Commercial-Quality Products

If you decide to retool your store, or even replace just a few pieces of equipment, make sure you’re choosing equipment that is manufactured for commercial use.

Some of you may have acquired existing stores that utilize machines designed for home use with a vended coin box, which means they’re more likely to require more maintenance and have a shorter lifespan.

For true success, use equipment manufactured by a company that has a legacy of providing machines and technology that stand up to any commercial challenge and that is the most profitable to own.

Equipping for Great Outcomes

Upgrading your machines to higher-efficiency equipment will help your store increase profits and lower operating costs. It will also infuse new energy into your business and generate excitement among customers.

There are finance programs available to help you make business improvements, and even substantial tax benefits if you act soon.

If you’re not sure where to start, contact your local distributor.

January 6, 2011

January 5, 2011

WASHINGTON —Vending, a traditional part of the self-service laundry experience, is about to undergo a major change in 2011. Fortunately, laundry owners will be spared a major inconvenience.

The Food and Drug Administration (FDA) is making it easier for consumers to keep their diet resolutions. In 2011, all vending machine operators with 20 or more locations will need to provide the calorie count of items before they are chosen, thanks to health-reform legislation passed last year.

November 3, 2010

How many times have you thought about ways to generate more income from venders? Is it time for some “out-of-the-box” thinking? Are you taking advantage of the latest technology?

BOOSTING PROFITS

If you want to improve sales, you might need a little variety when it comes to your vend choices, says Vince Hansen, Vend-Rite Mfg. “Offer a wide variety of product choices. Chips and soft drinks do not appeal to everyone.”

November 3, 2010

October 11, 2010

CHICAGO — When it comes to vending, how bold do you really want to be? Are your laundry

CHICAGO — When it comes to vending, how bold do you really want to be? Are your laundry customers ready for more than just the traditional food and drinks?

October 11, 2010

October 20, 2009

September 30, 2009