Content about machinery

CHICAGO — Fire, liability or a worker injury is a risk that a coin laundry faces every day. If the business doesn’t have the proper insurance protection in place, an incident could be difficult to recover from. In a worst-case scenario, it could even put it out of business.

American Coin-Op invited representatives from the industry’s major insurance providers to answer some questions that the average self-service laundry owner might have about protecting their business investment.

ACO: How often should a laundry owner evaluate his/her insurance coverage?

Steve Brodie, senior vice president, Wells Fargo Insurance Services USA: Things change all the time. I would review the liability when the lease is coming up for renewal and just keep in touch with your distributor annually on any major equipment price increases so you can raise your personal property value accordingly.

Adam Weber, president, Irving Weber Associates: All insurance policies should be evaluated yearly at the time of renewal at a minimum. If, over the course of the given term, changes are made to the building, machinery, autos, etc., the insurance should be re-evaluated at that time as well.

Anne Hawkins, senior underwriter, NIE: A good agent will contact his insured at least two months before renewal to review current coverage and make possible upgrades or changes. If an agent does not contact the owner in this manner, it may be time to look for a new agent. Don’t let a renewal go by without reviewing your coverage with the agent or carrier. There may be changes that are occurring to the insurance or you may have some new operation that needs to be covered.

I find that many Laundromat owners actually have other jobs and businesses and are extremely busy people. But always take those 15 minutes to remember what’s covered/not covered at the Laundromat. If you can’t be reached by phone, let your agent know that he can reach you by e-mail. I find it a convenient way to communicate, but it’s always nice to speak to the owner so responses are immediate and carry a more personal touch.

Larry Trapani, president, Brooks Waterburn Corp.: The insurance landscape is constantly shifting. In terms of price shopping, I recommend you review your policy about every two years. I do strongly suggest an annual conversation with your agent to review coverages. You may have bought new equipment during the year and the values need to be adjusted. The agent can also review new discounts that become available during the year.

ACO: How does the presence of a surveillance/security system affect a store’s insurance coverage and cost?

Weber: Surveillance/security system would lower the costs of most property coverage as this is a definite deterrent to theft, vandalism and similar situations causing a claim. Surveillance systems can also assist in determining if there was an actual fault on the business owner’s part in a liability claim, such as to whether a water spill caused a slip-and-fall.

Hawkins: That determination would be made on a company by company basis. I find that unless surveillance tapes/discs are kept for at least 2 years, they may not be of help for liability purposes. Why? Someone may fall on your premises and you may not hear a word about it until the statute of limitations is about to run out (two years in most states). In the meantime, the claimant has seen an attorney and been treated by a chiropractor for two years, running up many expenses. Then, out of the blue, you receive a lawsuit. If you haven’t kept the surveillance footage, it’s hard to contest the claim.

Security systems are great, but in many cases someone forgets to turn them on, they aren’t working for some reason, or they are working but the burglar is able to get in and out before the police arrive. They may be a customer during the day, trying to figure out exactly how they are going to pull it off quickly without getting caught. On the other hand, the fire portion of the security system is important. It can keep a small fire from becoming a potential total loss.

Trapani: Every insurance company has different credits for security systems. While most give a credit for alarms, cameras, etc., the discount is relatively small. The real savings occurs when cameras protect you from bogus liability or employee dishonesty claims. I’ve gotten many slip-and-fall and workers’ comp claims denied because the store owner had cameras on the premises and the claim proved to be false.

Brodie: It helps greatly in the defense of a liability case, so many carriers give a small credit for the installation of live, taped security systems (both fire and burglary).

ACO: What new developments in insuring coin laundries have there been in the last two years?

Hawkins: Coin laundries can now be insured on a business owners policy, which was not available to most carriers (for this exposure) two years ago through the rating service that most insurance companies use (ISO). This policy is quick to rate, quick to quote, and pretty much boilerplate. The cost and the use of this policy varies by insurance company.

Trapani: Insurance is a cyclical business. There are long periods of time (often five years or more) of insurance premiums going down and shorter periods of prices going up. Unfortunately, we are in one of the periods of higher prices. It started last year with some modest increase and looks to continue through the end of this year.

Some insurance companies have stopped writing the class of the Laundromat business altogether, while most are just raising their prices. The good news is that these cycles usually don’t last long. I think we’ll start seeing a downward shift in pricing in late 2013.

Brodie: Consider adding employment practice liability if you have employees, as well as pollution coverage. Sometimes pollution covers more than you think; for example, mold is a pollutant that’s excluded from all standard policies, but is covered under a pollution policy. Consider this if you have an apartment above the laundry. The heat and moisture in some stores creates mold, and the tenant then sues the laundry owner. Without a pollution policy, your standard insurance normally will not respond.

Weber: Insurance policies should be reviewed for the business property limits, as these have often changed in recent years. The policy was probably originally taken out to cover a loan taken on the equipment. Since that time, the equipment found in Laundromats has changed greatly with the times, particularly in terms of electronics.

Laundromats now usually contain flat-screen TVs, Wi-Fi equipment, computer connection equipment, key fob and/or card readers, and other electronics, which will add considerably to the property value at the location. Review and update this information often to be sure there is adequate coverage.

Q: What general advice about insurance can you offer a coin laundry owner?

Trapani: The best advice I can give a coin laundry owner about insurance is to be proactive. Read your policy, talk to your agent, and make sure your investment is well protected. You have insurance so you sleep well at night.

Also, make sure your agent has experience in writing Laundromats. While the class of business can be written by virtually any agent, if they don’t know the industry and ask the right questions, they may be missing coverages and leave some serious gaps in your protection.

Brodie: The best advice is to insure with a broker that has experience insuring coin laundries. Many local agents insure small businesses, and in this current economy are more than willing to insure a coin laundry, but they know nothing about the business. Go with a knowledgeable broker that has many stores insured, is recognized throughout the industry, and will be there to help with the claims process.

Weber: Be sure to have the correct insurance for your type of business. Standard business insurance doesn’t take into account the industry-specific needs with regards to water damage, bailee coverage, boiler coverage, etc. It is important that your insurance carrier offers coverages specifically designed for the Laundromat industry.

Also, review and update your coverage limits annually and whenever changes such as new equipment and building updates are made. And be sure that you are up front and honest with your insurer about hours of operation, if your operation is attended or not, and if you have certain systems in place (fire/burglar alarms, cameras, etc.) and that they are in working order; insurers will review this against the application at the time of a claim.

Hawkins:

• Insure your property to the proper value because if you do not, there may be penalties involved at the time of a loss.
• Maintain your premises and equipment to keep losses down, which in turn keeps premiums down.
• Be sure you have the proper venting installation. If you are not using class B vents, your premium may be higher. Also, make sure vents do not come into contact with combustible building materials.
• Clean dryer vents daily; lint sparks a fire easily.
• Call your agent or carrier if you have any questions regarding your insurance, your premium or loss-control questions. It’s their job to service your insurance needs.

Click here to read Part 1!

PEMBROKE, Mass. — Humor and a coin laundry doesn’t exactly sound like a natural combination. In fact, nobody connects humor with his or her local Laundromat. I’ve never heard a comedian make a joke that has anything to do with commercial cleaning establishments. That’s why you should strive for a touch of humor.

Why? It’s because humor is a positive force of nature. It helps dispel frustration and annoyance, puts good vibes in the air, and makes a person think less about his problems and more about the ironies in life. It erases fear. We always need more humor.

Let’s start with the name of your business. Two fun names I’ve come across are 1) Captain Bubble and 2) The Bubblette.

Captain Bubble conveys a larger-than-life character that will do your wash perfectly. The bald-headed character Mr. Clean on the label of the same-named cleaning solution comes to mind. In fact, the Mr. Clean character pictured on the bottles and featured in TV commercials has helped make the product one of the biggest sellers in its market. He makes you think strong, muscular, capable.

Bubblette has a different connotation—French, delicate, sudsy. But you also think of clean, well-scrubbed clothes, and the pleasant-smelling fleur-de-lis lavender flowers from the south of France.

These two Laundromats are real places, and I’m sure many customers get a chuckle every time they wash their clothes at one of them.

Come up with an identity that incorporates the virtues of a good Laundromat—spaciousness, new machinery, efficient operation, and fast wash/dry/fold service.

How about a “super-clean” hero who wears a blue cape and churns out clean clothes faster than a speeding bullet? Or a washer lady who takes care to make sure everything is extra-clean and stain-free? You could feature a delivery demon that delivers your clothes with minimum fuss and maximum speed every time.

How about a bandana-wearing, sailor’s-cap-doffing fish that weaves through the water to make sure every bit of dirt and grime is removed? Consider a patch-eyed pirate with a hook who carries a flag emblazoned with “The Cleanest Clothes in Town.” Every one of these characters has marketing potential.

Invent a character you favor and fashion him/her around your operation. Use this “spokesman” on all paperwork, vehicles, signs, front, etc. Place him/her front and center in any newspaper ads or marketing programs. All vehicles should emphasize the character’s identity. Put an identifying logo on each machine. Have staffers wear logo shirts.

When prospects see the image of your deep-sea character, they will know it’s a mailing from your company and be more apt to open it up. When passing your store, prospects will notice the larger-than-life hero soaring above the store sign and a smile will form on their lips. When their washers are broken at home, they will envision your pirate; that’s the place where they can clean their clothes. When someone asks about an area Laundromat, the image of your washer lady will pop into the listener’s mind and he will direct the person to your business.

Hang a humorous sign or two in your store. How about “We buff cannons,” for the pirate motif? Or “We make your blankets sleep-able,” alongside a kitten sleeping on a blanket? Or “We’ve cleaned over 6,000,000 garments,” to mimic McDonald’s iconic signs about numbers of hamburgers sold?

I’m partial to clever quotations, such as:

• Even a fish wouldn’t get into trouble if he kept his mouth shut. — Anonymous
• When everything seems to be going against you, remember that an airplane takes off against the wind. — Henry Ford
• You should always go to other people’s funerals; otherwise they won’t come to yours. — Yogi Berra
• An eye for an eye only ends up making the whole world blind. — Mahatma Gandhi

Any of these pieces on a wall provides entertainment to your waiting customer. They might even think, “I’m learning something here.” Rotate these quotations periodically, and you will have customers wanting to come back to see what your walls are “saying” this month.

Create a sandwich sign for the front of the store that reads, “Through these portals go the cleanest people in the world.” Or, in the back of the shop, seat a life-size mannequin clown in a chair and hang a sign around its neck reading, “Cleanliness is not only next to godliness; it’s inside each machine.” Above the washbasin, hang this sign: “Wash your hands before cleaning your clothes. We want you to be cleaner than clean.” In the bathroom, post a sign that reads, “Don’t even thinkof not washing your hands.”

Who would not smile at seeing any of these bits of business? The fact that they all emphasize cleanliness can’t help but be a plus. Any mental stroke that introduces clean into the customer consciousness can only prove beneficial. Subconsciously, your patrons will feel they are really cleaning their clothing.

Know an artist? Commission him or her to create a life-sized sculpture of a woman sitting in a chair and washing clothes using an old-fashioned wooden washboard. My vision is of an all-white plaster sculpture similar to the works of George Segal, with a sign affixed: “It’s easier nowadays, isn’t it?” Commission an artist to paint a mural on the outside of the building that features cultural icons—for example, Groucho Marx, Brigitte Bardot, Babe Ruth, Abraham Lincoln and Barbara Streisand in various stages of washing clothes, with the caption—“Our customer list has no shortage of famous people.” Think that would make passers-by smile?

All these suggestions display a sense of humor to customers, which shows the owner/manager is not above being playful. Any owner who doesn’t take himself/herself too seriously can’t be a monster. In this day and age of deadpan seriousness and fast-paced materialism, such levity would be refreshing. Or as they say, “Laugh, and the world will laugh with you.”

Try it in a small way at first and expand from there. It might even make you smile each time you enter your store.

CHICAGO — Credit is the oil that lubricates the machinery of business. Whether it’s a loan to buy supplies, to support expansion, a capital purchase, or just the need for a short-term loan to meet payroll or other operating expenses, most coin-op laundry owners need to depend on credit at some point. Unfortunately, the upheaval in today’s economy has resulted in a credit crunch that seems to have made it tougher than ever for business owners to swing a loan.

Still, for those in the know, there are enough options available to make the task a little easier. Money may be tight, but business loans are being made every day to those who know how to ask.

“In today’s banking climate, good deals still get done, but with more equity, more collateral and much higher credit scores required of the borrower than in the past,” says Linda Feltman, Pennsylvania State University, Small Business Development Center.

If you’re looking for financing for your coin-op business, now or in the future, here are some choices along with hints on how to greatly improve your chances of coming away with the money you need:

Banks

The first place most coin-op laundry owners turn to when they need a business loan is their local bank. That’s why it’s essential to build a solid business relationship with your bank well before you need to ask them for money. Allowing your bank to become familiar with your business sets the stage for the time when you need to ask for a loan.

“The news media tends to lump all banks together when it come to tight money,” says Bob White, president of Abington Bank, Jenkintown, Pa., “but there are big differences among banks. Like many other small community banks, we have always followed conservative lending practices. As a result, our default rates haven’t suffered and we’re in the same healthy position for making loans now that we were four years ago.”

Even after establishing a relationship, some business owners meet with frustration when the bank turns down their loan application. Most bankers agree that this is often because the owner has failed to come prepared with the information a lender needs to make a positive decision.

“How to find the money to finance a renovation, expansion, or other need is the last thing that many business owners think about when they plan a project,” says James G. Marshall, vice president, Fulton Bank, Lancaster, Pa. “It’s best to have a team lined up behind you when you plan a major financial move — and your bank should be a member of that team.”

How should you prepare for a meeting with a bank loan officer? Marshall suggests that you come armed with:

• Financial statements for your existing business
• Accountant-prepared financial projections and cash-flow analysis
• Marketing feasibility study for the project
• Owner’s personal financial statements and tax returns
• Information on the background and experience of owner(s)

“With this information,” says Marshall, “the bank can give proper consideration to your loan application.”

Be careful to avoid the red flags that may raise concerns in the mind of a loan officer. “One of the things that would turn me off,” says White, “is an applicant who has over-leveraged himself or recently financed the purchase of an expensive asset. And, of course, it’s absolutely essential that the applicant be honest and up-front with all pertinent information.”

Check back tomorrow for Part 2: What happens when the bank says no?

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. 

CHICAGO — Nearly every respondent (95%) offers some type of extra-profit center, and lack of space is the major reason operators don’t offer more extra-profit centers, according to the most recent Wire survey.

Eighty-eight percent of respondents offer vending (food/drink/supplies), while 73% offer drop-off service. Thirty-seven percent have some type of video game.