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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.

June 5, 2012
Distributor Relationship Advice

PEMBROKE, Mass. — Main distributor can be your eyes and ears to the industry

PEMBROKE, Mass. — One of the pivotal relationships for your business is with your main distributor. Not only do you count on him to provide products and equipment in a timely, economical fashion, he can be your eyes and ears to the industry.

He can be a sounding board as well as adviser. He can help you solve some sticky problems. He can help you run your marketing events. He can even point to good potential employees in the industry. The key is how you develop your distributor relationship.

Above all, be on good terms. Your distributor representative will be the contact person. Become his friend. Understand his needs. Relate to this individual as a person. This doesn’t mean that when John drops in, you take him out for lunch and treat him to a ball game, enjoying the beers and the woozy feeling you both share afterward. This means that you study the person, see what makes him tick, understand his inner needs, and develop strategies that enable the two of you to be friends.

This isn’t always the easiest thing in the world. You are two different people. One might be a quiet, self-contained introvert and the other might be a booming extrovert. One might hate politics while the other might think arguing about Democratic vs. Republican values is just about the best thing to do. Plus, there’s a bit of an inverse relationship. You both want to do business together, but one wants bottom prices and impossible service while the other wants higher prices and less-urgent service.

Even if the distributor is odd, unfriendly or slightly loopy, you must find a path to, if not friendship, toleration. You must overcome these obstacles, find common ground, and make that the basis of a friendship. At the very least, you have something in common—you are two individuals trying to make a living, often with families to support, and you both know that it is done through compromise. Certainly, that understanding can be a basis for a good relationship and mutual respect.

Use your distributor as a disseminator of industry information. Ask questions.

So what is XYZ doing?

Anyone placing any multiple-unit equipment orders?

Any newcomers entering the business?

What is happening with the manufacturer that is going bankrupt?

How do operators find business these days?

Is ABC’s kid taking over now with ABC being sick?

Have you seen a lot of price increases?

Such information helps you know what’s going in the industry, who’s doing what, and where the market is heading. Such knowledge helps you figure out where you are in the pack and where you might want to head in the future. For example, you wouldn’t raise prices if you didn’t know what others were doing, if for no other reason than you could prepare an explanation.

You never know when industry information is valuable. For instance, you might find out that XYZ recently had a store manager quit at the exact time you need someone to be your second-in-command. Perhaps this individual would be perfect for the job.

Or you might find out that XYZ is closing a store that borders your market. With such insider information, you can plan a marketing blitz on the north side to capture many of those customers.

Or you might learn that everyone is raising prices. That might clue you in that now would be a good time to follow the pack.

The distributor’s tip that XYZ is contemplating closing his operation could encourage you to expand your operation by taking over his location. Your distributor could fill you in on demographics, to see if you will acquire enough new business or will cut your current market reach in half.

Ask for advice when you have a problem. You feel your machine capacities aren’t perfectly aligned. Call up your distributor salesperson, lay out the problem, and see what he says. It doesn’t hurt to bounce problems off industry insiders.

One operator likes to make major decisions this way: “I get three or four insider opinions, and put them down on paper. Then I hole up with a pad of paper, and grapple with the problem, using the others’ opinions as guidance. Hopefully, I emerge with an answer. It might not be the answer a distributor gave me, but the distributor’s contribution helped me decide.”

If you are running an event, ask for assistance. Your distributor can provide marketing help, send pamphlets, and even appear as a personal emissary. If you want to design a mailer, send it to your distributor to review it. If you are considering replacing new equipment, ask the distributor for his suggestions. In other words, use the experience of an industry insider who has dealt with all sorts of situations. If you are attending a convention, ask the distributor if he can supply advanced info on show specials, which gives you time to do research.

Yet, don’t fall prey to becoming a dupe or a softie. You must still fight for the best deals, press for the lowest price, argue for favorable terms, and check invoices carefully for errors. You must become friends and be willing to seek help, while still acting as one tough customer. This is not an easy tightrope to traverse, but still you must walk it. In other words, never let friendship get in the way of driving a hard bargain.

One operator puts it this way: “I fight for every cent, then when I need the distributor, I ask for favors. When I sense reluctance or a bad attitude, I say, ‘Look you and me are in this together. You want me to succeed. I know I’m being a tough SOB, but it’s necessary to run my business well. So, put up with my demands, and over time, you’ll receive the lion’s share of my business.’” Never be afraid to say, “I need you, Mike. And you need me. Let’s work it out.”

A distributor relationship is one of your most important associations. Make it work for you.

May 23, 2012
Thinking About a Business Loan? (Part 2 of 2)

CHICAGO — Where to turn when bank says no

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.

What Happens When the Bank Says No?

When your best efforts fall on deaf ears at your local banks, all is not lost. Here are some alternate sources of business financing that may meet your needs:

State Government Programs — Most states have loan programs designed to provide small-business financing. Some of these programs provide loans at lower-than-market interest rates, provided the business will create jobs in the state.

Some states have collaborated with local banks in lending arrangements designed to attract, retain and expand businesses. Typical of these is a partnership between the State of Ohio and Huntington Bank. Known as the Ohio Huntington Business Loan Program, it has provided more than 2,000 small and medium-size Ohio businesses with loans totaling $465 million.

For information on small-business financing programs in your state, contact the office of your state representative or state senator.

Federal Government Programs — The federal government also has loan programs available to assist small-business owners. The most popular of these is the Small Business Administration’s guaranteed loan program that guarantees as much as 80% of the loan principal. This program gives your bank an incentive to lend to a borrower who does not otherwise meet the bank’s lending guidelines.

Among other SBA loan programs available to small-business owners is the 504 loan. Established in 1980, the 504 Loan Program provides long-term, fixed-rate financing for major fixed assets, such as real estate, facilities construction or expansion, or other fixed-asset needs.

If you decide to seek an SBA loan, your best bet is to work through a certified or preferred lender. The SBA’s guaranteed loan process is rather complex, so you want a lender who has experience working with them. To find certified or preferred lenders, visit the SBA website or call your local SBA office for guidance.

The SBA has local and regional offices in every state. You’ll find their phone number in the federal government section of your local phone directory. For detailed information on all SBA programs, log on to sba.gov.

Small-Business Investment Companies (SBICs) — SBICs are private investment firms licensed by the SBA to provide investment financing and long-term loans to small businesses. Some SBICs make only equity loans, others provide debt loans, and some provide both. As a rule, SBICs will require the same level of collateral and credit ratings as banks.

For information on how to contact an SBIC, check with your local SBA office or log on to sba.gov/inv.

Local Economic Development Organizations — Your local Chamber of Commerce or other business group may have some revolving loan funds available to businesses specific to your community. Generally, these funds come from local resources and have specific guidelines for their use.

Begin by contacting the director of your local Chamber of Commerce to see what help might be available for the specific purpose you have in mind.

Angel Investors — When conventional financing options seem out of reach, many business owners have had success seeking out individuals or commercial lenders willing to invest in a business expansion, with either debt financing or by taking an equity position in the business. When you find an “angel” investor, you’ll probably find that this option is more flexible than a bank loan or government program.

If you don’t know anyone with the economic firepower to fund your loan, don’t give up. There is an entire industry of professional investors looking for opportunities to invest in growing businesses. For more information on how to match up with an investor who might be interested in your situation, log on to entrepreneur.com/article/52742.

Keep in mind, though, that unless you’re willing to give up an equity position in your business, working with a professional investor is not for you.

When All Else Fails

Depending on the size and economic health of your business, the only source of expansion money available to you may be what you can dig up on your own. Be advised, however, that each of these money sources carries special risks.

Friends and Family Members — If you have a friend or family member able to help finance your growth, you may find this to be the easiest type of loan to obtain.

But use caution. Most financial experts agree that mixing business and personal relationships can lead to destructive problems in both your business and personal life. If you do take a loan from a friend or family member, make sure that all details are carefully spelled out in a written contract.

Credit Card Financing — If your needs are modest, you may have credit cards with lines of credit substantial enough to fund all or part of your financing needs. While it can be tempting to simply charge everything, this is arguably the riskiest and least desirable of all financing methods. The burdensome interest rates charged by credit card issuers these days can become impossible to meet if your business hits even a minor bump in the road. The result could be a severely damaged credit rating — or even the loss of your business.

When you need to raise money for your business, say most experts, a thorough and detailed business plan is the key to the safest and most desirable types of financing. While other than conventional sources of money may seem the easiest to find, they are seldom the wisest choice.

September 24, 2007
Leading the Way in the Lonestar State (Part I)