This is Chapter 12 of the book ‘Investor’s Guide to Coin Laundries’, compiled in 2012 by Jay McDonald, Vice President, Distributor Sales for Alliance Laundry Systems.
An Investor’s Guide to Coin Laundries | Additional Revenue Opportunities | Chapter 12
Alliance Laundry Systems is the largest manufacturer of commercial laundry equipment in the world and has over 50 years of experience in helping investors just like you, get started in the coin laundry market. This book is a compilation of experiences, ideas and input from hundreds of successful coin laundry owners and distributors from all over the world. Taking data and industry knowledge, it is a road map to help you succeed. At the end of it, you will have a general understanding of the industry and what it will take to operate a successful business.
A NOTE ON COIN-OPERATED LAUNDRIES IN SOUTHERN AFRICA
In Southern Africa, coin laundries are typically found in flats or townhouse complexes, caravan parks, holiday resorts and universities. Historically coin-operated activation systems have supported these laundries. However, this system is largely being replaced by our LaundryConnect Cashless Payment Gateway, which is convenient, hassle-free and the way of the future. It is easy to integrate or replace your existing coin mechanism in order to offer cashless payments or to use a card to activate machines.
Additional Revenue Opportunities
Chapter 12 : ADDITIONAL REVENUE OPPORTUNITIES
There are many great ideas on how you can supplement and grow the income of your coin laundry. In a previous chapter we talked about some of the ideas including a car wash, a DVD rental box, and even a tanning salon. But for those laundries that are attended, one of the easiest ways for coin laundry owners to capitalize on untapped income potential, is by providing a wash, dry and fold service.
Drop off laundry service or “wash, dry, fold” as it is commonly known, has been around since the beginning of time. Basically, people are willing to pay someone else to do their laundry for them. It is a true service industry business. This willingness is what developed the dry cleaning industry.
With the ability to boost your revenue with no significant additional investment required, wash-dry-fold is a fairly basic business opportunity that through proper management and customer service, can grow as much as you want it to.
Tapping into the Wash-Dry-Fold Market
With very little additional overhead in supplies (a few hundred dollars a month), you can open up a wash-dry-fold service. Wash-Dry-Fold or Drop Off laundry services are more labor intensive but for stores that already employ a laundry attendant, it is typical that these personnel can do the work in the normal course of their day. If your Drop Off business grows to the point where you need more employees, the incremental revenue can justify the additional personnel expense.
Some of the basic equipment you will need includes plastic bags to place clothing in after folding, service slips with customer numbers that can be torn off, hangers for shirts and dresses, starch, irons and ironing board; and space dedicated to dropping off and picking up laundry. Shelving can be built on site or purchased. Some stores add conveyor systems similar to what you will see in a drycleaner. I would not recommend investing in a conveyor system at the beginning. Wait until your business has ramped up to determine if this would make you more efficient. However, when designing the space for this service at your laundry, keep this in mind should you want to expand in the future.
Once you’ve got that in place, it’s time to start targeting potential customers. Unlike your coin laundry user, the wash-dry-fold customer is generally higher income, white collar and busy. They may also be further out of your demographic area, living in high-end apartments and working in offices.
TARGETING THESE INDIVIDUALS CAN BE FAIRY SIMPLE. BELOW ARE SOME IDEAS TO IDENTIFY POTENTIAL WASH-DRY-FOLD CUSTOMERS AND GET THEM TO VISIT YOUR LOCATION:
- Human resources
Many companies are looking for ways to provide added benefits and services to employees. Over the years, dry cleaning pick up and delivery has been one of them, but as fabrics are changing and people are dressing less formal at work, there is an opportunity for wash-dry-fold services. In one of my favorite examples, the ambitious laundry owner met with a growing large company whose employees typically worked well beyond an 8 AM to 5 PM workday. The H.R. department agreed to give the laundry an exclusive to have their delivery van in the company parking lot and to promote this service through an internal newsletter to their employees as a “benefit”. However, H.R. determined that the van would be in the lot from 7:00 to 7:30 AM and again at night beginning at 6:00 PM. This gave their employees a reason to get to work early and stay late, at least on laundry day.
Because pick-up and delivery might not be in your budget, consider offering companies with larger employee-bases, an opportunity to use your services at a discounted rate. Getting enough employees to take advantage of it will offset the cost of the discount provided. Offer to assist the company in the cost of advertising flyers or other things to help promote this new benefit.
Fortune magazine published their list of the “Top 100 Companies To Work For” a few years ago. Of those, almost one third offered on-site day care as an employee benefit. Laundry pick up and delivery could be touted as another employee benefit and best of all, it costs the company nothing!
- Direct Mail
You don’t necessarily need a fancy direct-mail piece, but rather a simple flyer. What will be important is getting the addresses of those living in the apartment buildings you wish to target. As many apartments offer their own laundry equipment, you are going to want to focus on the time-saving benefits of wash-dry-fold laundry services. Many rental units have hook-ups in the apartment for home style laundry equipment. But for an average family of four doing 8 loads per week, that equates to 10-12 hours spent doing laundry. Drop off may be a little more expensive but what is the value of saving this many hours to spend with family instead of a washer and dryer? Who wouldn’t want to do a week’s worth of laundry in 10 minutes?
- Chamber of Commerce
A chamber of commerce is only as valuable as the benefits that its members have available. Providing group insurance, lobbying, and discounts on services that businesses find of value are part of what attracts smaller businesses to a chamber. Consider adding your service to the mix. Join the chamber; work with the executive director and marketing director to provide a discounted rate for your services to chamber members. Perhaps you give them their first wash-dry-fold free to get them into your store to experience the convenience and quality that you deliver.
When targeting business people, be creative; show them the value and the benefit of your service. It’s the language they speak and the language they know best.
Two of the greatest benefits you can offer are available capacity allowing a week’s worth of laundry to be done quickly and larger capacity machines than a person would have in their homes. Consider putting an ad in the local paper a few times per year with special pricing on larger items like comforters and bedding, sleeping bags, rugs and draperies.
Besides the convenience of wash-dry-fold, the one thing that can make or break your sales is the customer experience. From the time they drop off their laundry to how it looks when they pick it up, and every step along the way, it all matters to your customer. A single bad experience and they will walk out the door and never look back.
This is where training is most important. Before you open your doors to a wash-dry-fold service, it’s imperative that you develop and implement a multi-tiered training program for any employee in your laundry.
- Dress code
Imagine if you walked into a business and the receptionist was dressed in a stained shirt, hair a mess, and looked unprofessional? How would you react? Would you proceed or turn around, walking right out the door?
The first impression you make on anybody is a visual one. It’s important that your employees are the vision of perfection when a customer comes in, greeting them with a clean shirt that is free from lettering, other than a uniform top with your laundry name on it, pressed pants, hair neatly done, minimal jewelry for both men and women, and definitely no facial piercings. It’s all about looking professional; after all, you’re doing their laundry. If your attendant looks sloppy, the impression they could be giving is that the service you provide will be sloppy too!
- The Greeting
Have you ever walked up to the register at the store or up to a clerk to ask a question and been greeted with a harsh “What?”? Sounds funny, but it does happen.
How your employees greet your customers is as important as how they look. Consider developing a standard greeting that employees can use, as well as a list of questions you’ll need answered in order to complete the order including: when the customer would like to pick up their laundry, are any of the items stained and if so, what kind of stain and where, etc. All of this will go along way into providing that beneficial and good customer service experience your consumers are looking for each and every time they enter your doors.
- Stain Detectives
Even when you know what kind of stain you are faced with, there will be times when you don’t. Knowing how to properly treat stains is hugely important when providing a wash-dry-fold service. The worst thing you can do is return an item of clothing that wasn’t treated properly for stain removal.
Work with your distributor to see if there is any training provided in this area and send all employees through it. It’s also wise to put together a procedure book covering the more common stains.
Some stains just can’t be removed. When a stain doesn’t come out, even after a few different attempts; make sure you make a note of it and how it was treated for your customer. This will lessen the impact of returning a stained item. And make sure you make consumers aware that some stains cannot be removed. Many laundries will have a disclaimer posted in the store and on the customer receipt.
- Folding and Stacking
This is where perfection matters most. With military precision, pants, shirts, socks, undergarments, dress shirts, dresses all need to be folded or hung properly and uniformly. Customers will not appreciate getting their laundry back in a large and wrinkled pile.
Consider using shirt boards for uniformly folding shirts. Jeans and pants look best if they are folded in half, then the legs folded up to the waistband, the rise tucked in and the legs folded one more time. It’s how most of them come from the store.
Socks should be paired and folded without the tops being tucked into each other so they are as flat as possible and undergarments folded in thirds. Once everything is looking new and fresh, wrap them in plastic to protect them. It also makes it easier to unpack and put away.
When you put them back in the laundry basket or bag, stack them neatly.
When it comes to wash-dry-fold, consistency matters. No matter who is working, each employee should be doing everything the same way. Take time to spot check work, making sure everything is done uniformly. If only one employee is doing it right, you might be out of luck and risk losing customers if he or she goes on vacation or leaves your business for other opportunities. By providing each employee with the same training, you’ll be setting yourself up for success.
Commercial laundry is different than wash-dry-fold or drop-off laundry. In most cases this will require you to provide fast turn around, consistency and usually pick up and deliver as commercial accounts are generally other businesses who produce lots of laundry themselves.
Some commercial account ideas that might provide additional income include:
- Salons and Spa’s
This account might require you to make a few trips per day as they go through towels, sheets and even robes at fairly fast rates. One way to help position you when trying to sell your commercial laundry services to a salon is by highlighting the cost savings. They wouldn’t have to invest in equipment and staff time would be spent servicing clients (generating revenue) and not washing towels. There would also be a cost savings in utilities as well.
- Hotels and B&B’s
When it comes to hospitality, a great deal of money is spent in the laundry department. Again, provide them with a cost analysis. Your store with its larger capacity machines can wash their towels, bedding, even larger items like curtains, comforters, blankets and table linens if there is a restaurant onsite.
- Sports Teams
Schools are looking for ways to reduce their costs. One area they could look at cutting expenses is through outsourcing their laundry services. This reduces overhead in staffing, equipment and utilities. Consider working with your distributor to develop a cost savings analysis to present to the school board.
Many restaurants do not invest in their own laundry equipment, instead using a linen company. However, there are some restaurants that choose to not rent linens but purchase their own. This is a prime opportunity to position commercial laundry services.
Whether you choose to provide just wash-dry-fold services or add on commercial accounts as well, it’s important to look at what impact these services will have on your bottom line. If it’s going to enhance it and bring in additional income it might just be the second wise investment you made, the first being opening a coin laundry.
ABOUT THE AUTHOR
JAY McDONALD has been active in the laundry industry for over 30 years. He is the Vice President, Distributor Sales for Alliance Laundry Systems, the largest manufacturer of commercial laundry equipment in the world. He also served on the board of directors for the Coin Laundry Association and received the Distinguished Service Award “in appreciation of his leadership in furthering the welfare and best interests of the coin laundry industry” in 2009.
SA’s FIRST COMPLETE CASHLESS PAYMENT SOLUTION
Laundry Connect offers an affordable and adaptable payment gateway that is fast becoming the system of choice. It is easy to integrate or replace your existing coin mechanism in order to offer cashless payments or to use a card to activate machines.