This question is frequently asked during our Monthly workshops, as well as in consultations with investors. I apologetically answer this question in a matter of fact, traditional manner. "The vended laundry business has been around for close to a century and every person on earth washes their cloths". But a better answer is this: Today, the life we live is very different than that of even a decade ago. How we communicate is changed forever. The way we work, earn a living, play, learn has all also changed. So the question is a fair one and deserves a better look.
The answer is that success lies in the control of the Laundry Operator who is willing to address the questions and make the modifications to better service today's service conscious customers. For those that pay attention and take action the future looks better than ever. Remember, "Doing Laundry Is A Necessity Of Life."
First, just to reinforce the old answer; let me assure you that there is nothing acceptable on the horizon to cause people to either stop wearing cloths or start disposing of them after use. So what does that mean? To answer further let us look at the elements that influence the business of a Laundromat. Many of these may sound familiar. After all, while the way we do things may have changed, our basic needs have not.
POPULATION & HOUSEHOLD PROFILE, It is now and has been true that the locations that are surrounded by large household sizes will have more business potential. Simply, people have a harder time keeping up with their laundry if they have a larger household size. This is true in all economic areas. The rental population being higher also improves the overall potential. Renters in apartments largely already use a community laundry. For them to go to a near by Laundromat is relatively easy and offers them many other benefits. Additionally, the near by laundry has a greater opportunity to out perform the apartment laundry with larger and faster equipment, price promotions and offering an on site attendant, there to provide added services, noticeable cleanliness and a higher level of customer service. This also best addresses the most important issue of customer safety, which we will discuss further.
Homeowners and renters of single unit properties are more likely to have a washer and dryer available at home. However, while this is a nice convenience they cannot properly wash comforters and extra large or heavily soiled garments. They will frequently get behind and a large washer will help. They need a laundromat. This large customer base is still not being sought out as well as it should and with current developments will become a big boost to the laundry owner who pursues them. This desirable demographic also is less likely to patronize a laundromat that is not attended, clean and safe. They are also more retainable, if they are taken care of. They are not as easily moved with price reductions.
CONVENIENCE, This is an area of growing advantage to the Laundromat. While location is King in this business, it is more a question of the Model and the unique elements of the location that cause a location to be good. These are wide and varied and must be saved to answer in a question and answer format.
There is also a growing interest in a higher level of service. Customers like the larger and faster equipment. Much of the new equipment being sold today offers a much greater variety of advantages, in addition to large utility savings. The added benefits of the newer programmable equipment speeds up the chore for them, which frees up time to do other things. One fact I can mention, no matter how nice we build the laundry, almost no one likes doing this chore itself. So now, in less than an hour, a customer can wash, dry and fold a weeks worth of blankets, towels and cloths; and even get shopping done at the same time.
By offering added services, like Fluff & Fold, over the counter sales of laundry, snacks, drinks and other products, Free WiFi and other numerous services, promotions, video games, TV's, music, reading material, combined with a positive "customer first" attitude, laundries have an ever growing opportunity to improve their businesses performance. This is not to say that the Self Serve Laundry is a thing of the past, but the business model of any self-service laundry should be examined for potential modification, or at least in order to understand the market and its potential and the costs and benefits to modify it. Failure to do so could be very costly to the investor.
SAFETY, in several surveys I have seen this is the biggest obstacle that the laundromat must overcome. Unfortunately, many laundries have been poorly run and a not kept clean. While laundries in this category are diminishing, people recall this and associate it when considering patronizing one. This image continues in the minds of a majority of potential laundry customers. Even though we continue to build better laundries with security systems and in many cases attendants on duty, a lot of people don't want to use one. Modifying this image is not as hard as some think and will grow the business. This is even truer in large family, medium and higher income areas. Proportionately, laundromats perform poorly in this category and receive a much smaller amount of business than that available to them. Many of these areas are poorly serviced and development is desirable. Addressing the Safety issue is the first step in the development of this part of the business.
EQUIPMENT, The equipment companies have been stepping up and addressing these questions in the development of the newer equipment. In many cases we can offer promotional pricing to build our business. Off-hour or day specials are also available. Washes can be available that use much less water or much more water. Cycle times can be adjusted and now Credit Cards can be accepted. You can use Sanitized (Ozone treated) water systems which offer benefits in cleanliness and customer peace of mind. The top load washer is offered much less and often at a higher rate than the 2-load front-loading models. Utility costs can be cut by up to 50% depending on what you had and what you select. This is huge. If used correctly, it gives the laundry owner enormous advantages.
So, taking these things into account, what is the future? I believe it is very good.
Contributor:
For over 25 years Peter Siegel, MBA has been providing niche business purchase financial advisory and loan placement services with SBA Loans, Non SBA Financing, Retirement Plan Conversions, Note Restructures, etc. Call me regarding business purchase financing and to get pre-qualified: 925-785-3118.
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McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
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If your business involves alcoholic beverage sales, we can help. Obtaining a liquor license transfer or selling a business with a license in California does not have to be a frustrating and overwhelming process. We have procured thousands of licenses for our clients.
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The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups.
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Cheryl's a restaurant business broker, over 25 years in the bar and restaurant industry coupled with a J.D. Cheryl works tirelessly to create successful strategies and effective negotiations for those who wish to purchase a new or sell an existing bar, restaurant, cafe, or night club. 415-309-2722
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Laundry consulting, due diligence, buyer representation: We preview laundries for you and evaluate them. 28 years laundry industry experience: buying, selling, valuing, retooling, analyzing, consulting services for laundry buyers and entrepreneurs in California. Contact us today about our services.
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