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Business suggestions needed

  • 1.  Business suggestions needed

    Posted 08-10-2019 14:13
    I am in the contract phase of purchasing a laundromat that is 95% coin revenue.  The area is saturated with mats providing pick up delivery and washing fold.
    Instead of competing with the other mats, I have been considering opening 24/7 since this is limited service in the area.
    1) should i still attempt to compete by flooding the market with an all out campaign to capture some of the pick up, delivery wash and fold sales?   If not this way.....What does anyone suggest to break into a flooded market?

    2) if I stick with coin only and make it absentee,  I would consider making the facilities automated.   Open and close remotely, video camera monitoring  with speakers Does anyone have any suggestions on how to accomplish this?

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    Rudy S
    New purchaser
    (NY, NJ metro area)
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  • 2.  RE: Business suggestions needed

    Posted 08-10-2019 14:36
    Edited by Michael B 08-10-2019 14:39
    Rudolph, if the store your buying is only doing 5% WDF sales? I would STOP on day one & save the payroll, then go 24hours. Sounds like very few stores are 24 hours in the area? ​ The best company I have found to do what you asked for automatic opening & closing has been Maglock, Access Control Kits, Cameras & More Buy Now | FPC-Security
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    Mike B
    Multi Store Owner
    Sunny Palm Harbor Florida
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  • 3.  RE: Business suggestions needed

    Posted 08-10-2019 16:00
    Just what I was thinking.  Thanks for the advice Mike!

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    Rudy S
    New purchaser
    (NY, NJ metro area)
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  • 4.  RE: Business suggestions needed

    Posted 08-11-2019 12:31
    Rudolph, here is one item that might help your decision. I am very experienced in the NJ market so these are some items for you to consider:

    All input from the forum is good, generally experienced and sound. But I have personally learned the hard way that different markets are just that. Different.

    The laundromat business is essentially a market share play. ( As opposed to a new restaurant where people will travel far distances to frequent. ) There are other factors but this is just broad strokes.

    Your market, whatever it is: 1/2 mi, 1 mi or amoeba shaped is what it is. You will not create more "demand". You will only impact other competitors directly. Therefore two items:

    1) You are all fishing in the same pond. As there are only the same number of fish- ask yourself what am I doing to differentiate myself from others. (Don't lower your price- you will fail. )

    2) visit those competitors you will be competing with. Assess the value of drop off. In NJ if the area is not really poor, WDF does great. This business is an entirely different customer base from your machine customers.

    if you need any more input, you can private message me. Good luck. I hope this helps

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    Rob Bodner
    President
    EFR Inc/ The Laundromat Guys
    Park Ridge, NJ
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  • 5.  RE: Business suggestions needed

    Posted 08-11-2019 13:01
    Robert is spot on the money.  I have three stores within 1.3 miles of each other (I used mapquest to get the exact distance)...One store does about $75K/Year in WDF, one about $15K, the other Zero. I can't stress Robert's point enough.  Different is different, even within a short distance.  He's also correct the market is a zero sum game; people don't drive 15 miles out of their way for a laundromat.  It has to be proximate and convenient to where they live, work, or drive by everyday.  Best of luck.

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    Paul Kludt
    Multi Store Owner
    Lake Worth Coin Laundry
    West Palm Beach, FL
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  • 6.  RE: Business suggestions needed

    Posted 08-10-2019 15:00
    Rudolph,

    How much is being spent annually on labor plus payroll taxes now?  How many square feet is the laundromat?

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    Larry Adamski
    Muskegon Laundromat
    Muskegon, Michigan
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  • 7.  RE: Business suggestions needed

    Posted 08-10-2019 16:02
    if your 24hours, you need little open/close automation.

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    Timothy Foster
    Multi-
    Timothy Foster Person
    Toledo
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  • 8.  RE: Business suggestions needed

    Posted 08-10-2019 17:39
    Rudolph,
        I think you must first decide what type of business you want to own and run. If it's a plain Jane laundromat with no employees, there's nothing wrong with that. Just understand you're likely buying a job. It's tough to do much or plan much because you could and will get called away at any point, and if you're open 24 hrs that even means during your sleep. You also must understand that being unattended 24 hours a day, there are many things that you cannot control no matter how diligent you are. I literally had a gentleman pleasing himself out in my store because we locked the bathrooms at night. We had him on camera, filed charges and the prosecutor refused to charge him because he "wasn't hurting anyone". She admitted it wasn't ok, but said she had limited resources and a conviction still wouldn't result in anything.   All because he did it when the store was empty... That's when I gave up.

    Another option is being attended which means more management, oversight and expenses but if you do it well, more freedom for you to live your life. If you run a nice operation, you can charge more for self serve and offer a nice drop-off service which also adds revenue and helps cover your labor. Between higher prices and drop-off revenue you should easily cover your labor.

       The third option is the store I described above, only on steroids and that is adding a well run and advertised pickup & delivery business. Once again, if done well with proper management and systems you can easily double or triple your stores' revenue. Between self serve, drop-off, and pickup & delivery revenue you can easily afford a well paid, highly skilled manager to run your operations for you. This is really when you're free in my opinion. This third option is your most profitable model with the best capital utilization. As you build it, this model is the most work but if built properly, it will ultimately give you the most freedom and revenue both. Under the first two models you likely own a job, under the last you own a business.

        I know because over the last 10 yrs I've built, run and owned all 3 of these types of laundry businesses. I now make more money, serve more people, and have more freedom than ever. I've found that the 3rd model is actually the least complicated and least amount of work although many don't believe me. This all assumes you build it correctly of course.

       Best of luck in any decisions you make! If I can help, let me know.

    ------------------------------
    Dave Menz
    Queen City Laundry Chain
    https://www.queencitylaundry.com
    Laundry Magician Pickup & Delivery
    https://www.laundrymagician.com
    Cincinnati, OH
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  • 9.  RE: Business suggestions needed

    Posted 08-10-2019 18:54
    Just to add to what Dave had to say. I have two different locations within a short distance that have a totally and completely different business model than myself. Factually we have nothing in common. NOTHING. Yet both of us seem to be doing just fine. As with any business decision you need to look at PRICE SERVICE and QUALITY! Which one or two are you wanting  excel in?

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    Curt Harrington
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  • 10.  RE: Business suggestions needed

    Posted 08-11-2019 10:33
    Thanks Curt for the advice.   I appreciate it 



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  • 11.  RE: Business suggestions needed

    Posted 08-11-2019 10:33
    Thanks Dave.  I was literally pulling my hair out trying to make a decision.   You have broken down my options in a manner that forces me to consider how I want to live my life as a mat owner.  It's a no brainers.  I would like to own multiple stores eventually so I need to put in the extra effort now so that I can reap the rewards later.   



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  • 12.  RE: Business suggestions needed

    Posted 08-11-2019 10:33
    Hello Larry.  Correction......w&f is 15% of total revenue.   My monthly employee pay out is 3,200. (Which is more than w&f net).   The store is approximately 1200 square feet.  Is it still worth cutting the labor costs and going 24/7? 



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  • 13.  RE: Business suggestions needed

    Posted 08-11-2019 11:21
    Great advice from others.  If your store is that small, I;d consider cutting labor and going 24/7 is the way to go; I'll throw a couple of thoughts at you.  Make sure the neighborhood is safe enough to have a 24/7 store.  That's a subjective thing, just something to consider.   Not every location is suitable for 24/7 or unattended.  My other thought is going what I call partially attended.  Regardless of what you do, it's hard to keep a store busy M-F during the day because, let's face it, that's when most other people work.  Absent a robust WDF business, I never thought it made sense to pay an attendant to help the small number of customers that come in. But on weekends when you're busy, having an attendant will save you lots of headaches.  I bought a small, fully attended store, made it partially attended and it's been a financial home run.  I have somebody there all day on weekends, and they come in 4-9 during the week and clean up.  Best of luck.

    ------------------------------
    Paul Kludt
    Multi Store Owner
    Lake Worth Coin Laundry
    West Palm Beach, FL
    ------------------------------

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  • 14.  RE: Business suggestions needed

    Posted 08-11-2019 11:58
    Hi Rudolph,

    As Larry indicated, the low wdf % (5 or 15%) is not a good number.  Are you prepared & willing to own a business that results in you going negative, breaking even or making a small profit?  If your business plan is to be a 100% mat owner and do nothing else you would want to maximize your profits so that your business stays profitable thus allowing both your business & yourself to operate.  It's a tall order.

     Wouldn't it better to have some of that 3200 to add to your operating margin than to have to pay the delta of the 15% (not including wdf costs) in wages thuis reducing that revenue from the business?

     Keep I'm mind that all mat locations are not conducive to, nor require to have WDF.  Larry & others including myself have no need or desire to offer WDF because we understand what's involved, the business location's need, not part of the business plan,. And / or t's simply not worth our personal or business location's time.

      Failure to recognize or accept this reality, will result in a more stressful, complicated and possibly even regrettanle business experience.

    An alternate option might be to focus on mastering the mat business & your location, streamlining the process & increasing your revenue while you build time, experience, pay yourself back the investment while preparing for your next opportunity.

     I recall you inquiring about financing on this & the classified section.  I would surmise that by now you understand the difficulties of obtaining financing when you have zero or less than 2 years of business experience.  Focusing on the operations aspect of things (customer service, business management, , equipment knowledge, repairs etc) might be a reasonable substitute as you master the business and validate your decision to be an owner.

     Good lluck.
     


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    Juan
    Cocoa, Fl
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  • 15.  RE: Business suggestions needed

    Posted 08-11-2019 16:41
    Rudolph:  Just in case...be sure you understand your income and expense before and after WDF, and all the terms of your lease including whether there is an option to go 24 hrs open.  The Lease terms are a priority across the board...a bad lease can make it near impossible to compete in some markets.

    ------------------------------
    LES MONTHEI
    MT VIEW LAUNDROMAT
    LAKEHEAD CA
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  • 16.  RE: Business suggestions needed

    Posted 08-12-2019 13:17
    When I look at purchasing a mat, one of the things that I must know is, what is the unique selling proposition.  What makes this different. Why should a customer come to me instead of a competitor. Of course, other considerations are important; but, if I can't draw more customers then there is now,  why should I buy it.

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    Jim Rumczikas
    Multi-Store Owner
    Dallas TX
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  • 17.  RE: Business suggestions needed

    Posted 08-12-2019 16:26
    Jim,

    Every laundromat has a competitive advantage - its location.  Consider the following.  Two laundromats are located across the street from each other.  One laundromat is more convenient for potential customers traveling in one direction and the other one is more convenient for those traveling in the other direction.  Neither laundromat is able to achieve the advantage that the other has.  Each laundromat can only hope to draw the other's customers through operating techniques that out sell the other.

    Why would a buyer pay for undeveloped "potential" growth?  Since the seller failed to develop the potential, how do you know it even exists?  Potential is just pie in the sky until it's developed into sales.  If the buyer later develops the potential into sales, why should he pay the seller for the fruit of his own efforts?  Never, ever pay for potential growth.

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    Larry Adamski
    Muskegon Laundromat
    Muskegon, Michigan
    ------------------------------

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  • 18.  RE: Business suggestions needed

    Posted 08-12-2019 15:57
    Depends where your mat is located. If it's in NYC that is a whole different beast.

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    Steve Smoth
    Steve Smoth Person
    new york NY
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  • 19.  RE: Business suggestions needed

    Posted 08-12-2019 16:39
    Larry A is correct, and it puts a whole new dimension as to why the chicken crossed the street...operating techniques.

    Steve S is correct...I live in CA, but have read enough of this forum over the years to agree that NYC is a whole other beast...like the song says.

    ------------------------------
    LES MONTHEI
    MT VIEW LAUNDROMAT
    LAKEHEAD CA
    ------------------------------

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  • 20.  RE: Business suggestions needed

    Posted 08-14-2019 10:52
    Steve Smith.   What if it was?  What would be your suggestion?



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  • 21.  RE: Business suggestions needed

    Posted 08-14-2019 11:18
    You said your mat is 1200sq ft. You have like what 30 washers/dryers?

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    Steve Smoth
    Steve Smoth Person
    new york NY
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