Facing Rising Prices, Lower Profits Is Fluff and Fold The Answer

In the vend operated laundry industry, just as in all businesses, there''s always been a struggle to prosper and survive. Today it seems to be tougher than ever to make ends meet. Laundry owners all over the west are going through this struggle every day. Even during this period of comparatively low inflation, there is still some, and costs for being in business are rising fast. It seems that a laundry owner''s ability to raise washer vend prices is all that stands between failure and success. So, from the largest city to the smallest town, laundry operators seek the right answers. Simplified, the dilemma seems to be either raise prices to cover costs and lose customers, or hold the line and make less. As W.C. Fields used to mumble, "A dubious choice indeed." There seems to be four basic reasons why the cost of doing business in laundries continues to inflate, even in this non-inflationary time. Rents Most premise leases contain Cost of Living clauses, which require rent adjustments periodically for inflation. Many of these also specify that there will be a minimum rent increase each year, whether there is inflation or not. Because of such clauses, rents are still rising and today are going up much faster than the actual rate of inflation. Water & Sewer Rates No matter the times and how good or bad they are, tax agencies and districts are still hungry for more income and more spending. Governmental entities keep constant pressure on water and sewer rates. The tax raisers know that a 2 or 3 percent increase in the water and sewer rates will bring little or no public resistance. That''s because small increases are hardly noticed by those who pay the bills for a majority of residential and business users. It''s only those who are major water users, such as laundries, that complain. We know that such increases might become serious obstacles on our path to either success or failure. Utilities We all have seen the results and affects of natural gas prices and the impact they are now having on the vended laundry industry and on the owner''s and operator''s bottom lines. When a future oil shortage is feared, speculators and oil companies tend to drive up prices. And that''s what has been happening throughout the world the last few years. As a result, the costs for all forms of energy increase along with gasoline prices. Among costs impacted has been everything made from an oil base. One of the hardest hit prices has been for natural gas used in dryers by coin and card-op laundries. These increases are forcing some out of our industry, while others are buckling down and buying better, more efficient equipment. Others researching price increases are reacting by adding services, such as drop off laundry. Labor Politicians seek re-election by trying to please unions and low-income voters with a guaranteed minimum wage increase. It''s always done with good intentions, yet it''s left up to the individual business owner to figure out how to pay his or her employees. It impacts all salaries, and puts upward pressure on all wages. It affects everyone''s pay, even the so called "independent contractors" hired by so many laundry owners to do the laundry''s janitorial or service jobs. Some people enjoying salaries amounting to ten dollars above minimum wage are going to want that same advantage over minimum wage after the increase. Whatever the reasons may be, today''s coin laundry owners are feeling pressured to improve the bottom line. Not so much because they are looking for greater profits, but because more income is needed to keep their profits from falling further back, or perhaps even losing money. Costs are rising and profits falling. What is a laundry operator going to do? Some Adopt Fluff & Fold As The Answer. In response to cost increase pressures on their cash flow, many owners have looked hard at adding a drop off laundry or drop off drycleaning service to their business. It''s just a no-brainer when it works. So long as there is space enough, drop off or fluff & fold service fits in naturally with running a vend operated laundry. There''s no equipment to buy and the costs for materials and supplies needed is inconsequential. Those who may already have attendants find it''s fairly easy to redirect employee activities toward doing laundry for others, and it''s a cost effective program for them to follow. Aside from labor, the principal investment is for invoices and buying wrapping materials. The purchase of a certifiable scale normally is the largest single cash outlay owners of attended coin laundries have to make. Is A Fluff & Fold Operation Your Answer? When under economic pressure, one of the first things self-service laundry owners think about is adding a fluff & fold service. It''s almost an instinctive thought. For many it''s an easy expansion of their business activities. For others, however, it''s the wrong choice. Before adding fluff & fold service as a way of growing your business, there are questions you must ask yourself or you may be wasting precious time and money by going down the wrong path and thereby delaying the solution to the problem. Is My Laundry''s Area One That Could Support A Successful Fluff & Fold Operation? Will the population serviced by your coin laundry be able to support this additional service, and will you and they both benefit from it? Are there enough middle and upper middle income people willing to pay for having their laundry done? Does the area have primarily housewives or is it working mothers? What about a pool of bachelors, such as college students or personnel at a military base? Are there enough businesses nearby that could take advantage of a fluff & fold service? Do you have the personal time so that you can call on neighborhood businesses to promote and sell the service? If not you, then who? A Long-Term Commitment Is Required. It doesn''t happen by magic. Even in those neighborhoods thought of as ideal for this type of service, it can take anywhere from six months to a year to begin a drop off laundry service and establish it as an activity that is self sustaining and profitable. Just because the service doesn''t cash flow in a few months, you can''t quit. Give it at least a year to succeed or don''t start it at all. Is Drop Off Service Going To Pay Off? As in all business fields, in the vended laundry industry there are some owners who don''t think problems all the way through. They may react too quickly and emotionally to low profits and decide to start a drop off laundry service without going through the right steps. When a laundry already has attendants, it hardly matters whether the area is good for fluff & fold, or not. Whatever drop off business comes in pretty much becomes all profit. The attendant is there anyway. When you have to hire people to set the drop off service in motion, that''s the time to research in advance. Talk With Owners Who Offer The Service. The laundry across the street isn''t likely to share with you their knowledge of the beneficial affects of fluff & fold on their bottom line. However, the one across town may not see you as a potential competitor and may be willing to provide you with lots of information. It may be necessary to talk with several others. The CLA and local associations should have information too. Vending and laundry supply dealers may also be able to give you helpful background and pointers. What Is It You Really Need To Know? How do successful drop off laundry services handle their books? Are there computer programs they can use, or is it better to look for preprinted forms? What steps are taken to make sure that attendants are honest? Does it pay to put attendants on commission, or is hourly better? What does it cost for wrapping materials and other supplies? What are the costs for doing the service? How much should we charge? How do successful operators advertise and promote fluff & fold? Will it be wise for new drop off laundry operators to wait to add dry cleaning service or do it now? Or is wait and see the best bet? What Are Good Sources Of Information About Drop Off Laundry & Cleaning? Other successful laundry owners who are already doing fluff & fold are one of the best sources for information about that part of the business. Again, you don''t ask the guy who is across the street or down the block. They are competitors and may not choose to be friendly and helpful. Go a distance where the owner will see that you are not going to impact his laundry''s income. CLA and local laundry association meetings are good sources for information. Sometimes a local vend supply company can be a really good source. They understand the business because they sell the supplies. Your equipment supply company can also be a good source. They should have customers they can refer you to. If you''re thinking about entering fluff & fold, a wise thing is to study a lot, then make a decision and stick to it. Steady, smart and thoughtful people will always do better in the long run.