Only You can Look After Your own Money

Courtesy of the Coin Laundry News

LaundryWizard 30 DAYS of FREE ADVERTISING Click HERE

In the coin or card operated laundry industry, just as in all businesses, there’s always been a struggle for business people to prosper and survive. In today’s strange and strained economy, 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. Other costs for being in business are rising as well. 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 to find 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 a Cost of -Living clause, which require periodic upward rent adjustments. These clauses are designed to protect the property owner from 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, laundry rents are still rising and today are going up much faster than the actual rate of inflation.

What can an operator do about that? All one can do is go to the property owner and request an abatement on the increases because of the current economic climate. Don’t forget that you are not alone, many businesses and even land lords are suffering a bit too. You won’t be the first to ask for an abatement, and may get one.

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-operated 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. Even those “independent contractors’’ who are hired by many laundry owners to do laundry janitorial or service jobs are affected.

Today’s laundry owners feel pressured to improve their 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 or even going in the tank. It’s a bad economy. Costs are rising and profits falling.

What are laundry operators going to do? We can’t punt, it’s not even football season.