American Coin-Op - January 2014

A S? IS RO AT E H OC . 19 W ET ee pg E S CH

Insurance Basics:

Are You Properly Covered?

COST-CONSCIOUS COVERAGE NEEDED TO PROTECT YOUR COIN LAUNDRY RAIN OR SHINE I N S I D E :I NJ SUI LDYE : 2 0J A0 N5 U A R Y 2 0 1 4 RESOLVE TO SET SHORT-, LONG-TERM BIZ GOALS

PRODUCT SHOWCASE: FRONT LOADERS

SOME IDEAS ARE LESS TAXING THAN OTHERS

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12/13/13 9:58 AM

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CONTENTS JANUARY 2014 VOLUME 55 ISSUE 1 COVER STORY

INSURANCE BASICS Do you understand the difference between property and liability coverage? The relationship between deductible and premium? Know where your coin laundry is at most risk of a claim? If not, these industry experts can help.

8 INSIDE

COLUMNS 12 SOME IDEAS ARE LESS TAXING THAN OTHERS

18 PRODUCT SHOWCASE:

FRONT LOADERS

22 THE YEAR IN REVIEW Just in case you might have missed a story or two, we look back to recap some of 2013’s best store management/operations ideas.

Most “Laundromateurs” wonder if they are paying too much in taxes, writes columnist Howard Scott.

Few are willing to study the tax codes or the changes that come out every year, so they rely on accountants.

But what happens if your accountant is too conservative or uninformed? Scott has some answers.

DEPARTMENTS 4 VIEWPOINT 6 YOUR VIEWS SURVEY 29 AD INDEX

30 CLASSIFIEDS 32 NEWSMAKERS

Cover Image: © iStockphoto/RyanKing999

22 A CLOSER LOOK American Coin-Op’s 2013 issues featured plenty of good store management/ operations ideas.

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www.americancoinop.com

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viewpoint

editorial Charles Thompson, Publisher E-mail: cthompson@ americantrademagazines.com Phone: 312-361-1680

Bruce Beggs, Editorial Director E-mail: bbeggs@ americantrademagazines.com Phone: 312-361-1683

anytime, anywhere

Roger Napiwocki, Production Manager Jean Teller, Contributing Editor Carlo Calma, Editorial Assistant Nathan Frerichs, Digital Media Director E-mail: nfrerichs@ americantrademagazines.com Phone: 312-361-1681

Advertising magazine central American Coin-Op has been “The Independent Voice of the Self-Service Laundry Industry” for better than 50 years, and now we’re making our industry-leading magazine more accessible than ever.

On behalf of our staff, I’m proud to announce that American Coin-Op is now available to read on your iPad or Android tablet.

Using Mirabel Technologies’ Magazine Central app, which you Bruce Beggs can download free from the App Store or Google Play, you have the ability to read our magazine anytime, anywhere. This e-reader packs plenty of punch.

Magazine Central supports reading in either portrait or landscape mode. URL elements on any page are active (meaning you can “click through” to a website mentioned in a story or ad). And the app provides you the tools to share pages or to clip and share content across multiple media platforms, including Facebook and Twitter.

It’s easy to get started. After you’ve installed and opened the app, type “American” into the search bar. Select the issue you’re interested in reading and click “Download,” then “View.” That’s it!

The app stays on your mobile device, and you can check back each month to download the latest issue.

We’ve just begin to scratch the surface of what this e-reader app can do for our magazine and for you. Remember — we’re always just a download away.

Bruce Beggs Editorial Director

Donald Feinstein, Natl. Sales Director E-mail: dfeinstein@ americantrademagazines.com Phone: 312-361-1682

Office information Main: 312-361-1700 Fax: 312-361-1685

Subscriptions 630-739-0900 x100 www.AmericanCoinOp.com

American Coin-Op (ISSN 0092-2811) is published monthly. Subscription prices, payment in advance: U.S. and Possessions, 1 year $39.00; 2 years $73.00. Foreign, 1 year $89.00; 2 years $166.00. Single copies $7.00 for U.S. and Possessions, $14.00 for all other countries. Published by American Trade Magazines LLC, 566 West Lake Street, Suite 420, Chicago, IL 60661. Periodicals postage paid at Chicago, IL and at additional mailing offices.

POSTMASTER, Send changes of address and form 3579 to American Coin-Op, Subscription Dept., 440 Quadrangle Drive, Suite E, Bolingbrook, IL 60440. Volume 55, number 1. Editorial, executive and advertising offices are at 566 West Lake Street, Suite 420, Chicago, IL 60661.

Charles Thompson, President and Publisher.

American Coin-Op is distributed selectively to owners, operators and managers of chain and individually owned coin-operated laundry establishments in the United States. No material appearing in American Coin-Op may be reprinted without written permission.

The publisher reserves the right to reject any advertising for any reason. © Copyright AMERICAN TRADE MAGAZINES LLC, 2014. Printed in U.S.A.

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INDUSTRY SURVEY

BUSINESS BETTER IN 2013?

59% OF OWNERS SAY YES

To read other Your Views survey stories, visit www.americancoinop.com 6

AMERICAN COIN-OP JANUARY 2014

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The majority of coin laundry store owners polled (43.5%) say that overall business was “somewhat better in 2013” compared to 2012, according to results from December’s American Coin-Op Your Views survey.

While 15.9% say their business performed “much better in 2013,” equal shares of 18.8% say that business this year was the “same as 2012,” or was “somewhat worse” compared to last year.

Only a small percentage reported business being “much worse in 2013” (2.9%).

In terms of their expectations, 47.1% of store owners say their business performance this year was “about what [they] expected,” while 31.4% say it was “better than [they] expected.” An even 20.0% say it was “worse than [they] expected,” while 1.4% say they “don’t know.”

Roughly 65% of store owners say that a “customer base increase” was one of the reasons why their business improved this year, while 37.5% attributed the improvement to “[installing] new equipment.” More than 35% “raised prices” this year to improve business, while 16.7% “improved marketing efforts.” Some attributed the improvement to “competition [decreasing]” (14.6%), while equal shares of 12.5% say their “costs/expenses decreased,” and that they also “offered new extra services.” (Respondents were asked to select as many as applied from eight options.)

For those whose coin laundry business worsened this year, equal shares of 46.4% attribute the dip in business to “customers [cutting] down on number of visits” or “costs/expenses [increasing].”

Roughly 30% say that their “customer base decreased,” while 21.4% say that “competition cut into business,” and 14.3% say that their “extra-service income dropped.” (Again, respondents could select any from a list of six factors.)

Some store owners stated other reasons (7.1%) as to why business worsened this year, such as issues with employee retention.

Regarding their memories of this past year, one store owner says, “My son has taken over; the new blood with modern ideas really work.”

“We made progress in our [remodeling] efforts and signed long-term leases at good future rent rates at key locations,” says another. “[We] also expanded in new and existing locations.” “[We have] new competition,” adds another store owner.

“Time to readjust [our] marketing plan.”

While American Coin-Op’s Your Views survey presents a snapshot of the audience’s viewpoints, it should not be considered scientific. Subscribers to American Coin-Op e-mails are invited to participate anonymously in an industry survey each month.

■ www.americancoinop.com

12/13/13 9:51 AM

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Insurance Basics:

Are You Properly Covered?

Cost-conscious coverage needed to protect your coin laundry rain or shine

Photo: © iStockphoto/RyanKing999

Q: How does business insurance work?

What are the basic components of a smallbusiness insurance policy?

Ann Hawkins, underwriter/vice president, NIE: Business insurance is composed of basically two important parts: property and liability. Property covers items for use in the insured’s business, such as building, personal property, loss of income, equipment breakdown, money, and various other items the insured may want covered.

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Liability covers bodily injury or property damage to a third party such as your customer or business invitee. It does not cover employees or owners of the business.

Workers’ compensation is needed to cover injuries to owners and employees.

and in some cases employment practices liability, fire legal liability, and non-owned auto coverage. These coverages are in addition to what is commonly referred to as general liability protection (premises coverage for injury and damages).

Jodie Millino, account executive, Wells Fargo Insurance Services: Business insurance for the coin laundry industry works in basic theory the same way any business would purchase commercial insurance, the main components being property coverage and liability protection (these are the two basic required coverages for a business insurance policy).

Under the property coverage, you can then purchase building and personal property coverage, along with business income protection. Under the liability component, you then have to determine adequate limits by your net worth and any required lease agreements.

Other considerations under the liability protection are personal injury (libel, slander, false arrest, defamation of character),

Larry Trapani, president, Brooks Waterburn Corp.: Business insurance is designed to protect your business, customers and employees from all types of calamities. While many people consider insurance a “necessary evil,” having the correct insurance in place can mean the difference between reopening after the fire and losing your investment completely.

The basic components of a small-business insurance policy are property, liability and workers’ compensation. The property covers your equipment such as washers/dryers, hot water heaters, vending machines, tables, chairs, etc.

Liability covers your business in case you are sued. For example, a customer can slip on a wet floor and become injured. Most landlords require at least $1 million in

▼

I

nsurance coverage is essential for every small business, but just how much do you know about it? Do you understand the difference between property and liability coverage? The relationship between your deductible and your premium? Where your coin laundry is most at risk of a claim?

This month, American Coin-Op invited representatives from the industry’s major insurance providers to answer some basic insurance questions that the average selfservice laundry owner might have.

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liability coverage.

Workers’ compensation covers your employees if they are injured on the job.

Most states require you carry workers’ compensation coverage if you have employees. The premium is based on your payroll: the higher the annual payroll, the higher the premium.

Adam Weber, president, Irving Weber Associates (IWA): If you’ve heard it once, you’ve heard it a thousand times: if you are starting a business, you’re going to need business insurance in order to protect you, your business and your assets in the event there is a claim. To simplify the business owner’s policy, there are two major parts.

First, there is property coverage, which covers costs of damage to the business’ personal property (contents) or the building if you own or are required to insure it.

Secondly, there is liability coverage, which covers costs to the owner in the event that someone’s person and property is damaged due to the business’ negligence (including defense costs).

Q: What types of coverage are typical of a small-business insurance policy, and what special coverages might the average coin laundry owner want to explore?

Trapani: Within each basic coverage, there are many sub-coverages you should consider. I’ll address them one at a time.

First, property coverage: • Make sure your policy provides “Replacement Cost Coverage” rather than “Actual Cash Value” (ACV). In the event of a loss, a “Replacement Cost” policy will provide what it will cost to replace the 10-year-old machine new. If you have an ACV policy, you will get only the depreciated amount for the 10-year-old machine.

• “Business Income & Extra Expense” covers your lost profit and continuing expenses while the process of rebuilding is ongoing. For example, if you suffer a fire and are out of business for six months while they rebuild, you may have expenses such as loans payable, rent, and employee salary that you have to pay whether you are open or not. Most “Business Owner Policies” provide “Business Income & Extra Expense” coverage for one year.

• “Cost of Buildout”: If you build a Laundromat from scratch, besides 10

American Coin-Op January 2014

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equipment, you will also have a costly buildout of the space you lease. This includes plumbing, heating, floors, and walls — anything that will stay in the building if you leave. A buildout can cost anywhere between $50,000 and $100,000. In most leases, if you did the buildout yourself, you are responsible in the event of a loss.

Next is liability coverage. Liability covers your business in the event you are sued. The most common types of suits are slip-and-falls. Also, I see children hurting themselves while running around the store.

Most landlords require a minimum of $1 million liability coverage. “Additional Liability Limits” can be purchased, usually on a separate policy called an “Umbrella Policy.”

If you do deliveries via automobile, “Hired & Non-Owned Auto” coverage is a must. It will cover the business if sued for an automobile accident. Often, you use your own vehicle for deliveries. It has insurance, but the business is not protected. This coverage protects the business.

Finally, workers’ compensation: • This covers your employees if they are injured on the job. It pays the medical bills and some lost wages (lost-wages payments vary by state). The premium is based on payroll: the higher the payroll, the higher the premium.

Be aware, the IRS and many states • are cracking down on “off the books employees.” They want their taxes and are going after traditional cash businesses such as restaurants and Laundromats.

Weber: There are many components to a small-business insurance policy. Some of the more common coverages to review in your business owners’ policy are “Business Personal Property,” “Business Income,” “Extra Expense,” “Employee Dishonesty,” “Equipment Breakdown,” “Glass” and “Outdoor Signs.” And for the coin laundry, of course, “Water Backup” and possibly “Bailee” (or customers’ goods) coverage!

• Business Personal Property, or BPP, covers the furniture, machinery, equipment, stock and all personal property owned and used in the business, as well as the improvements and betterments that you may have made to the premises (such as drop ceilings, lighting, flooring, etc.)

• Business Income is coverage for loss of income when a business needs to close due to disaster.

• Extra Expense is coverage for the additional costs you incur to continue running your business.

• Employee Dishonesty coverage protects the business from financial loss due to fraudulent activities of employees. It can also cover employee theft of money or property.

• Equipment Breakdown coverage protects against loss due to mechanical breakdown of nearly all equipment in the business. It applies to cost to repair or replace the equipment or property damage cause by equipment breakdown.

•

Water Backup coverage addresses water that backs up through sewers and/or drains. This is vital coverage for the laundry industry. Most business policies do not cover sewer and drain backups, so it’s important that coin laundry owners check to be sure this is included in their policies.

Hawkins: A typical small-business insurance policy will consist of the coverage I already listed. These are typical for a coin laundry owner as well but an owner may also want to consider adding bailee coverage if he/she is doing drop-off dry cleaning or wash/dry/fold service. Bailee covers the customers’ clothing while it is in the care, custody and control of the insured. It does not cover the clothing that the customer is washing on a self-serve basis.

Q: Describe the relationship between the deductible and insurance premiums. How can one ensure a small business is adequately covered while choosing a plan that’s affordable?

Millino: When purchasing business insurance, remember that premiums are determined by many factors, some of which include receipt levels, deductible sizes, construction of buildings, whether the store has an automatic sprinkler system, burglar alarms, cameras, and, of course, what limits of coverage you choose.

Be sensible when selecting each item. We always recommend higher deductibles since it reduces cost but, more importantly, keeps you from turning in small nuisance claims.

(Continued on page 28) www.americancoinop.com

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an outsider’s view

some ideas are less taxing than others

Howard Scott

12

Q: What is this talk about a home office deduction?

The home office deduction has been around for 35 years, but the recent expansion in the interpretation has made it an attractive write-off for small-business people. In previous years, the home office had to be your principal place of business. Now the IRS allows a home office deduction for an owner who conducts substantial administrative activities at home, even if he/she has an office at a separate work location. In other words, the store owner who works out of a business location, but uses a room at home to do paperwork, can now deduct those proportionate costs of that room, if he/she complies with the following: • Must use that room exclusively and regularly for work.

• Must do the majority of paperwork in the home office.

The deduction allows the owner to deduct all direct and proportionate expenses associated with the home office space. If 20% of house space is devoted to the home office, then the owner can deduct 20% of the mortgage, repair bills, upkeep, insurance, utilities, and depreciation on the property. These days, with an average house costing $300,000, it would not be hard to come up with a substantial home expense.

If it costs $25,000 to maintain your home (including depreciation), and you use 15% of the space for a home office, then you will wind up with a $3,750 home office deduction. Your business profits will be reduced by $3,750, and your company will save a minimum of $1,350 in taxes.

Furthermore, if you store material or equipment in a garage or basement, you can include that space in your deduction even if the space isn’t used exclusively and regularly for your business. You can also deduct all mileage from home office to workplace.

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Q: What if I’ve never taken a home office deduction before?

With the changing business environment, many smallbusiness people who have never taken the home office deduction now do so. It is no longer the red flag it used to be. Consult with your accountant. Change a guest bedroom into a home office. Rearrange your daily schedule to do all paperwork at home.

Q: What are the tax implications of filing as a Schedule C proprietorship, Subchapter S, or a C corporation?

A Schedule C—sole proprietor taxes everything that is left from expenses as income. A Subchapter S corporation allows all profit, loss and credits to flow through to the shareholders. A C corporation is taxed at a different rate (less than $50,000 profit at 15%, $50,000 to $75,000 at 25%, $75,000 to $100,000 at 34%, more than $100,000 at 39%), after your salary is deducted as an expense. Otherwise, they all follow a revenue minus expenses equals profit formula. So it is strictly a numbers-cruncher calculation—where will you pay the least taxes?

A corporation and Subchapter S does offer more protection against liability. That’s the main reason owners choose to incorporate. The disadvantage is paperwork and cost. One alternative is to remain a Schedule C sole proprietorship and purchase liability insurance.

Q: Should I take full use of my Section 179?

Section 179 allows the business owner to deduct in full up to $250,000 of capital purchases for a tax year.

Otherwise, the cost of equipment would be depreciated over five to 10 years.

If you’ve spent $100,000 to upgrade equipment and your profits are higher than they usually are, you might expense the full $100,000 as a Section 179 expense. If you expect the next several years to earn substantial profits, you might depreciate over time. It is a guess of what future profits will be compared to this year’s results.

Q: How much will the changes in Social Security affect me?

The temporary payroll cut has been eliminated.

▼

Most “Laundromateurs” wonder if they are paying too much in taxes. Few are willing to study the tax codes or the changes that come out every year, so most rely on accountants. But what happens if your accountant is too conservative or uninformed? Here are answers to some common questions that should provide food for thought for the current tax season:

www.americancoinop.com

12/13/13 9:49 AM

How Many Coin Laundries Has Your Insurance Agent Handled?

One or Two? Three?

I’ve personally handled insurance for hundreds of coin laundries! I’ve already dealt with most any issue your business is likely to face. If you have any questions about insuring coin laundries, I can and will give you a prompt, clear answer.

Skeptical? Call me with a question and find out for yourself.

Anne Cobb

Fabricare Insurance Specialist

There’s more: I’m just one member of a team of experts. NIE has been insuring fabricare business since 1915!

Cobb@nie.biz

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an outsider’s view

You can expect to have 2% more Social Security withdrawn from your paycheck. Or, if you’re self-employed, your Social Security Medicare tax will go from 13.3% to 15.3%. As for Medicare increasing to 3.8%, that’s only for single taxpayers earning more than $400,000 (married, more than $450,000).

Q: Will the new 20% capital gains affect me if I sell stock?

It’s still 15% for most of us. The 20% capital gains is only for those earning more than $400,000, including stock gain. But if you sell your business this year, you will most likely pay a higher capital gains tax.

Q: Is it really necessary to send in estimates?

Our tax system is set up for employed workers to have a portion of their weekly paycheck taken out every week and deposited in a tax fund. But it is not set up to do that for business owners. So, business owners must send in quarterly or monthly estimates to cover their expected profit tax liability.

If enough isn’t Fargo put into the system, 3:46 the IRS you with 0812aco_Wells 7/17/12 PMpenalizes Page 1 a surcharge. Generally, it might run 8% of what you owe. But the

bigger problem is getting behind, and not being able to catch up.

So it is vitally important to anticipate your profits and pay the appropriate taxes in the form of estimates.

Q: What happens if the IRS catches me cheating?

If an audit finds that you have overstated expenses, you will be required to make up the difference plus pay penalty and interest.

But if you are found to have under-reported income, this is a clear statement that you are trying to defraud the government. You could face serious consequences, even jail time.

My advice is keep records, maintain honest figures, and sleep well at night. n Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult an attorney or tax adviser for advice regarding your particular situation.

Howard Scott is a long-time business writer, small-business consultant, and author of four books.

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PRODUCT SHOWCASE

Front Loaders Huebsch uebsch® offers vended laundry owners the HCN080, an 80-pound front-load washer-extractor with eBoost™ technology and Galaxy™ 600 controls. The large-capacity machine helps customers wash bulky items such as bedding and winter attire.

Washer-extractors with eBoost are energy-efficient, using 33% less electrical energy and 11% less water than twospeed models, says the company. The technology also includes the patented Water Guardian that detects leaks in both the drain and fill valve, eliminating wasted water and resources.

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The Galaxy 600 control provides multilevel vend pricing as well as time-ofday pricing to help a Laundromat owner increase traffic during slow times. The Galaxy-equipped machines also feature eight cycle modifiers, including Extra Wash and Extra Rinse cycles.

Owners can retrieve machine data using a PDA or laptop with the Galaxy 600. Easy programming and information retrieval provides tools to help a laundry owner manage multiple Laundromats, Huebsch says. www.huebsch.com 800-553-5120

Wascomat

Maytag Commercial Laundry

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aytag Commercial Laundry designed its line of Multi-Load Soft-Mount Coin Washers to help Laundromat owners to grow their businesses.

Available in 18-, 25- and 35-pound models, the washers are easy to install and operate, and feature high-speed extraction of up to 350 G-force to help cut energy usage and drying time, Maytag says.

The soft-mount suspension system eliminates the need for machine bolt-down, so no special floor depth is required.

The flexible installation helps laundry owners save on cost and time, according to the company. Additionally, the heavy-duty latch and “nearly invincible” cabinet and frame add to the machine’s durability.

The advanced Maytag microprocessor control provides a large, easy-to-read LCD graphic display with multilingual controls. www.maytagcommerciallaundry.com 800-662-3587

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ascomat’s new Gen 7 line maintains a reputation as a “workhorse” while delivering new features designed to save money and help increase a Laundromat’s profits.

Wascomat washers distributed by Laundrylux come standard with the Compass Pro microprocessor. Simple to use, it features program selection, diagnostics and custom programming as well as a real-time clock for time-ofday pricing and promotions, the company says.

Compass Pro simplifies creating programs to meet specific market needs. It also displays two languages at one time.

Wascomat’s Crossover washer is a small-chassis washer designed for commercial use. It is a direct replacement for appliance-type top-load washers and front loaders, with built-in pump and heavy-duty construction. It’s ENERGY STAR-rated, CEE Tier 3-qualified, and ADA-compliant.

Wascomat commercial washers range in size from 20- to 135-pound capacities. www.laundrylux.com 800-645-2205 www.americancoinop.com

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Dexter Laundry exter Laundry offers a complete line of front-loading washers made in the United States.

Dexter’s Express machines are at the cutting edge of industry progress and are backed by “the industry’s best warranty,” says the company.

The machines feature heavy-duty bearings and an AISI 304 stainless steel top, front panel and side panel. A sumpless outer tub design enhances performance by saving water on every cycle, while perforated cylinders and raised baffles provide excellent wash action.

Dexter Express washers are available in a wide range of sizes, including 20-, 30-, 50-, 60- and 90-pound capacities.

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The washers feature 200 G-force extraction for greater efficiency, the company says. www.dexter.com 800-524-2954

CHEETAH FAST CUNNING SLEEK AGILE

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Continental Girbau

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ontinental Girbau’s ExpressWash high-performance washer-extractors are engineered to help reduce gas, water and energy consumption at vended laundries. Available in 20- to 90-pound capacities, the machines are freestanding, energyefficient, simple to install and programmable.

ExpressWash Washers use less water than traditional front-load washers and offer high-speed extract reaching 381 G-force, the company says. By comparison,

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conventional hard-mount washers reach 75-200 G-force extract speeds.

As a result, ExpressWash Washers remove more water from each load, cutting resulting dry time by up to 50%, the company adds, which helps vended laundries cut dryer gas consumption.

High-speed extract also helps customers complete laundry in 60 minutes or less, according to Continental Girbau.

www.continentalgirbau.com 800-256-1073

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Electrolux

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lectrolux Professional offers a range of solidand soft-mount frontload washers designed with the latest technology and money-, water-, and energysaving features.

Electrolux washers distributed by Laundrylux come standard with features such as Automatic Water Savings, which helps a Laundromat save up to 30% on water, says the company. Other features include Compass Pro with easily customized wash programs to regulate water levels, temperatures and drum action and two language displays at one time; a real-time clock for time-of-day and/or happy-hour pricing; Power Balance to help extend the machine’s life and provide trouble-free operation; Sanitizing Rinse; and Voice Guidance and Text Messaging Systems.

The S-Model 200 G-force washers range from 20- to

77-pound capacities and are engineered with Laundromat traffic in mind, plus single-phase electrical power means lower installation costs.

The H-Model 450 G-force soft-mount washers range from 18- to 75-pound capacities and provide shorter dry times and help with gas savings. Electrolux Laundromat owners report utilities at 9% to 11% with lower construction costs, according to the company.

The X-Model 220-300 G-force washers range in capacity from 65 to 135 pounds, and feature heavy-duty construction with Power Balance for extended lifetime, and high G-force for water and energy savings. www.laundrylux.com 800-381-7222

Pellerin Milnor Corp.

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ellerin Milnor Corp.’s MCR27E5 washer with a 60-pound capacity works for any Laundromat, the company says.

The front loader’s 9.0-cubic-foot cylinder volume allows for oversized loads. The durable stainless steel cabi-

net design, easy-to-use control, and comfortable door handle are designed for continued use, Milnor says.

The MCR27E5 comes with preprogrammed formulas; each can be configured with a different vend price. www.milnorcoin.com 504-712-7656

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ADC

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DC offers a complete line of commercial washers for vended laundries. EcoWash commercial washerextractors combine all of the benefits of technology and efficiency while keeping operation simple and reliable, says the company.

Ranging from 25 pounds to 80 pounds, EcoWash washers

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are available in 100G (Standard Spin), 200G (Rapid Spin) and 350G (Free Standing, High Spin).

The ADC EW Series washers incorporate a complete stainless steel outer cabinet, steel tube frame, heavy-duty cast aluminum counter balance and rugged door system.

A large, convenient supply dispenser and flexible waterlevel settings combine with state-of-the-art Intuitive Micro Controls (IMC) for simple programming and ease of operation. www.adclaundry.com 508-678-9000

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Whirlpool Commercial Laundry

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hirlpool Commercial Laundry’s high-efficiency front-load washer offers significant utility savings as a result of its ENERGY STAR and CEE Tier II qualifications, says the company.

Ideal for handling family-sized laundry loads, the 3.2-cubic-foot washer offers a combination of nine cycle options, and its high-speed spin—1,000 RPM—helps to reduce drying time.

The washer features user-friendly microprocessor controls, which display the time remaining and time-of-day pricing. www.whirlpoolcommerciallaundry.com 800-662-3587

RHINOCEROS TOUGH POWERFUL TENACIOUS RESILIENT

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Speed Queen

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peed Queen® offers energy savings and convenience for Laundromat owners with its 60-pound washerextractor, the company says.

Speed Queen’s Quantum® controls come standard on the SC60 to help reduce costs and increase profitability.

The system offers cycle modifiers that allow customers to select mediumor heavy-soil programs and provide store owners with time-of-day pricing options.

When store owners upgrade to Quantum Gold, the 60-pound washer-extractor has up to 200 G-force extraction to remove

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more water, leading to shorter dry times and lower energy bills, says the company.

Owners with Quantum Gold can also manage their Laundromats from anywhere in the world via wireless networking, among other benefits.

The SC60 was developed with a computer-optimized frame that lasts longer, balances loads more efficiently, and is easily installable, according to the company.

The machine is also equipped with the patented Water Guardian technology, which detects drain- and fill-valve leaks. www.speedqueen.com 800-590-8872

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Year in

The

Review Looking back at some of 2013’s best store management/operations ideas

A

merican Coin-Op covered a variety of topics in 2013. If you happened to miss a story along the way, then you might appreciate a brief recap. Here’s a quick look at some of the more informative articles we presented last year.

ELEMENTS OF BEING CUSTOMER-FRIENDLY It stands to reason that customer-friendly stores—those that are welcoming, bright, and offer a sense of security, for example— have a better chance of drawing business than a dark, dirty and run-down store.

Following are suggestions from store owners, manufacturer reps and distributor reps to raise your customer friendliness to new heights.

• “A store with glass frontage is more customer-friendly than one without.

Customers appreciate being able to see through the windows before entering the store, especially at night.” — Dave Phillips, IPSO. • “Having an external sign that features services your location offers can be a great asset to encourage new and potential customers to come inside.”

— Craig Kirchner, Dexter.

• “Ample parking is one of the most important aspects for a store. In addition to parking, a clean store front should be free of trash and wide enough for laundry carts and baskets to easily enter and exit.” — Jose Fernandez, Mily’s Place Laundromat, Coral Gables, Fla. 22

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• “Make sure the store is cleaned at least twice a day, which should include sweeping, mopping floors, cleaning out lint traps, and washing windows if there are fingerprints on them.

Bathrooms should be well maintained and stocked full of necessities … The store should also be spruced up at least once a year, especially if it has white walls.” — Karl Hinrichs, HK Laundry Equipment.

• “Reliable, quick machines can make the difference between whether a customer chooses your store or another. … You must choose professional equipment designed to take the abuse of a Laundromat.” — Dawn Nagle, Laundrylux.

STORE TRAFFIC: FINDING A BETTER BALANCE Sometimes, your store is overly busy, while other times it is underutilized, says columnist Howard Scott. The perfect balance is to have eight customers in your store during every hour of operation each week.

Say your Saturday volume is so busy that customers trip over themselves. You would like to convert a number of customers to come in Sundays after 1 p.m. How? Hand out a $1 coupon to every Sunday-afternoon customer. Do that for 10 weeks, Scott says, and you’ll have more business in that time slot.

Another tactic is to have a musician come in and play/sing on a slow night. You

Photo: © iStockphoto/bowie15

might pay him or her a token amount, and customers could be encouraged to tip the performer. Of course, you or a staffer will have to be there to manage the traffic flow, keep out undesirables, and keep the music to an acceptable decibel level.

Still another approach is to schedule a weekly drawing on a slow business day.

The rule is that the customer must wash his/her clothes on that designated day to be eligible to win. Offering an attractive prize—free dinner for two, or a gift certificate to a local store—might shift traffic.

EFFECTIVELY MANAGING MULTIPLE STORES For many store owners who own multiple locations, having a checklist of things to inspect is paramount. “As much as we can, we systematize the whole business,” says Bob Schwartz, owner and founder of SuperSuds Management, which operates 24 stores across the Northeast. “Whether it’s daily checklists, weekly checklists, quarterly checklists, we have it all documented.”

He delegates a checklist of 25 items that he requires his managers/attendants to inspect regularly, including how clean the store’s floor is; the cleanliness of the washers, soap trays and folding tables; and if any interior lights require replacement.

Bill Rhodes, owner of Rhodes Enterprises, operator of three coin stores in California, processes all collections and performs any necessary maintenance in one of his locations in Catalina. “I do most of the maintenance because it costs $500 to www.americancoinop.com

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bring a [repairman] there, so I’ve learned how to fix [equipment],” he says.

“Probably the best advice I can have for [others] is I try really hard to make the best use of time management,” says Dave Menz, owner of two coin laundries in Ohio.

HOW ARE SALES … AND WHY? To understand why your store’s sales are up or down, sit down at your desk—with all of your laundry’s business information at your fingertips—and come up with your best guess for a detailed explanation, advises columnist Howard Scott.

Are you losing business to a competitor?

You may have disappointed customers enough that they sought alternatives. Can you remember a specific incident, such as a customer complaining about a dryer break-

BUILD SUCCESS ON KEY DEMOGRAPHICS After choosing to invest in a coin Laundromat, a buyer has to make several decisions, with store location being perhaps the most important, says Speed Queen’s Dan Bowe.

Generally speaking, there are a few key demographics that an investor should consider.

First, the share of population that includes renters should be at least 35%, Bowe says. The ability to complete the weekly chore of laundry in less than 90 minutes is more desirable now than ever.

Considering household size and income level is important, because investors should place their stores in areas where demand potential is high. The average household size in a considered location should be at least 2.3 people with a low-to-

EQUIPMENT SERVICE TIPS There are some things that the average store owner can do to keep their machines in good working condition.

Keep equipment exteriors and all surroundings clean and tidy, eliminating the possibility of lint and debris getting into the machine. Be sure the water pressure is adequate (at least 40-50 psi, 60-70 psi is best) and that hose sizes are correct. Check and clean filters. Remove lint or debris on dryers, coin drops, control compartments, computer or output relay boards, and motor-cooling vents.

By taking advantage of equipment service schools, store owners and their employees can learn to service most aspects, says Russ Cooper, manager of technical service, Dexter.

Work that would involve electrical com-

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Revolutionary Galaxy Controls and eBoost technology.

Powerful 200 G-Force extraction and innovative Water Guardian leak detection. These features combine to deliver the most efficient machines on the market, making Huebsch® a whole new breed of laundry equipment.

TM

TM

Learn how Huebsch helps investors realize their dreams.

View our videos at Huebsch.com/SuccessStories.

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ing down and walking out?

Has the neighborhood changed? Subtle changes could be signaling increasing violence, less public-sector maintenance, middle-class migration to other neighborhoods, and loss of magnet stores.

Have you had a revolving door of night staffers making that time slot less efficient?

In the case of customer complaints, you could come up with a procedure to respond immediately to complaints. In the case of a changing neighborhood, one thought is to move. Another alternative is to install more exterior and interior lighting and to staff your store every hour that it is open. In the case of a member of your staff slacking off, can you rekindle his/her old fire?

“Do you see how asking how your sales are can really make you stop and think?”

Scott writes. www.americancoinop.com

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medium income level—approximately 40% of all households earning less than $35,000 per year use Laundromats. Lowerincome households are less likely to pay extra for amenities such as an in-unit washer and dryer, Bowe says.

When considering property locations, look for retail openings on a main roadway with high visibility and ample parking.

Forcing customers to street-park and walk long distances with large baskets of laundry will deter them.

Finally, Bowe says, choosing a Laundromat location based on commercial co-tenants can help provide incentive for customers to visit. Give them an opportunity to multi-task by locating next to a grocery store, “dollar” store, convenience store, auto parts store or check-cashing business.

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ponents, or large replacement components such as main bearings, cylinders, motor, and suspension systems, is best left to factory-trained technicians.

“I’m not sure you could come up with an exact figure or percentage for neglected maintenance,” Cooper says when asked how much money can be saved by following a preventive maintenance schedule.

“There is always a cost if a machine breaks down and revenue is lost when customers are unable to use it, but what does it cost in goodwill and perception of your store if multiple machines are out of order or perform poorly for the customers?”

■ For more laundry improvement ideas, or to read the complete stories that were summarized in this article, visit www. americancoinop.com.

JANUARY 2014

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coin-op 101

New Year’s Resolutions

Tom Fleck

EQUIPMENT When considering equipment goals, owners can begin by answering one simple question: What keeps you up at night?

Start by prioritizing which equipment should be maintained and which equipment should be replaced.

Analyze which machines, if any, require frequent maintenance, then consider if it is more cost-effective to repair or if it makes the most sense to upgrade the equipment.

Next, store owners should evaluate if their equipment mix is still correct or if the demographics of their customer population have changed, requiring new equipment. A reputable distributor should be able to work with store owners to answer these questions.

Distributors can also help store owners develop a fiveyear plan to modernize their facilities. By creating this long-term plan and implementing changes over time, owners can alleviate the burden of a major overhaul.

For example, machine efficiency may no longer be up to par, leaving room for a competitor to gain an advantage.

A distributor may recommend an advanced control system, which can help Laundromat owners with revenue-generating add-ons and the ability to adjust and measure how efficiently the equipment is operating, information that can help decrease utility costs and increase revenue. New equipment can also provide longer warranties and features such as leak detection in valves and drains.

Finally, replace unappealing equipment. Tumblers may last forever, but today’s modern tumblers are quieter, more efficient and do not suffer from drums that blacken with age, which may cause customers to seek out cleaner-looking machines at a competitor’s store.

RENOVATIONS AND STORE UPDATES Gone are the days of multiple loads based on colors and fabrics. Customers now flock to larger machines where they can combine loads to save time and money.

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When planning a cosmetic change to the store, consider equipment placement. In the past, larger machines were hidden in the back of the store, with smaller machines located closer to the entrance. Today’s trend is to move larger equipment to the front, making the machines easily accessible for customers who are willing to pay more to use them. Since larger machines increase revenue because of higher vend prices, owners may want to consider investing in additional large-capacity machines.

Store owners can also increase convenience for customers with larger loads of laundry by installing automatic doors; providing a plentiful supply of clean, easyrolling laundry carts; and ensuring that the store can be easily accessed with those carts.

We are a society that demands constant, immediate information. Providing wireless Internet and multiple TV screens and channels is a relatively inexpensive way to improve a customer’s store experience and overall satisfaction. In addition to upgrading technology, consider reducing coin dependency in 2014. We live in a plasticdependent world—install card or credit card equipment to eliminate a customer’s trip to the bank and/or the hassle of finding quarters.

SIGNAGE Surprisingly, signage is not something that owners generally think about when upgrading their stores. Some Laundromats sport old, poorly lit and uninviting signs.

Upgrading an existing sign can be as easy as refreshing it, or it might involve completely overhauling it in favor of an eye-catching, more energy-efficient new design.

Also, if 2014 is a year to renegotiate a lease, don’t forget to ask for additional signage space and more convenient designated parking.

MARKETING In recent years, there has been a significant increase in Laundromats executing effective marketing campaigns.

Store owners are realizing the value in Internet-based marketing, such as social media and tablet/mobile apps.

As customers are getting much of their information on handheld devices, it’s important to make sure that a store’s website is mobile-friendly.

Store owners are also seeing the value in e-mail blasts and in-store promotions. Put together a year-long marketing plan that utilizes 2-5% of annual income.

Strategically schedule holiday specials, customer appreciation days, giveaways and e-mail promotions, and

▼

The New Year is here and individually we are all setting personal resolutions. As a small-business owner, it is just as important to set business resolutions, or goals. These short-term and long-term goals are a vital part of ensuring business growth and measuring success.

There are several different categories Laundromat owners should consider when setting goals to create a well-rounded and comprehensive plan for 2014.

www.americancoinop.com

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coin-op 101

make sure to plan additional in-store promotions to collect customer data.

For example, a store owner in Florida gives away a bicycle each month. Customers are required to enter the store to submit their name, e-mail and phone number to enter to win, helping to increase the store’s customer information database and foot traffic.

Also, consider utilizing the multi-vend pricing option available on new control systems to encourage retired customers to do their laundry during slower daytime business hours. Try moving this customer base to weekday mornings. By decreasing the vend price to incentivize retired patrons to switch their laundry routine from Saturdays, a store owner can gain room for incremental growth.

PERSONNEL A highly successful multi-store owner once said, “If store owners take care of their employees, their employees will take care of the business.” This year, work with employees to increase training and customer service skills. Encourage improvement by creating incentive programs that reward your best workers.

Help customers to identify employees by providing uniforms.

Phone: (800)

362-1900

Encouraging something as simple as a branded T-shirt or apron will help customers more easily identify store employees when seeking assistance.

COMMUNITY INVOLVEMENT Finally, include local community events in your plan. Being an active member of the community can provide a significant increase in store recognition. One recurring customer is worth $500 per year, so consider handing out coupons or other incentives at community events to get new customers through the door. This can be especially effective in college towns during registration.

After finalizing the year-long plan, determine how you’ll measure success; this will, in turn, help identify 2015 goals. Aside from revenue, success benchmarks can include the number of replacement machines purchased, e-mail addresses captured, gift cards used, and new recurring customers, to name a few. n Tom Fleck is a senior regional sales manager of Speed Queen’s® commercial division, www.speedqueen.com/CoinOp101, 800590-8872.

Website: www.acpowerco.com

AC POWER Wishes you a happy and healthy 2014!

Please contact us to hear about all of our 2014 sales and specials.

G:

SALES

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Hawkins: The typical small-business policy now has a standard $1,000 deductible. That deductible can be increased, but the savings to increase it is minimal. My suggestion is to buy the coverage you need to replace building, business personal property and loss of income, at the very least, along with liability coverage.

Remember that replacement of business personal property should include delivery, installation and taxes, because they are included in your limit and are paid at the time of a loss.

Trapani: There is an inverse relationship between deductible and premium.

The higher the deductible, the lower the premium. Typically, I suggest a minimum deductible of $1,000. If values are higher, I encourage higher deductibles like $2,500 or $5,000.

As an agent, I want to make sure you are protected from large, catastrophic-type losses. A $700 glass claim is probably not going to make or break a business. But if you put in several small claims, it will affect

your insurability.

Insurance companies take a dim view on those who put in many small claims.

They feel they are using the insurance as a maintenance policy rather than protection from catastrophic losses. Your rates will increase or, worse, you may not be able to secure insurance.

Weber: Insurance premiums vary based on many factors. One is the deductible chosen. Basically, the lower the deductible, the higher the premium.

For instance, if you save $500 on the premium by choosing $1,000 deductible, in two years (without a claim) you could have made back what the deductible would be in the event of a claim.

Q: Where are the greatest areas of risk in and around the average coin laundry?

Weber: When looking at the risks involved in operating a coin laundry, probably the biggest risk would come from liability, meaning someone getting hurt on the premises due to negligence, such as someone slipping on water on the floor, or

mats causing tripping, etc.

Hawkins: The greatest areas of risk in a coin laundry are usually related to lack of maintenance.

Lint should be cleaned from dryers on a daily basis, because lint is the leading cause of dryer fires. All equipment should be checked for sharp edges on a regular basis to be sure that customers do not cut themselves. Leaking machines are the main cause of slip-and-falls. Unsteady furniture can also contribute to bodily injury, as can stools that are used to reach machines with controls that can’t be reached from the floor.

Millino: Interestingly enough, the two largest and most costly types of claims are fire (property-type losses) and, as you would expect, slip-and-falls and large property-damage claims to buildings in which you are a lessee (tenant).

Major property losses we have seen over the years come from poor maintenance, faulty wiring and unmaintained equipment; dryer ducts that have not been cleaned professionally; overheating in dryers with

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flammable materials put inside by customers; storage of flammable cleaning supplies around hot water heaters; and, in some cases, arson in unattended stores.

Liability claims range from slip-and-falls as a result of improper store maintenance, and bodily injury to customers by leaving equipment open to the public, to large fires starting in the laundry and burning down other businesses, and structure damage within the building occupied by the laundry (property damage liability exposure).

Trapani: By far the greatest area of risk is dryer fires. Typically, these are caused when a customer puts in items that are oily or contain some flammable elements that were not properly washed out. A proper maintenance program can help reduce the risk of dryer fires. For example, having vents professionally cleaned on a regular basis will greatly reduce the chance of dryer fires.

Another type of claim we see often are liability claims in which children pull down folding tables on top of themselves. While we hope parents are properly supervising their kids, often they do not. The solution

here is to bolt tables securely in the floor.

Q: What would you consider to be the minimum insurance coverage a coin laundry should have, and why?

Hawkins: I covered this previously. These are the minimum coverages, but many other add-ons can be taken such as money, sign, bailee, accounts receivable, valuable papers, and many other items.

Trapani: For liability, I would like to see a minimum of $1 million of protection. If you do deliveries, include “Hired and NonOwned” coverage. ... In today’s litigious society, lawsuits are common and the cost of liability insurance is relatively low.

For property insurance, you should protect yourself for the full replacement cost of your equipment and buildout (if any).

Ask yourself, “If my business burns down, how much would I need to make myself whole again?” A large deductible will keep the premium lower, but if you have to take a $50,000 hit because you don’t have proper insurance, it may mean the difference between re-opening or not.

Millino: When purchasing insurance for a coin laundry, make certain you are in full compliance with your lease obligations if you are a tenant, that your limits of property insurance are adequate to replace your equipment and/or building (if you Weber: The minimum liability coverage own the building). Also, make certain if would be $1 million per occurrence and $2 you are borrowing or leasing equipment million aggregate (over the term of the polthat your lender is protected and you are in icy, usually one year). We also recommend full compliance with your purchase or lease getting an “Umbrella,” which will add to agreement. the coverage over and above the coverage Avoid words in ... agreements that say of the regular policy. Umbrellas can be you must be insured on an “all risk” basis. inexpensive, therefore we suggest as high There is no insurance policy that covers “all an umbrella limit as you can get. As far as risks,” and every policy has exclusions, the property coverages, that would depend on Standard_half_horz 2/14/12 4:51 PM Page 1 biggest being earthquake and floods. the cost of the building and equipment. n

advertisers’ index Advertiser

Page

AC Power........................................................................ 26 American Switch.............................................................. 31 Card Concepts.................................................................... 9 Coin-O-Matic................................................................... 11 Dexter Laundry................................................................... 7 ESD Inc............................................................... 16, 17, BC FrontecStore.com.............................................................. 31 Gold Coin Laundry Equipment ....................................... 15 Great Lakes Commercial Sales ........................................ 30 HHC Electronic Service................................................... 31 Huebsch......................................................... FC, 19, 21, 23 Laundry Concepts ........................................................... 27 LG .................................................................................... 3 Mountain Electronics....................................................... 30 New York Laundry Equipment........................................ 25 NIE Insurance.................................................................. 13 Pellerin Milnor................................................................ IBC R&B Wire Products .......................................................... 1 Royal Basket Trucks......................................................... 29 Setomatic Systems.......................................................... IFC Super Computer Boards................................................... 30 Vend-Rite........................................................................... 5 Wells Fargo Insurance Services........................................ 14 www.americancoinop.com

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january 2014

American Coin-Op 29

12/13/13 10:01 AM

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12/13/13 9:25 AM

newsmakers

Laundrylux Appoints Sabino company President, Herman Senior Counselor, Director Equipment distributor Laundrylux has appointed John Sabino president and former President Howard Herman senior counselor and director, effective this month, the company reports.

“John has done a tremendous job the past four years as chief operating officer and manager of vended laundry sales,” says Neal Milch, Laundrylux CEO. “I am delighted to recognize John’s accomplishments and our confidence by greatly expanding his responsibilities as president of Laundrylux. John will be involved in every aspect of our business going forward.”

“I am excited by my new role and dedicated to building on our successful initiatives, working very closely with our distributors and customers,” Sabino says.

Regarding his new responsibilities, Herman says, “I’ve been involved in our day-to-day business for decades, but now I can step back and focus on larger business development opportunities which we have today in every area of our business.”

He adds, “I will help John and his team as needed, but my principal efforts now are relationship development, industry commitments such as the Coin Laundry Association, and executing strategic projects with Neal, such as the complete reconstruction and Herman Sabino expansion of our parts, service, quality control and warehouse operations in 2014 to support our rapid business growth.”

Regarding Herman’s appointment, Milch says, “Howard is known and respected throughout the industry. Howard will create opportunities with route operators, key national OPL accounts, multi-store owners, and other important constituencies where his extraordinary experience and relationships bring unique value.”

Rowen Steps Up to New Role for Alliance Laundry Systems Alliance Laundry Systems has appointed Kathryn Rowen North American sales manager for its Huebsch, IPSO and Cissell brands, the company reports.

Rowen transitions to the post from senior director of marketing and brands, the company says, which will allow her to “leverage her previous marketing experience and proven leadership ability as she provides the sales teams with strategic direction and insights.”

She will oversee regional sales managers and be responsible for the growth of distributor relationships and the enhancement of products and services provided by each of the three brands.

“Under Kathryn’s leadership, our brand campaigns and newproduct initiatives were well orchestrated; she produced meaningful work and progress that created enthusiasm among our custom32

American Coin-Op January 2014

0114aco_p32.FINAL.indd 32

ers,” says Mike Schoeb, president and CEO of Alliance Laundry Systems. “I am delighted to see Kathryn take on one of the most challenging management roles in the company and look forward to her continued success.”

Rowen has a bachelor of science degree in biomedical engineering from the University of Iowa and an executive MBA from Rowen Northwestern University, the company reports. Prior to joining Alliance, she was a general manager for Kohler Company in Kohler, Wis. setomatic systems welcomes third generation to team Setomatic Systems recently welcomed Gregg Schantz, assistant manager of sales and operations, to its staff. He becomes the third generation of his family to join the company.

“I am thrilled to be working alongside my son, as my dad and founder Jerry Schantz was when I joined the company in 1983,” says company President Michael Schantz. “With the rapid growth of our SpyderWash System, it was time for Gregg to join the team in a sales and operations management role to better serve our customers and distributors.”

Gregg Schantz graduated summa cum laude from the Eller School of Management, University of Arizona, with a finance degree. While at school, he worked at Setomatic during summers, holidays and the last two Clean Shows.

He has spent the past year working at the Canon headquarters, honing his skills as a financial analyst. He brings expertise in business solutions, profit and loss analysis, and sales force support to Setomatic.

“I have been around since the inception and original design of the SpyderWash System and watched it go from concept to Gregg Schantz reality,” Gregg Schantz says. “I am amazed to see how SpyderWash has changed the way people pay for their laundry. I look forward to working on the Setomatic team fulltime and contributing to its continued expansion.”

Washer/Dryer Campaign Raises More Than $16,500 for charity Speed Queen raised more than $16,500 for breast cancer research and awareness during its Breast Cancer Awareness Campaign benefiting The Breast Cancer Research Foundation® (BCRF), the company reports.

The campaign involved the release of a limited-edition, pinkaccented home-style washer/dryer pair to Speed Queen dealers around the country, reports the company, which donated $20 from every pair purchased.

In addition to product sales, Speed Queen and parent company Alliance Laundry Systems also raised money through fundraising efforts by employees at company headquarters. n www.americancoinop.com

12/13/13 9:19 AM

Quality. Durability. Affordability.

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To find out more about Milnor or about financing with Milnor Capital, visit www.milnorcoin.com, call 800-469-8780 or email milnorinfo@milnor.com.

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