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DISTRIBUTOR EVENTS

TIPS FOR GAINING THE MOST FROM OPEN HOUSES, SERVICE SCHOOLS AND THE LIKE I N S I D EI :N SJ IUDL EY: 2F 0E B0 R5 U A R Y 2 0 1 4 MILES CITY’S QUICK WASH & FIDOCLEANING

EIGHT EASY WAYS TO SIMPLIFY YOUR LIFE, BOOST YOUR INCOME

YEAR-OLD STORES ALREADY LOOKING AT EXPANSION

WWW.AMERICANCOINOP.COM

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DON’T LIMIT YOUR CUSTOMERS’ PAYMENT OPTIONS Today’s consumers expect multiple payment options. Setomatic Systems has partnered with USA Technologies to bring laundromats a simple blended rate that is among the lowest in the coin-operated laundry industry. Increase your revenue potential and give consumers the payment options they demand.

The SpyderWash payment system offers: • COIN, CREDIT, DEBIT, LOYALTY AND NFC MOBILE WALLET ACCEPTANCE • CLOUD-BASED REPORTING • A SIMPLE USER INTERFACE FOR UNATTENDED LOCATIONS Contact your Setomatic Systems rep today to learn how your laundry can benefit from accepting credit and debit payments.

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CONTENTS FEBRUARY 2014 VOLUME 55 ISSUE 2 COVER STORY

HOW TO GAIN THE MOST FROM DISTRIBUTOR EVENTS The format and frequency of open houses, sales shows and service schools vary by distributor but they all offer great opportunities for product inspection, networking with peers, and much more.

14 INSIDE 10 MILES CITY’S QUICK WASH

AND FIDO-CLEANING

A one-stop shop in Montana provides customers a 60-minute wash/dry, a place to wash pets without the mess, and convenient drop-off services that save time.

18 EIGHT EASY WAYS TO SIMPLIFY YOUR

LIFE AND BOOST YOUR INCOME

Business management writer William Lynott thinks the start of a new year is a great time to adopt these simple business-building strategies.

COLUMNS 20 SHARE PROFIT THROUGH EMPLOYEE BONUSES Starting this year, columnist Howard Scott says, you should show appreciation by tying Christmas giving to profit bonuses, and by being more generous than you ordinarily are. By tying the bonus amount to company performance, you provide staffers incentive to see that your company succeeds.

DEPARTMENTS 4 VIEWPOINT 6 YOUR VIEWS SURVEY 24 WEB UPDATE

26 NEWSMAKERS 29 AD INDEX 30 CLASSIFIEDS

22 YEAR-OLD LAUNDRIES ALREADY

PLANNING FOR EXPANSION

Distributor Western State Design likes to keep tabs on the coin laundries it helps to develop.

In this issue, the company shares updates on year-old stores in Oregon and Arizona that are already looking to expand.

Cover Image: © iStockphoto/Alexander Chernyakov

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18 A CLOSER LOOK Slash your costs for staying in touch, save money even when paying bills, and dig out from all that paper.

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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

business building

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

Bruce Beggs

time to kick the tires With spring just around the corner(!), it won’t be long until commercial laundry equipment distributors begin hosting open houses, sales shows and service schools to reach local and regional buyers and prospects.

But how do you get the most out of attending one of these shindigs? Huebsch’s Kathryn Rowen offers some advice for how you can best “kick the tires.” Look for it beginning on page 14.

eight easy ways The start of the year is a good time to re-evaluate your coin laundry business and refine operations to produce a profitable bottom line. Business writer William Lynott offers eight easy ways to simplify your life and boost your income.

Most involve just taking a little harder look at how you’re doing business and taking advantage of low-cost or no-cost tools that are available to you.

Learn how to strengthen your management skills by reading Bill’s story starting on page 18. plant profiles We have some plant profiles for you this month, as we take a look at a trio of stores in Oregon, Montana and Arizona.

First, beginning on page 10, meet the owners of the Express Laundry Center (and Sage’s Dog Wash), Miles City, Mont. Learn how their customers have responded to an array of amenities and timesaving drop-off services.

And starting on page 22, distributor Western State Design shares updates on year-old stores that are already contemplating expansion: Main Street Laundry in Boardman, Ore., and The Station Laundromat in Thatcher, Ariz.

I hope your operation is off to a good start this year, and that you’ll continue to turn to American Coin-Op for the latest on the self-service laundry industry.

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 2. 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

MANY LAUNDRY OWNERS TO RAISE PRICES THIS YEAR The majority of coin laundry owners are planning to raise prices in the new year (61.5%), according to results from January’s American Coin-Op Your Views survey.

Further, store owners say they plan to spruce up their store (46.2%), add new washers and/or dryers (38.5%), do more marketing (25.6%), add other equipment such as water heaters, changer, etc. (23.1%), and/or add another service (15.4%) (respondents were invited to select any or all from a list of choices).

A share of 10.3% say they have other initiatives planned this year, such as adding a snack bar, remodeling, boosting online marketing, and even selling their business. Another 10.3% say they have no changes planned.

“Business will be better than 2013,” predicts 56.4% of respondents, while 28.2% say it will “be the same as 2013.” A small percentage (2.6%) believes “business won’t be as good as 2013,” while 12.8% are unsure.

Among their greatest business-related concerns in the new year, the majority of coin laundry owners say they worry “utility costs will continue to rise” (64.1%). Increasing competition worries a small percentage of owners (7.7%), while equal shares of 5.1% fear they “may lose customers if [they] raise prices,” “won’t be able to keep up with maintenance schedule,” or “may need to update equipment.” Another 5.1% of respondents report they “have no business concerns this year.”

Approximately 8% listed other concerns, including “competing against free-dry stores.”

Taking everything into consideration, how challenging is it to run a coin laundry today? The majority of store owners polled say it is “more difficult” (53.8%), while 35.9% say “nothing has really changed during the last five years.” Roughly 10% say it is “easier than running a store five years ago.” No one who responded to the survey was “not sure.”

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

The entire American Coin-Op trade audience is encouraged to participate, as a greater number of responses will help to better define owner/operator opinions and industry trends.

■

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

AMERICAN COIN-OP FEBRUARY 2014

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www.americancoinop.com

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Miles City’s Quick Wash and Fido-Cleaning One-stop shop offers array of self-service laundry amenities plus dog wash

By Haley Jorgensen

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raving personal service and a 60-minute wash-and-dry, families, singles, professionals and pets frequent the Express Laundry Center – a high-speed, 2,400-square-foot coin laundry in Miles City, Mont. Complete with Sage’s Dog Wash, the one-stop laundry not only delivers a quick wash and Fido-cleaning, it offers an array of amenities and timesaving drop-off services, including wash/ dry/fold, load and leave, and dry cleaning.

Owners Shane and Rebecca McKinney relish their laundry just as much as customers relish its cleanliness, convenience and personal service. The couple purchased and renovated a Subway store anchored by the popular fast-food restaurant McDonald’s.

“We bought the building and converted it to an Express Laundry Center,” says Shane. “We felt like it was a fabulous location across from McDonald’s. We love this business and can’t wait to get to the laundry every morning. Our customers say 10

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it is hands down the nicest laundry they’ve ever been in.”

Laundry clients are privy to comfy leather recliners, soap and snack vending machines, video games, free Wi-Fi, flat-screen televisions, high-speed laundry equipment, and the adjoining Sage’s Dog Wash. Open from 6 a.m. to 11 p.m. daily, the Express Laundry Center is attended 8 a.m. to 5 p.m. weekdays, 8 a.m. to 4 p.m.

Saturdays and 10 a.m. to 4 p.m. Sundays.

HIGH-SPEED BENEFITS The McKinneys worked closely with Tom Millman when designing their store layout and equipment mix. Millman owns and operates Washtime Industries, a laundry equipment distributorship based in Greeley, Colo.

After careful research, the couple selected Continental Girbau high-speed, freestanding washers and complementary Continental drying tumblers for the store.

The Express Laundry Center harnesses high-speed ExpressWash™ Washers engineered to significantly reduce utility usage

Rebecca and Shane McKinney own the Express Laundry Center, where customers are privy to leather recliners, video games, free Wi-Fi and more. Photos: Continental Girbau and deliver a 60-minute wash/dry. Because the washers are freestanding, they installed easily without bolts or concrete foundations.

ExpressWash™ machines produce extract speeds up to 354 G-force. Because high-speed washers remove more water per load than hard-mount washers, laundry loads dry 40-50% faster, according to Continental. This shortens wash/dry time for customers—getting them in and out of the laundry sooner—and reduces electricity and natural gas consumption.

Additionally, the Express Laundry Center also saves water. There are no topload washers in the store, and as a result, the laundry saves significantly on water and water heating costs, according to Millman.

A typical top-load washer consumes 30-40 gallons of water per load, he says. In www.americancoinop.com

1/16/14 11:41 AM

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comparison, the Express Laundry Center’s 20-pound-capacity ExpressWash™ Washers are front-load machines using just 13.4 gallons of water per load with good wash results.

Altogether, utility costs—water, sewer, gas and electrical—represent 8% of Express Laundry Center revenue, according to the McKinneys.

Because the McKinneys selected freestanding ExpressWash™ machines, they successfully differentiated their store with a 60-minute wash/dry promise. On average, a customer can wash a load of laundry in 19 minutes and dry it in 24 minutes, says Shane.

“Customers are in and out faster,” he maintains. “Typically, in less than 50 minutes, laundry is washed and dried.”

DROP-OFF SERVICES BOLSTER BOTTOM LINE The Express Laundry Center aims to deliver timesaving convenience, which extends to the drop-off services customers crave.

“Our drop-off service is really big. We market to everyone, from homeowners and professionals to people who rent and don’t have washers at home. People are busy and want to save time,” says Shane.

The laundry caters to truck drivers, business owners, families, motels, restaurants and care homes — anyone needing a hand with laundry.

“Our city had a dry cleaner that closed down, so we contract with a dry cleaner out of town and provide drop-off dry cleaning,” he says. “We have a lot of satisfied customers who were desperate for that service.”

“We keep one of the 20-pound capacity washers and one of the 30-pound stack dryers in the back reserved for heavily soiled wash/dry/fold,” Shane adds.

The Express Laundry Center generates 40% of its revenue through drop-off services.

In total, the laundry boasts 22 ExpressWash™ Washers, including 16 20-pounders, three 30-pounders, and three 40-pounders; two Continental 75-poundcapacity PowerLoad Washer-Extractors; two 75-pound-capacity, single-pocket dryers; and two 45- and eight 30-poundcapacity dual-pocket stack dryers.

“We have a customer who has used our laundry from day one,” says Shane. “She has five kids, with no washer or dryer at home. On Sunday, she brings about 28 loads of laundry to the store. She told us it used to take six to seven hours and 90 bucks to finish her laundry. Now, using our store, she does it for $35 in two or twoand-a-half hours.”

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The Express Laundry Center utilizes 22 ExpressWash™ Washers, two PowerLoad Washer-Extractors, and a dozen singlepocket or dual-pocket stack dryers of various capacities.

How does she do it? “She uses the big washers, which cost less per pound and saves money on the dryers,” says Shane.

Simplifying life further for customers, the McKinneys placed dual-coin acceptors on the laundry’s bigger machines. Thus, the change machine is a double-service coin changer that dispenses dollar coins or quarters. “This saves customers time, and they don’t have to lug tons of quarters around.

Instead, they can use a few dollar coins,” says Shane.

SAGE’S DOG WASH Complementing the Express Laundry Center is Sage’s Dog Wash—the first and only coin-operated self-service dog wash in Miles City.

In its own corner of the laundry, sepa-

rated by a glass partition, pets undergo the ultimate washing experience as laundry customers look on. Sage’s Dog Wash features a separate entrance for simple access.

“Our laundry customers can see the dog wash and visa versa,” says Shane. “It’s good marketing. They complement each other.”

Pets are dried using the built-in blow dryer, or by hand with towels, which are provided.

A one-stop solution, the Express Laundry Center provides customers a 60-minute wash/dry; a place to wash pets without the mess; and convenient drop-off services that save time. n Haley Jorgensen is a public relations writer for commercial laundry equipment manufacturer Continental Girbau. www.americancoinop.com

1/16/14 11:41 AM

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How to Gain

Recognize opportunities up-front for greatest benefit

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Photo: © iStockphoto/Alexander Chernyakov

By Kathryn Q. Rowen

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hether a seasoned veteran of the laundry industry or a newcomer, store owners continually strive to improve their Laundromats.

One of the simplest ways an owner can feel empowered to make these improvements is by participating in distributor events such as open houses, sales shows and service schools.

While the format and frequency of events vary from one distributor to the next, owners should understand the benefits available so they can get the most from attending.

NEWEST TECHNOLOGIES, PRODUCTS Distributors will have the “latest and greatest” commercial laundry equipment on display at their events. Instead of reading about a washer-extractor’s efficiency capabilities, owners can get a first-hand look and “kick the tires.”

Not many of us would purchase a car 14

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without test-driving it, let alone never having seen it, so owners should use these events to see what’s under the hood, or the frame, of a manufacturer’s equipment. From testing a washer-extractor’s advanced control system to simply observing how easily a tumble dryer’s door opens and closes, an owner will get a better idea of how it would fit in the store and work for customers.

Huebsch Regional Sales Manager Keith York has seen many distributors in the Northeast host sales shows similar to the Clean Show, just on a local scale. In addition to showcasing the newest commercial laundry equipment, the distributors invite area vendors to exhibit related products such as card readers, water heaters, vending machines and laundry carts. That way, owners can see all the ways it’s possible to improve their stores. For those planning on opening a new store, this sales show format is of particular benefit as they could potentially outfit the store in one day.

MANUFACTURER SUPPORT While a distributor may be an owner’s main day-to-day contact, many events provide the opportunity to meet with manufacturer representatives.

Customer-focused companies want to hear from their equipment purchasers.

Owners should use these events to share their experiences—the good, the bad and the ugly—and ask questions of the manufacturer. Expect a factory sales representative to be present at sales shows, while it is likely that a member of the manufacturer’s technical team would attend major service school initiatives.

As only select commercial laundry equipment manufacturers provide laundryfocused, in-house financing, not every distributor event offers customers the opportunity to meet with finance specialists. For those that do, it is a great time for owners seeking funding to meet one-on-one with a specialist and learn about the laundryfocused programs available. They can even www.americancoinop.com

1/16/14 11:45 AM

complete an application on the spot.

PRODUCT AND SALES INCENTIVES During certain open houses or sales shows, attendees may have access to equipment discounts. Through these show specials, the distributor and manufacturer offer discounts on equipment or replacement parts. These promotions can be impactful enough that the event is a mustattend for owners looking to upgrade their equipment.

To show appreciation for attendees’ business and participation at an event, some distributors work with their manufacturers to give away prizes ranging from a free case of laundry detergent to a washer-extractor or tumble dryer.

TECHNICAL SUPPORT Some of the most popular distributor events are service schools, as the knowledge an owner gains from them can result in real savings. Not every distributor provides these seminars, but if available, owners should find time to attend.

Distributors are mindful of the varying levels of technical skills possessed by store owners. They therefore offer training that can be valuable forFargo both new and veteran 0612aco_Wells 7/17/12 3:56

owners. For example, a new owner may attend just to learn the basics, such as the location of a washer-extractor’s drain valve or how often to clean a lint screen on a tumble dryer, while a seasoned owner may be looking for assistance with a particular issue they are experiencing or attend for an update on recommended service schedules or techniques.

Recognizing that most owners were knowledgeable about service items like swapping out a drain valve or changing a dryer roller, one distributor in the Northeast offered electrical training seminars. Learning simple diagnostics such as how to use a multimeter or how to read a wiring diagram and electrical schematic can empower a store owner and also help reduce repair costs and machine downtime.

NETWORKING IN DIGITAL AGE The expanding reliance on the Internet to convey information about equipment and services has made for a far more knowledgeable customer. In response to a few simple keystrokes, the Internet delivers answers to life’s most challenging questions. What it can’t provide is face-to-face contact. using1 these events to meet suppliPMBy Page

ers and peers in person, owners have the opportunity to continue the research they’ve gathered from the Web and get validation that they’re making well-informed and thought-out decisions.

Owners shouldn’t forget about the incredible opportunity these events provide for learning from their fellow Laundromat owners. Meeting with members of the distributor and manufacturer teams can be incredibly valuable, but talking with peers about what’s successful in their markets, the struggles they face, and new marketing ideas can make these events a must-attend.

While the events will differ from one distributor to the next, if owners recognize what they stand to gain by attending before they walk in the door, they are more likely to leave with fresh insights and information, feeling well equipped to improve their stores.

■

Rowen

Kathryn Q. Rowen is the Huebsch® North American sales manager and may be reached at Kathryn.Rowen@ alliancels.com.

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Easy Ways to Simplify Your Life and Boost Your Income Image licensed by Ingram Publishing

Revitalize your coin laundry business for challenges, opportunities that lie ahead

By William J. Lynott

T

he start of a new year offers a fine opportunity to revitalize your coin laundry business for the challenges and opportunities that lie ahead. Here are eight easy steps you can take now to simplify your life, lower expenses, and pump up your net income: SLASH YOUR COSTS FOR KEEPING IN TOUCH With your cell phone, pager, broadband Internet access, and regular telephone service, you’re never far from anyone you want to reach.

Contact your primary provider to see what bundled plans are available in your area. You may be surprised at how much you can save by giving all of your communications business to one company.

Plus, dealing with one supplier will greatly simplify your bill-paying procedures.

If you are already dealing with only one communications company, give them a call and ask for an analysis of your account.

Companies are constantly coming up with new bundling plans and one of them might save you a bundle.

GIVE YOUR ACCOUNTANT A PAY CUT Sure, you hate all that paperwork and 18

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record keeping that have become part of your life. Nevertheless, if you find yourself scrambling to find receipts and other records for your accountant at tax time every year, you’re probably costing yourself some real money.

Hopefully, your business records are well organized, but that may not be true for your personal tax records. Certified Public Accountant Tom Normoyle, Huntingdon Valley, Pa., says that even the simplest of systems, one file for income and one for deductible expenses, can be a money saver.

“When clients present me with a shoebox full of unsorted papers, I have to charge them for the hours it takes to make sense of them,” he says. “A simple filing system that separates records of different types is one sure way to reduce my fee.”

SAVE MONEY EVEN WHEN PAYING BILLS Paying bills may never be fun, but new technology has made the task quicker, easier and less costly.

Nearly all banks are online these days, and most offer free online bill paying. Once you sign up and choose a password, you log on to the bank’s website where you enter the payee’s name and address, phone number, and the amount to be paid. The bank takes over from there, either by mailing a check to the payee or by making an

electronic transfer of the money.

You save precious time, the cost of postage—now nearly half a buck for every check you mail—buying checks, and trips to the post office. What are you waiting for?

SLAY THE CREDIT CARD MONSTER Life as we know it today wouldn’t be possible without credit. However, credit has its dark side as well. Credit cards have been compared to drugs; they offer shortterm pleasure in exchange for long-term pain.

Saying “charge it” is quick and easy, but that habit, uncontrolled, can lead you and your self-service laundry business down the road to financial oblivion. Once you become hooked on credit cards, it can be painfully difficult (and sometimes impossible) to free yourself.

Independent studies continue to show that the more credit cards you carry around, the more likely you are to dig yourself into a bottomless financial pit.

Equally important, if your wallet heavy with plastic is lost or stolen, the risks of identity theft skyrocket.

If your wallet or purse is bulging with plastic, now is the time to relieve yourself of that hazardous burden. Perhaps you have one of those “reward” cards for perwww.americancoinop.com

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sonal use, and a separate card for business.

That’s all you need. Dump the rest.

(Caution: Avoid cancelling several credit cards all at once as that could affect your all-important credit score. Instead, cancel them over a period of months, and be sure to keep the two cards that you have had the longest. The credit scoring companies like to see a long history of good credit performance.)

DIG YOURSELF OUT With all the paper you’re required to slog through for business purposes, you don’t need to add to the burden by hanging on to reams of paper because of the worry that you might need it someday.

If that sounds like you, organizing guru Maria Gracia (www.getorganizednow.com) suggests some guidelines to help end the

need (unless you’re raising a future Shirley Temple).

Never agree to credit life insurance or to car rental insurance. Your own auto policy or credit card will probably cover that base.

Once you’ve pared things down to those five types, look into consolidating some of the remaining policies with one company.

GO THE EXTRA MILE Never forget that a complaint from a customer can easily be turned into a valuable asset. Some years ago, a major retail marketing study revealed that customers whose complaints were satisfactorily resolved became better customers of the company than they were before the incident that triggered the complaint.

Some of the most successful companies

ment in your future.

Once you’ve sold yourself and your employees on why your self-service laundry business is the best choice for customers, it’s essential to focus your marketing efforts on ways to promote this image.

ADOPT A MARKETING MENTALITY If customer satisfaction is the mashed potatoes, marketing is the gravy.

But keep in mind that marketing involves far more than an ad in the Yellow Pages and a sign over your store. Marketing is a complex challenge, especially for a business operating in a specialized niche such as yours. You must be willing to spend time studying, reading and analyzing your market and your competition.

Keeping your business healthy and profitable requires an ongoing marketing pro-

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GET RID OF INSURANCE YOU DON’T NEED The cost of insurance is a major burden for business owners these days. In addition to business liability insurance, there are only five types that you must have: life, health, disability (as long as you’re working), homeowner’s, and auto.

Life insurance on your children is a classic example of insurance you don’t

in the world have been built on a foundation that revolves around the principle that customer complaints provide a valuable opportunity to build the business.

When L.L. Bean, founder of one of the world’s most successful catalog order firms, was starting out, he suffered what could have been a disastrous setback.

Shortly after he began shipping his first waterproof, hand-made boots, complaints that the boots leaked started coming in.

Bean returned the full purchase price to every customer, then set out to correct the flaw. That was the beginning of the customer loyalty that helped to make L.L. Bean what it is today.

Sometimes, satisfying a customer complaint calls for measures that you may feel unreasonable. When that happens, think of the cost in time and money as an invest-

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nightmare of out-of-control paper. Use the 4 D’s: • Do it • Delay it (File in action file or archive) • Delegate it • Dump it Open your mail right over the wastebasket. Immediately get rid of mail you don’t need, such as catalogs or advertising offers.

Then, use the 4-D system on what’s left.

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gram. There is no other way. While they are essential to optimum performance, competitive prices, clean and dependable equipment, and clean stores alone won’t do it.

Marketing embraces all facets of your operation. To be an effective marketer, you must nurture and promote your business image, sell yourself as well as your business, and concentrate on making your store the best choice for discriminating customers.

While any time is a good time to adopt business-building strategies such as these, the fresh start of a new year presents an especially opportune time to strengthen your management skills. n William J. Lynott is a veteran freelance writer specializing in business management as well as personal and business finance.

February 2014

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an outsider’s view

Share Profit Through Employee Bonuses

Howard Scott

Most coin laundry owners don’t give Christmas bonuses to their employees. One operator told me, “Why should I give a Christmas bonus? They’re paid to do the work, period. They receive adequate wages. That’s enough.”

Other “Laundromateurs,” moved by the spirit of giving, give modest sums at holiday time. “To show appreciation, I hand each of my staff a $100 gift certificate to an upscale restaurant,” says one operator.

I believe that, starting this year, you should show appreciation by tying Christmas giving to profit bonuses, and by being more generous than you ordinarily are. By tying the bonus amount to company performance, it provides staffers incentive to do everything in their power to see that the company succeeds.

Furthermore, by individualizing bonuses, the employee is committed to doing his/her very best.

Say you have three stores and six employees. Estimate your annual profit at year’s end. If you’re one of those operators who doesn’t compute profit, take revenue, deduct expenses, and deduct a reasonable salary for yourself. This is an example: Revenue of three-store operation ................. $850,000 Operating costs (inc. debt interest) ................ $750,000 Reasonable owner draw ............................... $70,000 Profit ............................................................. $30,000 Next, decide how you want to carve up this profit. In this case, 60% of the profits go back into the business

By tying the bonus amount to company performance, it provides staffers incentive ... to see that the company succeeds.

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for capital replacement, working capital, etc. Twenty percent goes to you, the boss, as a bonus. And 20% go to your six staffers; they divide 20% of $30,000, or $6,000.

Rather than give each staffer $1,000, create a formula of value based on your assessment of employee value.

In this example, the owner values contribution and loyalty. Contribution can be restated as “pay.” How much a staffer makes roughly corresponds to contribution.

Loyalty can be recast in terms of years employed. So, the formula might be 1 point for every thousand dollars earned and 1 point for every year employed.

The staffer who has been an employee for eight years and earns $22,000 annually receives 30 points (22 points for his wages and 8 points for longevity).

Add up points for all staffers—let’s assume that the total is 120 points. This staffer earns a bonus worth 30 points out of the 120-point total, or 25% of the pie.

That would equal $1,500 (25% of $6,000). The other five staffers earn varying amounts depending on their point totals, but the entire $6,000 bonus is fully distributed among the six staffers.

Make up your own formula. You might decide to give 10% as a bonus rather than 20%. Or, if you really want to incentivize your staff, you could choose to give away 50% of profit. Or, you can choose different characteristics or assign different percentages.

You may believe that longevity is the most important employee characteristic, and give 100% of the points based on years employed. Maybe you think that weekend workers deserve better bonuses than weekday workers; for every $1,000 in salary, every weekend worker gets 2 points and every weekday worker gets 1 point.

Or, you could reward wash/dry/fold workers at a level higher than those who don’t perform that service, say 3 to 1. A wash/dry/fold worker with a $9,000 salary would earn 27 points instead of 9 in that formula.

I can hear your questions now. Why give out hardearned profits when I don’t have to? Because this uncalled-for generosity shows your staffers that you appreciate their contributions. Moreover, this aligns them with company success.

They will be more considerate of customers. They will never close early. They will take the extra effort to make www.americancoinop.com

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sure that the place looks spick-and-span. They will bend over backwards for the customer. They will make sure their fellow staffers are equally committed. In other words, they will do what it takes to be successful, because company success puts money in their pocket.

Why make such a complicated formula? It’s not complicated, really. You can figure this all out, roughly, using pen and paper and a calculator. The point is, you are trying to assign importance to contribution. The formula I described reflects the level of employee contribution. Design any bonus system you want, but remember that it’s a motivational system.

Why give varying amounts, creating envy and distraction among my staff? You create the formula, and you can articulate it so that your people understand. My example—“I want to reward contribution, which is reflected in pay and longevity. That’s how I determine how valuable the employee is”—is easy to understand.

How can I determine end-of-year profits when it’s not the end of the year? Let’s say your year-end is Dec. 31, so the figures won’t be ready until the new year. The answer is to project expected profits.

Work with your accountant. Use past years’ figures as a guide. This is a volunteer payout system, so no sum has to be etched in stone.

Why combine holiday bonus with profit bonus? Because it kills two birds with one stone. It’s the perfect time, as everyone needs money. Since the sum reflects both a charitable nature and an awareness of their performance, your staffers will be extra appreciative for whatever they receive.

How can a bonus be included in expenses? Just issue the checks as payroll, as though there are 53 weeks instead of 52 weeks in the year. Then the bonus becomes a payroll expense. Company profit is appropriately lowered (below the computed figure used to determine bonus amounts), and you pay a lower tax liability.

Should I give a Christmas profit bonus when I only have one or two staffers? Absolutely, for these are the people who will make or break your business. It is more important to incentivize staffers in a tiny shop than in a larger operation.

Think of a Christmas profit bonus as a way to show your appreciation to your employees and as a way to get them to care more deeply about bottom-line results. n Howard Scott is a long-time business writer, small-business consultant, and author of four books.

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Thirteen states ring in new year with minimum-wage increases New minimum-wage increases have gone into effect in 13 states, which the Economic Policy Institute estimates will boost the incomes of 2.5 million low-paid workers, the National Employment Law Project (NELP) reports.

Four states—Connecticut ($8.70), New Jersey ($8.25), New York ($8.00) and Rhode Island ($8.00)—passed laws in early 2013 to raise their minimum wage, while the other nine states—Arizona ($7.90), Colorado ($8.00), Florida ($7.93), Missouri ($7.50), Montana ($7.90), Ohio ($7.95), Oregon ($9.10), Vermont ($8.73) and Washington ($9.32)—adjusted their minimum wage in accordance with state laws requiring automatic annual increases

to keep pace with the cost of living.

“As Congress drags its feet on raising the federal minimum wage, more and more Americans are earning poverty-level wages in expanding industries, like retail and fast food,” says Christine Owens, executive director of NELP. “In the face of federal inaction, states are boosting the paychecks of the lowest-paid workers, promoting growth and consumer spending, and hopefully providing an example for Congress to follow.”

At the municipal level, San Francisco raised its minimum wage to $10.79 per hour, alongside San Jose, which will raise its wage to $10.15 per hour, in accordance with city statutes requiring annual inflation

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indexing, NELP says.

Legislators in Massachusetts, New Hampshire, Delaware, Maryland, Minnesota and Hawaii have introduced proposals to increase their state’s minimum wage, while efforts to place minimum-wage increases on the November 2014 ballot are under way in South Dakota, Alaska, New Mexico, Idaho, Arkansas, Massachusetts and the District of Columbia, according to NELP. As of Jan. 1, 21 states and the District of Columbia have minimum-wage rates above the federal level of $7.25 per hour, which translates to just more than $15,000 per year for a full-time minimum-wage earner, says NELP. n February 2014

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Year-Old Laundries Already Planning for Expansion

OUTPACING PROJECTIONS

Though only a year old, Main Street Laundry in Boardman, Ore., is outpacing projections, and owner Don Russell and partner Steve Doherty have made plans to expand the coin laundry, according to WSD. Russell had considered adding a Laundromat to a car wash he had opened nearly 12 years ago on Main Street, but decided against it because the small town of 3,500 already had one, according to WSD. When that laundry shut down and residents had to travel 25 miles to the next closest Images provided by Western State Design coin laundry, he revisited the idea.

After joining the Coin Laundry ommercial laundry equipment distributor Western State Design Association (CLA) and researching equip(WSD), headquartered in Hayward, ment, Russell reached out to Jim Wright of Calif., likes to keep tabs on the coin laun- WSD, the company says, and installed the dries it helps to develop. Recently, it shared Dexter Express line of washers and dryers updates on two West Coast stores that are for his coin-op laundry.

The line’s ability to turn a load in planning for the future.

Distributor says Oregon, Arizona stores looking ahead to bigger things

C

roughly one hour “saves time for his customers and saves energy costs for him,” the distributor says. “His decision has paid off as many of his customers tell him that it’s the nicest coin-op laundry they’ve ever been in.”

Russell applies the same principles he’s learned from his car wash business to his coin-op laundry, in that “keeping equipment clean and functional means customers don’t abuse machines and the place stays in good shape,” WSD explains.

“It starts out clean every morning,” says Russell.

WSD provided him and his contractors with a layout drawing, utility schedule and shop drawings to aid in construction, the company says. “Russell remarked that he enjoyed working with the installation technician from WSD’s Portland office who even offered a personal cell phone number after the installation was complete,” the distributor says. “Russell was able to call him with a few troubleshooting questions afterward, and the technician talked him through a couple minor adjustments over the phone. Since Portland is a couple hours away, this was a huge help.”

Russell is working with Wright and WSD to expand the laundry by adding more machines, including a 90-pound washer.

COLLEGE CONNECTION Also about a year old is The Station Laundromat, a Thatcher, Ariz., coin-op laundry opened by local businessman Pat Rowan. He opened the business to provide high-quality, reliable laundry service to a small community (population approximately 5,000) that had limited options.

Owner Don Russell applies the same principles learned from his car wash business to the Main Street Laundry (shown). “It starts out clean every morning,” he says.

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The Station Laundromat (shown) caters to the local college student population, the high volume of contractors coming in and out of surrounding mining towns, and residents of the nearby Apache reservation.

Built on land of a former service station that Rowan already owned, The Station caters to the local Eastern Arizona College student population, the high volume of contractors coming in and out of surround-

Express machines and the EasyCard™ payment system. The latter provides a coinless interface that enables greater control over pricing, specials and loyalty rewards, WSD says.

daughter Katie, who runs the store’s dayto-day operations, also attended the college. Rowan specifically installed counters around the glass windows of the building so that students could sit and work while

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ing mining towns, and residents of the nearby Apache reservation.

The business has enjoyed enough success that Rowan is expanding the store by adding more Dexter Express washers and dryers, as well as additional equipment dedicated to his fluff-and-fold and drycleaning services.

Finding housing in Thatcher and neighboring Safford has always been a battle, Rowan says, and most of the housing does not provide laundry facilities. With limited coin laundries serving the area, Rowan decided to build a new store.

He worked with WSD’s Scott Harrington. To begin, Harrington brought Rowan to another store that Harrington had designed in nearby Apache Junction.

After talking with the owner of this laundry, Rowan embraced the idea of Dexter

Rowan feels a special connection to serve college students at his Laundromat— he met his wife while both were students at Eastern Arizona College, and his

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Pat Rowan (left) relies on his daughter, Katie (right), to run the day-to-day operations at The Station.

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they do their laundry. The business provides free Wi-Fi and Internet stations.

Looking back on building and opening The Station Laundromat, Rowan says there is little he would have done differently. But he acknowledges he would have started with more washers and dryers had he known how quickly the business would take off. Rowan has once again turned to Harrington for help in coordinating the next installation.

Rowan says he’s seen steady customer growth for basic in-store laundry as well as drycleaning and fluff-and-fold services, all without doing much advertising.

What’s he planning after this expansion is complete? He maintained the old service building on the property next to the Laundromat and hopes to one day turn it into the “Station Café.” n February 2014

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web update

Most popular stories from AmericanCoinOp.com for the 30 days ending Jan. 15 — (WE) denotes Web Exclusive

Top Five news Stories

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From AmericanLaundryNews.com:

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From AmericanDrycleaner.com: • When the Taxman Comes • Plant Design Awards— Grand Prize: CDM Cleaners

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alliance laundry systems promotes mcdonald to vp of home laundry sales Alliance Laundry Systems has promoted Jay McDonald to the newly created position of vice president of North American home laundry sales. He previously was vice president of business development for the company.

McDonald will be responsible for the development and implementation of strategies to expand the home dealer network and drive the success of the home laundry product line, which represents a new growth opportunity for the company. Earlier this year, Alliance completed a plant expansion to increase the production of small-chassis equipment, which includes the home laundry McDonald product line.

“Jay’s intellect, product knowledge and management skills make him uniquely suited to succeed in this new role,” says William Bittner, vice president of North American sales for Alliance. “He has accumulated a wealth of experience in sales and marketing

▼

Maytag Moving Front-Load Single-Load Washer Production from mexico to U.S. Maytag Commercial Laundry is moving the production line of its front-load single-load washers from Monterrey, Mexico, to a 2.4-million-square-foot manufacturing plant in Clyde, Ohio, the company reports, with production beginning in April.

The move is a part of a larger investment to continually advance the commercial front-load washer platform, according to Maytag.

Approximately 80 to 100 new jobs will be created in Clyde during the next three years to support this manufacturing relocation, the company says, increasing operational efficiencies and aligning with its strategy of building products in the regions where they are primarily sold.

“The company’s move to the world-class facility in Clyde represents a significant commitment to the commercial laundry industry. These front-load washers are engineered to meet the rigorous demands of the commercial laundry market,” says Bob English, general manager at Maytag Commercial Laundry. “We look forward to ramping up production and continuing to build this quality product in Clyde, for the United States and abroad.”

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NEWSMAKERS

in the laundry industry during his 34-year career at Alliance.”

McDonald began transitioning to his new role on Nov. 1.

He joined Alliance as a field service manager for Speed Queen in 1979. During his tenure, he has held various sales and marketing positions with increasing responsibility. He worked within the home laundry market for nine years, where he gained experience working with retailers and special accounts.

McDonald has a bachelor of science degree in economics from Ripon (Wis.) College.

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Features of the new six-floor building will include LEED certification, solar panels, a roof garden and a courtyard. (Illustration: Electrolux) “Electrolux is committed to bringing innovative solutions to consumers and to advanced manufacturing,” Truong says. “As a leader in appliance R&D, innovation and beautiful design, 32 ▼

ELECTROLUX TO SPEND $85 MILLION ON NORTH AMERICAN HQ EXPANSION Electrolux is adding 810 new local jobs and expanding its North American headquarters in Charlotte, N.C., its second expansion at the location in three years. The new jobs are in the areas of research and development, marketing, design, engineering, supply chain, finance, IT and executive management, and will be added by the end of 2017.

North Carolina Gov. Pat McCrory joined Jack Truong, president/ CEO of Electrolux Major Appliances North America, to celebrate Standard_half_horz PM in Page 1 the announcement2/14/12 as a major4:51 milestone the company’s growth.

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www.greatlakeslaundry.com Equipment For Sale Complete package for 1800 sq ft of not so used, Wascomat stainless washers and ADC dryers in Charlotte, NC for less than half of half price of new equipment. $49K. Call Charles 704-904-1464.

DIRECT LAUNDRY SYSTEM 718-468-1119 / 917-678-2095 Equipment:

W 185 $3000 W 125 $1700 W 75 $900 W 184 $2800 W 124 $1600 W 74 $800 JT 32DG $1500 Bearing Job: (Most States in the Northeast Service: CT, NJ, NY, PA, DE, MD, NH, RI, MA, VT) Wascomat, Alliance, Dexter, etc.

www.AmericanCoinOp.com

Motors, Baskets, Gas Valve, Computer, Doors, Front & Side Panels FL & GA. Call Victor 321-946-9890

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EQUIPMENT REPAIRS Repair Front Load WASHER Bearings.

Call Tony P. 516-805-4193

EQUIPMENT WANTED WASCOMAT WASHERS & WASCOMAT DRYERS 704-592-2022.

WILL BUY ANY EQUIPMENT (WASHERS AND DRYERS) ON WEST COAST. 888-205-0884.

PARTS FOR SALE

SERVICES AND SUPPLIES WASCO GEN 5 DOOR LOCKS & TIMERS REBUILT Door Lock $75 • Gen 5 & 6 Timer $85 Gen 4 Timer $75 • Continental Timer $89 DRYER COMPUTER BOARDS ADC Stack $60 • Single $45 Huebsch SQ Board $45 Huebsch Old Style Board $55 Stack Dexter/Continental $65 Washer Coin Boards $65 Some prices may vary!!!!

JECON INC. SUITE 272, 11064 QUEENS BLVD. FOREST HILLS, NY 11375 One-Year Warranty on All Parts Send Core Unit with S&H Fees Call Toll Free: 1-888-532-6677 (888-JECON77) Local: 718-525-3733 • Fax: 212-656-1913 718-525-2266 Visit: JECONINC.COM We Now Accept All Major Credit Cards

WASHERS and DRYERS COMPUTER BOARD REPAIR

SERVICES AND SUPPLIES TIMERS REBUILT — IPSO main & reverse, Milnor, Dexter, Primus, Whirlpool, Speed Queen, Maytag & Continental Girbau, Wascomat Generation 4 and 5.

Call for price sheet.

Reeco Timer Co., 2860 Kirby Circle, N.E., Suite 14, Palm Bay, FL 32905, 888-952-1889.

SERVICES AND SUPPLIES WASHER AND DRYER COMPUTER BOARDS REBUILT Igniters repaired Washers: $70 - & up Dryers: $40 - & up Igniters: $25 - & up Rebuilt Timers - Wascomat, Huebsch, Speed Queen, IPSO, Laundry Center, Maytag Call for exact price which includes free return shipping METRO LAUNDRY TECH CORP. 253 East 204th Street, Bronx, NY 10458 ONE-YEAR WARRANTY ON ALL REPAIRS Please call 718-742-4137 Or 718-733-4313 Or Visit our website at www.metrolc.com e-mail us at metrolc@hotmail.com

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Dexter VFD Inverter (Delta Motor Control) All Models (9375-xxx-xxx). . . . . . . $225.00 VFD-A & VFD-B (9732-237-001) . . . . . . . . call Stack Dryer (9875-xxx-xxx) . . . . . . . . . $65.00 Coin Accumulator . . . . . . . . . . . . . . . . $55.00 Wascomat / Electrolux Inverters (MotorControl) All. . . . . . . . . .call Maytag Computers . . . . . . . . . . . . . . . . . . . . . $65.00 23004118 . . . . . . . . . . . . . . . . . . . . . . . . . call W10343020 . . . . . . . . . . . . . . . . . . . . . . . call 33001129 . . . . . . . . . . . . . . . . . . . . . . $85.00

SERVICES AND SUPPLIES

CARD READERS FIXED

HHC

ELECTRONIC SERVICE

14844 Las Tunas Drive, Hacienda Hts., CA 91745

626-961-8678 • 800-820-9888 E-mail: hhc168@hotmail.com

LOOKING TO SELL SOME USED EQUIPMENT?

Contact classified sales to place your ad! classifieds@ americantrademagazines.com

ADC 137213 / 137234 / 137240. . . . . . . . . $65.00 Igniters (Fenwall only). . . . . . . . . . . . . . $30.00 Speed Queen / Huebsch Computers . . . . . . . . . . . . . . . . . . . . . $65.00 Motor Control . . . . . . . . . . . . . . . . . . . $95.00 IPSO 209/00440/70 (Micro 20). . . . . . . . . . $115.00

10% NEW CUSTOMER DISCOUNT Volume Discounts • One-Year Warranty Free Return Shipping El - Tech, Inc. 26 West St. Colonia, NJ 07067 For Complete Price List Please Call: 732-381-7620 or 908-510-6520 or visit us at www.eltechlab.com

SINGLE-COPY SALES To order any current or back issue of American Coin-Op by phone, or to subscribe, call our circulation customer service department at:

1-630-739-0600 Place your ad

ONLINE

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newsmakers

(Continued from Page 28) we’re excited about what this new expansion means for the future of our business and that our continued investment in Charlotte will help bring jobs and drive economic growth.”

Electrolux will invest $85 million in the development of a second building adjacent to the existing headquarters. Features of the new six-floor, 375,000-square-foot building will include LEED certification, solar panels, a roof garden and a courtyard.

“The $85 million investment will have an immediate impact on the local economy … as we engage local architects, designers and construction-related vendors and will last throughout the next two years as we build our second facility,” says Truong.

The North Carolina Economic Investment Committee voted to award a Job Development Investment Grant (JDIG) to Electrolux in support of the project. Receipt of the award is based on proof of job creation and other performance requirements.

“We’re proud to partner with Electrolux to help them bring more high-paying STEM jobs to North Carolina,” says McCrory.

“This announcement helps solidify our position as a state with a skilled workforce and strong business climate, and a place where global companies operate their North American headquarters with much success.” pws upgrades primary website, launches western regional site PWS - The Laundry Company has made a “substantial” upgrade to its company website, www.pwslaundry.com, plus has launched a new website, www.pwslaundrywest.com, targeted at California and Nevada Laundromat owners.

The main company website is now exclusively dedicated to the sale of laundry parts and supplies; it provides users with a selection of more than 120,000 parts and supplies, including products from all major manufacturers. Users can quickly locate a desired part by entering a part number, model number or part description.

Brad Steinberg, co-president of PWS, A screen capture of the www.pwslaundry.com home calls the website “the page. (Photo: PWS - The Laundry Company) single most comprehensive laundry parts and supplies website ever created.”

“We have dedicated the last 18 months to cataloging virtually every washer and dryer part ever manufactured, as well as significantly improving the customer’s ability to search for their desired part,” he says. “This website has been designed with the intent of simplifying the purchase of parts and supplies and includes 32

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thousands of pictures, as well as over 20,000 diagrams and repair manuals.”

The new Western site includes listings for Laundromats for sale in California, as well as videos, manuals, operating tips and schedules for PWS’ free monthly service school classes in Los Angeles and San Francisco.

Maytag University Helps Company Reps Refine Sales Skills Maytag Commercial Laundry recently hosted its Maytag University Commercial Laundry Factory Sales School, which focused on providing its sales representatives in-depth, hands-on training of the company’s multi-segment product portfolio, as well as give attendees an “intensive” session on the coin-store market, the company reports.

Sessions also delved into the company’s energy calculators, financing options and market discussions specific to multi-housing and on-premises segments, according to Maytag.

“Attendees of our sales school leave better prepared to succeed in a very complex commercial laundry market,” says Rex Braden, national sales manager at Maytag Commercial Laundry.

“Our sales team presents information in an easy-to-digest format that educates attendees about our expansive product portfolio, selling techniques and tools available to help them be even more successful.”

The sales school also provided its 15 attendees, representing Australia, Canada and the U.S., a tour of a local hospitality facility, a chance to explore the company’s testing lab, and the opportunity to compare competitor offerings.

“Nurturing a lead through closing the sale can be difficult.

Feedback and direction from successful Maytag Commercial Laundry team members helped me see the selling process in a different light,” says Kelly Croak, attendee and sales representative at Texas Coin & Commercial Laundry. “I will look back on this experience when trying to close even the most difficult of sales and know that the sales school helped me become more successful.” supplier ej thomas consolidates warehouses into ohio facility Laundry and drycleaning supplier EJ Thomas has consolidated its warehousing operations, the company reports. In spring 2013, the distributor moved its Indianapolis operation into a new 35,000-square-foot facility in Fairfield, Ohio, which also serves the company’s Cincinnati and Louisville markets.

Company President Randy Zimmerman explains that customers see improved service and have a larger variety of products to serve them from the combined warehouse.

“By combining the two warehouses, we are better able to concentrate our resources in our inventory as well as delivery and customer service functions,” Zimmerman says. “It allows us to stock a much wider variety of products, while simultaneously reducing back orders and other operational issues. Additionally, EJ Thomas continues to deliver into the Indianapolis area daily.” n www.americancoinop.com

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Brian Holland, Partner The Laundry Café

Why did you choose an ESD system?

We obviously wanted a state-of-the-art card system that would give us a competitive advantage, but we also wanted a company that was as celebrated for their service and customer care as they are for their most successful products.

ESD is the gold standard in the industry because of superior products, well-trained personnel, and outstanding customer service.

What is your experience in the laundry industry?

In the purest sense of the word, we are “newbies” to the vended laundry arena - excited to be here, eager to play, hungry for knowledge, and humble enough to learn from anyone who is willing to offer guidance.

At the same time we have seasoned experience and battle scars from both corporate- and small business experiences in unrelated industries.

While the industries are completely unrelated, the foundational business principals that they taught - Customer Service, Finance, Marketing, Sales, People Management, HR, Operations - are all directly relevant. Maybe we’re newbies with a little seasoning.

What are the unknown challenges that you faced with your new store? How has ESD’s system helped you to overcome these challenges?

The Laundry Café is located in a fantastic destination location, but it is in a an internet challenged area of the city. ESD exceeded all our expectations by creating a wireless network even though none of the major internet providers were available. ESD has an internal team of IT professionals who customized our system to meet our needs, from design to installation.

Brian Holland & Tyrone Akins of

Is there anything that surprised you about the ESD system?

I was pleasantly surprised at the managerial utilities. The reports are thorough, comprehensive,and seamlessly integrated.

I can produce performance reports that track nearly everything. These are great for tracking your business and making informed adjustments for improvement.

Contact your local ESD distributor or ESD sales representative for more information.

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