American Coin-Op - July 2015

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Diving

Into Diversification Options and considerations to make before plunging into an extra-profit center

I N S I D E : J U LI YN S2I 0D 0E 5: J U L Y 2 0 1 5 THE ABCS OF FUNDING COIN LAUNDRY PROJECTS

CLASS IS IN SESSION AT RAINBOW COIN LAUNDRY

IF YOU DON’T PROMOTE YOUR COIN LAUNDRY, WHO WILL?

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CONTENTS JULY 2015 VOLUME 56 ISSUE 7 COVER STORY

DIVING INTO DIVERSIFICATION Looking to increase your laundry’s profits by exploring another revenue stream? Learn about the ancillary services that are most common in coin laundries today, and considerations you need to make before taking the plunge into an extra-profit center.

INSIDE 14 FUNDAMENTALS OF FUNDING

Applying for credit to fund a coin laundry venture can be a daunting task. What do lenders look for in a loan application?

Here, we break down the process and reach out to experts in the financing industry to understand the ABCs of funding.

22 BANKING ON LAUNDRY

Discover how retired school teacher Joe Olivo transformed a former bank building in the Clark-Fulton neighborhood of Cleveland into a Laundromat that’s come to serve more than 2,500 customers since its opening.

26 COIN-OP 101: PROFIT CENTER PREDICTIONS

Speed Queen’s Dan Bowe expands on this month’s cover feature by reaching out to industry experts to determine which extra-profit centers are the most popular and which appear to be on the decline.

30 WASH. LEARN. REPEAT.

Class is in session at Rainbow Coin Laundry, where every Thursday night, business school students from neighboring Washington Adventist University host free tutoring sessions for local schoolchildren while parents wait for their laundry.

8 COLUMNS 34 IF YOU DON’T BRAG, WHO WILL? How do you discuss your laundry business with folks you meet? Columnist Howard Scott stresses, “If you don’t proselytize, you are missing opportunities.”

Learn tactics for talking up your laundry’s services and amenities without being braggadocious.

DEPARTMENTS 4 VIEWPOINT 6 YOUR VIEWS SURVEY 19 WEB UPDATE

36 NEWSMAKERS 37 AD INDEX 38 CLASSIFIEDS

30 A CLOSER LOOK Typically, four to five college students will be on hand to tutor schoolchildren at Rainbow Coin Laundry.

Cover Image: ©iStockphoto/IPGGutenbergUKLtd

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viewpoint

editorial

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

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

SET YOURSELF APART

Carlo Calma, Editor E-mail: ccalma@ATMags.com Phone: 815-768-7339 Roger Napiwocki, Production Manager Nathan Frerichs, Digital Media Director E-mail: nfrerichs@ATMags.com Phone: 312-361-1681

Advisory board TAKING THE PLUNGE As you read through the stories featured in this month’s issue of American Coin-Op, you may notice a recurring theme: diversification.

Our cover story explores the depths of extra-profit centers— which ones are the most common in today’s self-service laundries, and what considerations you need to make before you take the plunge into a new revenue stream.

In the story, you’ll also meet two operators—one who’s built 17 Laundromat/tanning salons throughout Indianapolis and Carlo Calma Kentucky, and the other a Nashville-based store owner who dishes up desserts and drinks to patrons waiting for their laundry.

How do they balance the responsibilities of running their Laundromat with their extra-profit center? Flip to page 8 to find out!

LEARNING AT THE LAUNDROMAT Similarly, our profile story on page 30 features a Maryland-based operator whose coin laundry needed some assistance after he dropped the business from its parent franchise.

A partnership with Washington Adventist University’s business school helped turn things around as students from the university not only spruced up his store and helped him give his laundry a new identity, but also introduced a new offering to its patrons—free tutoring sessions to local schoolchildren.

Discover how this unique addition has piqued the interest of not only the Laundromat’s customers, but the entire community, as well.

So, how do you differentiate yourself from your competitors? Does your business offer something unique alongside its laundry services?

Tell me about the extra-profit centers you’ve explored. Drop me a line at ccalma@atmags.com. I’d love to hear all about it!

Until next time, Carlo Calma Editor

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Kurt Archer Wayne Lewis

Ann Hawkins Kathryn Q. Rowen

ADVERTISING

Donald Feinstein, Natl. Sales Director E-mail: dfeinstein@ATMags.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., 1 year $39.00; 2 years $73.00.

Foreign, 1 year $89.00; 2 years $166.00.

Single copies $7.00 for U.S., $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 56, number 7. 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. The publisher reserves the right to reject any advertising for any reason. © Copyright AMERICAN TRADE MAGAZINES LLC, 2015. Printed in U.S.A. No part of this publication may be transmitted or reproduced in any form, electronic or mechanical, without written permission from the publisher or his representative. American Coin-Op does not endorse, recommend or guarantee any article, product, service or information found within. Opinions expressed are those of the writers and do not necessarily reflect the views of American Coin-Op or its staff. While precautions have been taken to ensure the accuracy of the magazine’s contents at time of publication, neither the editors, publishers nor its agents can accept responsibility for damages or injury which may arise therefrom.

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INDUSTRY SURVEY

ATTENDEES ‘HIGHLY LIKELY’ TO PATRONIZE CLEAN EXHIBITORS The majority (75.0%) of operators who attended this year’s Clean Show in Atlanta say it is “highly likely” that they will do business with the companies they visited, according to results of June’s American Coin-Op Your Views survey. “[It] helped me decide what equipment to purchase next,” says one respondent. “The show helped me compare most brands side by side.”

The remaining 25% of respondents say it is “somewhat likely” that they will patronize an exhibitor seen at this year’s show. No respondents answered “neither likely nor unlikely,” “somewhat unlikely” or “highly unlikely.”

Roughly 21% of respondents said they attended this year’s Clean Show, while 78.9% did not.

The majority of those who did not attend Clean say they had other obligations to attend to. Others cited budget constraints, while some believe that Atlanta is too far away from their location.

The show ran from Thursday, April 16, to Sunday April, 19.

The first two days of the event proved to be most popular among respondents who did attend, with 80% on hand Thursday and Friday, and 60% in attendance on Saturday and Sunday.

Many operators say they liked the show returning to a fourday schedule, with one saying he/she likes this format better compared to the 2013 show (which was a day shorter).

More than 30 hours of educational sessions were presented.

One-third of respondents (33.3%) say they attended three sessions, while 16.7% say they attended just one. No respondents attended just two sessions, or “four or more.”

The remaining 50% of respondents who attended Clean did not take in an educational session.

While many respondents liked the overall quality of the educational sessions, some thought the sound quality at some sessions could have been better.

“The main floor was a terrible place to have a seminar,” says one respondent. “It was far too loud, and lighting washed out the screens.”

American Coin-Op’s Your Views survey presents an unscientific snapshot of the trade audience’s viewpoints at a particular moment. Percentages may not add up to 100% due to rounding.

Subscribers to American Coin-Op e-mails are invited to participate anonymously in an industry survey each month. The entire trade audience is encouraged to participate, as a greater number of responses will help to better define owner/operator opinions and industry trends.

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Diving

Into Diversification Options and considerations to make before plunging into an extra-profit center

unday has become the busiest day of the week at Mark Schottland’s Laundromat called Madeline Nashville.

Located approximately three miles from downtown Nashville, the laundry facility has only seven washers and eight dryers, and is nestled in just 400 square feet of space. One can imagine how busy the Laundromat must be.

“We have 10 or 11 regulars, and what I mean by that is people who come in [to] use five of the seven machines,” he says.

“There have been some days where we have a wait to get into the Laundromat, which is good and bad,” says Schottland. “Fortunately, we have plenty of other things for them to do.”

There certainly is more to his Laundromat, as Madeline’s is not only a neighborhood laundry, but a café, as well.

Establishing an extra-profit center as a complementary business is nothing new in the self-service laundry industry, as the core business is combined with other types of services, among them car washes, tanning salons and gas stations.

Exploring other revenue streams can increase profits, but what should operators know before taking the plunge?

American Coin-Op spoke with

experts in the industry to find out.

IMPORTANCE OF DEMOGRAPHICS “There’s no sense jumping into doing an extra-profit center without doing your due diligence,” says Terry Anderson, consultant for Midwest Laundries, Chicago.

Anderson has helped build several Laundromats throughout his career as a distributor, many of them with various extra-profit centers, like a dog wash, car wash and café.

“There are a lot of different things, but some of these things, you’ve really got to [ask if] there is a need for [it].

You have to look at your demographics and see,” says Anderson. “Is there an unfulfilled need that you can [fill]?”

Schottland took this approach when deciding to build Madeline in what he says is one of Nashville’s “quirkier” neighborhoods.

“I thought that the demographics warranted some amount of service ▼

S

by Carlo Calma, Editor

Photo: © iStockphoto/ IPGGutenbergUKLtd

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Mike Gilley has 17 locations for his Laundromat/tanning salon, Laundry & Tan Connection, throughout Indianapolis and Kentucky. Demographics play a big role in how much tanning equipment he installs in each location, with one location featuring 22 pieces of equipment. (Photos: Courtesy of Mike Gilley/Laundry & Tan Connection)

A LAUNDRY STAPLE One laundry-related extra-profit center that’s become a mainstay in the industry is wash-dry-fold.

“The wash-dry-fold service has proven to be a major revenue producer for most operators,” according to John Antene, president of coin laundry sales and marketing for Coin-O-Matic, Alsip, Ill. Anderson agrees, touting the various benefits the revenue stream can bring into a Laundromat business. “[A] part of this that people should think about is if you’ve got a full-time attendant, wash-dry-fold can offset the cost of that attendant,” says Anderson.

“If they have wash-dry-fold orders to get 10

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out, not only are you keeping them busy, but you’re also offsetting your cost of having that attendant on payroll.”

LAUNDRY-RELATED SERVICES Once established, having wash-dry-fold as an extra revenue stream can lead to other laundry-related channels, according to Antene.

“Operators can also enjoy additional revenue by acquiring commercial accounts.

This area typically generates, once started, a guaranteed flow of income on a regular basis,” he says.

“Partnering with a dry cleaner to service your drop-off [drycleaning] customers allows operators the benefit of income by acting as the ‘middle man.’”

Anderson agrees with this approach.

“If the wash-dry-fold is successful, and you’ve got everything in place to make that work, the next step, if you have the room, would be to add the dry cleaning,” he says.

When taking on wash-dry-fold or commercial accounts, Anderson stresses the importance of allocating equipment for the service.

“The other part of this is, ‘Are you going to be using your existing machines, or are you going to set up a separate area with an ‘on-premise laundry’ washer and dryer so you’re not competing with your own customers for the use of the washers?” asks Anderson.

“You’ve really got to be cognizant that … your wash-dry-fold orders aren’t out there pushing your regular customers out of the way, or using the machines that they want to use.”

‘SILENT SALESMEN’ Another extra-profit mainstay in many laundries includes vending machines that dispense items like soaps, snacks, soft drinks and candies, according Anderson.

“While the ‘hotter-spicier’ snacks are popular, owners will typically stay away from chocolate and chewing gum due to difficulty of cleaning,” says Antene.

“The coin-operated soap vendor and the pop machine and the snack machine, those things take care of themselves,” says Anderson. “We always call that service your silent salesmen.”

These vending options, according to Anderson, are perfect offerings to patrons waiting for their laundry to finish.

“The thing that people don’t realize before they get into the business is you’ve got a captive audience there. They’re there for two to three hours,” he says. “All of these things like that are all adding to your profits of your Laundromat. And you make good money on all of those things, and you don’t have to do anything other than plug them in.”

Regardless of whether they place a vending machine, ATM or video games in their store, Anderson advises operators to be strategic in where they place them.

“It all goes back to if you have the room,” says Anderson. “If you’re thinking about having 20 people [in the store] doing laundry, will this thing still flow?

Can people get in, can people get out? Can they get their wash done, can they get to the dryers? Do they have enough folding table [space], and does this thing flow?

“If the Laundromat can’t flow because you added [vending machines or gaming machines], then you’re defeating the purpose of putting them in there.”

▼

where I located this, and we knew that, demographically, we were locating to a place that was high in renters,” he says.

“There isn’t one [like it],” says Schottland of his business. “Not only do we have the uniqueness of the bar/Laundromat in Nashville, but we also have the dessert element.”

The importance of demographics was an aspect that Mike Gilley, owner of Laundry & Tan Connection, Indianapolis, considered when he decided to add a tanning salon to his Laundromat’s business model in 1996.

Since then, he’s come to own 17 stores throughout Indianapolis and Kentucky.

According to Gilley, 70% of his stores are a Laundromat/tanning salon hybrid.

“We were looking for an additional revenue source, and we had extra space,” says Gilley, as many of his locations are generally 7,000 square feet in size.

“It’s basically demographic-based,” he says. “How much revenue potential we think there is with the tanning depends on how much space we’re going to allocate in the store. Some stores, we have as few as five pieces of tanning equipment, some of them, we have as many as 22.

“It depends on the neighborhood and what we think the revenue potential is.”

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Just three miles outside downtown Nashville is Mark Schottland’s Madeline Nashville, a Laundromat/ café hybrid. The business is unique to the area, according to Schottland, as he has frequently seen laundry customers hopping over to the café side of his store for beer or something to eat. (Photos: Courtesy of Mark Schotttland/Madeline Nashville)

NEW CHALLENGES Taking on new revenue streams, like wash-dry-fold, can present new challenges outside of the day-to-day responsibilities of operating a Laundromat, according to Antene.

“New managerial challenges that might present themselves by taking on wash-dryfold for the first time may run hurdles by introducing a new process or program to attendants set in their work habits,” he says. “The change in schedules and priorities may affect an attendant’s productivity.”

“By discussing different circumstances that arise with fellow operators, solutions in most cases are realized through networking,” adds Antene.

To help manage new challenges with wash-dry-fold and commercial accounts, the Coin Laundry Association offers training videos available for operators and attendants, according to Anderson.

To have a strong grasp on managing challenges for both the Laundromat and the accompanying extra-profit center, Anderson stresses the importance of operators mastering the processes themselves.

“Whoever the managing partner [is] should know how to do every aspect of the business—take in dry cleaning, take in wash-dry-fold—[they should] train themselves,” says Anderson.

“If you know how to do it, you can train your people yourself.”

Schottland shares this mentality.

“I’ve got all the problems of a restaurant, and now, I’ve got all the problems of a Laundromat. And because the Laundromat is so small, it’s very high-volume. And so, when one of those machines goes down … it hurts,” says Schottland. “[From] the laundry side, the biggest challenge is obviously keeping the machines up and running.”

“Laundromat servicing can be pretty expensive … but learning to do some amount of work on the machines yourself saves you an awful lot of time and money,” he says.

In training his attendants, Gilley ensures that his employees become jacks-of-alltrades.

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“If you’re operating a combination store, you need somebody that has great customer service skills that doesn’t mind cleaning and has sales skills,” says Gilley. “So, the person has to be a little bit more well-rounded in a combination store.”

A BUSINESS WITHIN A BUSINESS Before diving into any type of extra-profit center, Antene advises operators to consider how they will fund the venture.

“If the new profit center requires capitalization or investment dollars of equipment or hard products, will the funds be readily available, either through existing reserves or lending sources?” asks Antene. “If so, what are the best considerations to be made regarding loan terms and investment return?”

Anderson agrees, saying, “[An extraprofit center] is an existing business within the business, and you have to look at it that way.”

“Starting any new business is always a gamble, but you want to have your due diligence and you want to make sure you have enough start-up money that you’re not going to be taking money from your existing cash flow to do [it],” he adds.

Schottland explains that he and his customers view his store as a true Laundromat/ café hybrid, which he says is an advantage for his marketing efforts.

“I would say it’s 99% crossover. We may have some people who use the Laundromat, but for the most part, they duck away and grab a beer, or get something to eat,” he says.

“I thought the crossover would be much greater than it really is,” says Gilley of his tanning salon/Laundromat business model.

Though he acknowledges that customers come solely for the Laundromat or just for the tanning salon, he has seen some crossover, particularly for customers who are waiting for longer periods of time for their laundry to finish.

“It certainly was not a detriment. It

brought additional people into the facility, so I would say it was a win-win for both sides of the business,” says Gilley.

‘DO YOUR RESEARCH’ “Always do your research before you jump in,” says Anderson, of pursuing an extra-profit center.

“The additional services and products you provide should always be a win-win for you and your customers,” says Antene.

“Consideration should always make the most economical sense while providing your customers the utmost of services and products.”

“The biggest thing is that if somebody wants to add an additional ancillary revenue source—whether it be tanning, whether it be a car wash, whatever it happens to be—they need to do their homework and do business with somebody that is a professional that understands the business,” advises Gilley.

One other piece of homework Anderson advises operators to complete is surveying their current clientele to see if the venture could work.

“The simple thing to do is glean your customers’ [input]. … Is there an unfilled need in your area to support this?” he says.

“If you do your research and you come to the conclusion that [there is] … then it is a good profit center.”

ACO www.americancoinop.com

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Fundamentals of

Funding

(Photo: ©iStockphoto/OlgaLIS)

A primer on applying for credit to fund coin laundry projects

by Carlo Calma, Editor

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What financing options do operators have in today’s market and, once a lender has been chosen, what key documents do they generally require from a borrower?

American Coin-Op reached out to experts in the financing industry to answer questions like these to ensure that coin laundry operators understand the ABCs of funding.

STATE OF THE LENDING INDUSTRY The current lending market is “very appealing” from a borrower’s perspective, according to Jim Freeze, president, Dexter

Financial Services Inc. “Interest rates remain quite low by historical measures, and availability of credit has improved,” says Freeze.

Carol Dang, vice president of sales and marketing at Valley Village, Calif.-based Elite Business Investments agrees, explaining that she’s seeing “more competitive rates” among lenders.

“We are experiencing a lot of growth in financing requests and originations,” says Matthew Westphal, financial services manager for Alliance Laundry Systems.

“We believe this is driven by a com-

▼

E

stablishing a coin laundry business can be a daunting process.

From site selection to equipment consideration, a lot of thought and preparation goes into the overall life of a Laundromat.

The foundation under all of these decisions stems from how much capital an operator has to help grow his/her coin laundry business.

Whether an existing operator, or a new investor, applying for credit to fund coin laundry projects can also be an intimidating process.

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6/15/15 8:35 AM

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In addition to these options, Rinaldi points to the U.S. Small Business Administration as another financial resource.

“Lastly, if your business is located in a specific ‘opportunity zone’ (inner city),” Rinaldi adds, “you may find some of the local community banks more receptive than others due to regulatory oversight that promotes lending to businesses in these areas.”

SCOUTING A LENDER While competitive terms and rates are important aspects to examine when scouting a lender, many of the experts also agree that investment on the part of the lender is key.

“Small-business owners should look for

“Nobody wants to lend money to a business owner who isn’t 100% committed …”

—Robert “Bob” Rinaldi, Milnor Capital businesses don’t have the luxury of everything in their business growth fitting into a traditional model. If there is a story or something that requires explaining to completely understand the company, then that is where the community banks tend to shine.”

AVAILABLE RESOURCES “For current owners, there are several banks that will provide refinancing, especially if there is some re-tooling along with it,” says Dang.

Operators looking to re-tool their store can turn to banks that specialize in the laundry industry, as well as equipment manufacturers, according to Dang.

To meet the needs of a laundry investor, a “complete laundry lender” should have access to finance programs like new-equipment financing, acquisition financing and equity financing, according to Westphal.

“For prospective buyers, there is bank financing, as well as seller financing, available on acquisitions of laundries,” adds Dang. “If the laundry that they are purchasing is in need of new equipment, the banks look favorably on doing a combination loan for the acquisition along with the re-tool.”

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a lender who is going to be in it for the long haul with them,” says Dang. “If a small-business owner can develop a personal relationship with the banker, it will go a long way for him or her in the future.

I see that my clients who have developed these relationships find it much easier to get financing or lines of credit in the future.”

“A small-business owner should look for a complete lender that will be willing to offer all the financial tools and distributor resources needed for the laundry business,” says Westphal.

“Also, look for a lender that is willing to tailor a finance solution to an investor’s specific needs [as well as a] lender that offers financing programs that go beyond just standard new-equipment financing, such as equity and acquisition financing.”

Freeze advises operators to also partner with lenders that have a “strong understanding” of the laundry industry, in addition to a “reputation of operating with integrity, ability to handle future business credit needs, and competitive financing program offerings.”

‘CONVICTION IS A KEY ELEMENT’ On the flip side, what do lenders look for in a borrower?

“Generally, a borrower must have a sufficient credit score, along with a borrowing history and net worth equal to the loan amount they are trying to obtain,” says Westphal. “When the request is for a new store, or acquisition of an existing store, the borrower must have liquidity available for roughly 30-35% of the total project cost for their investment into the project.”

Dang says she tries to determine how much capital a borrower has available.

“Is this cash in the bank, or are they planning on borrowing this from a line of credit, or home equity loan?” she asks.

In addition to analyzing a borrower’s credit, Dang says she also looks for “any surprises” in the application process.

“I do this so that when I am showing them stores for them to invest in, I want to make sure that they are not going into a store that is over their means,” says Dang.

When interviewing a loan applicant, Rinaldi says he makes sure to ask how long the borrower has been in the industry.

His advice: “The shorter the time in business, the better prepared the package of information must be.”

He also advises operators to have knowledge of their business model when describing their operation to the lender.

“Practice it and, above all, you need to believe it yourself,” says Rinaldi.

“Conviction is a key element. Nobody wants to lend money to a business owner who isn’t 100% committed and confident in their success.”

FINANCIAL RECORDS Once an operator decides on a lender, Freeze advises them to first determine the equipment mix with their distributor prior to completing a credit application.

For the application process, all experts stressed the importance of having several financial records on hand.

“In preparing for a loan, there are several items that most lenders always ask for,” says Dang.

Among records in this list are items like current personal and business financial statements; two years worth of personal and business tax returns; and the last three months of all personal and business bank statements, according to Dang.

If an operator is applying for an acquisition loan, Dang adds that, in addition to these items, they should also have a copy of the income/expenses of the prospective business; copy of the current lease or pro-

▼

bination of low interest rates, lower cost of rent and real estate, and a demographic shift to higher renters. All of these conditions favor a robust and aggressive economic climate for the self-service laundry business.”

Relatively newer businesses can find more success in obtaining financing from their local community banks as opposed to “large, regional or national money center banks,” says Robert “Bob” Rinaldi, vice president, Milnor Capital.

“The more standard the financial story, or adherence to perceived norms in financial ratios, the more lenders will devote attention,” says Rinaldi.

“However, the vast majority of small

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posed lease terms; utility bills for the last six months; and a current list of the equipment in the store.

Regarding financial statements, Rinaldi advises operators to partner with a certified public accountant to help prepare the documents.

Outside of these records, he also advises operators to provide a “short narrative history about the business, its formation, its growth prospects and the market it serves.”

RED FLAGS Typical red-flag items in loan applications, according to Freeze, include: “poor credit history, insufficient cash for the project, high levels of existing debt relative to cash flow, lack of successful laundry or general business experience, and inability to explain merits of project/location.”

Another red flag Westphal says he sees is “overvaluation of current businesses and real estate on [an applicant’s] personal financial statement, thus inflating their net worth.”

In any event, Westphal stresses the importance of honesty in the application process.

“Operators can avoid making these mistakes by being open, honest and upfront with their lender about their current situation,” he says. “Many times, a simple explanation and conversation with the analyst on a past credit issue can help them overcome any negatives and get the deal approved.”

“List all the banks that you do business with and the amounts in all of your accounts,” Dang says. “Now is not the time to be coy about how much money you have.

“Be honest! Show what your expenses are, because they will show up on your credit report.”

ROADBLOCKS Finding a lender that “fully understands the laundry business” can be a challenge for operators when applying for capital, according to Westphal.

“An additional challenge for some operators is not having ready access to documents and/or records that are typically 18

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to secure financing to get the overall deal approved.”

Other options, according to Freeze, include “reducing project scope, providing a larger down payment, adding a business partner [or] cosigner, or borrowing from family.”

Dang also advises operators to explore other choices with the lender.

“If that is all negative, and if you are looking for equipment, talk with the distributor and see if there are any options that they may be able to help you with,” she says. “Perhaps the manufacturer may be willing to help with the financing.”

“If you are looking for acquisition financing, going back to the seller and asking them to carry all, or a part, of the loan may be an option,” she adds.

“Small-business owners should look for a lender who is going to be in it for the long haul …”

—Carol Dang, Elite Business Investments required when applying for credit,” adds Freeze.

One major hurdle Dang advises borrowers to be wary of are documents from lenders that require a landlord’s signature.

“Without [these] documents, the lender won’t fund. This should be addressed at the beginning if it is going to be required,” says Dang. “Most of the lenders are willing to negotiate on some of the points in this document, so dealing with this in the beginning will make the process go a lot smoother.”

APPROVAL Once a borrower is approved for a loan, typically, the lender will provide a letter of approval outlining its terms, according to Dang.

“Once you get this letter, start preparing all the documents that the lender is requesting and any other conditions that will need to be met,” she says.

Once these documents and conditions are complete, the lender will prepare and send the loan document, which Dang explains should be read carefully.

“Make sure that names, addresses, and the terms are correct,” she says. “Some documents will require a notary, others may require a witness, so make sure that you know which documents need to be witnessed or notarized.”

Dang also suggests keeping copies of these documents before sending them back to the lender.

“Once the lender receives the documents, they will typically have their legal department review them prior to funding.”

REJECTION In the event an application gets rejected, what options do borrowers have?

“Speak with the lender and analyst who denied financing to see what, if any, other options may be available,” says Westphal.

“Many times, by offering a down payment or other collateral, an operator will be able

‘COMPLETE AND ACCURATE’ To ensure the loan application and overall laundry project’s process goes smoothly, Westphal advises operators to assemble a team that includes a “knowledgeable distributor,” “a manufacturer that provides reliable equipment,” and a “finance company that not only understands the laundry industry, but your goals and long-term business plans.”

Full understanding of the capital that’s needed to be borrowed is important for Dang.

“The hardest thing for a borrower is to apply for a loan in one amount, and then find out that they are going to need more and have to re-apply for a higher amount,” she says.

Rinaldi adds, “Understand the financial implications for the money you are borrowing. Know fairly certain the revenue that the business will earn on the equipment you are buying, for example.”

For Freeze, accuracy in the application is paramount.

“Submit a complete and accurate credit application package, and then be prepared to tell your story,” he says.

“Doing these two things will demonstrate that you’ve done your homework and allow your lender to efficiently perform the underwriting process, including offering a structure that best meets your financing needs.”

ACO www.americancoinop.com

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Banking on

Laundry

Retired Cleveland schoolteacher morphs former bank into neighborhood Laundromat Retired schoolteacher Joe Olivo has converted an old Federal Bank building in Cleveland’s Fulton-Clark neighborhood into this 3,500-square-foot Continental Girbau Express Laundry Center. (Photos: Continental Girbau)

By Haley Jorgensen

A

n extensive renovation and the installation of freestanding equipment morphed an old bank building into a high-speed laundry.

Located in the Clark Fulton neighborhood of Cleveland, the new 3,500-square-foot Express Laundry Center delivers a 60-minute washdry-fold, card access and customer care, among other amenities.

Retired schoolteacher Joe Olivo purchased the Federal Bank Building at the end of his teaching career.

“Over the next few months I did research on laundries,” he says.

“I accessed Continental Girbau online to contact my regional representative, Scott Vlahos. I called Scott in Akron and asked if his father was Andy Vlahos. It turns out, our fathers had been good friends.”

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The reconstruction of the former bank building was a lengthy process, according to Olivo, who explains that the building had to be re-roofed and tuck-pointed. www.americancoinop.com

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The laundry took form around an old vault, which became the office, and 18-inch walls.

BANK TO LAUNDRY

Olivo employed the assistance of Scott Vlahos, of distributor Advantage Equipment, in outfitting the store with Continental’s ExpressWash soft-mount washers and ExpressDry dryers. windows on the second floor so we could rent out the upstairs apartments. Scott helped a lot with the layout and equipment mix.”

In November 2013, the fully attended Express Laundry Center hosted its grand opening. ▲

Vlahos, of distributor Advantage Equipment, assisted Olivo with the bank’s renovation and redesign.

“The main bank building was re-roofed and tuck-pointed,” says Olivo. “The adjacent addition was virtually knocked down, except [for] part of the floor and one wall, and reconstructed.”

The laundry took form around an old vault, which became the office, and 18-inch walls.

“The reconstruction took awhile,” says Olivo.

“Someone broke in and pulled the copper plumbing off the walls. We put new

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EQUIPMENT CONSIDERATIONS

Owner Joe Olivo (pictured) also equipped the store with Card Concept Inc.’s FasCard system, which allows him to remotely manage his laundry machines via the Internet.

He also utilizes the system to operate a customer loyalty program and establish time-of-day pricing.

Key to the laundry’s success is its equipment, according to Olivo.

The Express Laundry Center features a mix of ExpressWash™ washer-extractors, including 14 20-pounders, 11 30-pounders and 10 40-pounders.

Fourteen Continental dual-pocket stack ExpressDry™ Dryers; the Card Concepts Inc. FasCard™ system; vending and snack machines, as well as wash-dry-fold service round out the store’s offerings.

The freestanding ExpressWash washers provide a 60-minute wash-dry-fold, simple installation and lower utility costs, among other benefits.

“The soft-mount washers are installed in the main bank building, which sits over

“We couldn’t put hard-mount washers in because they require a reinforced concrete foundation, which we didn’t have.”

WILL DO OUR DISTRIBUTORS

— Joe Olivo, owner, Express Laundry Center

a basement,” says Olivo. “We couldn’t put hard-mount washers in because they require a reinforced concrete foundation, which we didn’t have.”

“We had to go with soft-mount machines or we simply could not have developed the laundry.”

The washers produce extract speeds up to 354 G-force.

In doing so, according to Vlahos, ExpressWash washers remove more water during extract, which decreases resulting dry time by up to 50%.

“High-speed extract improves customer turnover, getting customers in and out in under an hour, which works to boost profit potential,” he says.

Reduced drying time translates into reduced dryer operation and natural gas usage, as well.

While utility costs at the average coin laundry make up 26% of gross revenue, according to a Coin Laundry Association 24

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WHATEVER IT TAKES FOR YOUR SUCCESS. THAT’S WHAT FAMILY’S FOR.

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“The people are nice, and I like this neighborhood,” says Olivo of his store’s clientele. The store caters to young and old alike, and since opening, has served more than 2,500 customers. industry survey, utilities at the Express Laundry Center make up just 15%, according to Olivo.

CARD-OPERATED AND -MANAGED

The best part about family is that you can count on them to be there when you need them most. That’s the kind of trust we at Huebsch® strive to build with our customers. In fact, the Huebsch distributor network earned the highest reliability and trust scores in the vended laundry industry,* with outstanding marks for prompt response and expertise of staff. So when you have questions or challenges, you can trust that we’ll be right there with immediate answers and solutions rooted in unmatched industry knowledge. Because d e d i c a t i o n t o y o u r s u c c e s s i s w h a t t h e Huebsch family is all about.

Learn why Huebsch is the trusted partner your business needs at Huebsch.com/WillDo.

The store features a Card Concepts Inc. FasCard™ system, which accepts credit and debit cards, and interfaces with Continental laundry equipment.

The computer interface allows Olivo to program machines through the card system and view washer operation statistics remotely from a computer, tablet or smartphone, via the Internet.

He can also go into the exchanger remotely and issue cards, check what machines are doing, or find out how much money was generated that day.

The remote store-management system allows him to see what’s going on and respond quickly if there is a problem.

Olivo uses the card system to launch loyalty and bonus programs, and schedule time-of-day pricing.

“We offer three, four and five free dries on the 20-, 30- and 40-pound-capacity washers,” he says. “Customers also get a $3 credit after $30 of washes.”

THE NEIGHBORHOOD LAUNDROMAT

*According to an August 2014 Leede Research Customer Value Analysis.

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Fully attended, the Express Laundry Center is open from 7 a.m. to 11 p.m. daily.

Located in a low-income and ethnically diverse area, the laundry caters to young and old alike.

“The people are nice, and I like this neighborhood,” says Olivo.

Since opening, the store has grown to serve more than 2,500 customers.

ACO JULY 2015

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coin-op 101

Profit Center Predictions Popular, emerging and disappearing

Dan Bowe

Providing a clean, safe store with reliable, working machines in the right location is the foundation of a successful coin laundry business.

Unfortunately, these basics aren’t always enough to differentiate your store from competitors who offer the same.

“The only way to be successful is to do what other stores aren’t doing,” says Oliver Lay, owner of Connecticut-based Wash Works. “All Laundromats offer washers and dryers, so you have to provide services that get customers to travel across town to go to your store.”

This is where ancillary services, or extra-profit centers, can play a key role in getting customers in the door, while providing additional sources of revenue.

With numerous options, it’s important to carefully choose what services will work in your store, while also keeping in mind that trial and error may be necessary.

If you’re in the position to add services, consider the following extra-profit centers—those that are Laundromat mainstays, those that are up-and-coming, as well as a few that may be losing their effectiveness.

TRIED AND TRUE According to the 2014 Coin Laundry Association Industry Survey, 60% of store owners offer wash-dryfold.

This high popularity is for good reason, according to Peter Limoncelli, chief operating officer of Yankee Equipment, a Speed Queen® distributor based in Barrington, N.H. “Wash-dry-fold and drop-off services have been around for more than 25 years, and I don’t see them going away anytime soon,” Limoncelli explains.

“They’re especially easy to justify in a store that’s already attended, because a store owner can often avoid the added cost of hiring extra personnel.”

Chris Balestracci is president of Super Wash Laundry based in East Haven, Conn. The store offers wash-dryfold for $1.15 per pound, plus flat rates for other items such as comforters.

“Our customers definitely appreciate the time we

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NOW TRENDING Adrian Najera Jr., owner of Mi Lavanderia (My Laundromat) in Illinois, has experimented with vended products since his store opened five years ago—from refreshments, to detergents, to laundry detergent buckets, to something more unique: international calling cards.

With the success of calling cards, he and his mother extended their offerings a year and a half ago to become a certified cell phone retailer. They dedicate a small corner of the store to a kiosk.

▲

To read more Coin-Op 101 columns, visit www.AmericanCoinOp.com

save them,” he says. “They know paying a little extra is worth it if it means more time to do the things they want to do.”

Taking on commercial accounts is a complementary service to wash-dry-fold. This can be a huge source of revenue, but store owners should first ensure their infrastructure can meet the added volume.

“A store owner may need to invest in new equipment, employees or even linens to take on commercial accounts, but the added business can definitely pay off,” Limoncelli says.

He estimates 20% of his customers offer commercial laundry services.

Another profit center that’s relatively simple to incorporate is the sale of vended products. While customers enjoy the convenience of purchasing detergents or fabric softeners where they do their laundry, store owners make a profit.

For store owners considering offering vended products, both machines and over-the-counter sales have their pros and cons.

For example, Balestracci prefers the built-in inventory control of vending machines, while eliminating the need for an employee to man a counter.

Alternatively, over-the-counter sales can be advantageous because they allow store owners to offer larger or unique products, such as full-size detergents or laundry bags.

“Regardless of how they’re sold, more and more customers are choosing to purchase detergents at the Laundromat over the supermarket or other venue,” says Limoncelli.

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coin-op 101

“By knowing our demographic, we knew it was important to partner with a provider that offered plans tailored to international calls,” he explains. “We’re located in a low-income market with many immigrant customers, so we were confident this service would be successful while filling a need in the community.”

According to Najera, 10% of foot traffic today is for cell phones only—business that did not exist prior.

“The goal is to become a one-stop shop,” says Najera, who is also in the process of soon offering wire transfer services. “My vision is that customers will come in to do laundry, wire money, and buy minutes for their phones in one trip.”

So what’s the draw of a service that requires a bit more handson work and expertise than others? Both Lay and Limoncelli say profit per square foot.

“A check cashing service can bring in millions in added sales per year, in just an 8-foot by 10-foot space,” says Lay. “It can be the difference between making a store competitive or not.”

He adds that lottery sales are also a service to consider, but it may not be successful in all stores, depending on demographics.

He knows from experience, as it’s worked well in three of the four stores he’s attempted to offer the service. If a store owner wants to avoid the process of becoming licensed to provide such services, an alternative is outsourcing to a vendor that is qualified.

“I have a customer who rents out a 24-square-foot booth to a licensed Western Union dealer, meanwhile bringing in thousands of dollars per month in rent and getting more customers in the door,” says Limoncelli.

“At the end of the day, success can be traced back to the basics.”

— Chris Balestracci, Super Wash Laundry

ON THE DECLINE As the described offerings increase in popularity, one service that continues to become less popular in the coin laundry industry is video/arcade games.

With the prevalence of smartphones, this should come as no surprise, according to Lay. However, he says modern technology isn’t the only factor that should steer store owners away from offering gaming.

“Video and arcade games ultimately don’t have a huge impact on the bottom line or lead to foot traffic,” he says. “I think it’s better to direct time and resources towards a service that will make a difference—usually services that require more hands-on management.”

Najera agrees. He equipped his store with numerous video 28

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games when it opened, but admits they are seldom used now.

Another service Limoncelli has seen declining in recent years in the Northeast is drycleaning services.

“I believe it’s because society is moving towards a more casual, wash-and-wear culture,” he says. “Over the last 15 years, people are trading suits for khakis, which don’t require as special of care.

Wash-dry-fold can take the place of dry cleaning in some cases.”

However, with the right demographics, dry cleaning can have a huge payoff—“almost a 100% profit margin,” estimates Balestracci.

The bottom line is to do your research on what’s working at stores with similar demographics.

Lay adds, “It doesn’t take a lot to go above and beyond the competition. It just might take a little innovation and creativity.”

UP-AND-COMING Innovative and creative. One might use these words to describe the numerous laundry drop-off and pickup mobile applications (apps) that have emerged in recent years.

While some may see these laundry service providers as negative because they decrease foot traffic, these companies can actually benefit a store owner by increasing overall machine utilization.

Essentially, a mobile app such as Laundry Locker, FlyCleaners or Washio will pick up a customer’s laundry at a designated time from a designated place.

These companies then partner with local Laundromats to wash, dry and fold, and then return clean laundry to the customer at a specified time.

“I believe these apps lend the greatest opportunities for growth when it comes to extra-profit centers, especially as the services expand to include more metro areas.” says Balestracci. “There are many options, but a clear leader hasn’t emerged yet—time will tell.”

“By partnering with one of these services, a Laundromat owner can negotiate a portion of the profit,” explains Limoncelli.

“Furthermore, it expands a store’s marketable area by serving customers that would otherwise frequent a closer Laundromat.”

While mobile applications appear to be a source of opportunity, Balestracci cautions store owners to start with the basics before hopping on the bandwagon, and before implementing any extraprofit center for that matter.

“It’s surprising how many Laundromats still don’t even have a website. With consumers turning to search engines to find their local Laundromat, it’s an obvious tool to have, and one that can lead to foot traffic and profits,” says Balestracci.

“At the end of the day, success can be traced back to the basics.”

ACO Dan Bowe is the North American sales manager of Speed Queen’s® Commercial division. For more information visit www.

SpeedQueen.com/CoinOp101 or call 1-800-590-8872. www.americancoinop.com

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Business students from Washington Adventist University (WAU) have revamped the look and feel of Rainbow Coin Laundry, Silver Spring, Md. In addition to painting the walls bright colors, the students have begun hosting free tutoring sessions to local schoolchildren for one hour every Thursday night while their parents complete their laundry. (Photos: Courtesy of Kimberly Pichot/Rainbow Coin Laundry)

Maryland Laundromat finds new life by offering tutoring program

ENACTUS Kimberly Pichot, WAU business school associate professor and chair, has been working within the department to help connect its students with local small businesses, like Rainbow Coin Laundry, through the university’s implementation of the Enactus program.

Enactus, an international nonprofit organization, empowers students to “collaborate” and “gain experience through community projects,” according to Pichot.

“It really is trying to find an entrepreneurial start-up con-

▼

By Carlo Calma

t’s a Thursday night at Rainbow Coin Laundry in Silver Spring, Md. Amid the washers turning and dryers tumbling, a new sound can be heard—the sound of learning, as business school students from neighboring Washington Adventist University (WAU) have recently begun helping local schoolchildren with their homework here every Thursday night.

Though it may not seem like it, the onehour, once-a-week tutoring program is all part of the business school’s efforts in rehabilitating the Laundromat, which operator Nok Kim has owned for almost 10 years.

Kim has faced various operational challenges since dropping his Laundromat from its parent franchise in recent years.

But through the projects that the business school has helped him with in the past year, Kim has been able to slowly build up business and utilize his store for more than just a laundry.

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Art contact: Shelley Timm-Thompson, 708-771-9948 Insertion Date: Ongoing

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cept that the students can start, run, make sustainable and hand off to an established business or non-profit,” Pichot says.

As part of its Enactus program on campus, WAU business students host a smallbusiness symposium featuring free workshops for local small-business operators.

Staged every fall, the symposium attracts roughly 13 to 18 local small businesses, according Pichot.

From these symposiums, the students then select a small business that they can partner with to work on various projects.

“A lot of our selection comes from those attendees because they’ve already gotten to know us, [and] we get to know them,” says Pichot. “Then, we look at what do they need, and do our students have the skills to be able to [help]?”

A NEW BUSINESS PARTNER The business school also has ties with local small-business associations that seek counsel from the group to help rehabilitate member businesses.

“We’re in contact with two different regional small-business associations and a lot of times, they’ll come to us and say, ‘We have this person who’s a member and their business really needs some help right now.

Do you have the time or the expertise to help them out?’” explains Pichot.

This process was how the group got in touch with Kim and Rainbow Coin Laundry in February 2014.

“Our first contact with him was through the Long Branch Business League, and they approached me and said, ‘We have this business [and] it used to be a franchise.

He’s dropped the franchise, and he’s gone his own way now, and we have some concerns for his long-term viability. Would you guys come in and talk to him?’” explains Pichot.

From this initial contact, Pichot explains that she and other members of WAU’s Enactus group sat down with Kim and evaluated the state of his laundry.

“As part of that interview process, we looked at his finances and we discussed commitment level, because it’s a big commitment on [the business owner’s] part, as well, to open themselves up to other people’s ideas,” says Pichot.

A NEW IDENTITY Several factors were affecting Kim’s coin laundry business.

A new competitor had opened a 32

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Owner Nok Kim (wearing striped shirt) has owned Rainbow Coin Laundry for 10 years. Formerly a franchise location, the store has gotten a new look as well as a new logo.

Four to five college students from WAU will come to the laundry to help tutor students. Community involvement in the program has grown, as well, as locals have donated school supplies to the cause.

Laundromat less than a block away, and because Kim had dropped from the store’s original franchise, his laundry had no sense of identity, according to Pichot.

“A group of marketing students really took an interest in his business, and so they said, ‘OK, since you don’t have a brand anymore, you don’t have any advertising anymore … Let’s give you a facelift,’” says Pichot.

As part of its early projects, the group developed a new logo for Rainbow Coin Laundry and painted the walls with bright colors.

“They thought about something different for my laundry [to] make it better … so they painted my Laundromat four different colors, like a colorful design,” says Kim. “I think the thing that made the biggest

financial impact for him, in helping him get started turning around, was the fact that his business looked fresh and new, and clean again,” says Pichot. “Then, we went around the neighborhood and gave out fliers, inviting people back.”

AN EDUCATIONAL FRONT As the group worked to reintroduce Rainbow Coin Laundry to the community, it also began forming ideas on its next project for Kim’s Laundromat.

In October, the group decided to survey patrons on what they’d like to see at the laundry among five different services/amenities, according to Pichot.

A kid’s play area and drop-off and pickup services were among the possibilities, but the most popular among them was www.americancoinop.com

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Turnout for the free tutoring sessions has grown since its inception in January. On average, more than 12 schoolchildren come once a week to get help with their homework. after-school tutoring.

“Hands down, the clientele said, ‘If we have to choose one thing, it’s tutoring for our kids,’” says Pichot.

The offering piqued the interest of customers, particularly as Rainbow Coin Laundry caters to a high immigrant population of Hispanics and Ethiopians, according to Pichot.

The group put up posters and fliers to advertise the free tutoring program, which officially began in January.

The one catch—the children’s parents had to be doing their laundry.

The program had a soft start.

“We started with most of my customers’ children. [On the] first week, we had seven or eight children,” says Kim. But then, more and more children started coming.

“One day, we had almost 32 children here,” says Kim. “[The children] bring their own homework and our college students sit down and go over their homework with them, and read over the directions and guide them,” says Pichot.

“If there are kids who come in, whose English [skills] are limited, then we’ve got these booklets that are age-appropriate that we work with them and get them engaged in more conversation,” she adds.

“Sometimes one of my students will sit and read with the kids and listen to their reading and help them.”

Typically, four to five college students will be on hand to help with tutoring, according to Pichot. So far, the group has seen, on average, more than 12 students come in every Thursday night. www.americancoinop.com

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Community involvement in the program has grown, according to Pichot, as members have donated school supplies. In the fall, the group plans to collect backpacks and even more school supplies to donate to the children.

“We realized that, from the parent’s point of view, it was an instant success,” says Pichot, who adds that parents have expressed interest in adult tutoring programs at the laundry, as well.

“That’s something that we want to add in the fall, as well. The adults want conversational English [lessons].”

‘THE BIGGEST DANGER IS OVER’ How has the revamp and tutoring sessions impacted Rainbow Coin Laundry’s sales?

“I can’t give you exact numbers, but he has turned around, and he is breaking even,” says Pichot. “Our next step is to get him to a profit. So, the biggest danger is over, but we still have to help him with what is going to be sustainable long-term.”

The next project the group is working on with Kim is a cost analysis of replacing the laundry’s equipment. Currently, the laundry has approximately 96 machines, according to Pichot.

“The cost of water in our county has increased drastically, and his machines are older machines that use more water. So, we started a cost analysis to see what it would take to, maybe on a long-term basis, replace those machines,” she says.

The group is also working on launching a website for Rainbow Coin Laundry this summer.

“We want to get his website up and

running this summer because our next step is going to go for corporate accounts,” according to Pichot.

“We feel that if we’re going to offer that, number one, he’s going to have to do pickup and delivery for his business. He’s going to need branded materials, and it needs to feel like a well-established business.”

A web presence, according to Pichot, can best communicate the laundry’s offerings to prospective customers.

“This summer, we want to get the pieces in place [so that] when the students return in the fall, then we would launch the campaign to go out and look for those accounts,” she says.

THE NEXT STEP Pichot explains that the group will generally work with a company for two to three years.

“Within those three years, we would expect [him] to be at a point where he’s learned everything he can from us, things are running smoothly, [and] he has his next step,” she says.

Despite any challenges, Pichot says it’s been a pleasure working with Kim. “Despite what he’s been through, and the struggles with his business, he’s always positive and my students have gained a tremendous amount of appreciation from that,” she says.

“He has been 100% willing to work with us every step of the way. I could tell you that as a consultant, that’s rare. Frequently, you have resistance, and we don’t. We have an amazing relationship with him.”

A ‘HUMANITARIAN REACH’ The experience has been a crash course in the Laundromat industry for Pichot.

“It’s a learning curve for me to learn what the cost structuring is, and how many loads it takes to break even. It’s been fascinating,” she says.

Pichot adds that the “humanitarian reach” that the Rainbow Coin Laundry project has had in its local community is one that every small business should emulate.

“No matter who your clients are, they’re going to have needs that go beyond what you offer,” Pichot says.

“I think it’s a model that we can really develop across America, because it’s also showing your clientele that it’s not all about you. It’s about what the client needs and what the clients are looking for.” ACO JULY 2015

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an outsider’s view

IF YOU DON’T BRAG, WHO WILL? How to masterfully promote your coin laundry business in person

Howard Scott

In a slow supermarket line the other day, I began chatting with a man in front of me.

At the end of the conversation, I asked what he did to “keep body and soul together”—my phrase for “How do you make a living?”

“I’m in the laundry business,” he answered.

“So, what aspect?” I asked.

“I own a couple of Laundromats.”

That was it. The clerk started to process his order and he focused on her, and our contact ended.

But I got to thinking about the encounter: What if I was a regular Laundromat customer?

Or, if someone in town asked me about a nearby Laundromat and I had no answer to offer the individual?

Shouldn’t he at least have said, “I own Highland Laundry, one in town here and another in Hudson”?

BE AGGRESSIVE That encounter is juxtaposed with someone I met a week later.

This woman is a paint conservator for historical organizations, and she went on and on about several jobs.

She got so involved that I lost track of her gist. After a while, I was nodding repeatedly, mentally plotting how I could get away from this information overload.

Each conversation is extremes of a continuum.

Shouldn’t you be a salesman for your company?

Shouldn’t you promote yourself? Shouldn’t you always be trying to win business?

I know you may be the type of entrepreneur who doesn’t want to call attention to himself/herself— ”maintain a low-key presence” is the operative phrase— but these days, it is advantageous to be aggressive.

At the same time, you don’t want to be a bore, as in the second conversation.

You don’t want to overwhelm the listener with stuff he/she doesn’t understand.

MISSED OPPORTUNITIES If you don’t proselytize, you are missing opportunities.

You may miss converting a prospect, or miss being overheard by potential customers. You miss improving the business’ reputation by bragging about the company.

You lose the chance to boost your spirit through tout-

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ing your success. Wouldn’t you want your enterprise to be wrapped in enthusiasm rather that shrouded in darkness?

What would Donald Trump do?

Sure, you don’t want to be a bloviating idiot, a la The Donald, but a two- or three-sentence sales pitch can make you “cool.”

A BITE-SIZED SYNOPSIS So, speak in a clear, loud voice. Articulate your message. Speak slowly.

Compose yourself into a confident, friendly fellowresident: “I operate two Laundromats, one here and one in Hudson. We’re pretty much the only show in town.

We offer pickup and drop-off laundry for busy folks.”

Just three sentences, not a long, detailed explanation of why and how you do such fabulous work.

Rather, you put forth a bite-sized synopsis, ending with a hook. The hook here is the laundry service for busy folks.

The listener might ask, “What do you mean by that service?”

And then you go in for the clincher: “Some busy folks hire us to do their weekly laundry. By picking up and delivering cleaned and folded garments, we make life easy for them.”

The listener hears this, and might think, “Maybe I should use their service. It could be worth it in time saved. Wouldn’t this be a nice gift for my wife who does all that drudgery work?”

BINGO—a new account is won over.

CUSTOMIZE YOUR PITCH Of course, customize your pitch to your listener.

If you meet a renter, you might say, “I operate the best Laundromat in town. I hope you clean your clothes there.”

Which opens up a discussion that gives you the opportunity to sell your services.

If you meet someone in transition, you say, “You might not know about my Laundromat. It’s Highland Laundry on Central Street.”

That plug might nudge them to patronize your shop.

To the divorced young man: “Ever do your clothes at www.americancoinop.com

6/12/15 11:22 AM

Highland Laundry? I own it. Lots of attractive women clean their clothes there.”

That gambit opens up another kind of conversation.

To the general public, you say, “I own the Laundromat uptown and the one in Hudson. Sooner or later, everybody patronizes me.”

Finally, if you are trying to build your wash-dry-fold pickup and delivery service, you use this same spiel.

JOLLY, FRIENDLY APPROACH Tout your services with a jolly, friendly approach. Let your enthusiasm show, and boast without being offensive.

Sure, a few people will react rudely. To these few, offer a polite “Thank you for listening” and walk away.

Don’t take it personally. There is always a small percent of the population who are unfriendly, hostile and looking for trouble.

Everyone knows that a salesman must have a tough hide.

He/she knows that one prospect out of every five pitches will hit paydirt.

You must realize that it is a numbers game, and that keeps you going. That fuels your persevering spirit.

ASK QUESTIONS At the same time, try to learn something by asking a question or two.

Proper inquiries include: Do you ever use a Laundromat? When?

If you are not a regular user, did you ever consider having your clothes laundered through a pickup and delivery service?

What would make you opt for such an offering? What are your hesitations?

Don’t lob all the questions at once, but perhaps two or three and see where the conversation leads.

You might pick up an objection or an insight that will provide you with an idea or a way to fix it.

For example, if the listener says he doesn’t use your laundry because the shop isn’t open after 6 p.m., maybe you will consider staying open during the evening.

Finally, consider this: If you don’t brag, who will?

ACO

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

CONGRATS! to the winners of our iPad and Android tablet give away at the Clean Show.

Lori Benson The Towel Guy LLC, Toms River, New Jersey

Heidle Baskin Baskin Laundry LLC, Canton, Texas

Join them in reading our digital edition on your tablet too!

www.americancoinop.com

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July 2015

American Coin-Op 35

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newsmakers

Whirlpool to Acquire American Dryer Corp. (ADC) Whirlpool Corp. has entered into an agreement to acquire American Dryer Corp. (ADC).

Whirlpool brand Maytag Commercial Laundry and ADC each made the announcement via separate press releases.

Terms of the planned transaction will not be disclosed.

Whirlpool says the planned acquisition gives its commercial laundry business a platform to reach new markets and channels.

“Acquiring ADC strengthens our commitment to the commercial laundry industry and is aligned to our objectives of driving growth in adjacent businesses,” says Jeff M. Fettig, Whirlpool Corp. chairman and CEO. “We believe this acquisition nicely complements our leadership position in the overall laundry category.”

“The acquisition of ADC by Whirlpool is an important milestone in the evolution of innovative global commercial laundry equipment,” says Chris FitzGerald, CEO of ADC. “Whirlpool Corp. commercial laundry business and ADC are each leaders in global commercial laundry innovation and development. Together they will be able to offer an impressive array of commercial laundry equipment as well as significant research and development capabilities.

“I firmly believe this combination will be good for both Whirlpool and ADC, and just as importantly it will be good for ADC’s customer base due to the expanded product portfolio as well as the combined strength of the two companies in manufacturing and R&D.” Whirlpool expects to close on the ADC purchase this month, with integration activities happening throughout the balance of 2015.

Speed Queen Honors PWS as 2014 Distributor of Year Speed Queen has recognized PWS – The Laundry Company as its 2014 Distributor of the Year.

Co-Owners Brad Pollack, a second-generation distributor, and Brad Steinberg, a third-generation distributor, accepted the award for “outstanding sales achievement, customer service and professionalism” on behalf of the company.

Dan Bowe, Speed Queen North American sales manager, recognized the company at a ceremony during Clean 2015.

“Not only have they generated an impressive volume of sales and have a proven track record of providing outstanding customer service, but the company is renowned in the laundry industry for being the largest distributor of commercial laundry equipment in the United States,” says Bowe.

Steinberg says the company is “honored” to have received the award, and being recognized as “best of the best.”

“For almost 50 years, Speed Queen and PWS have been great partners,” says Pollack. “Speed Queen’s products, support and financing have been invaluable to help our customers achieve optimum profitability for the Laundromats they operate.”

“PWS has had a well-established business relationship with 36

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(From left) Dan Bowe, Speed Queen North American sales manager; Brad Steinberg, PWS co-owner; Brad Pollack, PWS co-owner; and Bill Bittner, Alliance Laundry Systems vice president of North American sales, celebrate the recognition of PWS as Speed Queen’s 2014 Distributor of the Year. (Photo: Alliance Laundry Systems) Speed Queen for decades,” says Bowe. “After 47 years, PWS continues to be an incredible ambassador to the commercial laundry inudstry. The staff at PWS are reliable, knowledgeable and dedicated, and we are proud of our partnership with them.”

Setomatic’s Gregg Schantz Undertakes New Role For Company Setomatic Systems – SpyderWash has promoted Gregg Schantz to director of sales and operations, the company reports.

Since joining the company full-time in 2013, Schantz has helped support SpyderWash distributors throughout the country and “played an important role” in increasing its distributor base, according to the company.

In his new position, Schantz will continue to support Setomatic’s distributors and cusSchantz tomers, while taking on more responsibilities as the company expands.

“Gregg has helped our company surpass many of our goals since joining Setomatic Systems full-time,” says Michael Schantz, president. “His vast technical knowledge, along with distributor and end-user interaction, has allowed him to quickly pick up trends and help guide SpyderWash’s continued development.”

“Gregg has also had the responsibility of overseeing the design and release of our new website in 2014 that gives detailed information about our complete line of payment devices,” adds Michael Schantz. “I am excited about the future as we are building a great team at Setomatic Systems – SpyderWash, and this will benefit all of our customers.”

WashClub NYC on ‘Trak’ With Company Roll Out WashClub NYC has debuted its services in Washington, D.C., through its recently developed (continued on page 40) www.americancoinop.com

6/12/15 3:23 PM

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newsmakers

WashClubTrak software licensing program.

WashClubTrak allows local vended laundry and drycleaning operators to become WashClub licensees, according to WashClub NYC founder Rick Rome.

For an upfront set-up fee and a monthly royalty, licensees are provided with WashClubTrak’s logistics software, website and app, along with training, marketing and technical support, and other aspects, like facilitating pickup and delivery, according to the company.

“What we do is we license software to the local [operator] and they utilize [it] and do all the work,” says Rome.

Customers in the area can then download the WashClub app on their mobile device for on-demand laundry or drycleaning pickup and delivery services.

“WashClubTrak allows you to extend your storefront virtually 30 miles in every direction because it costs a lot less to get a truck and a driver than it does to build another location 20 or 30 miles away,” says Rome.

The company is also on track to roll out its service to other areas, like Atlanta and in Alabama, according to Rome.

A “white label” licensing location has already been established in Dallas, according to the company.

A similar location will be opening in Los Angeles, says Rome, who adds that the company is also exploring possibilities in international markets, like Indonesia and Mexico.

“We have a lot of iron in the fire. Things have been very good to date,” says Rome. “We still have much to do, and we’re very, very excited about what we’re doing.”

Rome, and business partner Henri Alexaline, founded WashClub NYC in 2010 as a walk-in laundry in the city’s Sunset Park neighborhood.

Tennessee Distributor/Operator Named Huebsch Store Owner of Quarter John D. (J.D.) Dixon, distributor and owner of National Laundry, Dickson, Tenn., was recently named Huebsch’s Store Owner of the Quarter, the company reports.

“As an equipment distributor with almost a decade of experience in the laundry industry, Mr. Dixon has served as a mentor to many business owners, helping them identify industry trends and provide insightful advice on how to make their businesses successful,” says Kathryn Rowen, Huebsch North American sales manager.

“Seeing Mr. Dixon apply his expertise and creativity to revamp his own Laundromat into an experience that is successfully attracting customers is inspiring.”

Dixon used his expertise as a distributor in renovating a rundown, 3,600-square-foot store in the area over 90 days.

He had a “clear vision” for his new Laundromat, according to Huebsch: “A simple, yet elegant, store that gets customers in and out quickly.”

To achieve his design goals, Dixon implemented the company’s 40

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control panel overlay options to his machines to “add a splash of color to the store.”

He chose to apply the company’s “Cityscape” color scheme, which features a gray control panel complemented by a “splash of vivid green.”

The machines also feature a polished John D. (J.D.) Dixon was recently named Huebsch’s chrome handle and a Store Owner of the Quarter. The company acknowlHalo chrome door ring, edged Dixon’s expertise as a distributor in revampaccording to Huebsch. ing his own Laundromat in Dickson, Tenn. (Photo: Dixon also replaced Alliance Laundry Systems) lighting and flooring, added a fresh coat of paint and improved the store’s layout, adds Huebsch.

“It’s easy to notice the positive difference when revamping an entire store, but even small changes can go a long way in transforming a store’s brand,” says Dixon.

Aaxon Appoints Brown to Oversee Central Florida Market Aaxon Laundry Systems has appointed Bill Brown as its multihousing account executive for the central Florida market, the company reports.

In his new role, Brown will represent Aaxon at industry events, establish strategic partnerships with condo management companies and apartment owners, and retain current route locations, according to the company. He will be based in Orlando, Fla. Brown spent the past two years at H2O Degree, utilizing his skills in business develBrown opment, account retention leadership and lead generation techniques with a customer relationship management system.

He also served as the Mid-Atlantic sales manager for Mac-Gray for the past two years, in addition to serving as the Mid-Atlantic vice president for CSC ServiceWorks for one year.

“I’m honored and excited to be a part of the Aaxon family,” says Brown. “I’m most passionate about achieving a win-win for the customer and the company, and I’m fortunate enough to be joining a team that also believes in this philosophy.”

“Bill’s wealth of experience and industry knowledge has made him a key addition to the Aaxon family,” says Robert Sanchez, Aaxon’s multi-housing sales manager.

“I’m confident that Bill will play a key role in providing and implementing high-quality solutions for our customers.”

ACO www.americancoinop.com

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