American Coin-Op - February 2017

Insurance

BASICS

Navigating your way through the maze of risk

I N S I D EI N : SJ IUDLEY: 2F 0E B0 R5 U A R Y 2 0 1 7 BRINGING BACK THE HUMAN ELEMENT

TAX TIPS: LAST-MINUTE SAVINGS ON YOUR 2016 BILL

COIN-OP 101: FINANCING THROUGH A MANUFACTURER

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CONTENTS FEBRUARY 2017 VOLUME 58 ISSUE 2

COVER STORY

INSURANCE BASICS To help you navigate the maze of risk, we invited insurance company reps familiar with our industry to answer some basic questions that the average self-service laundry owner might have.

(Cover image: © iStockphoto/ismagilov)

INSIDE 14 GOIN’ WITH COHEN: BRINGING BACK THE HUMAN ELEMENT This month, Laurance Cohen heads to Alabama, where he catches up with multi-store owner Ken Barrett. Barrett pays close attention to the way his customers interact with his stores’ equipment and sometimes even bucks traditional store design to enable everyone to stay in their comfort zone.

22 TAX TIPS: LAST-MINUTE SAVINGS

ON YOUR 2016 BILL

Earning money in a small business is tough enough these days, and keeping it is even harder. William J. Lynott suggests some last-minute ways to do just that by reducing your 2016 tax bill.

30 COIN-OP 101: FINANCING MADE EASY:

PARTNERING WITH A MANUFACTURER

When it comes to selecting a financial lender for your next laundry project, your first thought may be to turn to your bank or the Small Business Administration. But Speed Queen’s Jeff Harvey says that partnering with a laundry equipment manufacturer offers experience and familarity that those outside the industry can’t match.

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6 COLUMNS 26 ADHERE TO THE CODE OF TAX HONESTY Taxes are upon us once again. Understanding that not all Laundromat operators are honest with their figures, columnist and former tax preparer Howard Scott argues, both from personal and societal positions, that being dishonest where taxes are concerned is wrong.

It’s up to each one of us to adhere to the code of tax honesty and do our part to support the society that allows us the opportunity to own and operate a business.

DEPARTMENTS 4 VIEWPOINT 29 PRODUCT NEWS 36 NEWSMAKERS

38 CLASSIFIEDS 39 AD INDEX

16 A CLOSER LOOK Alabama store owner Ken Barrett is as comfortable behind his washers as he is behind a computer keyboard.

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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

PROTECT YOUR INVESTMENT NAVIGATING THE MAZE OF RISK WITH PROPER INSURANCE You committed a great deal of money to buy or build your vended laundry, so it represents a sizable investment.

Therefore, it makes sense that you would want to protect it.

And that’s where having the proper insurance coverage comes in.

Do you understand how insurance truly works? How it protects your business should there be a fire, or a little old lady slips and falls on your damp floor, or any of the various other Bruce Beggs scenarios that could play out?

Every business is unique, but there are some common principles to follow when it comes to insurance coverage for laundries. For our cover story this month, which begins on page 6, I invited reps from several insurance companies well-acquainted with our industry to answer some basic questions that the average self-service laundry owner might have. I was especially interested to learn the “myths” that many store owners have come to accept as fact.

TAX TIME IS UPON US As much as I dislike thinking about it, tax time is upon us. It’s time to get out those calculators and figure out how much Uncle Sam might collect from us this year.

William J. Lynott says you still have time to take some last-minute action that’ll lower your 2016 tax bill; you can find his suggestions beginning on page 22. And if you may be tempted to cut some corners and not be fully truthful in your tax filings this year, columnist and former tax preparer Howard Scott says that isn’t a good idea. And he’ll tell you why, beginning on page 26.

LOOKING AHEAD Manufacturer Alert: In January, I contacted by e-mail all companies that were listed in our last Buyer’s Guide so they could update their information in advance of March’s new edition. If I failed to reach you, please call or e-mail me (my information is listed at right) so I can make sure you are properly listed.

Bruce Beggs Editorial Director

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Roger Napiwocki, Production Manager Nathan Frerichs, Digital Media Director E-mail: nfrerichs@ATMags.com Phone: 312-361-1681

ADVISORY BOARD 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

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 $46.00; 2 years $92.00.

Foreign, 1 year $109.00; 2 years $218.00.

Single copies $9.00 for U.S., $18.00 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 58, 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. The publisher reserves the right to reject any advertising for any reason. © Copyright AMERICAN TRADE MAGAZINES LLC, 2017. 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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INSURANCE BASICS:

Navigating Through the

Maze of Risk

by Bruce Beggs, Editorial Director

A

dequate insurance coverage is a must for every small business, but just how much do you know about it? Do you understand the difference between property and liability coverage?

Know where your laundry is most at risk of a claim? Have you come to accept some things as fact when they may be myths?

To help you navigate the maze of risk, American Coin-Op invited representatives from some of the industry’s major insurance providers to answer basic insurance questions that an average self-service laundry owner might have.

Q: What are the basic components of a small-business insurance policy?

Ann Hawkins, vice president, Under6

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writing & Sales, NIE: The basic components of a small business insurance policy are commercial property (building and/ or contents), commercial general liability, loss of business income and equipment breakdown. Separate policies may be purchased for commercial auto and workers’ compensation.

Larry Larsen, agent for Crusader Insurance Co.: There are two parts to it. One is liability insurance, which you carry for two reasons: One, you have a moral responsibility to the community in case an accident occurs on your premises or in your business that you don’t have the financial resources to pay for. Second, you want to protect the financial assets that you do have. Generally, on a policy for a Laundromat, that’s about 50% of what you pay.

The second major part is property damage. In Laundromats, the primary thing we’re worried about is fire. You want to insure against potential for catastrophic loss.

(Photo: © iStockphoto/ismagilov)

Jodie Millino, vice president, Commercial Lines-Producer, HUB International Insurance Services: Property, covering equipment and tenant improvement and betterments; in most contracts, the tenant is responsible for the entire inside of the laundry. General liability coverage to protect the store owner from being sued if a customer is injured. Business income coverage for loss of income due to a covered cause of loss; normally, it is written on 12 months-actual loss sustained basis. Glass and money coverage are also normally included in the small-business policy.

Larry Trapani, president, Brooks-Waterburn Corp.: A Business Owner’s Policy (BOP) combines protection from most major property and liability risks in one package. These policies are created for small businesses that generally face the same kind and degree of risk. BOPs include: • Property Insurance, for building and contents owned by the company.

▼

Understanding your liability and avoiding claims

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Q:

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

Larsen: The next one that you want to consider is theft coverage; you must have major property and liability coverage. You need to assist your insurers by being smart.

Protect your changers with proper guards and locks, security, alarms, and don’t be so foolish to leave a duplicate set of keys in the back room in your locked desk drawer.

Millino: What was discussed in the first question are typical of a small-business insurance policy but the owner may want to explore higher liability limits and review property limits to make sure it is enough coverage to replace the store.

Trapani: Laundromat owners have some unique coverage needs. Here are the main ones to consider: 8

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• Tenant Improvements — When you bought the Laundromat, did you buy an existing one or build one from scratch?

If you are a tenant in the building and do renovations to the space or a “buildout,” you are responsible for those improvements you make. Imagine if you do a $100,000 build-out and have a fire that destroys your Laundromat. If you don’t have the Tenant Improvements coverage, it would be a major gap in your protection.

• Bailee Coverage, aka Customer Property — You do a fair amount of wash-andfold service. If something happens to those clothes, you are responsible for them. Most Laundromats we protect have a minimum of $10,000 Bailee Coverage.

• Hired & Non-Owned Auto Coverage — Do you do deliveries or make deposits at the bank? If you do, is it with your personal vehicle or perhaps one of your employees’ vehicles? What if there is an accident and the business gets sued? Hired & Non-Owned coverage will protect your business in the event of this type of claim. The approximate cost is only about $100 annually.

• Money & Securities — Most Laundromats deal in cash. Make sure your policy has sufficient “Money & Security” coverage for both inside the premises and outside.

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

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

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

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

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

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

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

Hawkins: [The types of coverage I described in response to Question 1] are typical of small-business insurance policies but the average vended laundry owner might also want to purchase bailee (coverage) to cover the clothing since so many laundries now do wash/dry/fold, commercial laundry and drop-off drycleaning.

They may also want to explore utility services coverage for loss of power to their machines due to a covered cause of loss that happens away from the premises, such as a lightning strike down the block.

Q:

Are there any small-business insurance “myths” that have mistakenly come to be accepted as fact?

Millino: “Myths” might include that there is no deductible on business income coverage when there is normally a “waiting period.” This can be anywhere from 24 to 72 hours. Also, “I only need to insure my equipment for a certain amount since it is older.” This is not true, as most smallbusiness insurance policies are written on a “replacement cost” basis and that would mean that the equipment would be replaced with new, comparable equipment. Also, coverage is triggered by a covered cause of loss, so not all losses are covered.

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• Business Interruption Insurance, which covers the loss of reported income resulting from a fire or other covered causes of loss that disrupts the operation of the business.

• Liability Insurance, which covers your company’s legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do, or fail to do, in your business operations that may cause bodily injury or property damage due to defective products, faulty installations, and trips/falls that may occur due to slippery floors or uneven sidewalks.

Adam Weber, president, Irving Weber Associates (IWA): If you are starting a business, you’re going to need business insurance in order to protect you, your business and your assets in the event there is a claim.

To simplify the business owner’s policy, there are two major parts.

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

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

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for any claims against you on that. That one, along with the idea that the money inside your boxes and your changer are covered in the event of theft.

Q:

Millino: Make sure you seek an insurance professional who specializes in this class of business for your insurance needs.

They will know the carriers that are the most competitive and the coverages that are needed.

Taking deductibles and insurance premiums into consideration, how can one ensure his/her small business is adequately covered while choosing a plan that’s affordable?

Where are the greatest areas of risk in and around the average vended laundry?

Trapani: One of the best ways to ensure that your Laundromat is protected while not overpaying is to shop around. While many agents and brokers can write Laundromats, those that specialize in the industry can more often than not get you better deals, as they know the markets and which companies are more competitive than others.

Another suggestion I always make to reduce the price is to consider a higher deductible. This is much more preferable than lowering coverage. Most insurers take a dim view of small claims. I generally try to discourage my customers from putting in small claims because, in the long run, it will increase their rates.

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

Therefore, it is important to weigh this in your choice of deductible.

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

Hawkins: The best way to know that your business is adequately covered is to know and trust your insurance company or agent.

Try to choose a company or agent who deals with many businesses like yours. This representative will be able to make suggestions and run various numbers to make sure you are covered correctly without buying coverage you don’t need.

Larsen: Liability is generally available in $100,000, $500,000 and $1 million coverages. It’s my recommendation that people always choose the $1 million coverage, because it doesn’t cost that much more. For personal property, I recommend a $1,000 deductible.

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

Also, large storms can be a problem, causing damage to the premises, glass and signs as well as causing the business to be closed for a time, with loss of income.

Hawkins: The greatest areas of risk in and around a vended laundry are, of course, slip-and-fall or trip-and-fall, and dryer fires.

The former can be minimized by keeping all floors clean and free of water, debris, broken floor tiles and crinkled rugs or mats. Also, keep the sidewalk and parking lots free of debris and potholes. Dryer fires can be minimized by removing lint on a daily basis and cleaning vents and the area behind dryers weekly. Also, post warnings about not drying oily rags or uniforms, and cleaning pockets before drying.

Larsen: It is poorly maintained equipment or improperly repaired equipment, in addition to slip-and-falls and lint buildup and fires.

Millino: Greatest areas of risk in and around the average vended laundry are being sued if a customer were to get injured in the store, and being underinsured for business personal property. The limit for the latter should include all equipment (new), and tenant improvements (including floors, walls, tables, plumbing, wiring, vending equipment, etc). Store owners really need to read their lease!

Trapani: In the Laundromat industry, there are two major types of claims: 1. Dryer Fires — Almost every property claim we have is a result of dryer fires.

They occur for two main reasons.

Q:

▼

Trapani: One of the biggest “myths” that many Laundromat owners believe is that their workers can be classified as a contractor or “1099” status. By any standard, your employees are just that, employees. They do not fit the IRS definition of 1099 and therefore are subject to workers’ compensation benefits.

Weber: A common myth held by the majority of policyholders is believing that “everything is covered,” that their property, their liability, and perhaps even their customers’ property, are all covered by their business policy. The fact is, coverage can only be “triggered” by a covered cause of loss, and the included and excluded triggers are spelled out in the policy.

Policyholders should carefully review their policies to ensure that their exposures are adequately insured.

Another myth is that property limits remain adequate from year to year. These limits should be reviewed every year (at renewal or when adding/replacing property) to ensure they represent adequate values per the policy provisions. For example, if your policy includes a “replacement cost” provision, the property limits should represent the cost to replace the property in the event of a total loss. If the policy includes a 90% co-insurance clause, the property limits should represent a minimum of 90% of replacement cost value.

Yet another myth that becomes reality would be that small-business owners are receiving adequate attention from their insurance reps (brokers or carriers). Often, due to premium size, small businesses are neglected for larger, higher-premium customers who garner more of the broker’s time and expertise.

Hawkins: One small business insurance myth is that all insurance companies give credits for burglar alarms and video surveillance. I find that not to be the case because when a loss occurs, often the surveillance and/or alarms were not on at that particular time.

Larsen: A lot of people have the concept that when they get an ADA [Americans with Disabilities Act] lawsuit that the insurance company is going to pay for that, and they’re not. They’re not going to pay for the legal defense and they’re not going to pay

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The first is customers putting flammable items in the dryer. For example, greasy towels or rags catch fire, especially in the heat of a dryer. The second reason is poor maintenance on the dryer ducts. With a buildup of lint over time, it doesn’t take much heat to cause a fire.

2. Slip-and-Fall Liability — Almost every Laundromat owner has had a customer slip and fall while in their store. These can be either a minor situation or they could be injured more severely. Either way, in most cases, it involves making a claim to the insurance company.

Too many of these claims will result in a higher premium or, worse, a nonrenewal of your policy.

Q: What would you consider to be

the minimum insurance coverage a vended laundry should have, and why?

Larsen: What did you pay for it? What have you got receipts for, for improvements that you’ve made to it? That should be the coverage you carry on the property. At a minimum, you want to cover at least what your loan is on the property.

Millino: This is a difficult question to answer as it really depends on the size of the store, equipment mix, etc. The store owner needs to make sure that the insurance policy meets the requirements of the lease but also that the limits on the policy would replace the store should there be a covered loss.

Trapani: Every Laundromat is different and therefore requires different coverages.

I would suggest you answer the following questions when deciding on how much protection you need: • If a fire occurred today, how much would it cost to replace all the washer/dryers, hot water heaters, vending machines, etc.? (contents coverage) • How much was my build-out cost? (tenant improvement coverage) • How long would it take to rebuild? (business interruption coverage) • How much would it cost if a customer were seriously hurt while in my store? (liability coverage; most Laundromats have $1 million coverage, but occa12

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sionally the landlord requires a higher amount) Weber: The minimum liability coverage would be $1 million per occurrence and $2 million aggregate (over the term of the policy, usually one year). We also recommend getting an “Umbrella,” which will add to the coverage over and above the coverage of the regular policy. Umbrellas can be inexpensive, therefore we suggest as high an umbrella limit as you can get. As far as property coverages, that would depend on the cost of the building and equipment.

Q:

What is the single biggest mistake that vended laundry owners make when it comes to insurance?

Larsen: They don’t read their policy.

When they encounter a loss, they never read it the first time and at that point they want to blame the insurance agent. A sophisticated business owner understands what his policy covers and what it doesn’t.

Millino: The single biggest mistake that a vended laundry owner makes is to not read the lease before buying the store. The lease should be reviewed by their attorney to make sure the insurance policy meets all of the requirements of the lease agreement.

Trapani: The single biggest mistake Laundromat owners make when it comes to their protection is only carrying enough coverage to satisfy their loan. The lender may loan you $150,000 for the purchase of equipment. It wants to make sure you have enough coverage to pay it back in case of a fire. That’s all well and good, but what about the investment you made? Perhaps you put in another $100,000 of your own money. If you had a claim, you want enough coverage to be able to reopen the business, not just pay off the lender.

Weber: See my earlier comment on myths.

Business owners should be reviewing their insurance policies on an annual basis to be sure they have adequate coverage. They should keep in mind any changes made in the recent past with regard to equipment values and over limits that may need adjustments, as well as review the policy for any possible changes the carrier may have made to its policy offerings.

Hawkins: The biggest mistake is not

insuring to value. You must think of the value of your equipment in terms of replacing it all with new equipment. If you had a total loss, you would need to buy new equipment and pay for delivery, installation and tax, and all of that is covered under the business personal property limit. Don’t assume you can replace current equipment with used equipment.

Q:

Do you have any other comments regarding small-business insurance and vended laundry coverage that you’d like to share?

Millino: Insurance is one of those things that people feel they have to have but it is intended to protect a small-business owner from catastrophes and also put them back in business should there be a loss. Not every loss is covered, but it is important to ask questions! An experienced insurance professional who specializes in vended laundry coverage is where they should start.

Trapani: Read your lease. It will clearly state what you are and are not responsible for. If you are responsible for tenant improvement, make sure you have the right coverage. Even if you didn’t make the improvements yourself but assumed a lease from a prior owner, you may still be responsible.

Be careful of how many claims you report. Insurance companies are getting picky about the types of risks they write.

They will not hesitate to cancel your coverage if they feel the risks outweigh the costs.

Today, there are far fewer companies out there willing to write Laundromats than even 10 years ago. With less competition out there, prices are bound to go up.

Take control of your own protection. Do what you need to do to prevent a loss. For example, have a maintenance checklist and clean the vents to prevent fires. Another suggestion is to install cameras to record those “slip-and-fall” claims; many are legitimate, but some are quite exaggerated.

Hawkins: Be sure to let your carrier know all of the exposures you have, such as subleasing to another small business, UPS drop-off, lottery sales, etc. These are important bits of information that may require certificates of insurance.

ACO www.americancoinop.com

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GOIN’ WITH

COHEN

Bringing Back the

Human Element

aundry owners sometimes get so caught up in equipment automation that they neglect how people interact with the machinery on the floor. Not Ken Barrett. His holistic approach puts the oftforgotten human element back into the self-service equation.

While Barrett’s YouTube videos offer views of his newest coin-op from the trenches up, I wanted an up-close and personal perspective of the finished project and the man behind it. After journeying along Interstate 20 through Alabama’s picturesque Talladega National Forest, I pulled up to an unassuming strip mall housing his Washin Oxford Coin Laundry on a busy Sunday afternoon and knew this wasn’t your run-of-the-mill unattended store.

Sure, the front-of-the-house kids’ corner, well-appointed restroom, free Wi-Fi, and twin 55-inch TVs were creature comforts not often seen in an unsupervised coin-op, but what really caught my eye was how smoothly things flowed.

DEPARTING FROM CONVENTIONAL WISDOM The layout is a departure from conventional wisdom by offering a new twist on symmetrical and pyramid machine configurations. Two back-to-back bulkheads with three washer capacities on each side ascend and descend in a stairstep fashion.

The dryer wall, running perpendicular to the washers, features a midsection of four 45-pound stack dryers flanked on both the left and right by three 30-pound stacks.

All 23 washers and 20 full-cycle vend tumblers are priced at dollar increments with larger-denomination coins as the preferred — but not exclusive — form of

payment. While the dual-hopper, $1-$20 changer dispenses only dollar coins, quarter-toting patrons are welcome to activate or “top-up” machines. A wall-mounted ATM complements the changer. Barrett’s self-described “dollar coin mostly” system operates without a single in-house instruction sign, relying instead on customer intuition and LED countdowns built into the washers and dryers.

Over the course of the past seven years, Barrett has renovated three existing laundries — retaining two — and, most recently, built one from scratch. He quickly discovered that coin-op management is a stream of big and small projects, each with its own learning curve. And while information on machinery was readily available, sourcing the intangible nuts and bolts of the business posed a challenge.

“I went in with the idea that there’s no inventory and no employees. You show

▼

L

by Laurance Cohen

Alabama store owner Barrett builds chain, resource base

Washin Oxford Coin Laundry is the latest addition to Ken Barrett’s group of Alabama stores. (Photo: Courtesy Ken Barrett) 14

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COHEN up and collect the money and everyone’s happy — which is what most of the people going into this industry think,” he remarks.

“This is my full-time job, but it’s as much of a full-time job as I want to make it. It’s a business, not a hobby. A lot of the little projects I do make things better and easier for me.”

Barrett found his niche in east-central Alabama, where he continues to pursue parallel paths: developing his own successful chain while simultaneously building up a resource base sharing tips with those already in the industry or looking to enter.

Lessons were learned early on. “My wife told me if she won’t go in there at night, nobody else will,” he remembers.

Barrett heeded the advice and up went the new lighting and down came all the window graphics. Later, following latenight incidents of motion detector alarms being set off by wandering vagrants sneaking in before closing, he informally polled customers as to their desire for 24-hour operations. The door locks were disengaged the next week.

PROVING GROUND A young and eager Barrett approached projects using both his hands and mind.

At 34, he put his skills to work as a carpenter, welder and electrician to build himself a 2,900-square-foot log home near his Ontario, Canada, boyhood farm. His passion for electronics led to a career in automotive industrial robotics with a major international manufacturer.

It was during development of an assembly plant that Barrett took notice of the value of time-lapse photography to document a project’s progression. When he later decided to switch paths and “change the face” of central Alabama’s coin-op market, he chronicled each step. More importantly, he spent countless hours in his stores studying each laundry’s flow by observing customer habits and how they gravitate to machines within a self-directed, automated environment.

His first acquisition — a long-shuttered location in Oxford’s neighbor, Anniston, Ala. — was a proving ground for the then16

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44-year-old novice operator back in 2010.

He retained the existing homestyle tandem small-chassis washer-dryer arrangement, but dramatically boosted poundage with a nearby bank of large front-loaders and multi-load tumblers. Barrett quickly realized small-load patrons were creating a bottleneck by competing with family trade for the quarter-vended high-capacity dryers. The congestion was remedied by implementing full-cycle dry pricing — a scheme carried over to the new Washin Oxford venue.

While monitoring traffic flow, he also examined cashbox collections, revealing customer propensity to use little and big washers positioned in close proximity to one another.

Barrett is as comfortable behind his washers as he is behind a computer keyboard. (Photo: Laurance Cohen)

An unorthodox ascending and descending stairstep washer configuration at Washin Oxford maximizes customer maneuverability and ensures an open beeline to the largest tumblers. (Photo: Courtesy Ken Barrett) “They proved right there that’s the layout they want,” Barrett emphasizes.

MAXIMUM MANUEVERABILITY 24/7 When he contemplated his Oxford buildout last year, the initial rendering of a single, straight-line washer bulkhead was nixed in favor of a twin design incorporating an alternating stairstep. The result: maximum aisle maneuverability and a beeline down the middle to the largest dryers.

“By positioning the largest 60-pound washer opposite the smallest 25-pounder, your aisle is at a 15- to 20-degree angle and you can walk through even if all the doors are open,” Barrett points out.

Not only can patrons toss clothes inside up to three varying washers with ease, they can remain within in their comfort zone.

“Some want big machines and others just want a small one at the end of a row,” the

owner shares. “Some want to be the center of attention and be right in front while others want to be back in a corner.”

Being around the corner from the world’s largest retailer draws wash patrons to his newest laundry day and night from up to 30 miles, Barrett claims: “They have a Piggly Wiggly grocery in their town, but once a week they’re making the journey to Walmart and this is part of the trip.”

With a Walmart Supercenter anchor and other 24-hour outlets at the nearby I-20 interchange, the operator says a steady flow of families opt for less-congested overnight hours to wash multiple loads while enjoying a carry-in meal from a local eatery.

OPEN BOOK, AND OVER THE SHOULDER Barrett is proud of his accomplishments and humble enough to own up to his mistakes. Unlike most operators who play

▼

GOIN’ WITH

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COHEN things close to the vest, the formula for this entrepreneur’s success is an open book, as he candidly shares the laundry biz’s insand-outs through more than 100 YouTube video posts and a published paperback (Feeling Dirty? Life as a Laundromat Owner), along with dozens of podcasts and blog entries prominently featured on his LaundromatHowTo.com website. He finds appeal among do-it-yourselfers as well as those who just want an appreciation of the workings of a coin-op.

Sharing visual play-by-plays began six years ago as a way to entice customers back to his newly renovated laundry located a few miles from his original Anniston store.

The 1,600-square-foot Golden Springs location was revamped to improve throughput of both self-serve and drop-off trade.

“I put a photo album up on the website and thanked them for their support,” the operator recalls. “I wanted to convey that it’s not that same old Laundromat they were in 15 years ago.”

Taking over the aging attended store meant Barrett was charged with counter duty. During the course of processing loads, he studied the dynamics of the location and reconfigured a haphazard flow based on the observations. He eventually hired staff, instituted operational guidelines, installed

Individual attendant safes are employed at Barrett’s Golden Springs location for added cash control between shifts. (Photo: Laurance Cohen) 18

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a trio of bank safes for employee cash, and designated a prime position to finish drop-off loads.

“Attendants fold at a specific spot because they can see everything from there,” he explains.

Although he was skilled with robotics, commercial washers and dryers were not his forte. He leaned over the shoulder of servicemen to acquaint himself with the tricks of the trade to save time, money and knuckles. As projects grew in scope, he nevertheless remained close to each undertaking.

“I want to be hands-on and want to understand. I might hire you to do it, but you can bet I’m going to know what you’re doing,” Barrett says.

SPARKING INTEREST The initial focus of his blog entries, videos and podcasts centered on renovation-related topics, but soon encompassed wide-ranging subject matter from advertising and marketing to store budgeting and handling refunds. While much of the content is drawn from personal experience, Barrett also introduces followers to personalities inside and outside the industry offering their perspective on improving laundry operations and profitability.

Barrett doesn’t sugarcoat his content and uses the Internet vehicle to stimulate discussion between operators.

“My goal with more targeted articles is to spark interest and lead owners to talk with their peers in the industry,” he notes.

“People come to a topic and understand a piece of it and ask intelligent questions because now they’ve got something to base it on.”

Most feedback he receives is in the form of e-mails or phone calls. One hot topic, Barrett says, is drop-off laundry.

“Ten years ago, you could probably stumble through it but, today, customers expect more. If you open a drop-off, they expect you to open a business that runs.

If you don’t start it right, you’ve got no chance to save it down the road,” he insists.

Internet marketing and social media played a pivotal role in launching the new Washin Oxford.

“I had my website address before I signed the lease,” Barrett recalls. “I knew I had to come out of the gate running. I didn’t want to be standing there waiting for people to find me.”

With his Facebook pages updated and

Washin Oxford’s pylon sign displays civic pride with the mascot of the neighboring community high school.

(Photo: Laurance Cohen) a presence on Google Maps, patrons were ready to wash even if he wasn’t. “I had customers coming in before I took the plastic window covering down.”

The savvy operator hopes to capitalize on the success of recent raffles and extending them to key holidays throughout the year. Drawings for up to $100 in laundry tokens, along with household goods and gift items, attracted 350 entires alone at the Oxford grand opening. And his gesture of quantities of free tokens to local law enforcement personnel was also wellreceived.

With a trio of laundries running on autopilot, Barrett is not resting on his laurels.

He takes pride in raising the bar in his market and the realization that executing a well-conceived project affords one the opportunity to grow.

“Until you get a second store, you don’t realize you’ve made yourself a job, because it’s easy to go to one store. I was in a position with two stores — one partially attended with three employees and a very active drop-off and doing most of the repairs myself — to be able to take four months to build a new store and still be able to be home for dinner at night.”

ACO Laurance Cohen crisscrosses the country seeking out the most unique vended laundries. He served as American Coin-Op editor in the early 1990s and currently operates Laundry Marketing Concepts based in Hallandale Beach, Fla. He can be reached at goinwithcohen@outlook.com. www.americancoinop.com

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LAST-MINUTE SAVINGS on

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by William J. Lynott

Time you spend chipping away at what you owe can be worthwhile investment

T

he filing deadline for 2016 federal income taxes is rapidly approaching, but you still have time to make sure you’ve done everything you can to keep Uncle Sam’s paws off as much of your money as possible.

Earning money in a small business is tough enough these days, and keeping it is even harder. Here are some last-minute ways to do that by reducing your 2016 income tax bill:

SAVE MORE FOR RETIREMENT

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DON’T FORGET SALES TAXES Do you still have records of large purchases made in 2016? You still have a choice of deducting either your state and local income taxes or state and local sales taxes, but not both.

If you live in a high-tax state such as Ohio or Massachusetts, you’re probably better off continuing to take the deduction for state income and property taxes. However, for residents of states like Florida and Texas, which have no separate income tax, the sales tax deduction can significantly reduce federal taxable income.

Can’t find your sales receipts? Not to worry: the Internal Revenue Service (IRS) has developed tables that allow you to estimate, based on your gross income, how much state sales tax you probably paid. Visit www.irs.gov and type “estimated state sales tax” in the search box to find the tables.

▲

One of the most important tax-savings steps you can take is contributing the maximum to your 401(k) or other taxdeferred retirement plan. If you haven’t done so, max out your retirement savings now by bringing your contribution up to the legal limit. For 2016, you may put as much as $18,000 into a 401(k), 403(b) or 457 plan. If you’re over age 50, you may add an additional “catch-up” contribution of $6,000.

Every dollar you contribute means you will pay less income tax. Except for the new Roth IRA, all contributions to taxdeferred retirement plans are tax-deductible in the tax year for which you make your contribution.

If you’re in the 28% tax bracket, for every $100 you contribute, your federal tax bill decreases by $28. Your total savings will actually be higher when you factor in savings on state taxes. Obviously, the higher your tax bracket, the higher your savings.

This is “found” money. Whatever you do, don’t walk away from it. Of course, many people are not in a position to contribute the legal maximum. If you can’t come up with the maximum, bump up your contribution as much as you possibly can. It may seem painful now, but you’ll benefit greatly in the future.

Remember, you must make your contributions no later than the time you file your 2016 return.

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HAVE KIDS IN COLLEGE?

If you’re dishing out big bucks for college tuition, you might be able to get some of them back. There are two education credits and a tuition deduction for which you may be eligible.

A credit reduces the taxes you owe dollar for dollar. A deduction reduces the taxes you owe by a percentage of every dollar you deduct. For example, a $100 credit reduces your taxes by $100. A $100 deduction reduces your taxes by $100 times your tax bracket. If you’re in the 28% bracket, your $100 deduction will reduce what you owe by $28.

The Hope Scholarship Credit is for taxpayers whose children (or themselves) are in their freshman or sophomore years in college. It offers a maximum tax credit of up to $2,500 for 2016. The Lifetime Learning Credit offers a maximum tax credit of up to $2,000 per year to pay for qualified tuition and enrollment fees.

If your income is too high to qualify for either the Hope or Lifetime credits, you may be eligible to take a tuition deduction.

And don’t forget the Child Tax Credit, which allows you to claim a maximum $1,000 per qualified child. Remember, a tax credit is a direct subtraction from your actual taxes owed, which is much more valuable than a deduction.

Details and earnings limitations on education deductions and credits are complex, so it’s best to check with your tax adviser to see if you are eligible.

OFTEN OVERLOOKED DEDUCTIONS

Many easily overlooked miscellaneous expenses are deductible as long as they

add up to at least 2% of your adjusted gross income. Grouping them can help you meet the 2% threshold. Here are some miscellaneous items you may have overlooked: Tax Preparation Costs — You may claim the cost of personal income tax preparation software or books as a miscellaneous deduction. If you hire a professional tax preparer to do your taxes, you may also be able to deduct the fee.

Interest from Home Refinancing — If you refinanced a mortgage and still have unamortized points left to deduct from an earlier refinancing, you can claim all the unamortized points from the earlier refinancing as deductible interest.

Purchases Financed by Loans or Credit Cards — If you made large purchases on your credit card or with a loan, don’t forget to deduct any interest costs involved.

Use caution when taking advantage of miscellaneous deductions. Document everything. If the IRS decides to question you about any of your deductions, they will want to see all of your pertinent receipts and statements. Self-employed business owners are a favorite audit target for the IRS. Check your math and be sure to get the correct tax amount from the tax table, if you use it. The other numbers to be most careful about are identification numbers — usually Social Security numbers — for each person listed on the return.

There is an IRS toll-free help line, 800829-1040, and the agency’s website has interactive tax aids, forms, and publications available to download.

If you’re unable to complete your return on time, you may request an auto-

matic extension to Aug. 15; Form 4868 has details. There is also a special toll-free number for requesting an extension by phone — 888-796-1074 — before the regular filing deadline.

An extension gives extra time for filing only, not for paying any balance due.

Interest will apply to any tax not paid by the April deadline, plus a late payment penalty if you pay less than 90% of the total tax on time.

When you mail your return, be sure to get it to your local Post Office before the last pickup of the day. Some Post Offices stay open late to accept returns for a “deadline day” postmark.

You may also use one of the designated private delivery services to meet the filing deadline. The four companies involved — Airborne Express, DHL Worldwide Express, Federal Express and United Parcel Service — can provide details on which of their services qualify and how to get proof of timely filing.

Keeping your personal income tax to the legal minimum requires a little planning and effort on your part but the time you spend chipping away at your taxes may be among the most profitable investments you’ll make this year.

ACO Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult an attorney or tax adviser for advice regarding your particular situation.

William J. Lynott is a veteran freelance writer specializing in business management as well as personal and business finance.

Plan Now for 2017 Taxes The best way to pare your personal and business income taxes to the legal minimum is to avoid the last-minute rush to beat the filing deadline. Here are a few tips that will help you minimize taxes for 2017.

Organize Your Records — If you scramble every March and April looking for receipts and other records to pass along to your accountant, you’re probably missing out on some healthy deductions. Start out right by organizing your records as

24

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they accumulate. Set up manila folders for expense and income records and file them as they accumulate.

Maximize Tax-Deferred Retirement Funding — Don’t wait until filing time to fund your retirement account. Making the maximum allowable deposits into your retirement account as early in the year as possible not only reduces your tax load, it also adds months to the taxdeferred compounding of your investment.

Home Equity Interest — If you have a high-interest car loan or a large credit card balance, you may want to consider taking out a home equity loan at a lower interest rate to pay them off. You can generally deduct interest you pay on the first $100,000 of a home equity loan. However, there are some limitations, so you should consult with your tax adviser on your eligibility.

Balance Investment Gains and Losses — Keep a close

eye on your investment performance during the year. By selling appreciated assets and liquidating underperforming investments, you may match gains and losses to minimize your personal income taxes.

The amount of capital losses you can use to offset ordinary income is limited to $3,000. But if your net loss totals more than $3,000, don’t worry. You can carry forward the losses over $3,000 every year until you use them up.

ACO

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AN OUTSIDER’S VIEW

ADHERE TO THE CODE OF TAX HONESTY

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that point, the poor fellow took his own life, and his wife left the country so her funds wouldn’t be garnished.

Second, the collected figures provide valuable information. They are used to pay taxes, yes, but they are also used to produce information. They constitute your monthly profit and loss (P&L), your specific reports, and your ratios. If you don’t use correct figures, the information will be corrupted.

Not only the altered figures, but all your figures become less than reliable. You will ultimately rely less on the information in front of you and more on gut, and that is where you will begin to make mistakes.

I will argue, both from personal and societal positions, that being dishonest where taxes are concerned is wrong.

To use an example, if you pocket some cash volume every day, you will lose track of the proper pricing ratio upon which you are operating. Your price-cost ratio will be incorrect. Your expense margins will be off. No one can make good decisions with skewed information.

You will lose focus and then your business becomes a vehicle for taking cash, not a legitimate enterprise.

You begin to look for other ways to cheat, rather than focus on the business. Instead of a going concern, it becomes a conduit for obtaining money.

A final reason you should pay your fair taxes is because you’re a person of integrity. You like to talk to anybody about your business. If you were cheating the government, you would become reticent, fearful, and less open. Your attitude should be that you run your business so that it earns a profit. You pay your fair taxes, and you’re proud that you do your share to keep the economy (and country) going.

Now to the other side of the ledger. Namely, we receive benefits from our taxes. First off, you are allowed to operate a business and to do as well as you can.

▼

Howard Scott

Taxes are upon us once again. It is an annual ritual during which we bring our figures to our accountant and the information is assembled. The finished forms are handed to you and you write out checks to the federal and state tax authorities.

It has come to my attention that not all Laundromat operators are honest with their figures. I will argue, both from personal and societal positions, that being dishonest where taxes are concerned is wrong. It doesn’t help a store owner or their business in the long run. And it is not good for them personally.

Why should a business file its true taxes? First and foremost, it is fraud to understate income. When you understate income, you reduce profit, and pay less taxes than your business should. Fraud is an offense punishable by jail time and heavy fines.

Unless you admit guilt, there must be a trial. You must appear in court and hire a lawyer. The judge rules the outcome. Time drags on.

You will find yourself overwhelmed, trying to run the business and handle the legal case at the same time.

Expense errors are generally less serious.

What are the odds of being audited? It happens, believe me. Over the course of 30 years, you probably have a 50-50 chance of being audited. Moreover, if you cheat, that increases the chances.

The Internal Revenue Service (IRS) decides who it will audit by several different criteria. One method is simply random selection, but other criteria include changes from last year, divergent figures from industry standards, and a high audit score.

The IRS has a formula involving calculations that include low gross profit margin, high auto expense, high travel and entertainment, and little (or zero) profit to determine probable cheating. These are the audit triggers.

I’ve heard of a few business owners who were ruined by their audits. One Laundromat operator was so hounded by the IRS after it was discovered that he underreported his income that he closed up. Another business owner reported minimal profit for many years, so the IRS re-examined his books and assessed him $125,000. When he wouldn’t or couldn’t pay that assessment, the agency began garnishing his wages. At

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AN OUTSIDER’S VIEW

That is our free enterprise system. If you lived in China, for instance, you would be extremely limited in what you could do.

The greatness of our country is that there is the opportunity to do whatever you want. That freedom principle is worth paying for.

We enjoy a safe society. Despite the occasional incident (extremely rare considering we’re a country of 320 million people), we feel unafraid almost anywhere. That goes a long way toward doing business, not to mention living one’s life. Consider a country like Israel, which has incidents regularly. There is palpable tension in the air.

We don’t have that. Our law enforcement organizations have done a good job of keeping the peace. In addition, our military has kept wars out of our country. That privilege of stability is worth paying for.

We have fine infrastructure. Our roads,

Without infrastructure, running a business efficiently would be impossible. Infrastructure is expensive, and we must pay for it. highways, public transportation, communication networks and postal service all energize our society. With them, we are better able to operate our businesses.

We can order an item from across the country, and it appears on our doorstep the next day. Without infrastructure, running a business efficiently would be impossible.

Infrastructure is expensive, and we must pay for it.

We have all sorts of bureaucratic organizations working for us. The Food and Drug Administration ensures that the food we eat is safe. The Department of Health and Human Safety keeps us healthy. The Department of Education educates our youth. All these are benefits to running our business. Such oversight costs money and it is our responsibility to keep it going.

We have a safety net of welfare payments that ensure our poorest citizens have food, enjoy shelter, and are able to live modestly.

The net result of these programs is that the population stays reasonably content.

We pay for our better society. This is why you should be honest with your taxes.

ACO Howard Scott is a longtime business writer and former tax preparer. He can be reached at dancinghill@gmail.com.

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1/16/17 3:23 PM

PRODUCT NEWS CLEANER’S SUPPLY LAUNCHES NEW WASH-AND-FOLD BAG

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R&B WIRE PRODUCTS’ NEW TRUCK DESIGNED TO PREVENT FACILITY DAMAGE

Cleaner’s Supply® Inc., a distributor of products for the coin laundry and drycleaning industries, has launched a new Wash N’ Fold bag designed to make customer drop-off and pickup a breeze.

The Wash N’ Fold bag will hold 40-50 pounds of clothes, and is made of 600 Denier with a 210 Denier 10-inch extended cover with drawcord to protect the garments inside.

Other features include a removable PVC base, two handles for carrying, and an invoice pocket.

A Bottom Bag Divider is available for purchase as a convenient way to organize smaller items, Cleaner’s Supply says.

Bags are available plain or custom-printed, in a variety of bag colors and 22 ink-color options. Custom-print pricing includes free artwork, plate set-up, and shipping, the company adds.

R&B Wire Products has launched a Poly Truck with a 360-degree Top Rim Air Cushion Bumper. When trucks and carts hit walls, doors and equipment, they often create dings, scuff marks and dents. The Poly Truck was designed specifically to prevent these types of damage; the top rim features R&B’s “Force Field” Perimeter Protection, soft vinyl bumper, which provides 360-degree facility protection.

“The truth is, most transport products on the market are built to last but not built to protect the facilities,” says Frank Rowe, R&B’s vice president of sales and marketing. “We wanted to change that by creating a facility-protecting product made to pay for itself within months.”

The Poly Truck is available in sizes from 6 bushels to 20 bushels (4606CUS/PTB – 4620CUS-PTB) and can be outfitted with an internal spring platform lift for added safety.

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COIN-OP 101

Financing Made Easy:

PARTNERING WITH A MANUFACTURER

Jeff Harvey

Whether you are a new investor entering the laundry industry or an experienced owner looking to reinvest in or expand your business, there are many options when it comes to selecting a financial lender.

While your first thought may be to turn to your bank or to the Small Business Administration (SBA), there is another answer: an equipment manufacturer.

With customized finance programs, as well as acquisition and equity financing, a lender that understands the industry will help your business succeed and maximize profitability.

IN-DEPTH INDUSTRY KNOWLEDGE Not only have laundry equipment manufacturers been providing revolutionary equipment for many years, they’ve also been offering customized financing solutions that help set their customers’ businesses apart.

Through this experience, they have an extraordinary understanding of the industry and will share this insight and expertise with you.

Their in-depth knowledge helps simplify the application process and decisions are made quickly. A manufacturer recognizes the value of the machines and the importance of reinvesting in your business. It also knows the impact replacing outdated equipment with new, state-of-the-art machines will have on a store owner’s bottom line.

Multi-store owner Mike Gilley, who has been in the industry for more than 25 years, owns 18 Laundromats throughout Kentucky and Indiana. He says he owes much of his success to working with Speed Queen® Financial Services (SQFS), who has helped fund his new equipment and stores over the years. In 1993, Gilley took out his first loan to replace outdated equipment.

“My first loan was around $30,000, which seemed like a lot of money at the time,” Gilley says. “Once the new equipment was installed, I quickly saw the benefits it provided, and my revenue began to rapidly increase.

A few months later, I went back to SQFS so that I could replace even more equipment.”

A bank or agency that does not know the value of laundry equipment, how it works and what is needed to be successful in the industry has an extensive application

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process and requires a substantial amount of personal information and financial documentation that can take weeks or months to process.

If you’ve been in the industry and have a proven track record, you could be approved for a $250,000 financing loan with your manufacturer instantly once a brief application is completed.

“When I built my first new store, the financing was structured with interest-only payments in the beginning. This allowed the business to ramp up and helped increase cash flow.”

— Mike Gilley, multi-store owner “In 1995, I was ready to build my dream store,” Gilley says. “I went back to SQFS and because I had previously reinvested in my business and paid my loans on time, they gave me a significant loan to build the store.

From that point on, I continued to partner with SQFS to grow my business.”

VARIETY OF PROGRAMS There is more to financing in the laundry industry than obtaining funds to purchase new equipment. There are a variety of programs available that will meet your business needs, such as equity and acquisition financing.

Acquisition financing will provide a loan to acquire an existing Laundromat, as well as replace the equipment.

Your manufacturer will also work closely with you and your distributor to determine what Laundromats for sale would be a smart investment opportunity.

If you’re a multi-store owner, a lender in the industry can use equity in an existing location — by evaluating current store value and income, as well as equipment — to finance a new store development or store acquisition.

Jake Gergues grew up helping in his family’s Laundromat in Jersey City, N.J., and took over the busiwww.americancoinop.com

1/17/17 7:20 AM

ness in 2014. That year, he was interested in retooling and attended an event hosted by his distributor, Super Laundry. There, he met a SQFS representative who discussed financing options and showed Gergues how the new equipment would reduce utilities and boost profits. Since the equipment was installed, Gergues says he has exceeded revenue projections by 50%.

A couple years later, Gergues was ready to purchase a new store and turned to Super Laundry and SQFS. “I met with SQFS to discuss the figures I would need to get the new store up and running,” Gergues says. “Matt Westphal at SQFS told me about the opportunity to use equity from our first business to fund the new store. As we started working on the second location, Westphal helped make everything so easy, and our success was his No. 1 concern.”

TAILORED TO YOUR NEEDS A lender in the industry knows what it takes to be successful and will develop a finance program tailored to an investor’s specific needs and budget.

“When I built my first new store, the financing was structured with interest-only payments in the beginning,” Gilley says. “This

allowed the business to ramp up and helped increase cash flow.”

Beyond the financial needs, your lender should be trustworthy. A lender in the industry will be invested in your success and business goals, and the relationship doesn’t end once the loan is approved.

A full-service team of experts will personally manage your account, and also serve as a resource and trusted partner anytime you want to discuss new opportunities, such as expanding your portfolio.

“Westphal and his team are part of our business; I consider him a partner,” Gergues says. “If I was working with a bank, they would not be interested in my stores. They would not be familiar with some of the challenges that arise when you are opening a new store and therefore wouldn’t be ready with a solution.”

Whether you’re replacing equipment, acquiring an existing store, or building one from the ground up, your manufacturer’s financial experts will create a customized, flexible and timely program to best suit your cash flow, payment goals and the needs of your Laundromat.

ACO Jeff Harvey is the brand manager for Speed Queen® Financial Services, Ripon, Wis. For more information, visit speedqueen commercial.com/finance or call 800-223-8408.

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FEBRUARY 2017

AMERICAN 1/3/17 COIN-OP 3:17 31 PM

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Owasso ELC’s Focus: “

“

Clean,Safe,EasyandFast Clean

Branded store in Oklahoma focuses on top-notch service, results

By Haley Jorgensen

“W

e are first and foremost in the people business,” says Marty Mullican, owner of Owasso Express Laundry Center in Owasso, Okla. “Our local community loves who we are and what we do.”

The 4,500-square-foot laundry, which opened in March 2016, is all about pampering clients with “five-star service and the very best in wash/dry/fold.” Equipped with high-speed Continental Girbau equipment, sanitizing ozone, and a highly trained team focused on top-notch service and results, the card-operated Owasso ELC is “Clean, Safe, Easy and Fast,” Mullican says.

Mullican, who retired from the Department of Defense, spent two years researching everything laundry prior to investing in the real estate and store development. He and wife Lynn visited more than 100 vended stores across 12 states, spoke with other successful Express Laundry Center owners, joined the Coin Laundry Association (CLA), attended the Clean Show in Atlanta, and selected J.H.

At the Owasso Express Laundry Center, attendants are trained to provide unrivaled customer service, according to owner Marty Mullican. (Photos: Continental Girbau) Stuckey Distributing, Omaha, Neb., as their equipment distributor.

“We did a lot of research into market need and the unique nature of the laundry business model,” says Mullican. “The business is also a good fit for our family personality, investment-risk tolerance and long-term business goals.”

He credits industry mentors, including Rob Maes, Dan Sofranko and John Stuckey, for his store’s success. Sofranko owns Perfect Wash Express Laundry Center in Huntington Beach, Calif.; Maes runs two Express Laundry Centers in Houston; and Stuckey, besides serving as a distributor, owns and operates a trio of Express Laundry Centers in Omaha.

HARNESSING THE FRAMEWORK

(From left) Owasso ELC Manager Janet Swetson and owners Lynn and Marty Mullican.

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Following a demographic study and competitive analysis, Stuckey recommended that Mullican develop an Express Laundry Center with a robust full-service wash/ dry/fold offering. The brand developed by Continental Girbau Inc. is a complete store

solution touting high-speed Continental laundry equipment, a 60-minute self-service wash/dry/fold, branded services, low utility costs, and marketing, training and operational support.

“The Express Laundry Center program — when linked to a quality distributor — is much like having well-developed corporate franchise support, without the corporate franchise fees, inflexibility or ‘can’t adapt’ contract,” Mullican says.

The store’s increased revenue potential due to extended service offerings put the numbers in line for optimum financing, according to Mullican.

“With Continental’s Express Laundry Center program as the framework for our business plan, financing was much, much easier to obtain,” he says. “My bank made that statement several times.”

QUALITY WDF SERVICE GLEANS RESULTS Just nine months in, full-service wash/ dry/fold made up a hefty 16% of total store revenue.

▼

LEARNING THE MARKET

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“Because demographic studies weren’t as solid as we had wanted, we developed the store to emphasize drop-off laundry production,” Stuckey says. “Marty’s commitment to hiring and training excellent team members, who deliver a consistent topquality product, sets the laundry apart.”

Full-service wash/dry/fold sales are growing by 1-2% each month, he adds.

All items are carefully washed and sanitized according to customer specifications, precisely folded, separated by size or type, and shrink-wrapped, according to Mullican. Owasso ELC also provides laundry pickup and delivery for residential and commercial accounts. A 24-hour turnaround appeals to customers.

HUMMING ON SELF-SERVICE SIDE Business hums on the self-service side, as well. Customers enjoy big machines, card operation, ozone sanitation and oversized parking spaces. Other amenities include a 70-inch flat-screen TV, free Wi-Fi, automatic front doors, vending machines, and counters complete with charging stations.

“The store is hyper-lit with LED lighting that’s 20% brighter than the norm – popping whites and colors,” says Mullican.

With laundry carts in tow, attendants greet customers in the parking lot, help them load their laundry into the carts, assist with the Card Concepts Inc. (CCI) LaundryCard system, and offer to load and operate equipment.

LOW UTILITIES LEND TO PROFIT POTENTIAL Designed for energy efficiency, Owasso ELC utility costs take up just 11% of rev-

Owasso Express Laundry Center is the only laundry in Owasso, Okla., to offer a 60-minute self-service wash/dry/fold, ozone sanitation, card operation, and full-service wash/dry/fold, the owners say. enue, according to Mullican.

Engineered to use less water, freestanding Continental ExpressWash Washers generate extract speeds up to 400 G-force for greater moisture removal when compared with lower-speed models. This cuts resulting dry time by up to 40%, according to Mullican, which decreases natural gas consumption and dryer wear-and-tear.

Working in concert with each washer is an ArtiClean Ozone Laundry System. “[Ozone] deodorizes and sanitizes laundry during cold-water washes and rinses,” Mullican says. “Ozone gas, which works in cold water to break up organic matter and loosen fabric fibers, kills 99.999% of all bacteria and viruses in the wash.”

It also decreases the natural gas used to heat water and leaves laundry fresh-smelling, bright and clean, according to Mullican.

No other vended laundry in its area offers Owasso ELC’s sanitation promise.

“Our customers don’t have to worry about who used the machines before them.

The ozone is injected into all cold-water rinses so laundry is sanitized and deodorized every time,” he says.

EQUIPMENT MIX, MACHINE CONTROLS

Customers with big, bulky loads use Owasso Express Laundry Center’s Continental 75-pound-capacity PowerLoad Washers, the store’s most popular machines.

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The equipment mix features a lineup of ExpressWash Washers, including six 60s, 12 40s and 19 20s. Four 75-pound PowerLoad Washers take on bulky, familysized loads. These are complemented by ExpressDry Dryers, including two reversing, single-pocket 75s; 12 dual-pocket 30s; and 12 dual-pocket 45s.

“Each ExpressWash Washer features the ProfitPlus Control, which brings more washing options and cycle features to customers,” says Stuckey.

The control offers three primary cycles

The laundry is outfitted with free Wi-Fi, a flat-screen TV, and a countertop with charging stations.

— hot, warm and cold — plus optional premium cycles, such as “Extra Wash,” “Extra Rinse” or “Delicate.” Each premium adds to the total vend price. ProfitPlus “extras” contribute an additional $2,000 to monthly store revenue, according to Mullican.

CARD SYSTEM OFFERS BENEFITS Finally, the LaundryCard system offers customers simple equipment operation and payment, while allowing Mullican remote store management. He can quickly program machines, run promotional specials, alter vend pricing, and track revenue, equipment turns and more. While the 75-pound PowerLoad Washers are most popular, the 60-pound ExpressWash Washers are most profitable, according to Mullican.

The store hit its break-even point after five months and continues to grow, he says. ACO Haley Jorgensen is a public relations writer for commercial laundry equipment manufacturer Continental Girbau. www.americancoinop.com

1/16/17 3:16 PM

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NEWSMAKERS

CONTINENTAL GIRBAU WELCOMES THREE TO STAFF Continental Girbau Inc. recently welcomed Peter (PJ) Grasee, of Ripon, Wis., as inside sales and customer care associate; and Sarah Griffin, of Fond du Lac, Wis., and Courtney Krepline, of Brillion, Wis., as graphic/web designers.

In his new role as inside sales and customer care associate, Grasee interfaces with Grasee Continental staff, distributors and customers on a daily basis; manages Continental’s lead qualification process; and handles inside sales and customer relations duties.

He earned a bachelor’s degree in media studies from University of WisconsinPlatteville in 2015.

As graphic/web designers, Griffin and Krepline orchestrate a number of design and web development functions within Krepline Continental’s marketing department.

Krepline earned a bachelor’s degree in digital studio practice from the University of Wisconsin-Milwaukee in 2016, and has three years of augmented reality, design and production experience.

Griffin, who brings 16 years of design, marketing and web design experience to Continental, has a bachelor’s degree in graphic design from Viterbo University in La Griffin Crosse, Wis. PRIMUS ADDS TWO MORE TO DISTRIBUTOR NETWORK The distributor network for commercial laundry equipment manufacturer Primus continues to grow with the additions of two companies based in the Southeast.

Steiner-Atlantic Corp., Miami, now offers Primus equipment to customers in Florida, and Southern Automatic Machinery Co. (SAMCO), based in Fayetteville, Ga., now offers the brand’s equipment to vended Laundromat and on-premises laundry (OPL) customers in Alabama, South Carolina and parts of Georgia.

Steiner-Atlantic has served the laundry, boiler and drycleaning industries for more than 50 years, Primus says.

“At Steiner-Atlantic, we are committed to providing our customers with high-quality equipment featuring leading technologies,” says Michael Steiner, CEO and president, Steiner-Atlantic.

“We know that the Primus equipment will meet our customers’ needs and that this efficient and reliable equipment will help our customers’ businesses succeed.”

SAMCO has been in the commercial laundry business since 1948, providing equipment for Laundromats as well as OPLs in hospitals, schools, apartment buildings and hotels.

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“At SAMCO, our customers are our No. 1 priority,” says SAMCO COO Brett Nolan. “We are thrilled to now be able to offer our customers Primus equipment, which will provide them with reliable, efficient machines that will help their businesses succeed.”

Grant Einhorn (left), Gee Coin Laundry, Plantation, Fla., accepts the Golden Washboard Award for “Newest Member of the Dexter Family” from Todd Fener, CEO of Laundry Owners Warehouse. (Photo: Laundry Owners Warehouse) LAUNDRY OWNERS WAREHOUSE HONORS AWARD WINNERS Distributor Laundry Owners Warehouse recently hosted an open house event for coin laundries at its Fort Lauderdale, Fla., headquarters. Besides conveying facts about the line of Dexter Laundry products and highlighting the common issues faced by the laundry industry, the company honored the winners of its 3rd Annual Golden Washboard Awards.

The awards are presented annually to recognize the achievements of coin laundry store operators for their outstanding work in different aspects of the industry, the company says.

Recipients of the 3rd Annual Golden Washboard Awards are: Lifetime Achievement – Paul Russo, Mr. Machine Laundromat, Oceanside, N.Y.; Laundroteur of the Year – Claudio & Mercedes Vilas, Project Butterfly, Pompano Beach, Fla.; Newest Member of the Dexter Family – Grant Einhorn, Gee Coin Laundry, Plantation, Fla.; Best Interior – Bill Pederson, The Laundry Warehouse, Tamarac, Fla.; Industry Advocate – Daryl Johnson, Giant Wash Laundry, St. Ansgar, Iowa; Best Store Rehab – George Youssef, Aloha Laundry, West Palm Beach, Fla.; Best Find – Alberto Mosconi, All Me Laundry, Lake Worth, Fla.; and Rookie of the Year – Cedric and Jessica Davis, Diamond Bright Laundry, Pembroke Pines, Fla. “I would like to take a moment to congratulate the winners of the 2016 Golden Washboard Awards for their achievements in various fields of the laundry industry, and hope to see even more coin laundries recognized for their success next year,” says Joshua Prager, owner of Laundry Owners Warehouse. (continued on page 40) www.americancoinop.com

1/17/17 7:16 AM

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SERVICES AND SUPPLIES

SERVICES AND SUPPLIES

WASHERS and DRYERS COMPUTER BOARD REPAIR Dexter VFD Inverter (Delta Motor Control) All Models (9375-xxx-xxx). . . . . . . $245.00 VFD-A & VFD-B (9732-237-001) . . . . . . . . call Stack Dryer (9875-xxx-xxx) . . . . . . . . . $65.00 Coin Accumulator . . . . . . . . . . . . . . . . $55.00 Wascomat / Electrolux Inverters (MotorControl) All. . . . . . $245.00 471977101,105,115 . . . . . . . . . . . . . . . . . call Compass Control Assembly Gen. 6. $175.00 Selecta II Dryer PCB Assembly . . . . $175.00 Maytag Computers . . . . . . . . . . . . . . . . . . . . . $65.00 23004118 . . . . . . . . . . . . . . . . . . . . . . . . . call W10343020 . . . . . . . . . . . . . . . . . . . . . . . call 33001129 . . . . . . . . . . . . . . . . . . . . . . $85.00 ADC 137213, 137234, 137240 . . . . . . . . . . $65.00 137253,137274,137275 . . . . . . . . . . . . . . call Igniters (Fenwall only). . . . . . . . . . . . . . $30.00 Speed Queen / Huebsch Computers . . . . . . . . . . . . . . . . . . . . . $65.00 Motor Control . . . . . . . . . . . . . . . . . . . $95.00 IPSO 209/00440/70 (Micro 20). . . . . . . . . . $115.00 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

WASCO GEN 5 DOOR LOCKS & TIMERS REBUILT Door Lock $75 • Gen 5 & 6 Timer $85 WASCO Gen 4 Timer $85 • Continental Timer $95 DRYER COMPUTER BOARDS ADC Stack $60 • Single $45 Huebsch SQ Board $45 Huebsch Old Style Board $55 Stack Dexter/Continental $75 Washer Coin Boards $65 Some prices may vary!!!!

JECON INC. PMB #272 / 5 CONTINENTIAL AVENUE STE.#2 • 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

LOWlaundry.com (954) 537-1643

Trust!

People You

TIMERS REBUILT — IPSO main & reverse, Milnor, Dexter, Primus, Speed Queen, Maytag & Continental Girbau, Wascomat Generation 4, 5 and 6.

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

ADVERTISERS’ INDEX Advertiser

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Advertiser

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AC Power ........................................ 29

Laundry Concepts ............................33

American Switch ...............................38

Laundry Owners Warehouse ......13, 39

BDS Laundry Systems .......................19

Metro Laundry Tech Corp. ..............39

Cleaner’s Supply ...............................39

Mountain Electronics ........................38

Clean Show .......................................37 Coin-O-Matic ...................................27 Continental Girbau .........................IBC CryptoPay .........................................15 Dexter Laundry ..................................3 ESD Inc. .............................. 20-21, BC FrontecStore.com ..............................38

NIE Insurance ...................................23 Parts King .........................................35

PWS ..................................................17 R&B Wire Products ...........................1 SESLaundry.com ...............................25 Setomatic Systems .......................... IFC

Great Lakes Commercial Sales ........ 38

Tjernlund Products ...........................38

HHC Electronic Service ................... 38

Tri-State Laundry Companies ...........11

Imonex Services ..................................7

Vend-Rite............................................5

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Holds up to 50 lbs.

Progressive Insurance ........................31

Gold Coin Laundry Equipment ..........9

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www.AmericanCoinOp.com FEBRUARY 2017 AMERICAN COIN-OP 39

1/16/17 3:39 PM

NEWSMAKERS

(continued from page 36) LAUNDRYWOOD SERVES AS VENUE FOR VERIZON COMMERCIAL Verizon’s recent national advertising campaign included a holiday commercial shot on location at Laundrywood, a Continental Girbau-equipped vended laundry in Los Angeles.

A young actor dances in Los Angeles vended laundry Laundrywood, as shown in Verizon’s newest holiday commercial. The store closed three days for the commercial production.

(Photo: Continental Girbau) Laundrywood is a card-operated, eco-focused laundry occupying a renovated, early 20th century building just minutes from Hollywood and Paramount Studios. Owner Gary Thompson says the 8,000-square-foot megastore is busy, colorful and constantly in motion — like it’s represented in the zany commercial highlighting dancing customers in various stages of doing laundry, rolling in laundry carts, and jumping atop Continental washers and dryers.

Thompson opened Laundrywood in 2013. The high-speed store offers a 60-minute self-service wash/dry/fold, and full-service, drop-off wash/dry/fold. Customers also enjoy massage chairs, flatscreen TVs, a touch-tunes jukebox, video games and a large kids’ play area.

“We shut down the store for three days for production,” he says.

“It was a lot of fun and once it was over, the crew cleaned up and we couldn’t tell that they had ever been there.”

SUHY, WRIGHT NEWEST ADDITIONS TO WHIRLPOOL LINEUP Whirlpool Corp. Commercial Laundry continues to tap industry veterans to join its all-star lineup. The latest laundry aficionados—Michelle Suhy and Chris Wright—will help drive the “unsurpassed experience customers have come to expect” from the Maytag® Commercial Laundry, ADC and Whirlpool® Commercial Laundry brands, the parent company says.

“To succeed in this market, our entire organization has to not only be ambitious, but possess the aptitude to drive results and strengthen key customer relationships. It’s imperative to surround our customers and deliver a holistic experience at every touch point,” says Trey Northrup, general manager of Whirlpool Corp.

Commercial Laundry. “With Michelle Suhy and Chris Wright in 40

AMERICAN COIN-OP FEBRUARY 2017

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place, delivering optimal customer experience will be a seamless process.”

Adding to her 19-year track record within sales and marketing, National Sales Manager Suhy will be responsible for creating sales growth programs and driving cross-functional synergies throughout the company’s three commercial laundry brands.

Wright has been winSuhy Wright ning customers over for the last 16 years, Whirlpool says. As field service manager, he is accountable for service training across all brands and products within the Whirlpool Corp. Commercial Laundry portfolio.

DISTRIBUTOR/BROKER PWS OPENS 3,000TH LAUNDROMAT Distributor and broker PWS – The Laundry Company recently opened its 3,000th Laundromat, the ultra-modern SpinCycle Laundry Lounge, next to the company’s newly renovated headquarters in South Gate, Calif., south of Los Angeles.

The interior more closely resembles a coffee shop than a traditional laundry, and includes couches, large TVs, countertop space for laptop usage, 25-foot-high exposed wood ceilings, and free Wi-Fi. The 3,400-square-foot store is equipped with the latest Speed Queen washers and tumble dryers and offers more than 1,400 pounds of wash capacity to its customers. Machine controls feature large graphical displays and options to modify and customize wash cycles based on personal preferences.

Smart technology will gather market intelligence, and two-way mirrors will enable PWS personnel to observe how customers use the space and interact with equipment and store staff.

ACO

Distributor/broker PWS – The Laundry Company built its SpinCycle Laundry Lounge to be a showcase store and as a tool to gather data to enhance the user experience at other current and planned Laundromats. (Photo: Alliance Laundry Systems) www.americancoinop.com

1/17/17 7:16 AM

IT’S SIMPLE.

AT CONTINENTAL, WE ARE INNOVATORS. Continental has installed commercial-grade high-speed, softmounts in laundromats for over 20 years. We lead the industry in marketunique, creative innovations that positively impact vended laundries. NO WONDER THE OTHERS FOLLOW OUR LEAD! For years, we’ve proven the huge store advantages garnered from washers that produce greater than 200 Gs. Laundries with plus 200 G-force enjoy lower utilities costs and overhead, increased customer turnover and boosted profits.

When installing washers with over 200 Gs, a 3,500-square-foot laundry can save as much as $70,000* per year in utility expenses!

Watch and learn at www.continentalgirbau.com/expresscomparison.

Call (800) 256-1073 to make your laundry more attractive, flexible, profitable, convenient and unique! www.continentalgirbau.com

GIRBAU INC.

*Contact CGI for specifics

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