Content about Business

CHICAGO — A majority of dry cleaners report they have given raises in the last six months, according to data from this month’s unscientific American Drycleaner Wire survey.

When asked if they’ve reviewed employee compensation in the last six months, 64.7% of respondents replied yes, saying they “raised pay on an individual basis,” while 23.5% “raised pay across the board.” Only 11.8% replied no, saying that they “did not raise pay.”

Coinciding with this trend, more than half of cleaners (52.9%) report that they pay their employees more than other plants in their market area. Roughly 41% of respondents have kept their pay rates about the same as other area plants. Just 5.9% report paying their staffers less than other plants in their area.

Just 17.6% of respondents report having had to lay off employees in the last 12 months for financial reasons.

CHICAGO — CONSUMER CONFIDENCE continues to grow, according to the latest Surveys of Consumers by Thomson Reuters and the University of Michigan. In the March survey, economists report higher confidence amid signs of growing employment, and increasing home prices also had consumers giving a thumbs up to the future.

“Although confidence dipped in early March, since the middle of the month consumers have expressed improved prospects for economic growth,” says Richard Curtin, Surveys of Consumers chief economist. “Two factors were responsible for the gains: Consumers discounted the administration’s warning about economic catastrophe following the cuts in federal spending, and consumers have renewed their expectations that job gains will accelerate in the months ahead.”

Curtin also says that while optimism like this has been seen before, recent gains look to be sustainable, with a lower unemployment rate and increases in consumer spending on the way.

CHICAGO — In today’s competitive business environment, it makes sense that every dry cleaning plant operator is seeking ways to increase profit. But one can increase prices only so much. And with any potential labor savings having generally been rung out of most plants, operators must find other ways. Simultaneously, environmental impact is a major concern.

One of the areas in which to save, yet one that is often overlooked or glossed over, is the high cost of energy: electricity, heat and water. Hence, prudent dry cleaning plant operators are, or at least should be, having a critical look at this expense and seeking ways to reduce this financial drain.

The best way to reduce this expense is to implement a pre-planned assessment (a.k.a. audit) of the energy consumers in your dry cleaning plant. Much of this you can do yourself. For those systems and equipment items that could prove more difficult to assess, most utility companies are more than willing to assist, usually at little or no cost to you.

CHICAGO — The more things change, the more they stay the same. So goes that old saying illustrating an important truth in many aspects of life, but not in retirement planning.

The world of retirement planning has undergone many drastic changes in recent years, most of which would appear to be here to stay. Perhaps the most significant of those is the gradual disappearance of the corporate defined benefit plan.

A generation ago, in the days of generous corporate retirement plans, spending an entire working career with one employer was a common experience; these days, not so much. Today, many if not most of us will have more than one employer during our working careers.

Some of those employers may provide one of the new retirement accounts such as 401(k)s and some may not. In those cases, we have the option of opening individual retirement accounts (IRAs) to help save money for our retirement years. As a result, over a working career, many people wind up with retirement dollars spread out in several different accounts.

COLUMBIA, Md. — Private equity firm JPB Capital Partners has invested in Value Drycleaners of America LLC, the parent company of ZIPS Franchising LLC (“ZIPS”), one of the largest franchisors of retail dry cleaners in the Mid-Atlantic region. Terms of the transaction were not disclosed.

ZIPS began in 1996 with a group of eight dry cleaners in the Baltimore-Washington region and has grown to 36 franchise operations in Maryland, Virginia, Pennsylvania and Washington D.C.

“We believe that ZIPS has created great brand awareness and a unique model within the dry cleaning industry,” says Jim Bolduc, senior managing director of JPB Capital Partners. “With this foundation in place, and the combination of our capital and our team’s knowledge and experience in both retail and franchise operations, we believe that we can move the concept through its next phase of growth including improved execution of the existing system and further geographic expansion of the concept.”

SAN FRANCISCO — In our consulting practice, we field many questions, but the most common question has long been “How do I increase sales?”

When this question arises, we always encourage the person who is asking to modify it to “How do I increase profitable sales?”

How many of you have tried Groupon, delighted initially at the large number of respondents, but then evaluated the retention rate on those deeply discounted sales and vowed never to use it again? These promotional efforts can be used as a marketing introduction for a new service or new location, but resulting sustained sales are rare. They have the added disadvantage of training your customers to think that your service is not worth your normal price.

So what is the answer?

First, there is no silver bullet. Profitable sales require a multi-pronged, sustained effort. There is no passive path to increased profitable sales.

PEMBROKE, Mass. — Let’s talk relationships. You are the boss, and you have employees working for you. You pay them wages to do a good job. You expect them to want your company to do well and become mad when it seems they don’t care. Is there something more you can do to build allegiance and get them to care about your business?

Believe me, if you paid them one and a half times what they would earn at a competitor’s shop, you wouldn’t have created more allegiance. Money is not the answer. You build allegiance by creating a team.

One aspect of a team is that everyone looks out for everyone else. Since you are the most successful member of your team, the heaviest burden falls on you. You must be someone the others can go to when they need a favor.

This is tricky, because allegiance walks a fine line. Become overly friendly with an employee and you’ll lose the ability to be his or her boss. You will have difficulty making the hard decisions that are demanded of a business owner. The crew will take advantage of your softness.

CHICAGO — Quick. Easy. Efficient. Who doesn’t love online banking? Be aware, though, of the danger: Hackers can access your account, drain your funds and threaten the survival of your business.

The risk is growing. Cyber attacks increased some 24% in the first half of 2012 over the same period the previous year, according to a new report from security firm Symantec. Reason? “Any time the economy goes down, white collar crime goes up,” says Bill McDermott, CEO of Atlanta-based McDermott Financial Solutions. “We’re seeing an increase in corporate account takeovers. It’s a huge problem.”

Banks commonly refuse to indemnify companies for funds stolen from commercial accounts. “A lot of people have the misunderstanding that banks offer to business accounts the protection offered to consumers,” says McDermott. “In fact, banks will not hold business account holders harmless for losses from cyber-fraud.”

EVANSTON, Ill. — I once wrote an article titled Training Foreign-Born Hispanics for Supervisory Jobs in the Dry Cleaning Industry due to the need to teach the growing numbers of Latino first-level supervisors how to improve performance in the face of customer demands for high-quality cleaning and next-day service, all at competitive prices.

The article explained how dry cleaners could boost productivity and speed turnaround times by training Hispanic supervisors to adapt the traditional authoritarian Latino leadership style to a U.S. “best practices” mode of supervision. I also discussed the five key elements needed for effective training of Hispanic supervisors.

Here are those elements, and the results of the training from six dry cleaners using this approach. Each had four to seven drop-off stores, for customer convenience, feeding their garments to a single central plant.

CHICAGO — A late-night fire scorches a two-story home, but firefighters are able to douse the flames before the structure is destroyed. Still, the smoke and water damage is extensive. Now, in his time of greatest need, the homeowner turns to his insurance company to begin the process of getting his family’s lives back to normal.

So, who does the insurance provider turn to at a time like this? It’ll call in contractors to see about repairing and/or rebuilding the structure, but before that can happen, something has to be done about the family’s personal belongings. Can they be saved? Are they worth saving?

That’s when the smart adjuster calls in a dry cleaner that specializes in restoring garments and soft goods. Long an offshoot of dry cleaning, restoration has come into its own as the add-on that can easily eclipse the core business.

WASHINGTON — Borrowers and lenders of U.S. Small Business Association-backed loans will have greater access to capital and less paperwork as a result of a proposed regulation aimed at streamlining the application process while strengthening oversight and program integrity.

“Streamlining and simplifying has been a key focus of our agency over the last few years,” says SBA Administrator Karen Mills. “The changes are the latest steps to reduce paperwork burden, with our eye on the larger goal of expanding access to capital and giving entrepreneurs and small-business owners the financial resources to grow and create jobs.”

The SBA proposes the new measures after extensive consultations with lenders and borrowers to identify the greatest challenges they face and find ways to reduce barriers to making and accessing loans, while still maintaining strict oversight.

Among the proposed changes are:

CHICAGO — MANY EXPERTS, including the Board of Governors of the Federal Reserve System, report economic growth in recent months, albeit at a modest pace.

The 12 Federal Reserve Districts, in their January report, showed expanded activity since the previous Beige Book, with all 12 showing modest or moderate growth. Consumer spending was up, with 2012 holiday sales somewhat higher than in 2011. Ten districts reported steady or stronger automobile sales, and tourism activity was up across much of the nation. Transportation services in six of the districts showed increases, while manufacturing reports were mixed (six districts reported an increase and three reported a decrease). And real estate activity (for sales and rentals of existing homes) held steady or increased slightly in 11 districts.

THE INTERNATIONAL COUNCIL OF SHOPPING CENTERS reported an increase of 3.6% in the net operating income of U.S. shopping centers for 2012. The figure is 2.3% higher than 2011, and expenses were reported to be down by 0.1%.