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Advice for New Operators

Howard Scott |

Every so often, I receive a call asking for advice from a new drycleaner. They’ve read a piece or two of mine in this magazine, and wonder what else I have to say about the industry. A few ask if I have a book or pamphlet to send them. Unfortunately, I don’t. This article, then, will have to serve the purpose.
The first and most important rule is to make sure that the inflow is greater than the outflow. Maybe not in the first three or four months, certainly, but after that initial push, you must comply with this iron rule of business survival. Every day, the inflow must be greater than the outflow.
When outflow exceeds inflow for a day or a week, make it up the following week. What that means is you must keep your expenses down, employing fewer staffers than you need so that everyone is forced to work hard to get the job done. Next, you must underdraw until the inflow exceeds the outflow, and even then, draw out less than you should.
Pump Up The Volume. The second rule is to push volume up. Unless you bought an existing business, you’re starting from zero, so you have nowhere to go but up. Work like hell to attract business to your store. Walk around the neighborhood and introduce yourself. Make phone calls to area residents. Put on grand-opening parties to welcome the public. Run promotions to get folks interested. Take on outside trade — commercial, residential or office work.
Go, go, go and don’t stop until your plant’s volume is respectable. For a new package plant, the magic number may be $2,500 a week. For an established business, it’s more.
Third, get your drycleaning procedures down pat in the off hours. Try doing it at night — you might be too busy during the day, or at least too busy to review and refine the processes. Learn the art of spotting. Become a careful finisher — finishing is a critical component of drycleaning. Every garment has different challenges, but make sure each one looks and feels great.
Don’t trust your own judgement; get your spouse or someone who knows clothes to make the call. Every garment should look like new and fit to form. Shirts should be bright. Edges should be crisp. Nothing should hang or drag or puff out. Write down the procedures of cleaning and and finishing in a book, and use that book to teach your staff.
Fourth, get your prices up with upcharges, special fees and two-tier pricing, while setting base prices in the upper-middle range. Three-fourths of drycleaners price lower than you do, and one-fourth price higher. Aim your prices toward an upper-income clientele, but give breaks to the middle-income clientele.
It’s tricky, but you need to set your base prices at market level, yet charge above-market. Upcharges — now accepted in the industry — are one way to do it. Other drycleaners use frequency incentives to lower prices — clean nine garments and the 10th one is free, and that sort of thing.
Fifth, start a route business right away. Knock on doors in affluent neighborhoods and win patronage. Once you get a customer in a neighborhood, saturate their neighbors with information, promotions and prodding.
Achieve area density to avoid long drives. Go after offices — visit them and agree to pick up clothes. Knock on the doors of commercial establishments — medical facilities, Laundromats — and offer to do their drycleaning. Again, group these accounts so that driving is minimal.
Bulk work may not be as lucrative as the retail trade since you have to offer a cut, but it will get your volume up quickly. At the same time, try to avoid drycleaning wholesale business — it usually is not profitable.
In the store, get to know every customer and call them by their first names. Use humor to win people over. If there’s a problem, don’t appear beleaguered. Rather, handle it as if you relish a challenge. Always be upbeat, positive and unfazed.
Give your staff a cause: the challenge of building a prosperous business. Explain that they’ll all share in the prosperity. This is how you’ll get them to churn out quality product and work overtime when the plant is swamped. Show your appreciation by occasionally handing out $20 bills. Be a tight boss, but be appreciative.
Become mechanically inclined so that you can fix the equipment; not only will you save money, you’ll eliminate downtime. Maybe you can’t work on major jobs, but even attending to small jobs is of help. Most of the work will be plumbing, which is not rocket science.
Pull out little money in the first few years. Draw a small salary the first year — maybe $100 or $200 per week. If you can, double your draw the second year. You need to get cashflow under control. It’s tough, but there are ways: Live on your spouse’s salary. Rent out part of your house. Rely on savings. Cash in your investments. Borrow money from family and friends.
Resist spending on schemes, unproven marketing strategies and new equipment that is not absolutely essential. Get your expenses down to a set level and keep them there. Don’t spend on anything unless it will win additional business with 90% assurance.
For example, don’t commit to a $5,000 marketing scheme unless there’s a 90% chance of success. Don’t buy a machine if you won’t get regular use out of it. Don’t pay a cleaning service; do it yourself or hire your teenage son.
Last, offer extras that cost nothing or almost nothing. Take on sidelines to round out your offerings. Shoe repair, alterations, reweaving, pillow service, tie-narrowing and front-counter impulse items are a few things that can keep the inflow of dollars going.
And be persistent. In the words of Winston Churchill, “Never give up. Never, never, never, never, never, never, never.”
 

About the author

Howard Scott

H&R Block

Industry Writer, Drycleaning Consultant, and H&R Block Tax Preparer

Howard Scott is a longtime industry writer and drycleaning consultant, and an H&R Block tax preparer specializing in small businesses. He welcomes questions and comments, and can be reached by writing Howard Scott, Dancing Hill, Pembroke, MA 02359.

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