CHICAGO — “Are you nuts to wanna be a drycleaning owner!?” This and other exclamations aside, owning a drycleaning operation, as many surely know, takes, at times, a combination of a keen business acumen, a gambler’s winning swagger, and a roll-up-your-sleeves gutsy style.
But what about the newcomer? The first-time buyer? Or the first-time expanding operations? What solid advice can we impart to them regarding making a purchase in dry cleaning?
Two drycleaning owners, both as it happens from Texas, share their insights on buying a dry cleaner.
“For a new buyer entering into the industry, first and foremost I would advise you to work for a friend, or someone you know in the industry for a minimum of six months to understand the nature of the business before you invest a fortune. Understand the pros and cons of the business and, importantly, understand completely the risk with your investment.”
That’s Rahim Maknojia. His brother and he own Oaks Cleaners located in Houston. Twenty years in dry cleaning, he overseas the entire operation and manages 30 full-time employees, including routes. He says they work with elite Houstonians and specialize in handling boutique and high-end clothing.
“In my opinion, although you might have to pay premium for acquiring an existing business, I would rather buy that type of business to mitigate the risk, where there is a proven track-record of data with profits and loss,” Maknojia says.
“I would advise someone planning to buy, to talk to a dry cleaner who has made the recent transaction either buying or selling.
“Also, identify a realtor who specializes and focuses mainly in drycleaning transactions, and seek advice from an experienced attorney,” he adds.
Buying tips include not just personal experience but finding professional connections.
Maknojia: “I highly advise a buyer to hire a drycleaning consultant who can introduce you to operators in your network, as they will be more comfortable sharing the information through a personal reference. This could be the best way to learn from an experienced owner and operator to determine the worth of business as well as the dynamics of the business.”
He says that in his personal experience: “I always believe in quality and not quantity. When I entered in the business, my rent was way more than 12%-15% which is what industry recommends. But as you know, you get what you pay for.
“It was all about the location, for me, and my operation is surrounded by sophisticated clients who believe in service and high quality.
“Therefore, if you have a drive for quality rather then quantity, I feel you should go for the better market, even if you have to pay higher rent. In return, you can charge a little more than the average cleaner would.
“It wasn’t an easy decision years ago, but with all the due diligence, today, I am operating a successful business, even though I paid high-dollar rent. Today my rent is way below industry recommendation,” Maknojia notes.
What if you’re thinking of buying a plant vs. drop station?
“My advice is, buy a plant. I would never invest in a pickup station only and rely on someone else to produce a quality product, which is near impossible in this business as you know,” Maknojia feels.
“In our industry, we sell only two things: service and quality. They both go hand-in-hand, therefore you must excel at both, or you may not be able to survive for too long,” he says.
For existing operators he says this:
“If you wish to expand there are many ways, but in my opinion the best way to go about expanding is to start a route. There is absolutely no reason not to offer this services, as we are accustomed to Amazon, and to free home delivery services like groceries, or having prescriptions delivered to our door steps free of charge. Why not dry cleaning?
“In my opinion, those who don’t offer free pickup and delivery services may not be able to grow and sustain for long.
“Lastly,” Maknojia reminds, “invest in technology and human resources, it’s a no brainer.”
Those how-to ‘to-dos’ speak to preparing to buy, but what about going through the actual act of buying a dry cleaner. Let’s hear from our next Texas tipster on actually acquiring a business.
Check back Thursday for the conclusion.