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Pivoting for Profit (Conclusion)

Ways dry cleaners have found to flatten the learning curve when offering new services

CHICAGO — When times are good, the pressure to explore new areas of profitability isn’t as intense for a business owner. When events such as the recent pandemic completely upend that business model, however, pivoting to include new ways of serving customers quickly becomes paramount. Dry cleaners who never thought they’d change how they did business were forced to re-examine everything.

In Part 1 of this series, we examined why pivoting could be a great strategy for forward-thinking dry cleaners, and in Part 2, we looked at pivoting to include services outside of traditional drycleaning services. Part 3 explored the mindset that lies behind successful pivoting efforts, and today we’ll conclude by seeing how dry cleaners who have been successful have made changes to their business to increase their profitability.

Risk and Rewards

When starting a new venture, it can be difficult to know where to start or what to expect.

“The biggest risk is being vulnerable to the learning curve,” says Joe Gagliostro, president of Muldoon Dry Cleaners in Auburn, New York. “You have to gain experience, and you’re going to make mistakes. You’re not going to know how to process something, or you’re not going to give an adequate amount of time to do it, so you’re not going to know your sweet spot for the profit margin. Finding that threshold of efficiency, I think, is actually the risk, so you have to educate yourself.”

Fortunately, says Mary Scalco, CEO of the Drycleaning & Laundry Institute (DLI), there are plenty of opportunities in this industry where dry cleaners can avail themselves of opportunities to network with other cleaners and learn from their experiences.

“We started these peer-to-peer calls we now have once a week, and what was amazing to me throughout this pandemic was how willing our members are to share information with one another,” she says. “We see this on online forums as well. People ask a question, and they get advice from those who know what they’re doing.”

Tim McCann, who owns Best Cleaners in the Albany, New York, area with his wife, Catherine, advises dry cleaners to ask honest — and potentially difficult — questions of themselves before taking the next steps.

“One way to minimize the risks, I think, is to do a self-skill assessment,” he says. “What did you learn about yourself through the pandemic? What did you learn your hidden strengths were through COVID? Lean toward those. Understand how deep the skill sets are that this industry forces upon successful operators and know that those are transferable and applicable into what I would say would be kind of any human-based service business.”

Kurt Lucero, owner of The Cleanery in Albuquerque, New Mexico, believes that going into new areas can mean leaving some old ideas behind.

“During an industry meeting, a cleaner said, ‘This is going to separate the dry cleaners from the entrepreneurs,’ and that really stuck with me,” he says. “I can’t just wait for customers to come in. I’ve got to take some action. I can’t control everything that’s happening, but I don’t have to sit there and wait, either. We need to have the mindset that we’re not just dry cleaners anymore. How can we solve problems that our customers are having? Maybe we don’t have that service line yet, but could we if we were open and curious enough?”

“Cleaners have to think of themselves differently,” Scalco agrees. “They need to think of themselves as a convenience, not just as dry cleaners. They have to think of themselves as textile cleaners. It becomes a mindset. And it took a crisis for people to come to terms with that. They’ve now had more than (two years) to come to terms with it.”

New Ideas, New Opportunities

While business leaders need to adjust their offerings to better serve the ever-changing demands of their customer base, Casey Walker, vice president of retail operations for Max I. Walker, based in Omaha, Nebraska, believes that cleaners need to make sure they have the elements necessary to succeed.

“You can’t expand your business without pushing the boundary of your comfort zone. That being said, if you do not have the right person for the right job, then your core business will suffer. You could damage your brand’s reputation. If you have a great person for the new service, then give them the tools to succeed and go for it.”

Scalco believes that trying something new doesn’t necessarily mean completely rewriting your business plan. With the exception of starting route services, she says, most new service ventures in dry cleaning don’t require a large capital investment: “It can’t hurt to try. In most cases, you can start out small and see what happens.”

Being open to new ideas is one of the best abilities a cleaner can have, Gagliostro says — a lesson he’s learned over the past two years.

“I went from saying, ‘I refuse to do laundry’ to, ‘Actually, that’s not a bad idea,’” he says. “We are 100% open-minded. One of my new service ideas is testing a subscription model, where the customer pays X amount of dollars for the month and gets their wash/dry/fold service. We’ll see how that goes.”

Lessons Learned

For the survivors of the pandemic’s economic fallout, Scalco believes that better days are ahead — if they’ve taken lessons from what has happened.

“People ask if we’re ever going to come back to 100%. I think they’re going to come back 110% because of what they learned in the past,” she says. “Cleaners add a new diversification. They add new ways of getting customers. I call it ‘COVID time’ — everybody was thinking about doing these things. Well, COVID didn’t allow you to think anymore. You had to put things into practice. And you had the luxury of screwing up because you had plenty of time to work on your business. You had nothing but time.”

Gagliostro believes that flexibility is key to future success: “Be as open-minded as possible. Listen to your clients and see what’s going on out there. Learn from others. As long as you can diversify and are able to shift with the needs and demands of the consumer, you should be fine.”

“I think the survivors realized that they’ve got to take action and cultivate relationships,” Lucero says. “We’re in the perfect business for that. We have great relationships with our clients, and I didn’t really realize that until I was in the trenches, working production and running routes. Our customers don’t just value sending dirty shirts and getting clean ones back. It’s more than that. We are saving them time. We’re taking care of their family. We’re part of the team that makes their lives better.”

Armed with his new attitude, Lucero is eager to see what happens next.

“I am excited about the industry and my business,” he says. “Sure, I’m a little guarded. It’s not the same as it was before, but I believe that, if you take some action and you appreciate your people and your clients, there’s room for growth.”                  

For Part 1 of this series, click HERE. For Part 2, click HERE. For Part 3, click HERE.

Pivoting for Profit

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Have a question or comment? E-mail our editor Dave Davis at [email protected].