CHICAGO — Ever thought about getting into the coin laundry business, to complement your established dry cleaner? You might have plenty of experience washing and drying clothes, but achieving success in operating a coin laundry can require learning about new equipment and serving a diverse group of customers.
“Prior to opening a store, there are several factors that a new investor should consider to better equip themselves for long-term success,” Dan Bowe, national sales manager of Speed Queen’s commercial division, wrote in sister publication American Coin-Op recently. “This process starts with the initial building and furnishing of the store and transitions through to ongoing marketing efforts and, most importantly, customer service and appreciation.”
DEMOGRAPHICS
Examining and analyzing a market area’s demographics—defined by Merriam-Webster as “relating to the dynamic balance of a population, especially with regard to density and capacity for expansion or decline”—will put you on the right track toward establishing a coin laundry.
“Rental populations in the United States continue to increase at a staggering pace, and census data has this trend continuing through 2020,” Bowe says. “Increasing immigration, the recent housing collapse, and overall change in attitude regarding home ownership have created a nation of renters. These renters are no different than homeowners when it comes to dealing with the time pressures of our fast-paced world. The ability to complete the weekly chore of laundry in less than 90 minutes is more desirable now more than ever.”
When deciding on a location, considering household size and income level is important; investors should place their stores in areas where demand potential is high, according to Bowe.
“The average household size in a considered location should be at least 2.3 people with a low-to-medium income level—approximately 40% of all households earning less than $35,000 per year use Laundromats. Lower-income households are less likely to pay extra for amenities such as an in-unit washer and dryer.”
Trailer parks and other types of communal living offer the potential of “built-in customer bases,” he adds.
When considering property locations, look for retail openings on a main roadway with high visibility and ample parking, Bowe says.
“Traditionally, Laundromat customers are not making the trip to do a quick load of laundry,” he says. “Rather, they save up to make one trip with multiple loads. Forcing customers to street-park and walk long distances with large baskets of laundry will deter them from frequenting a specific Laundromat. Convenience is key.”
Finally, choosing a Laundromat location based on commercial co-tenants can help provide incentive for customers to visit.
“On average, customers spend 90 minutes in a Laundromat,” Bowe says. “Give them an opportunity to multitask; by locating next to grocery stores, ‘dollar’ stores, convenience stores, auto parts stores or check-cashing stores, Laundromats allow customers to get their laundry done and run errands at the same time.”
IS THERE COMPETITION NEARBY?
You’ve probably surveyed the other dry cleaners in and around your community to assess their businesses and how they appear to be doing. The same strategy can be used when starting a coin laundry.
For instance, the competition’s equipment mix and total number of washers and dryers may influence your decision to equip your store and thus take advantage of a competitive edge.
EQUIPMENT CHOICES, MIX
The average coin laundry today has both top-load and front-load washers, but it appears that the number of top loaders has been generally declining nationwide in recent years.
More and more customers are flocking to larger 40- and 50-pound-capacity washers, according to a June 2014 Your Views survey of subscribers of sister publication American Coin-Op.
While 22% of store owners said they “haven’t noticed any significant [equipment] trends,” 17.1% said customers in their area were “flocking to larger—75-pound plus—washers,” while 12.2% said their customers were also utilizing larger-capacity dryers.
A small share (2.4%) said customer usage of smaller-capacity front loaders (18 and 25 pounds) was decreasing. There were no responses indicating that customers exclusively “want more top loaders” or “don’t want top loaders.”
Given the chance to change one thing about their equipment mix, even shares of 20% said they would like to add more large-capacity washers (75 pounds plus), or add more large-capacity dryers (75-pound single pocket, or 45-pound stack) to their store. Roughly 18% said they would like to get rid of their top loaders altogether, while 10% would like to “offer a greater mix of smaller- and larger-capacity washers.”
While 7.5% listed “other” things they’d like to change about their store’s equipment mix, a small percentage (5%) were interested in adding small-capacity washers (18 to 25 pounds), while 20% said they “wouldn’t change a thing.”
Apart from how well a particular machine washes or dries clothes, the laundry industry has adjusted to meet the needs of a more sophisticated investor and tech-savvy customer, Bowe says.
“Revolutionary technology combines equipment controls and programming into one, full-store management system—helping owners adjust cost structure, reduce utility costs and increase revenue from any computer, anywhere in the world.”
Today’s technology is capable of analyzing output average totals, turns per day and revenue details, as well as use “time-of-day pricing.” Machines can be set to charge premium prices when the store is at its busiest and offer specialty rates during off-peak hours to further maximize the revenue stream.
As you work closely with a distributor to determine equipment mix and store layout, keep these pointers in mind:
- Avoid having too many top loaders.
- Put large front loaders in the front of the store, so customers can see that you offer them.
- Have enough dryers so that you can avoid bottlenecks; most customers are happy with a number of dryers equal to the number of washers or more.
- One-and-a-half washer loads to one dryer load is an acceptable ratio.
- Don’t place washers and dryers two feet apart, with no room to sit or fold.
- Narrow aisles can negatively impact business; five feet of aisle space is considered reasonable.
- Have an ample number of larger (50 pounds or more) washers.
- Maximize revenue per square foot.
“Ensuring long-term laundry success requires a continual investment of time and resources, but it is not complicated,” Bowe says. “The process begins with providing customers the best equipment, monitoring the Laundromat for machine errors and cleanliness, and ‘incentivizing’ returning customers to recommend the store because of their positive experience. If each of these steps is executed properly, investors should continue to see increased profitability and a return on their investment.”
Have a question or comment? E-mail our editor Dave Davis at [email protected].