The coin-operated laundry business has undergone significant changes, evolving beyond its traditional model. Let us delve into the exciting developments:
A Metamorphosis has occurred, from the traditional self-service Coin Laundry to “The Laundry Business”:
After more than 70 years of straight forward coin-operated operations, laundromats are now transforming into comprehensive “Laundry Businesses.” This shift reflects a broader approach that goes beyond mere self-service coin-operated machines.
Increased Revenues and Diversification:
Remarkably, self-service revenues have tripled or exceeded traditional expectations.
Laundries that previously generated $15,000 to $20,000 in revenues have adopted new strategies. By modifying their facilities, these same locations are now achieving sales of $30,000 - $40,000 and even $60,000+ or even more, in just the self-service revenues alone.
Ancillary services, such as Fluff & Fold, can contribute an additional 10% to 30% in walk-in revenues including the benefit of better patronage to the self-service laundry. Expanding Services is also becoming more popular Nationwide. Forward-thinking laundromats are branching out into new areas.
Pickup & Delivery Services: Offering convenience to busy customers who prefer not to visit the laundromat at all. This is a rapidly growing trend that is still in its infancy in many markets.
Dry Cleaning Agency are often incorporated into these models Providing a one-stop solution for laundry and dry-cleaning needs.
These strategic expansions have led to substantial revenue growth, with some professional laundromats adding five figures in additional monthly income.
So why is this happening now? And is the self-service easy-to-operated coin laundry still possible?
Honestly, the bleak and uninviting atmosphere of many of these unattended self-service laundromats will just not lend themselves to the greater population. Middle America does not like hanging around in an unclean or unsafe environment. The 10% or so that have now patronized laundromats now have new and better options, so self-service laundries are faced with this along with other issues. However, they do exist and many can be improved. Analyze these wisely.
Laundromat owners cannot ignore this necessity of life business but they can devise programs to separate the environments so that they can coexist. This requires the use of Laundromat Science.
Keep in mind that at the laundry the cost of washing and drying a single persons weekly wash is only about $7.50, equal to the cost of a cheap burger and a soda. This is still important to understand for gaining that “necessity of life” business, which you absolutely do want. However, to the rest of the population it is a matter of the customers experience and convenience.
Early on, the coin laundry was designed to accommodate the lower incomes and renter markets. This growing group of people had few options other than to rely on the coin laundry and they learned to accept the low standards provided by many laundry owners. For the laundry owner, it was so easy to operate and still offers decent revenues and not much time or much work being needed. That is a tough scenario to decide to move away from. It has been this way for 3 generations and continues to be a great model for the passive-minded investor. However, times are changing and changing a lot and quickly.
Many of these coin laundries are plagued with unhappy landlords and lease issues, community pushback, homeless invasion and decreasing revenues, amongst increased competition. In many cases the increased rental cost of the new lease and cost of replacing equipment will be too high without a very extensive redirection, assuming the market potential is even there.
However, the laundry owners themselves have left a great amount of potential revenue on the table by catering primarily to this easy-to-get “Necessity of Life” driven business, largely due to the owners own lack of involvement and a long-term failure to act.
So many things are being done to promote this metamorphosis. Savvy laundry owners are providing more staffing, intelligent marketing, a cleaner and safer environment, a well-planned mix of equipment, utilization of technology, entertainment, added services and they are focusing on the customer experience. By reversing this trend, the laundromats today are promoting the popular buzz words, a comfortable atmosphere for socialization and are going after the entire market. We also have pay systems available that allow for softer and more strategic pricing. Laundry investors now need to understand the science in order to compete.
Learn more by attending our weekly Wednesday noon webinars by visiting us at the PBILaundry website.
Thank you and be sure to reach out!
Chuck Post
President of PBI Laundry Consulting, Inc and
Author of the book, “The Laundromat,” An American Dream Business and an Entrepreneur’s Playground
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