Are you thinking about purchasing a card system for your laundromat? Do you have worries about it being an investment without a return? Here are three reasons why investing in laundry card technology has a high ROI and benefits laundromat owners and investors.
Build Float By having customers pay first and use a card system, it establishes customers with a sense of loyalty and encourages them to return. Float is the amount of money added to cards but has not been spent yet. As customers add more value to their cards, the ‘float’ of your business increases.
Ability to Sell Upgrades increase profits with a card system by offering your customers the ability to upgrade their cycles. Offset utility expenses by charging more for hot water.
Time of Day Pricing With a card system, you can charge different prices at different times of the day or different days of the week. This allows you to offer specials during slow times to attract business and raise prices during busy periods to maximize profits.
Marketing Tools Entice new business and reach new sales goals with marketing programs available through a card system like Loyalty Points, Bonus Packages, Free Dry and Group Discounts.
Simplify Employee Management Remote management of employees is possible with a card system. Create, edit and monitor one-time and ongoing employee work schedules for multiple locations. Allow employees to clock in and out for their shifts using the system for hands-off time management.
Remote Monitoring of Your Laundromat When you can’t physically be at your store, it is comforting to know that you can always access your laundromat from any remote location. Configure vend prices, specials, run reports, configure alerts, and monitor the status of the system and equipment in real-time from your laptop or smartphone.
Make the Most of Your Time Collecting coins from each machine in your facility is a time-consuming business and your time as an owner is valuable. As vend prices rise and stores get bigger, the physical task and limitations of accepting coins becomes greater, making eliminating the need for coins with a card system a popular choice.
Take Control of Your Revenue If you are paying another company to collect coins for you, that is money out of your pocket, combined with the uncertainty of how much is actually being collected. With a card system, you can see real-time profits and sales data for each machine without having to collect coins.
Decrease Security Risks Having to collect coins and carry around bags of money can compromise the safety of you and your employees. Your machines are susceptible to vandalism and theft, that can leave you with costly damage plus the loss of revenue until those machines are repaired. With a card system, you can minimize or eliminate these issues.
All of the features above can be found in CCI’s payment systems. Whether you’re just starting out in the laundry business or a long-time owner of multiple stores, CCI has a laundry card system to fit your needs. Our FasCard system is a hybrid solution that allows you to accept both coins and cards. The FasCard system works with existing coin laundry machines and doesn’t have a minimum card reader purchase, allowing you to start small with card readers and add more over time. If you are looking for a ‘card only’ solution for your Laundromat, our LaundryCard system is perfect for new and existing stores with 40 or more machines. LaundryCard is completely coinless, totally automated and rich in features.
If you’re a laundromat owner or investor looking to set your business apart from the competition, contact us today to learn more about our payment solutions and how investing in the right technology can benefit your laundromat business!
If you’re asking yourself if you should purchase a laundromat, this 6 point checklist will help you determine whether or not it’s the right investment for you.
The first laundromat, then called a “Wash-a-teria”, opened its doors in Ft. Worth, Texas in the Depression-era 1930s. Soon, the popularity of laundromats exploded and storefronts spread across the country. The first laundromats were geared toward self-service—which was a change from the earlier commercial companies that laundered, folded, and pressed clothing as a complete service—which means customers paid by the hour to wash their clothing using early electric coin-operated washing machines.
These coin-operated laundry machines enabled those who were affected by the Depression and couldn’t afford personal washing machines another option: deposit a few coins and rent a washing machine for a period of time. Even after the rise of affordable household or in-unit washing and drying machines, laundromats have since never lost their enduring appeal for the convenience, economy, and ubiquity they offer.
Today, there are some 35,000 laundromats operating in the United States, generating over $5 billion in total revenue annually.
From Novice to Veteran: The Savvy Owner’s Guide To A Profitable Laundromat
Modern laundromats have had to constantly update and keep abreast of the current developments in laundry technology to stay competitive, including the addition of amenities such as free Wi-Fi, flatscreen televisions, vending machines, and children’s areas with family-friendly entertainment.
Some laundromat owners choose to stay open 24/7—upping their convenience factor—and some are completely automated, meaning an owner, manager or employee doesn’t need to be in the store at all, while some storefronts have several employees to help patrons with services like changing cash or coin into proprietary store credit for vends.
Even considering these new trends in the laundry industry, the basic model of the self-service laundry industry has remained the same as it was over 80 years ago. Many things relating to the business model of laundromats has changed, however, including a higher return on investment with these more customer-oriented ancillary services and the ability for many owners to self-manage their stores remotely as absentee owners. Laundromats are so ingrained in the American landscape that it is considered to be a mature market.
Laundromats have become a canny choice for investors and entrepreneurs looking to play a minor role in the day-to-day operations of a business, who want to tailor a business to their exact wants and specifications—since most laundromats aren’t franchises—and who want the feeling of security that a laundromat’s steady income can bring.
If you’re thinking of buying a laundromat, it’s best to research what to expect in the buying process, management duties, and to add up the potential expenses, costs and bills along the way.
Want to know the secret to running a profitable laundromat? Download our ebook — From Novice to Veteran: The Savvy Owner’s Guide To A Profitable Laundromat.
We’ve created this checklist of 6 items to cover in detail when buying a laundromat. With all of these tips come the caution of due diligence: A potential buyer will want to check everything thoroughly; talk to multiple owners, consult relevant professionals, like real estate agents, laundry machine maintenance and repair companies and experts and others.
If there were ever a time to repeat old real estate platitude, “location, location, location,” it’s when you’re doing research on buying a laundromat. Locations in urban areas near
are the best bets for your laundromat. Multi-Housing facilities and apartment complexes usually have community area laundry rooms, but many residents are loyal to local laundromats. These types of residents that are spread across a sprawling multi-family property are the perfect demographic. Locations near colleges and universities are also attractive, with the vast majority of students using the services of a laundromat.
Don’t forget about a laundromat’s virtual location.
It is also a wise move to make sure that the laundromat business you’re interested in buying is listed on search engines, as many first-time customers choose which laundry service to patronize based on a Google search for “laundromats near me”.
If the laundromat you’re looking at has a good marketing strategy, they may even have an agency create web-based ads for the store. The more prominent a store’s presence in Google, Bing and Yahoo search engines and the higher its reviews on forums like Yelp!, the more likely the store to be profitable.
Laundromats have few costly recurring expenses, but potential buyers—whether they are searching to buy an existing laundromat or even to build a new store— should be aware of each of these expenses. The lease for a laundromat’s actual storefront will be the highest monthly expense, and buyers in the market today should look for a lease term that is suited to industry standards. If possible, try to find a longer lease term that is amenable to your budget.
In many cases, however—if the current proprietor of the laundromat doesn’t own the location—they have a contract with a leasing company. This would mean that the lease would transfer over to you after you sign the contract.
Naturally, when buying any business, a solid budgetary plan is the first necessary step to factor the initial investment costs of a laundromat and recurring expenses. Whether you’re buying an existing space or building a new store from the ground up. If you are buying an existing space, the costs can range anywhere from $200,000 to $500,000.
Not to be overlooked when calculating overall expenses is possible renovation, which could mean the difference between a rapidly successful store and a business that sees only passersby. If you get a great deal on a store, there may be a reason the owner is selling so low. If the store is just barely hanging on, rundown with equipment in disrepair, completely revitalizing and renovating the laundromat could turn the former derelict store into a profitable business, buzzing with constant activity and foot traffic.
How much time an owner spends in their store is entirely dependent on the owner’s prerogative. An owner can spend as little or as much time in their store as they want. Laundromats are particularly amenable to absentee owners, due to the automated, self-service nature of the business and new technology like digital card payment systems.
If an owner invests in digital card payment systems, loyalty cards which can be used to pay for vends at that store can be dispensed automatically via a payment kiosk without the need for an in-store attendant. Customers also add value, and redeem loyalty program benefits, discounts, and promotions right from the X-Changer kiosk.
Check the existing equipment thoroughly. If you aren’t experienced in testing commercial laundry equipment, do some research on the washing or drying machine operation, read relevant model manuals, or call the specific manufacturer to get some information. You can also contact a laundry repair service and see if you can have a professional assist you in helping to inspect the machines.
Take a fine tooth comb to the machines, are they large industrial washers and dryers? Do they look clean? How old are they? Current maintenance or problems? Do they have digital payment systems, like FasCard and LaundryCard, or is it a coin-only laundry?
Some of the most common problems with washing and drying machines to add to your assessment checklist are:
Also, if the potential store is outfitted with digital laundry payment systems, either cashless card-only and coin-and-card systems, the possibility of a large amount of “float” could add to the appeal of the store.
Is the store you’re looking at buying near another laundromat, you may want to consider doing some commercial recon on your potential competition.
If your competition looks to be fairly successful and nearby, then it may be a good idea to check elsewhere for a store.
Does your store have a good reputation for convenience and comfort? Does it need many renovations?
Does it have extra amenities and new technology, like:
A laundromat can be one of the wisest business investments, with due diligence on the part of the investor and a few upgrades, a laundromat storefront can become and continue to be a profitable investment for years to come.
From Novice to Veteran: The Savvy Owner’s Guide To A Profitable Laundromat
Learn more about investing in and running a profitable laundromat by downloading our guide to a profitable laundromat.
If you would like to learn more about buying a laundromat or digital card payment systems, Card Concepts Inc. is here to help. Contact CCI for more information.
CCI’s products are not just card systems that allow you to accept alternative payments. Our products are advanced automation systems that provide you a holistic solution to running your laundry business. We are continually making improvements to our products to take your laundromat to the next level, and we are excited to announce our latest system update for FasCard, Release 14. At CCI, we design all of our products with both the operator and end user in mind and Release 14 for FasCard is no exception. The latest upgrade for FasCard has innovative features that benefit users, employees, managers and owners.
Here are the new additions included in the latest system release for FasCard:
1) Modern and Personalized Customer Benefits
2) Automated and Remote Employee Management
3) Added Features to Credit Card Processing
4) New Internet Services Available
Release 14 is available August 2017 and is provided at no additional cost to all FasCard customers. If you’re interested in learning more about FasCard or implementing CCI’s solutions in your laundromat, contact us today!
Technology has made just about everything in our lives more convenient and that includes the management and use of multi-unit laundry rooms. Having modern amenities in your laundry room such as online monitoring via smartphones and card payment systems will bring value to your property and set your property apart from the competition. As an owner or manager, introducing automated systems into your laundry room will save you time and money and reduce the stress of running a laundry room. In this blog post, we’ll show you how bringing technology into your multi-unit laundry room will turn it into a profitable and valued amenity of your property that is easy to manage.
Installing CCI’s FasCard system in your laundry room gives you the ability to manage cash and collections, provide immediate customer service, configure vend prices, implement marketing programs, run sales reports and monitor the status of equipment – all live and remotely from your smartphone or laptop! Having web-based management means accessing your FasCard system is simple and can be performed from any web browser so you can manage your laundry room at anytime from anywhere. With FasCard you can accept cash payments and resolve problems without having someone physically there. If a tenant or guest has a problem with a machine, you can simply log into their account and refund their money.
Card and Coin Auditing
Using FasCard in your laundry room allows you to audit both coin and card sales on any specific machine. This will give you the ability to not only track the success of your credit card sales but monitor the number of coins in each machine. You can configure FasCard to send you email notifications when coin boxes reach capacity so you collect only when you need to. If you are having someone else collect for you, you can receive an email notification that details the coins collected from each machine once your collector has finished. Having less cash in your machines will reduce theft and you’ll always know at any time how much money is in your laundry room. FasCard isn’t just a card payment system; it introduces a holistic solution to running your laundry room.
Flexible Payment Options
Installing FasCard in your laundry room makes the experience of doing laundry easy, quick and stress free. Whether a customer prefers using currency or credit/debit cards, FasCard provides the ultimate in convenience by accepting all types of payment. Customers can even insert some coins and swipe their card for the balance. By adding card acceptance, you are make it easier for your customers to use your laundry room, encourage more use of your machines and therefore produce more revenue for you. No longer do your residents have to obtain coins and cash or deal with the hassles of coin dispensing equipment. In addition, our F2 Card Reader makes it even easier for your customers to pay for their cycles.
Residents want to complete their laundry as quickly and efficiently as possible. With FasCard, instead of your consumer having to revolve their schedule around doing laundry, the laundry card system makes it convenient for them to do their laundry and easily fits into their busy schedule. Smartphones play an integral role in our lives and FasCard includes a smartphone app for today’s latest devices. From their smartphone, your customers will be able to create an account, add value, manage loyalty cards, check machine availability, request cycle completion notifications and even start a machine! No longer do your residents have to make unnecessary trips to the laundry room to check the status of machines, sit around and wait for their cycle to complete or risk loss of clothes sitting in the machines for hours.
CCI’s systems will give you the technological tools to create a modern laundry room that is a valuable business, easy to manage, and meets the needs of residents and guests. Our FasCard system is a perfect fit for multi-housing applications such as apartment buildings, hotels, condominium buildings and residence halls. If you’re a property owner or manager looking to get more out of your facility’s laundry room, contact us today to learn more about our FasCard payment solutions and how investing in the technology can take your laundry room to the next level!
One of the main goals for any business owner is to expand their business and grow into a more profitable, more effective enterprise. A laundromat owner is no exception. While owning a single laundromat can be a successful endeavor, there is no doubt that growing your laundromat business and expanding to multiple locations can be even more lucrative.
At some point, as a laundromat owner yourself, you may feel ready to take on the challenge of opening another location. Laundromats represent convenience, and what’s more convenient to the customer than multiple locations? But the promise of a greater bottom line does not come without its own unique tests and complications.
Assuming that you are financially capable of opening a new store, the first (and biggest) challenge you’ll encounter is managing it. How will you manage more than one location? How will you split your time between more than one store? How will you handle training your new employees? How will you oversee them when you are not there?
The next challenge is equipping your new location. Will you use the same equipment you are using at your current store? Are you equipping the store entirely from scratch or are you taking over an existing laundromat? If you are taking over a store, will you need to upgrade the equipment?
The final obstacle is time. Managing more than one location will add a lot of time to your already busy day. Will you have the tools to help you manage that time effectively and efficiently? Without them, you could easily become overwhelmed and not have the time to give either location the attention it deserves.
How can you be sure to expand your business in the best way possible? A key to owning multiple laundromat stores is having well-trained employees, high quality equipment and tools that make running several stores easier. Each makes your job as the owner of multiple laundry facilities easier and allows you to be more efficient.
One way to do this is with a holistic laundromat management solution like LaundryCard. LaundryCard gives store owners all the tools they need to effectively manage multiple locations in one integrated system. It replaces all of the traditional coin mechanisms with networked card readers in a store, allowing for several features that make managing multiple laundromat stores easier and less time consuming.
LaundryCard is designed to work with any device that has an internet browser. You can remotely control, view, and configure the system from a smartphone, tablet or PC. Run sales reports, configure specials, change vend prices all from the comfort of your home or office. You are no longer limited by distance when opening new stores because complete remote management is now possible.
Every employee has a dedicated card in the system that highlights their responsibilities. When you hire a new attendant, they are issued an Attendant Card, which enables them to clock in and out of work, view work schedules, see scheduled duties, and check off when they have completed tasks. These features will help your employees perform their job effectively, even when you aren’t physically able to be in each store overseeing staff.
Multi-Store Networking allows you to distribute loyalty cards anywhere and lets your customers use them in any of your locations. For example, customers can purchase a card in Store A and use the card in Store B or Store C as well.
Opening another laundry location can be a worthwhile endeavor, but not without tools that can help you manage multiple businesses. LaundryCard is totally automated, completely coin-less, and helps you run your business and increase profits. Learn more about the laundromat business by downloading our owner’s guide to running a profitable laundromat, or contact us today to get started with our holistic laundry management system in your next location!
Karl Hinrichs has been in the commercial laundry business since 1980 and is the president of HK Laundry Equipment, Inc. Since 1967, HK Laundry Equipment, Inc. has been serving New York and Connecticut with laundry equipment, service and repair and training and support. HK Laundry Equipment, Inc. is a distributor of CCI’s FasCard and LaundryCard systems.
How did you get involved in the commercial laundry industry?
In 1967, my father and neighbor formed a partnership equipping stores with washers. When I was 13 years old, I would bring my toolbox up there, and by the time I was 16 years old, I was out fixing the machines. In 1980, I was working as a chemist and my father made me an offer I couldn’t refuse. I went to work with him and I have not looked back. I’ve now been in the business for 36 years.
What are the challenges that laundromats are facing today?
The biggest challenge is maintaining profitability with the increase in water and sewer rates. Water and sewer costs have become a very expensive utility expense for laundromats. Many water supply and sewer improvements have caused huge capital costs that local towns and counties have passed along to water consumers. Laundromats are one of the biggest consumers of water and are at the mercy of local water municipalities and their water rates. To maintain profitability, laundromats need to keep an extra eye on their expenses and increase vend prices accordingly.
What major trends are you noticing in the laundromat industry today?
More and more people are going to a cashless society. This month I saw a study come out that said over 50% of transactions are now electronic. The time spent in coin laundromats emptying quarters out of the machines, counting them, and filling bill changers two to three times per week is very non-productive. Until you go to an alternative payment system, you are going to max out at 12-16 stores, because after that you are running around processing quarters all day long.
What trends do you see for the future?
Laundry card systems are the way of the future. The biggest evolutionary jump is eliminating the quarter. There is a high initial entry price, however, laundromats save money and time in the long run and the operator doesn’t need to physically run the store. With card operated laundromats, there is no limit to the number of laundromats you can operate and you can spend your time focusing on managing your business rather than processing quarters.
What are your thoughts about laundromats using incremental vend pricing with card systems in order to be able to raise a vend price by a few pennies instead of a quarter?
I like it. I’ve done it with pennies but I actually prefer nickel incremental pricing. Incremental vend pricing is a huge advantage of implementing LaundryCard over FasCard, because you are able to increase your pricing by an amount less than a quarter. When your water rates go up, you can take advantage of incremental vend pricing by increasing the cost of your washers to help you absorb the increase in utility expenses.
What’s the best way today for a laundromat to increase the value of their laundromat business?
Investing in a card laundromat system. You know exactly up front what the revenue is for the store and operating that card store is much easier. With coin operated stores, you have to be there at least 2-3x per week. With a card store, all you need is a trusted individual to collect the paper receipts because you know your true business numbers and exactly how much is in there. When you’re buying a business, it’s based on profitability. You can increase the value of a laundromat by increasing the multiple at which the store is valued. If your store has laundry equipment with a card system, then you are increasing the multiple because the store is worth more. The more automated and hands free you can make your laundromat, the higher the multiplier of the profit and the higher the value of the store. A card laundromat is an investor rich system whereas a coin laundromat is an owner operated system.
What advice would you give a new store owner just getting into the laundry business?
I would suggest doing as much research as possible. A laundromat business is capital intensive and you really want to make sure you have the best distributor, equipment and location. You want to partner with a distributor who has been around at least 10-15 years, knows the area, and knows about running a laundromat.
LaundryCard is a holistic laundromat management system that gives owners of multiple stores all the tools they need to succeed. LaundryCard replaces all of the traditional coin mechanisms with networked card readers in a store. Customers get a loyalty card from a kiosk by inserting cash or a credit card and the value added to the loyalty card can then be used to start the customers desired machine. A LaundryCard system is a great choice for owners of more than one location because it has several features that make managing multiple laundromat stores easier and less time consuming.
No More Coins
With coin based laundromats, you spend a lot of time collecting and processing quarters. Since there are no coins used to start the machines in a LaundryCard store, there is nothing to collect except the cash receipts located in the X-Changer kiosks. LaundryCard saves busy multiple store owners time because they don’t have to empty coin boxes frequently or make several trips to the bank each week. A store that would normally take 2 hours to collect with coins, can now take 5 minutes, giving you time to manage your stores rather than work them.
Multi-Store Networking allows you to distribute your cards anywhere and lets your customers use them in any of your locations. For example if a store owner operates three locations in the same town, customers can purchase a card in Store A and use the card in Store B or Store C as well. The totals report will have an added field to show store owners the dollar amount of card balances that have been transferred in or out.
One Touch Collection
One of the major benefits of having a card system is its ability to reduce the exposure to cash and coins to the public. When collecting from a Laundry Card System, all that is needed is a collectors card. The collector is issued a Collectors card and this card enables the system to track the date, time, and amount of each collection. This allows multiple store owners to spend less time collecting at each location and even allow trusted employees to collect. In a LaundryCard system, every employee has a dedicated card that highlights their responsibilities. You can have a dedicated collector that retrieves the collections from each store.
In a LaundryCard system every employee has a dedicated card that highlights their responsibilities. When a store owner hires a new attendant they are issued an Attendant Card and this card enables them to clock in and out of work, view work schedules, see scheduled duties, and check off when they have completed tasks. These features will help your employees perform their job effectively and manage your stores because when you run multiple stores, you aren’t able to physically be in each one overseeing staff.
LaundryCard has been designed to work with any device that has an Internet browser. You can remotely control, view, and configure the system from a smartphone, tablet or PC. Run sales reports, configure specials, change vend prices all from the comfort of your home or office. You are no longer limited by distance when opening new stores because complete remote management is now possible.
With coin operated laundromats, the number of stores you are able to run depends on how much you can physically handle and there are only so many hours in a day. A LaundryCard system helps you automate and grow your business so you aren’t limited to how many stores you can manage and operate. Contact us today to learn more about LaundryCard and how its tools can help your laundromat business!
Bill Norteman has been in the self-service laundry business since the early 2000s. He owns several laundromats in the Chicago area and has implemented CCI’s LaundryCard system in his stores.
What attracted you to the self-service laundromat business?
I began looking closely at the self-service laundry business shortly after September 11th, 2001. A friend of mine and I were in a precarious position. We’d spent all of our adult lives preparing for a career in the airline industry which began to collapse in the early 2000s. We both loved and wanted to continue in our jobs as long as possible and decided the laundry business would be a good hedge against what, at the time appeared to be the inevitable loss of our jobs and along with it any prospect of re-employment in the same industry. We were fortunate our fears did not come to pass. While many did lose their jobs, we were able to remain employed throughout. These dark days of layoffs and bankruptcies in the airline industry gave us something positive to focus on – growing and expanding our Laundry business.
What is your favorite part of this business?
I really enjoy being in control of my financial destiny. The business will do well if I make good decisions and put the time into it. Of course the opposite is true as well.
What is your least favorite part of this business?
It’s really a double edged sword. I really like the variety of people I meet and work with. This is true of both employees as well as customers. I have a tendency to assume everyone is a good honest person. Sometimes this turns out not to be the case, and because I’m a fairly trusting individual I end up being disappointed on occasion. To be honest, we all run into this in our daily lives, but when I fail to accurately judge someone’s character, it stings a little more when it affects your bottom line.
In your opinion, what is the biggest issue laundromat owners are facing today?
The challenges facing laundromat owners are in some respects similar to those faced by most American small business owners.
What trends are you noticing in the self-service laundry industry, especially in the Chicago area?
I’ve noticed a trend away from small neighborhood laundries. While small stores will always be with us, due to the high cost of building a new laundry, most newer stores are 3,000 sf or larger. The larger stores can offer more products and services to offset these higher upfront costs.
How do you market/advertise your business?
We’ve tried many approaches to marketing over the years and their overall effectiveness has also changed with time. We’ve used yellow pages, newspaper inserts, direct mail, door flyers, signs in public places, ads in holiday community calendars, chamber of commerce welcome packages, radio spots, google, yelp, email campaigns to our web page, etc. The only medium we haven’t tried, that I can think of, is television. We found it to be cost prohibitive. Currently our preferred marketing strategies are email campaigns and online search engines such as Yelp and Google, which we hope take customers to our websites.
Before you had LaundryCard, what had you heard about card systems in Laundromats?
Before investing in LaundryCard, I went to the “Clean Show”, a biennial trade show featuring equipment and products from all the manufacturers and vendors of laundry and dry cleaning equipment. There I was able to see and touch all the available payment systems.
Why did you choose the LaundryCard system over other systems?
In 2005 when I first looked at and compared LaundryCard to other systems, LaundryCard was years ahead in development. It was the most feature filled platform available. While the technology has come a long way in the last 12 years, LaundryCard has only gotten better. The number of other payment systems has grown, but none can compete with LaundryCard’s features, reports, stable operating platform, support, and cost.
How have your customers responded to LaundryCard?
Customers really like the system. They love being able to walk into our place without carrying a pocket full of quarters. They like the flexibility of using cash or credit card. Periodically I’ll see a new customer looking a bit puzzled as they are trying to figure out the system. Before an attendant or I can greet them, there’s always an existing customer that will jump in to explain how to get a new LaundryCard. Customers get excited about the system and enjoy teaching and telling others about it.
Did you realize a return on your LaundryCard investment?
Yes. We realized a return on our investment fairly quickly with each store and continue to enjoy the benefits.
How does LaundryCard save you time?
We save time collecting. We don’t have to empty hundreds of coin boxes across our stores each week or spend time cleaning lint out of jammed coin drops.
We save time managing. We can address customer service issues by adjusting a customer’s LaundryCard balance from our computer or any mobile phone. We can evaluate the effectiveness of different promotions and pricing strategies by pulling reports summarizing sales or starts for any time period and analyze how each type / size of equipment is doing. We can remotely monitor the maintenance status of our washers and dryers, sending a technician when needed. We can pull employee hour reports simplifying payroll.
Customers save time as well. With a quick trip to the X-changer to check their balance and/or add value to their card, they can start any and all machines by simply dipping their laundry card into the reader. This is significantly faster than inserting quarters. This becomes an even greater time savings as vend prices increase with time.
Which LaundryCard features have been most valuable to your business?
I’m a huge fan of the remote access feature. I really like checking in throughout the day to make sure the attendants have shown up on time and to see how sales are doing. As someone who has a full time job, it’s comforting knowing my investment is being taken care of and I can go about my day without worry. When / if there are issues, I can remotely login and fix most customer service problems.
Do you use incremental vend pricing with LaundryCard? If so, how has being able to raise vend prices by a few pennies instead of a quarter had an impact on your bottom line?
Yes, we usually raise prices in nickel or dime increments. By raising prices consistently but in small increments, we get very little pushback from customers and most don’t even notice. This allows us to keep ahead of utility and other cost increases. Our competition has to raise by an entire quarter which provides us with a competitive advantage.
What advice do you have for laundromat investors thinking about adding a LaundryCard system?
I’m biased. Without LaundryCard I would not be as successful as I am, so I would say it’s a no brainer – just do it. That being said, it’s important to note that what’s right for me on my budget and in my market might not be for everyone. An existing small store with a limited budget may want to consider a FasCard System. This can be added to some but not all machines without affecting coin sales and provide some of the advantages of LaundryCard.
If you are building a new Laundromat or rehabbing an entire store in today’s market, you’d be remiss to not invest in a complete payment system. Look at all the systems out there and ask some questions. Don’t look at just the benefits to customers, just the benefits to owners, just the price tag, or just the company’s support – look at all these and more. The choice will be clear.
Would you implement LaundryCard in your next store? Why?
Yes. Just last week I purchased a closed laundry and signed a new lease for that space and the space next door. I’m building an entire new laundry in this space, and it will be a LaundryCard store. We just placed the order last week.
What do you feel are the keys to a profitable self-service laundromat business in 2016?
Much the same as any small business, the owner needs to be vigilant and able to adapt to changing market conditions. Failure to analyze trends and customer response to pricing and marketing strategies can be very costly. LaundryCard provides an owner with the tools to closely monitor these trends.
What do you wish you had known when you were first getting into the laundromat business?
The list is endless. It has been an exciting journey filled with many learning opportunities. The whole process of becoming a business owner / operator has been very satisfying for me personally.
What are your top business goals for the rest of 2016 and into 2017?
As I begin construction on my 4th Laundromat later this month, I hope to incorporate many of the ideas and features I have learned are very popular with customers. My goal is to divide my attention between getting the new Laundry up and off to a successful start while maintaining the level of customer service we’ve attained at our existing stores. Incorporating technology such as CCI’s LaundryCard is indispensable when running multiple locations.
Art Jaeger, after a 20 year career in the music industry including tenure as an executive vice president at Capitol Records, knew he wanted to start his own company. But he also wanted an investment that was going to last.
So Art devised a checklist to grade multiple business investments by with very strict criteria, including, an investment that only needed a small number of employees, the capability to be self-financed, the ability to be an absentee owner or spend less time in store if he wanted, and an investment that retains its value, so he could sell quick near original buying price if necessary. After attending a laundromat industry trade show, Art decided on investing in a laundromat and procuring the newest in laundry technology.
He was immediately interested in the digital laundry tech that he previewed at the laundry trade show. Art saw innovation in key features and benefits like laundromat automation, remote online store management, digital credit/debit card payment, and loyalty marketing programs when he received a demo for a digital card-only LaundryCard reader from Card Concepts Inc (CCI).
He used the LaundryCard digital laundry payment system to transform his vision of a fully-automated, all digital coin-less laundromat into a highly profitable reality. A laundromat equipped with digital card readers turned out to meet all of his criteria for a wise investment.
Cyndia Zwahlen and Shan Li, in an article for the LA Times, noted his business acumen and plan for a future-proof laundromat, saying,
In Sherman Oaks, the Oaks Express Laundry Center opened last fall with banks of high-capacity, front-load washers, a full- time attendant and a card payment system that enables the owner to add bonus dollars to customers’ cards, tweak individual machine prices electronically and track machine use via remote computer.
The write-up continues, with the LA Times putting the spotlight on Art’s laundromats and the Card Concepts Inc. (CCI) equipment he chose to outfit and automate his storefronts with:
It’s a formula owner Art Jaeger came up with after building four other laundries.
“I build laundromats that are intended to attract people that ordinarily might not go into a laundromat,” said Jaeger, a former record company executive. He said his per-store revenue is in the top 10% for the industry. Jaeger got into the business after attending an industry trade show.
From his two decades of experience being a senior executive in the music industry, Art was experienced in networking and keeping to the ear ground for the latest developments and technology for whatever he was passionate about. So of course, Art was one of the first to know first-hand about anything cutting-edge in the laundry industry:
Like many other recent new investors in the old industry, he was impressed with the possibilities offered by the new card systems, the potential of larger-scale stores and the efficiencies of the latest machines.
“I realized,” Jaeger said, “that the business was on the cusp of changing.”
Not only was Art featured in the LA Times, but Card Concepts Inc. (CCI), the manufacturer of LaundryCard, also caught up with him in one of his California stores. He spoke about his experiences of automating his laundromats with digital coinless card readers.
Art learned that with LaundryCard naturally came “float”, or the amount of unused funds left on a self-service laundry loyalty card. These amounts over time can add up to large sums of money each month, in some cases, float can pay for the implementation and cost of the digital card systems and loyalty kiosks that accrue it, or equal the average rent on a laundromat facility.
“By definition, you’re always going to have ‘float’ in this business. And that is the difference between the customers who place money on their card and how much they use on their LaundryCard to actually start washers and dryers… I would have to say that in my Santa Clarita store, the float alone has paid for the entire LaundryCard system.”
“In the years that I’ve been using LaundryCard in all of my stores, I have found the customer experience to be an extremely positive one. There’s not a week that goes by when I don’t have customers coming to thank me that they no longer have to tote around tons of quarters, especially when you have machines that could require as many as 70 quarters.”
Art continues to be a multi-store owner of a cluster of profitable stores in the Los Angeles-area. We at CCI are very happy to see Art receive the recognition he deserves for his hard work, business savvy, and insight!
Have you ever asked yourself if Laundromats are a good investment, the cost of operating a retail store, or if “fast casual” is a smart investment for your hard-earned money?
Certainly, starting a business or searching for the right investment business may sound like a daunting task, and it is, but there are plenty of ways to trim your time and avoid reinventing the wheel, while still turning your store into a profitable commercial hub. It’s important to consider all aspects of an investment before jumping in, and which kind of investment will be the right fit for you. In this article, we will highlight several different kinds of investment opportunities along with with the pros and cons of each. Of the many different investment opportunities you may be considering, including fast food (or “fast casual”), fitness, and retail franchises, the laundromat business offers several key advantages that make it ideal for many investors. Low startup costs, a proven business model, and a stable customer base results in high success rates among laundromat owners. For more information on what it takes to get into the laundromat business, download our Laundromat Investment 101 ebook.
Before getting too far into what goes into running a laundromat, let’s take a look at the pros and cons of some other investment options.
One option is to work with an established franchise. In general, franchises are less risky because you are working with a proven model and business. Instead of creating something from scratch you can ride the coattails of another company while still making plenty of profit. The general downside of working with a franchise is the boundaries placed on you. You can’t modify your business (add services, etc.) when working within the confines of a franchise. That’s why this piece will cover both franchises of all types and other business investment opportunities.
The year 2015 is not the time to invest in McDonald’s or other traditional fast food franchises. As a result of the recent economy, low-income consumers are avoiding the dollar menu. Chains like Chipotle and Chick-fil-A provide what’s called “fast casual” are cornering the market. This means that consumers are looking for more bang for their buck.
Remember that each franchise is unique in its focus so be sure to do plenty of research on what the franchise opportunity looks like. For example, you can open a Chick-fil-A for only 10k but they are specifically looking for operators “seeking a full time, ‘hands-on’ opportunity.” The translation is you won’t be able to step away for weeks or months at a time or operate as a more hands off investor. McDonald’s total investment will be $1,000,708 to $2,335,146, with a franchise fee of $45,000. Subway will be $99,000 and $243,000.
For example, after diving into the pros, cons, costs, and liabilities of a few fast food restaurants like Taco Bell, KFC, or McDonald’s, if you find that the initial investment costs to be paid in cash or liquid assets are too steep, the particular ROI and brand image not healthy enough, and the liabilities too numerous, you may begin to look elsewhere.
The idea of buying a franchise like Chipotle Grill at first seem like the perfect fast casual investment alternative. They have a solid marketing strategy which includes a green corporate social responsibility efforts, positioning as a healthy-yet-quick restaurant by serving only organic, non-GMO ingredients, and of course, there’s their “Cultivating Thought” campaign, which saw the printing of famous author’s short stories on their cups and to-go bags. But sadly for potential franchisees of the popular Mexican grille, Chipotle retains complete control and corporate ownership of their some 1,700 storefronts and doesn’t look to be franchising new restaurants any time in the near future.
The fitness industry is booming, and unlike other sectors that are in direct conflict with online shopping (think retail or personal services), the vast majority of people still need a place to go to work out. And all these new fancy apps that help people improve their fitness are frequently used within gyms instead of outside of them.
Franchises cost more at start up and limit your freedom, but consider Crossfit. The owner has a philosophical view that Crossfit operators should have the freedom to run their gyms how they want to. A famously low franchise fee gets you in the door of Crossfit but you better be a true believer! Also check out Gold’s Gym with a franchise fee of $40,000. Anytime Fitness lists $78,700 to $371,175. Retro Fitness lists from $1,000,000 to $2,000,000.
Retail stores can fluctuate significantly with the product market and economy, but they tend to have high levels of marketing strategy support, freedom, and holiday sales bonuses.
The start up for services like 1-800-Got-Junk range from $111,800 to $143,600. Servopro painting service lists $138,550 to $187,200. Supercuts lists $113,750 to $233,600. Cruise Planners lists $2,095 to $21,990.
Laundromats provide a very unique and attractive investment opportunity. There is little to no name recognition comes with Laundromat franchises. However, this can actually turn out to be both boon and blessing. By working with distributors you can get into a proven business model but without all of the franchise fees associated with other investment opportunities. With a laundromat investment, your profit is yours alone, there’s no monthly fee as with traditional franchises. Laundromats have a proven and stable market and new technology, such as card payment systems for laundry machines. Investors can operate these businesses remotely, even work at home as an absentee owner, or with less time in-store as they have no need to collect coins and can even see each turn of every machine from a smartphone or laptop.
Check out resources for calculating the start-up cost for investing in a Laundromat franchise. Additionally, we’ve compiled a Laundromat Investment 101 ebook which looks at this in greater detail. When you compare all of these options for 2015, laundromats present a great balance of cost and independence. The absence, for the large part, of name-brand franchises enables new owners to compete on a more level playing field while avoiding costly franchise fees. And the addition of a card system to your location gives you the option of remote management—turning a profit while requiring less of your time and physical presence. All of these advantages make laundromats a solid business investment for your future.