What to do

[Anonymous]

Hi
I wanted to get in to the mat business for a long time. I bought two mats 5 months ago.My mistake, I trusted the numbers given by the sellers. In 5 months I have seen only 50 % of the revenue indicated by the owners.
My dream is turning in to a little nightmare .

Any thoughts or suggestions from experienced operators.
Thanks

[Kitty]

Hindsight 20/20..........your nightmare is one that is far too common and this is why coinwash is in exsistence......to educate! Unfortunatley for you, you trusted a seller. You could either cut your losses or find a way to improve your business. Tell us a little more about your situation and I am positive you will get much response from many who will try and help you.

[Anonymous]

of the two mats.

mat 1- was to do 13 to 14000 per month. I startd the first month with 7,000. Currently I am doing around 9,000.

Mat 2 was to do around 10 to 12,000/month. Currently doing
7000 per month.
Both are fully attended. I have used some couponing, flyers and direct mailings.

I still like the business and would like to salvage it without loosing my shirt.
Would appreciate any comments from members.

Thanks
tsaj

[Kitty]

First start.........cut or reduce payroll

[mike]

Kitty is right, much more detailed info is needed.

Specifically on expenses.

By nightmare, do you mean very little profit, or losing money.

To borrow from other posts, if you financed 100%, you probably can't hold on too long, but you already know that.

If your losing a lot of money, think about selling to Ken, he can probably use some losses to offset his profits.

[pete f]

How do the water comsumption numbers and gas compare to the previous owners's? You must have those numbers, if not, check the water/gas company to see what the consumption history is. If you do NOT find a large discprepency than you may have basis for a lawsuit, I have sellers sign a paper at closing for these numbers and hold them accountable. If the water is much less now than it was when the seller owned it, then other factors have entered the market, ie, another mat or two, your management, etc. In this case you have to cut expenses and go to work, being an attendant. In all case of mats I ever bought I had to work them for the first few years, and mostly, years after! I never made any money for a few years, there was always defferred maintainance and other issues, then when I made a few bucks the old stuff needed replacing. Actually I am still waiting for my "profits", I keep reinvesting.

[Jim]

No problem....

Just go back to the previous owner with the contract that he signed stating the past income...or to his CPA Accountant that signed off on the numbers...

.....err you do have a contract right...?


ok then... just go back to your due diligence numbers and find the mistakes by rechecking the water, gas, and electric......

......err you did do your due diligence didn't you...?


ok then... just go to your lawyer that helped you with finalizing the contracts and made sure you dotted all the i's and crossed all the t's.....

...err you did use a lawyer didn't you...?

Ok then.....Welcome aboard !!!

This is what the real laundromat business is all about.

Good Luck and may the quarters be with you....

[Kitty]

Good Luck and may the quarters be with you....

Now this is a good one........

[Anonymous]

Thanks for all the comments.I will follow the suggestions and review the whole situation again. yes I am loosing money. As I wanted to get in to this business for a long time, I still want to try everything before I give up. I will continue to check and learn from all the posts on the coin wash board and take the advises of expereinced owners through this forum.

Thanks to all of you.
Hopefully the quarters will keep coming.

Tsaj

[Anonymous]

Hi kitty
You said first to start cutting wages.
I have two full timers in mat 1 and the same for mat two. As I have a full time job, i am unable to work at the mats.
Would you say that i should cut the hours the attendants are available.
I have some drop off business at both locations. But in one most of the time employee is just sitting there.
Any thoughts
thanks

Tsaj

[Kitty]

TS,

You will have to do some calculations and see how profitable your drop off is, before you could accuratly assess the attendant benefits to you during the week.


Your attendants are an extension of you. They must promote your business and they must be very customer service oriented as well as keep an immaculatly clean laundromat. If they cannot grasp this simple concept then you do not need them and you can terminate them and find part-time help that will be worth the money or contract help to maintain the cleanliness of the mat.

I found this in my files: Anyone else have a job description and expectations of an attendant?

JOB DESCRIPTION OF AN ATTENDANT

All Laundromat attendants are required to maintain a clean and well-kept Laundromat at all times. It is the responsibility of the attendant to inform Owner/Manager with any change machine problems or other important issues that you may not be able to handle.

Each store has different ways of handling change money for customers and you will be trained according to the policies of where you are employed. Providing change to our customers is very important and should be done so in a courteous manner. All change money is the property of Laundromat business. These funds are not to be used for personal use.

Many times a machine will malfunction and will require the attendant to satisfy the customer. Posting an out of service ticket with a detailed explanation of the problem on the machine is required. Any necessary refunds given to the customer will require a refund ticket to be completed and placed with your change money, which will be returned weekly. Change money may be audited at anytime. Customer service and satisfaction is extremely important and you are expected to provide superior service at all times when representing the Laundromat.

Dependability is essential to your position with this company. You are required to report to work on time; however, when/if there is problem and you will be late, you are expected to call the store PRIOR to being late. In the event, you become ill and you are unable to cover your shift, you will need to immediately call the store as well as the owner/manager.

The cleanliness of the Laundromat is as important as maintaining superior service. You will find the expectations listed of this requirement within the employee handbook as well as posted at each location.

Each new hire is on probation for 90 days, after 90 days your performance will be evaluated. If you have successfully performed your duties according to the expectations of the Laundromat business, you will be considered a permanent hire.

[Kitty]

TS,

How about a list of your expenses, machines and vend prices?

[gkjvl]

Have you explained the situation with your attendents? You said they are just sitting around most of the time. If you explain that they may not have a job for long, they may be more responsive to the customers and may have some ideas that could help. Maybe shorter hours would be better for them than no hours.

[mike]

Perhaps the attendants could make all the money

from WDF INSTEAD of their salaries.

[soaps]

In addition to the other responses:
1. Is all your equipment in good repair?
2. Is the store clean at all times?
3. Are the attendants friendly? Do customers like the attendents?
go spend some time in your mat being an attendant, meet your customers...they'll tell you a lot!
and finally
DID YOU REPLACE YOUR KEYS? WHOSE HAS KEYS? DO YOU HAVE A SILENT PARTNER? There are a number of ways to find out including collecting often, utilities to income ratios, etc. Dishonesty could come from old owner, attendants or somebody else. Statistics say that Employee crime is very high.
check everything. Run a good clean store. Keep the attendant if you can but many store run unattended successfully (you would need to spend more time cleaning, etc yourself but this could be a good thing as you will really learn the ropes fast.)

[soaps]

One thing that nobody mentioned is the possibilty of theft.
Did you rekey your locks? You could have a silent partner (past owner attendants, or? Statistically, employee theft rate is very high.)
You need to collect often, check utilities to income, check on attendants during unscheduled visits. I also think you must make time to be an attendant for awhile..not only to save some money but to find out more about your attendants, your customers, and your store. You'll be surprised how much your customers will tell you (mine keep my attendants honest... they keep me very well informed)
Make sure your equipment runs well, your store is clean & inviting.
Also, many mats run successfully unattended. You may need to do this but it means you will have to put in more time there cleaning , etc. (This would be a good thing for you while you learn about the business.)

[Westlake]

Last year my revenues dropped by 35% when my competitor went to free dry. I tried a number of promotions including 2 for 1 sales, discount coupons, free coffee/ donuts, etc. But none of these offers brought the customers back. I remember at one point I considered fighting fire with fire and going to free dry myself. Since my attempts at bringing the business back had failed I took a hard look at the expense side. I managed to take a dent out of the expense without affecting the business. These are some of the areas I focused on:

Cut gas expense - shut down the boiler during closed hours and insulated pipes.

Electric expense – shutdown excess equipment and lighting at closing. (Including video games, soda & snack machines and almost all lighting).

Disconnected the house phone. Attendants now use the pay phone. Not only did I save on the phone bill but my payphone revenues went up by $40 a month.

I cut back on office & cleaning supplies. I use to spend about $50 a week on cleaning supplies, toilet paper, etc. Once I slowed down the flow of supplies, they actually seemed to last longer. I think the attendants now have to buy their own toilet paper for their homes.

These are just some ideas on how I managed to cut expenses. A few cuts here and there added up to hundreds of dollars of monthly savings for me. Not a big deal to some people but when your running a thin line it can help. I would recommend you go thought your P&L statement and see if you can make any reductions.

Oh, things have somewhat turned around for me. As the expense cuts did not quite get me where I wanted to be, I eventually raised my prices. Today prices are up, mat is clean, customer service is good AND yes a lot of those customers have come back!

Good luck and hang in there.

[soaps]

So what happened to the free dry guy? I've seen so many of the "discount" or "low price" guys go out of business...the only problem is you have to be able to last long enough to see it!

[Westlake]

I haven’t been over to the free dry mat in awhile. Last time I checked he was still doing a good volume. Make no mistake I did lose a lot of business to him. Some people in this neighborhood are strapped for money and will go for the free dry. Makes no difference to them how dirty the mat is, whether customer service is horrible or even if ½ the machines are out of order. They only care about the savings, or perception of savings. Since his washers are priced between .50 and .75 more than mine these customer are really not savings anything, they’re just paying up front.

To fight back against the free dry, I raised my prices. I made an assumption that the customers that did not leave me to run across the street where more concerned with the quality of service and the environment. So between the price increases and my expense reductions my net income stabilized and eventually started to recover. Now 8 months later, I have noticed that my volume is starting to come back. I guess some of those customers either got frustrated with that mat or figured out that it wasn’t really free. My volume has not returned to normal but my net income is almost there.

[Anonymous]

Hi
Thanks to all of you , I am picking up a lot of valuable info from you people. I intent to use every idea I get from here and hope to keep my mat business running. I have already learned thet enthusiasm to own a business is always good. But to buy two mats in the same week is boarderline insane.

But I want to make them work.

I will try my best and give it all, because i always wanted to own a mat.
Thanks again to all of you.
Tsaj

[buddy]

tsaj,

if you have notes pending from previous owner, stop paying them.
Let them go to court. Most likely they will settle and you will not have to pay remaining notes or you will get greatly reduced notes. If they want you can return their MAT to them and get your money back.

I always advise buyers to insist on seller to hold some notes so if they are dishonest you can throw a monkey wrench and make them miserable.