May I have your ear please?

[TotoMongo]

As many of you know, I have been looking to purchase a mat for quite some time. In the mean time, the thought occurred to me that I could start a laundry services company, gather customers, and gain real world experience until the "Golden Fleece" came my way.

Well, six weeks ago, I did. And, I am so very happy that I did! I would like to describe my operation and get some feedback and advice from the people I have learned so much from in the last few months.

Advertising is done by register tape, handing flyers to supers and doormen, and stuffing flyers under apartment doorways. I have gained 50+ customers this way.

My work is contracted at 0.50 to a local mat. I havent received stellar results by doing this but on the whole I am satisfied with her service. On the whole, even after a few discolored socks and lost towels, her service is what I would consider good. The clothes are very clean, they smell nice and I get many customer accolades.

Calls are received by a messaging service. Most customers love it. A few hate the fact that they cant get detailed answers right away (there is so much training you can give to a telephone operator). The service isnt cheap but allows for professionalism and serves the needs of most customers. And, it frees up time for me.

I do the pickup & delivery. I absolutely like the ability to interact and meet customers. They, on the other hand, like the ability to speak (or complain) to the guy in charge. Doing the P&D myself allows me to sell other services (dry cleaning, comforters, rugs, pillows, etc) and get first hand feedback on the quality of my service.

At 0.75/lb, I am not making much money. This allows me to get experience and customers for when I do purchase a mat. My short term goal is to hire an attendant to do laundry in a store that is underutilized (we wouldnt be paying for service, just stuffing coins in slots) and to help me advertise when we arent doing WDF.

In the mean time, I would like to get your advice on the viablility of this business plan until I buy a store. Can I make a lot of money by not owning a mat and using someone else's mat? I would have none of the normal expensses - rent, R/E tax, repairs, water, etc - but the coin wouldnt be going back into my pockets. Workable?

Off to "work",
Toto

[CharlieS]

Several thoughts

First - You are making a classic error. You are pricing not only under what a drop-off WDF business would charge to make money, but also clearly not charging for the pickup and delivery service. You have not created a business with a clear profit potential.

It is easy to create a business. However, unless it has a clear profit potential, its not a business I would want to own. All you are doing is churning dollars and burning your own time without a reasonable return.

Second, you actually don't have a bad deal at 50 cents per pound for processing. I wouldn't even do the processing for that price, since it also doesn't make money, although it might add profit dollars for a store that has an underutilized attendant. If you have to add personnel just to do WDF, you are losing money at that rate.

If you are willing to work for minimum wage, you could do the work yourself. You could also hire someone to do the work for you. This could be on your own machines or at a laundromat.

The key is to run the numbers. You can't run a business without knowing your key expense and income numbers. What is the real cost of pickup and delivery, including vehicle and fuel costs, (don't forget repair), the cost of your time or hired help, the cost to do the WDF, whether contracted or done in-house, etc. Then you can run the income side. The classic error made by most budding entrepreneurs is to underestimate expense and overestimate income.

Good Luck
Charlie

Charlie

[Anonymous]

CharlieS hit the nail on the head. You should expect people to pay a premium to have you do the service for them - not give a discount. But you have been successful in the hardest part - going out and getting the customers. Congrats on that. Now you just need to rethink your price points.

[pete f]

I have 2 laundromats that have a person using them doing w/d/f. AT one I give him some space out back, he picks up, delivers at $1 a pound first 10 #, 90 per after that. He also takes in DC and farms that somewhere. I do not charge him rent, he pays whatever the price on the machine is like any other customer, buys all his own supplies, and will call me if there is an issue I need to know about, customer problem, etc. It cost him about 15 cent a pound to wash and dry at my current rate. At another mat, a dry clean, w/d/f shop opened just up the street about a month ago. I had ment to stop in and say hi, and offer the use of my machines if he need them for bigger stuff. I assume he has a top load and dryer there, but I do not know. I saw him recently bring in bags and bags of stuff, and load up a bunch of big washers recently. At that mat it is a little cheaper, so maybe 13 cent a pound to wash and dry. I do not know what he charges. My point is price your business correctly at the start, and then maybe you would be better off doing the work yourself at a local laundromat. I think it is a great idea to build a w/d/f business prior to buying a mat, congratulations on starting up.

[TotoMongo]

Talk about "live and learn"! Great feedback so far.

My initial goal was to place a higher priority on attaining customers than worry about costs. I actually feel that I can quadruple my current customer base in just 2 months. But I guess that wouldnt be important if I wasnt making money! :)

Charlie, words like "minimum wage" wake me up a bit. I am in this for the long haul and to make a lot of money. Thanks! Fuel and my time are my biggest costs : how would I adjust my price per lb to reflect them?

Thanks Kirby. Good advice. Need more of it!

Thanks, Pete. Are you saying that at your mat it would cost 0.15/lb for me to wash? How much per lb is your time worth? If that guy hires an attendant, would he then lose money?

Toto

[pete f]

We all start somewhere, than adjust our time to the most profitable jobs. For some that is working at a corp job, others, like many owners here, fixing machines in their mat rather than hire it out. I still sweep floors. I don't really have to, but the again, I have nothing better to do. When I do (have something better), I hire someone. I can not say if it s worth your time to do the actual w/d/f yourself, only you will know. You pay 50 cents, it cost maybe 15 cent a pound.. so 35 cent times how many pounds? Maybe you are better in the front end selling, we all have our strong points. Stick with, and grow, what makes you money.

[mike]

I think you have found a great way to get an "inside look" at this biz

without putting a lot of money at risk.

Good for you !!

Time will tell you how to proceed.

(you will also have an ear to the ground if a mat comes up for sale)

[TotoMongo]

We all start somewhere, than adjust our time to the most profitable jobs. Stick with, and grow, what makes you money.

Sounds like I am in my "learning curve" stage. Great advice Pete!

Mike, establishing a WDF operation without the huge dollar layout was a big reason behind my plan. It allow me to get some experience and customers without paying through the nose.

I have seen too many mats - dilapidated, shoddy, run by people who have no business in a service/retail establishment - I know that I can operate a mat many times better than most I have come accross. I also know that if I can give a great product and service and charge a fair price I could be highly successful.

This was a hard lesson I learned - I assumed that because I wouldnt have the conventional expenses I could make a tidy sum. I'm staggerred but not down yet. Slight readjustments here and there and I think I can regain some footing. All while I find my Mat.

You guys are invaluable. Thank you!
Toto

[CharlieS]

As Pete says, "if it was that easy, everybody would do it". The real expense in WDF is not the washing and the drying. Its the folding and the packing.

[djlpartners]

What part of NYC are you in. It is very interested what you are trying to do. How is it coming along?

[TotoMongo]

What part of NYC are you in.
Queens and Western Long Island.

How is it coming along?

Well, 50+ customers wouldnt be enough to keep anyone inundated. The repeat business is encouraging. A big disadvantage is that I have little control over the quality of the WDF but yet all the responsibility for it.

Advertising and marketing take up a big portion of my time. This is as it should be in any business, I believe - sell, sell, sell! Being a firm believer in expediency, I will soon begin a direct mail campaign. This will save me time and money in the short run as well as the long term.

Having never been involved in anything more exciting or rewarding (in ways other than monetarily) I appreciate your question.

Toto

[djlpartners]

I would be interested in discussing this with you offline. I am following the same path as you, here in Dallas, and believe that we have experiences that we could share and learn from. The difference is that I do own my own mat, but also have a wash/dry fold pick up business.

So let me know if you would be interested in comparing notes.

[mike]

djlpartners,

Why discuss it offline?

We ALL want to know about this !

(I understand offline for something EXTREMELY private, but is that the case here?)

[TotoMongo]

djlpartners,

Why discuss it offline?
We ALL want to know about this !
(I understand offline for something EXTREMELY private, but is that the case here?)

I think he didnt want to burden anyone with a topic that he may have alot to comment on. Either way, I dont mind as I can only get more knowledge.

Toto

[djlpartners]

Not offline for privacy...but seriously, any written form has its limits. A discuss is faster and more info can be shared quickly. This topic is dear to me so I didn't want to make this a month long conversation over a written forum. I wonder how long the declaration of independence would have taken if it were concieved and discussed over this forum. One thing, i will be willing to do is post a summary on the site so no one feels cheated...i justed wanted to discuss this at a faster pace than this. I have learned so much from this site and thank everyone for sharing.

[Coinwash]

That is why we are here for Discussion.

Share you information.
If you think it's important , the odds are others do too

That makes us NUMBER 1

Thanks

[mike]

I think it doesn't bother me discussing things here, because I can only think as fast as I type, (and I only use the one finger :-(

As for the declaration of independence, if it was discussed here first, it may not have had so many amendments !

(I think Jonathan was at the original signing,)