Strength or Weakness

[Kitty]

A new competitor is entering a market and not sure whether the store will be a card system or not. The 18 year veteran that has retained the market share is betting that if the new state of the art store is a card system , that he will be home free and continue to retain the market share. I have different views.

The new competitor is located in a retail center geared to attract the hispanic population, they have already had some marketing to create the initial buzz and have a great location. Great street visibility and decent location. The entire retail strip is decorated with the hispanic colors red white and green and has additional shops that will attract this clientelle as well. Most of the business is considered the hispanic population.

The current owner is betting if the competitor puts the card system in the clientelle will not like the system? What do you think?

[Fred50]

W-R-O-N-G!!!

Card systems work well in many environments - not all perhaps. The marketing possibilities of a card system are endless and once a customer uses a card system, especially in a new store, that are not likely to go back to quarters.

In addition, most Spanish speaking countries (Central/South American and Europe) make greater general use of cards than the US does. Think transit, government programs, low value smart cards, phone cards, etc.

If a card store is introduced with the proper marketing and customer training on the use of the system, it can be a real bear to compete against.

I would not take this threat lightly.

[pete f]

Dave needs to get his head out of the hole and do some pre empt damage control. I have been on both sides, having had a card store try and put me out, and having a card store ( not trying to put anyone out but had 3 mats nearby close down)
The card store will have business. Dave will have business, but less, becuase 30% of his customers will move thier biz. The bigger question might be where does the new store get the other 60% of the biz?

[Kitty]

We had a lengthy conversation the other day in regards to his bet against the card system and his view on how the clientelle will accept it if indeed the new proprietor is putting a system in. He is going on the information of another market, his brother in law faced a similiar situation several years ago where a card system came in and many patrons did not like to pay for the card and stayed with the coin mat of his brother in law. I reminded ole BD that this was the systems of yesterday and the card systems of today have gotten much less expensive and many operators much wiser on how to market them to the clientelle so as not to piss the customer off. BD is still hung on the float issue and the amount of money he feels operators "use" against the consumer by incremental pricing strategies and I had to argue with him ( funny I never do this ) that this is the strategy that is the best incentive for the operator, although there may pricing for a washer or for a dry time that allows money to stay floating on the card consumers would eliminate quarters and this is an incentive when was prices are 3.50-4.50-5.50 per vends not including dry times.

I told him 5 years ago we should protect that market, when I left I tried to capture that market, now there are many fighting for that market share. IMHO, if ole BD is betting on a clientlelles simple preference that is a pretty big bet. He's been "whoring" that market since the 80's although, he has always priced reseasonable, he has never put aesthics and additional services back into the business. He especially has never demaned the employees to keep a spotless mat. Now there will be other choices for the consumer and he could lose more than 50%.

I'd be scratching around my sand box to get out of the box to be thinking of ideas on how to retain my market share in this hot spot before these new stores take that many customers.

[Kitty]

The competitor store has been opened for several months and the strip center is completely filled. In addition to this mat another mat/Tacqueria came in without notice while the remodel took place
( if this is how you spell it, the mat has a tacqueria which is a
hispanic shop and eatery l) Both new mats have over 25 washers and enough dryer capacity all front loading machines. Both mats are catering to the hispanic clientelle and offer numerous amenities including wire transfers, phone cards and payment stations etc.

From a water anylsis the new businesses have taken at least 45% of the nineteen year vetran store.

I am not sure if there is a way to regain the lost business as both new stores are owned and operated by hispanic owners. Their amenities they provide the clientelle is a necessity for so many of the hispanic population and the convenience to them is a great time saver as well. One mat offers an excellent store and eatery that seems to gain a great deal of customers. How would you all like to compete with this?

At least 7 years ago BD could have built another mat to possibly monopolize the market as the increase in the hispanic population continued to increase year after year. After a remodel in 95 business increased more than 30% immediatley and eventually saw an increase of 300% in revenue from the time the store opened with only one increase in price in this time. He decided against putting an additional store in because he virtually had all the business and betted against anyone else being able to do it, but at a 45% loss in revenue that computes to around 4K a week~ was that decision a good one? Just your thoughts on what you would do if you had been faced with this scenario years ago....

[Fred50]

In any business, you have to change with the times or suffer the same fate as the dinosaurs.

Someone who is "set in their ways" is destined to fail eventually. It sounds like this guy grew up in this business when it was very different - energy price increases were small or non-existent, and competition was zero.

Now, every retail business is under constant attack from several sources. It is either an increase in costs, competition, resistance to price increases, government oversight, or lawsuit potential that we must all face.

These issues didn't exist 20 years ago, or at least they didn't exist or increase like they do now.

Adapt or die is the current battle call for us all. If you let your equipment get run down, your store get dirty, your employees get lazy and your physical plant get run down then you shouldn't be surprised when new competition comes charging in.

The troubling thing in some markets like NYC and LA is that new laundries are going in where they are not "needed". That is, the market may be well served and the stores may be well maintained and staffed but new people come in and everyone loses.

I see this happening all the time and shake my head. The new laundries don't do too well and they take the cream away from the existing laundries.

I blame a lot of this on distributors with unrealistic proformas and investors who don't do their due diligence. I don't think there is a real solution to this one.

[Tom@Troske.com]

Couldn't agree more with fred. We have cards and never regretted it. Best thing we ever did. Lose very few customers with the card.

[kbc747]

The worst thing anyone in business can be confronted with is no competition, human nature makes us sloppy and we are not always on our toes. I bet this mat is owned by someone else or does a lot better job over the next few months than in the past.

Having said that the American market is quite different than the Canadian market, I would hate to own a card system here, I updated all my washers and dryers and they now take .25 $1 and $2 coins. In fact the new Dexter dryers will accept all three in just one slot. Change machine dispenses both .25 and $1 coins. Our highest prices washer is $5 and that is just 5 coins or 3 if you use the $2 coin as for the dryers, we market higher dry times when they use the dollar or $2 coin. If the American market gets caught up with the coins it becomes very hard to justify the card systems, having said that I still don't understand why they don't make one that accepts both. Why not you would sure give the cashier a wierd look if she accepted only one at your local retail store.

[William]

Doesn't sound like a card vs. coin situation to me. Sounds more like someone saw an unmet need in the market for a hispanic oriented laundry and filled the need.

It also sounds like BD was doing about $9,000 per week? Good for him, I wish I had those numbers. And if I did, I would EXPECT someone to enter the market as there is money to be made by taking market share.

[anonymous]

The worst thing anyone in business can be confronted with is no competition, human nature makes us sloppy and we are not always on our toes. I bet this mat is owned by someone else or does a lot better job over the next few months than in the past.

Having said that the American market is quite different than the Canadian market, I would hate to own a card system here, I updated all my washers and dryers and they now take .25 $1 and $2 coins. In fact the new Dexter dryers will accept all three in just one slot. Change machine dispenses both .25 and $1 coins. Our highest prices washer is $5 and that is just 5 coins or 3 if you use the $2 coin as for the dryers, we market higher dry times when they use the dollar or $2 coin. If the American market gets caught up with the coins it becomes very hard to justify the card systems, having said that I still don't understand why they don't make one that accepts both. Why not you would sure give the cashier a wierd look if she accepted only one at your local retail store.

The unfortunate comments above indicate a lack of understanding of card systems and what they provide. Those that look at them as just a different way to accept payment are missing the entire boat and it is not surprising they don't see the benefits as being worth the cost. Further, to install both coin and card gives you the worst of all worlds and is a total mistake.

As has been explained before, a card system allows you to collect a huge amount of data to use to optimize your business. Why do you think supermarkets and other businesses have those membership discount cards they have you swipe before they check you out - its all data driven to help them run their business. Then there is the issue of being able to adjust your prices by the penny rather than in 25 cent increments. The returns on that alone pay for a system very quickly.

Those that still don't see the value should talk to people that own the systems or just get a company to give you a quote on upgrading to a card system and they will explain the merits ( of course you have to discount some of the sales crap).

[TLR]

William is right - it is a competition thing - simple as that. He did not lose 45% of his businees because of cards vs coins - maybe 10% of that business can be broken down into cards vs coins - the other 35% is because it is competition.

TLR

[max]

anyone ever thought of establishing a dual system - card OR coin at each machine like in the casinos with coin or notes - that way the card could be made to be cheaper therefore training the customer to want the card then in a year or two everyone would be using the card so turning over to total card would be easy.

[DaveLevenson]

anyone ever thought of establishing a dual system - card OR coin at each machine like in the casinos with coin or notes - that way the card could be made to be cheaper therefore training the customer to want the card then in a year or two everyone would be using the card so turning over to total card would be easy.

Set-O-Matic offers a card system that can be added on to machines that accept coins, allowing for both. The also offer a system that accepts MasterCard and Visa credit or debit cards, so the laundromat operator does not have to spend money on the VTM part of the card system.

[fishmanz]

I'm with clean clothes on this one. You loose all the benifits by allowing coins and cards. Kittty, I'm surprised you don't have a card system.

[Kitty]

This is not an issue of cardvs coin as although the first presumption was that these owners would go card, evidently they have not. My point is that competition was apparant years ago that ultimately this market was hot and with said my question to you all, would you have had the foresight to corner your market share by building or leasing additional services within the same market to hold your market share or would you do what this owner decided and lose 40-45% to another just a few short years after the call not to add additional services?

[William]

I am glad I am not faced with that decision! It would be tough. Why pay twice the rent, new machine payment, etc. The new competitor may or may not materialize. So I am not sure if BD made a bad decision or if it is simply a bad outcome to the right decision.

The question now is what is he going to do about it!

[anonymous]

If memory serves me correctly there was another new store that opened maybe 2-3 years ago and that had minimal to no impact in the area.

[pete f]

Maybe Kitty in the know should have built the store?
What were the deterents in doing so?

[mjwalsh]

Please do not read this if you no longer believe in American innovation!

I'm with kbc747 & Max. The only thing I would add to kbc747 would be a "more affordable" than card system info counting system. That would consist of some type of mass produced data wireless devices either as hubs or individual units for each piece of equipment. That would make the info gathering a non issue. With the amount saved we could afford to round off to the nearest quarter on the lower side so that the "few pennies" issue would be turned around.

As far as understanding who is coming into the laundry, actual credit cards to tokens as an option to our existing floor space saving bill changers makes the most sense. Are you listening Jim, Kris, & Mike? I am still lobbying! You would get a lot better feel for your demographics than an in house card system. Tokens can be as good of a marketing tool as cards if you are talking about promotion I would think & the car wash industry has shown that. The growing number of free airline---cash reward Visa credit card & automatic download record keeping fanatics will definitely be happier with that laundry vs the in house card only operators' laundry.

[Kitty]

Maybe Kitty in the know should have built the store?
What were the deterents in doing so?




The only deterent was coming up with adequate equity to put up especially with the split from my husband when that element became inevitable I could not financially do it alone with my portion of the assets. I did have an excellent business plan and what I presumed to happen in this market has, meaning it was inevitable additional services were needed. However the now deterent in this market is not only one store but two has been built and opened in the last 6 months. The market was definatley in need of addtional services, but two may have saturated it to the max of the potential. An addition to his store three to five years ago may have discouraged any others, maybe not?

I still wonder, financially would it have been wiser to protect the market especially when growth was seen year after year.

CC, the laundry you are referrring to was in and adjacent town in a different market. There was one recent closing of one of the laundries that went in about 7 years ago where BD generated a decent return of customers within the last year.

Kitty

[pete f]

you may have been lucky in a wierd way. How to buy and finance is often asked on this BB, your advice on trying should be helpfull to those who ask in the future. I was told a long time ago a few tidbits.., it takes money to make money, do not go to a bank and ask for a loan when you need one, go when you don't. Align yourself with successful people and you to can be successful. Do not lend money to friends or relatives. I am sure there is more, but these seem to stuck in the back burner of the mind. And oh yes, if you miss a deal, there probably will be another one that comes along that is better. Maybe in a few years you can end up with one of the mats, then the other closes down and it is you and BD to corner the market. Es pan ol?

[bravedave]

What has actually happened at this location only reinforces my belief that we made the right decisions on protecting this market. Since everyone here seems to know my business thanks to Ms Kitty, I'll give you more acurate data. We were around the 9000/week range and dropped to about 6500, not 45-50%. I could not see spending another 500 to 700,000 building another store to try to protect this small rural market. Unfortunantly, people with a dream of owning a business rarily use good common business sense and those 2 stores that were built would have been built anyway and that proverbial pie would be split further-I would have lost income and had a heafty mortgage to boot! I'll invest my money In a better , less crowded market! MEOW!

[Kitty]

What has actually happened at this location only reinforces my belief that we made the right decisions on protecting this market. Since everyone here seems to know my business thanks to Ms Kitty, I'll give you more acurate data. We were around the 9000/week range and dropped to about 6500, not 45-50%. I could not see spending another 500 to 700,000 building another store to try to protect this small rural market. Unfortunantly, people with a dream of owning a business rarily use good common business sense and those 2 stores that were built would have been built anyway and that proverbial pie would be split further-I would have lost income and had a heafty mortgage to boot! I'll invest my money In a better , less crowded market! MEOW!

The question was put to the board to determine what others would do if faced with the scenario you were under not necessarily disagree with what you decided.

In the event you had decided to corner the market in this rural area, you would have had about six years on any competitor that may have been considering entering your market including the tax advantages that go with that while you were also paying off any notes. You and I both know your store was well above a comfortable level for your patrons and the store was overcrowded which showed any interested parties how ripe this area was for additional services. Regardless of what has happened, my question remains whether splitting your own pie would have been a better financial return especially since now two has entered your area....ROAR...

[bravedave]

I would say that pretty much every decision I have ever made about my businesses has been disected and anaylized by this board without my permission thanks to you Ms. Kitty! Your Question was not just a hypothetical-it was directly about what I did. Well, in real life business there are many, many factors that play a role in what you decide to do. In the online fantasy laundry world these decisions can be made to seem much more comfortable and simple!

You can fight competition by doing the basics- GIVE THE CUSTOMER WHAT HE WANTS!! A very CLEAN, well equipted, well run store at a fair price! If you don't give them a reason to leave most of them will not!

P.S.- I'm not aware of any magical tax advantages that puts quarters in my coin vaults and helps me pay back $500,000 plus interest!

[Kitty]

You are correct with your assertion to what has been printed here however no malice was every intended. Your decisions were what they were and I never insinuated the question was hypothetical but an interesting situation. While competition is feirce in many areas of the country others face what you have and my question to the very bright business people here was merely questioning what you chose to do, wondering if the choice was different would you have been ahead or is the loss of revenue today the least amount of loss? If faced in the same situation, what would others do with the same scenario.

Not disputing your decsion was not best for you.

[Fred50]

Wow, this board has gotten really interesting all of a sudden!

It is always a difficult decision to expand your business and it should never have been taken lightly.

Brave,

Could you have expanded your existing location to better serve your customers? It would probably cost a lot less to expand your current location than to start a new one.

How much has the potential customer base expanded over the past 1, 5, 10 years? If you market is expanding rapidly then all services to these customers has to expand to accomodate them if you have hit capacity.

Even if your competition has poor location, bad layout and poor service they have obviously taken a good chunk of your business.

You also have lost a great deal of value in your business since the new competition has come in - net annual lost revenue time 5, for instance. This could make the cost of expansion or a new location.

In retrospect, would you have done anything different knowing what you know now? I think your responses would be very helpful to all of us, especially those of us in increasingly competitive markets.

[William]

We were around the 9000/week range and dropped to about 6500, not 45-50%.

I'd still love to have $9,000 per week! Heck, I'd love to have $6,500 per week...

Let's look at it this way. If you had the "corner" on the market, then the total market is worth $9,000 per week or $450,000 per year. The new guy is now doing $182,000 and you are doing the rest.

If the new guy spent say $600,000 on his store then assume his monthly payment is $8,000 per month (pv = 500,000, n = 84, i = 9%). He is doing $15,000 per month gross. Utilities are running him 25% (nice modern machines) so that is $3,800 per month. He has $3,200 left over for everything else.

So, the smartest move might be to let him build it, and then become the second owner in a few years....

[Kitty]

P.S.- I'm not aware of any magical tax advantages that puts quarters in my coin vaults and helps me pay back $500,000 plus interest!

There are advantages to depreciation and if my memory serves me, there were significant tax advatages regarding equipment purchases up to $400K for a few years. I think the interest rates were low until just recently as well, not to say that the 120K intial deficit to your gross dollars will not increase or possibly decrease, the hit to your net right now is pretty substantial.

[bravedave]

We had already expanded about 5 years ago and had no more room. We were pretty much maxed out, but this is actually a pretty small town and the availability of utilities, in particular natural gas was limited. If I wanted to build another store to protect this market it would have to be too close to the original store; basically splitting what I already had and picking up a huge debt and STILL no guarantee to keep others away! If I could have found the right location on the other side of town with natural gas I would have built there, but there was no gas except right in the central business district, and we are talking about a town that is less than a square mile!

I had so much business because we were drawing from a large rural area that was very poor, full of trailers-almost the perfect storm laundry wise. Then the hispanic influx began and this area was perfect for them because of the types of industries here.So I decided to ride that storm as long as it lasted.

I had many sleepless nights trying to decide what to do to protect this store, but in the end it made no sense to me to build another store across the street and compete with myself. This year TWO new laundries have opened but both are geared to hispanics-we welcome everyone! I'm very happy with the amount of business we've kept-it could have been much worse, but we run a great laundry and people still come from long distances to wash with us!

[Kitty]

Whose to doubt your ability at keeping your market share, certainly not me. The competition currently in your market may not be the saviest in business and they have made mistakes in regard to competing with you such as gearing to only one type of consumer and other aestecics within their establishments, but they did add the additional services that were needed in this area. Count your lucky stars that the owners of these businesses weren't as knowledgeable as someone say, like me.... even though you are still making great profits you have lost net earnings and you will either work hard to make some of that up or live with the losses.

As pete says it takes money to make money and in this business it takes a bunch of money to start a mat. When competition comes knocking it can take that gravy from your pie, which can leave some people hungry Your scenario and struggle for what to do is something others are facing in other markets. Whose to know what is best, the question was a hindsight look at what you decided and no disrepect to what you did was intended.

[bravedave]

The reason I even responded to this thread was that it became personal- start reading from the the beginning-my name was mentioned repeatedly!!!!!!!!!! I didn't start this debate. I'm just trying to give my side of my decision with ACURATE facts, not just parts and peices.


And that's the point here. Making these kinds of decisions is very complex and will depend on your set of circumstances. I weighed mine and now am glad it turned out as well as it did.

As far as offering other services, I could have opened a grill, a pool room, wire services, tanning beds, etc, etc, but I chose to do what I do best-WASH CLOTHES CHEAP! I like to keep things simple. The other owners can spend their money and time on those things and I will keep my customers happy and comming to me because My dryers are hot and cheap!

And finally, I do sleep better at night knowing I don't have to compete against the Queen of Laundry! Thank you Lord!

P.S. Kitty and I are still friends!!

[laundryboy]

I have seen the point about depreciation mentioned on this board. Please remember, while this is a non-cash expences in future years, you did pay for the equipment. So, you still must consider this 'cost'. You either use 'your' cash or someone else's. Either way, there is a cost.

[Kitty]

As far as offering other services, I could have opened a grill, a pool room, wire services, tanning beds, etc, etc, but I chose to do what I do best-WASH CLOTHES CHEAP! I like to keep things simple. The other owners can spend their money and time on those things and I will keep my customers happy and comming to me because My dryers are hot and cheap!

And finally, I do sleep better at night knowing I don't have to compete against the Queen of Laundry! Thank you Lord!

P.S. Kitty and I are still friends!!

I understand KISS....although you are happy with your decsision, why do you resign yourself from losing 30-40% to your competitor without seeking additional ways to increase your revenue? I know your philosphy of hot and cheap dryers, clean mat, yada yada but living by price may lead to dying by price in a competive market place. Competing today should not be a situation of a price game but seeking ways to either attract or retain the customer and it is getting harder to do this for many who only think of price as the reasons for why a consumer chooses their laundry.

I'll ask this from everyone, give 5 reasons a consumer should do business with you and leave out, clean mat, good equipment and price. What makes YOUR laundry stand above others?

Ill say to you BD, if I lost what will surmount to 120K a year I would be seeking ways to increase what I lost and would never resign myself with what was taken. I can't image if I entered your market you would have cut a slice from your pie and served to me via a silver fork. With this said, I would also differentiate myself from the competitors by becoming a FULL SERVICE laundry with WDF and a complete package of customer services for the patrons that will seperate you from the inexperienced laundries that now surround you....

[bravedave]

Kitty, Kitty, Kitty.....Things are so simple for you in your FANTASY LAUNDRY! "I would do this and I would do that!" Well, running a business in real life is not as simple.

Where do I store that WDF?
Who do I hire to manage it?
Where am I going to find customers in the poorest county in the state?
How am I going to oversee it while I run all my other stores?
ETC. ETC. ETC.

As for losing a portion of my business, I didn't ask those two competitors to move in, and as I've stated previously there was nothing I could do to prevent it, and it follows logically that some business will be lost-can you follow that logic Kitty? Who says that I'm just sitting here crying in my milk about my bad fortune-did I not share my complete business plan with you? You try to loose as little as possible and move on knowing that you will win alot of it back by being better than the competition, working harder, giving them better value!

I don't think it's wise to overreact and start trying to do things that you are not good at or can't handle-you don't MAKE THINGS COMPLICATED!

My customers don't go to the burrito stand to wash their clothes, and they don't come to me to get burritos.

I'm done beating this dead horse, cause there must be a rule on this board that Kitty gets the last word whether it makes sense or not!?
Has anybody here ever gotten the last word?

[Kitty]

Kitty, Kitty, Kitty.....Things are so simple for you in your FANTASY LAUNDRY! "I would do this and I would do that!" Well, running a business in real life is not as simple.

Where do I store that WDF?
Who do I hire to manage it?
Where am I going to find customers in the poorest county in the state?
How am I going to oversee it while I run all my other stores?
ETC. ETC. ETC.

As for losing a portion of my business, I didn't ask those two competitors to move in, and as I've stated previously there was nothing I could do to prevent it, and it follows logically that some business will be lost-can you follow that logic Kitty? Who says that I'm just sitting here crying in my milk about my bad fortune-did I not share my complete business plan with you? You try to loose as little as possible and move on knowing that you will win alot of it back by being better than the competition, working harder, giving them better value!

I don't think it's wise to overreact and start trying to do things that you are not good at or can't handle-you don't MAKE THINGS COMPLICATED!

My customers don't go to the burrito stand to wash their clothes, and they don't come to me to get burritos.

I'm done beating this dead horse, cause there must be a rule on this board that Kitty gets the last word whether it makes sense or not!?
Has anybody here ever gotten the last word?


Dave, Dave Dave....I forgot the joy I feel when I antagonize you. ;)Thanks for the giggle. Here in reality laundryland, I rarely give the last word but I have been known to submit to others, although I seriously doubt I will to you as you are so new to, what did you say? Fantasy laundryland? You did however, open yourself to a reply because of the following:

Where do I store that WDF?
Who do I hire to manage it?
Where am I going to find customers in the poorest county in the state?
How am I going to oversee it while I run all my other stores?
ETC. ETC. ETC.

If you'd do slight rearranging you could store the WDF if you'd clean out a few areas. Managing the service, you do it in SP you certainly could in this area. Finding customers? The demos in this area are excellent, there are many double income families earning between 65-75K a year, there continues to be an influx of new housing and as you should be aware the military is being increased in the neighboring town which is on the border of this town. If you did or did not know, the one dry cleaners in the area closed because of a divorce issue. It takes no money to start a WDF so I am not sure why you would not consider this and managing the service could be simple. I do believe you have a new assistant you could train with how to inventory, control and audit. However, your excuses can be eliminated if you want to make the effort to give it a try. I believe business is always lost but what I do not believe in is not finding alternate ways to bring in the lost revenue and create new business and new relationships by creative thinking and seperating from what competition does. Although you say running your business is not simple you strive to keep it simple and I never thought you were crying in your milk. But I do think with today's consumer with choices, a clean laundry at what a proprietor says providing value isn't necessarily an effective way to compete for market share or any way to gain back the lost revenue.

[William]

Is WDF the reason that the other store opened?

I thought it was to cater to the hispanic market?

The main question is still did it make sense to open another location or simply keep what you had?

Sorry Kitty, I think BD made the right call. Or at least the same decision I would have made.

Now, when the other guys go out of business in a couple of years, you two can get in a bidding war over their location!

[Kitty]

William, his scenario was never brought up to decide whether he did or did not do the right thing. What he has faced was more a question of whether building to protect a market could be a better financial return in the long run, or face the inevitable loss of business. However he has since dealt with his choice and now has lost some business, the question is now, what to do about the loss of revenue?

Why take punches without raising your gloves? My point is look for ways to replace the loss of self service revenue and what an easy way to attract additional business as well, including offseting attendant payroll with the WDF service. What is there to lose?

[Fred50]

Dave,

Did you do any advertising or run any specials prior to or as these new stores are opening? I know of several people in the NY metro area that are or soon will be in similiar situations and they are looking for suggestions of ways to deal with this.

I think that trying to drive revenue up as much as possible prior to competition coming in may offset the pain, but I'm not sure if that was possible in your case.

Any suggestions are greatly appreciated.

[William]

What he has faced was more a question of whether building to protect a market could be a better financial return in the long run, or face the inevitable loss of business. However he has since dealt with his choice and now has lost some business, the question is now, what to do about the loss of revenue?



It appears that it would not have made sense to build another store to protect the market! Though he has lost some revenue, his business is still doing better than the new competitor (assuming what we have been told is correct). So it is clear that he could not have made more money by expanding. Instead, everyone is now making less!

What to do about the loss of revenue? I wish I knew! But, it seems that the new mat is hispanic oriented, so they went after a specific market. One could assume that it might make sense to try to appeal to some of the hispanic customers to try to lure them back. But perhaps this is already being done.

WDF is not a slam dunk. There are incremental costs involoved, and the increase in revenue might not cover the increase in costs!

I don't think that the comparison of taking punches is entirely accurate. In this case, the best way to "win" might be to avoid the fight. If the numbers posted here are accurate, the new mat is going to have a hard time making ends meet over the long run, and BD is a lower cost producer. That is not the same as saying his prices are lower! But, for a given amount of revenue he will be more profitable, which means he can reinvest or lower prices or simply survive on less revenue than the new guy.

[bravedave]

Fred,

Yes, we heard thru the grapevine for several years that others were looking to come in to our market-that happens to anyone who has a good location. Most of those back out when they find out the cost, but we knew the day would come.

We started out by rehabbing the store. We took out tops and added more fronts-we went with the high speed Dexters and advertized in-store that they could save time and money because they had quick cycle and fast spin saving dry time. Added new double-stack dryers,re-painted entire store, waxed floors, etc.

Instead of spending money on advertizing-no effective way in this small town- we gave away really nice laundry bags imprinted with our name ,address, etc. We personally handed out 600 and they just ate it up!! Loved em! My theory being that if they went else where they would walk in to competitor with my name all over their laundry bag!!

William- AMEN BROTHER!!!!!!

[Kitty]

You guys need to read what was said better, I believe there is no sense in fighting the competition as it is apparent they will be there for the duration...however, continuing to seek out their weaknesses and promote your own strengths is something that should always happen. The questions and comment were pertaining to what can or will be done about replacing the net loss to the bottom line...

I heard your comments BD in regards to cannot do this or cannot do that, but I beg to differ as I am well aware of the area and what it has to offer, what is happening within the community today as well as what is to come. I know you purchased equipment, painted, gave out laundry bags and spruced up your 19 year establishment to some respect however, with all this expense you have still lost revenue. My point in this discsussion, is what are you to do to replace this income?

From what you are saying you have no plans to work at seeking ways to increase your revenue and replace this income to your pocket?

[Kitty]

WDF is not a slam dunk. There are incremental costs involoved, and the increase in revenue might not cover the increase in costs!

Any laundry that is already attended could start a WDF service that would be a minimal cost, of course you need to have the right person in the position. All of this will take work, of course...is it a pain in the ass? Possibly, but if you can net approx 60% of gross sales from the service while giving your attendant something to do, what is the deterrent? Because it may take work?

As I said, this particular area has the community and would utilize such service, of course any establishment will have to seek to attract this portion of the population as well as retain the customer as well, but no one said it would not take work to accompolish.

But if one is resigned to taking a net loss , is comfortable with not seeking additional means to gain the income back then I suppose that silver fork was not intended for anyone else to eat off, but has a place setting already established.