Today’s episode of the Laundromat Resource Podcast with Andrew Cunningham is jam packed full of useful information for laundromat owners and newbies, alike!

Andrew has been in the laundromat industry in various roles and capacities for 35+ years and knows this business inside and out. He freely shares tips, insights, and procedures that only come with an intimate knowledge of the business. And we get to benefit from his many years of experience!

Andrew is a co-founder of the famous Lucy’s LaundryMart in Southern California and co-founder of Cunningham Investments. As a sales rep, multi-store owner, consultant, broker, and more in the laundromat industry, Andrew is well versed in this business from multiple angles. 

From quick tips and tweaks to improve business to his in-depth store analysis procedure, Andrew is one of the good ones dedicated to helping you find financial freedom through laundromat ownership.

In today’s episode, Andrew and I talk about:

  • His history in the laundromat business
  • How to survey a laundromat
  • The inception and rapid growth of Lucy’s Laundrymart
  • What makes a good broker
  • The glass ceiling of a laundromat
  • How to reach a laundromat’s potential
  • His simple tip to save money on a key utility
  • What to do if your laundromat is struggling
  • The 2 lives of our machines
  • Should you buy that laundromat?
  • Breaking down employee responsibilities
  • Your two most important business relationships
  • Coin vs. Card systems
  • Renting equipment
  • How to instantly lose $25,000
  • From most to least busiest days of the week
  • Laundry pick-up & delivery
  • Biggest mistakes owners make- laundry carts?
  • Make-up air for dryers
  • How to analyze a laundromat for sale

And so much more! Seriously, take good notes on this one. There is so much gold to be had for anyone interested in the laundromat business!

Listen To The Podcast Here

Watch The Podcast Here

Today's Sponsor

Laundromat Resource Marketing If you need help building or managing a website for your laundromats, let the experts at Laundromat Resource Marketing help you design and build a custom, professional website for you! As experts in the laundromat industry AND in web design and online marketing, we at Laundromat Resource Marketing are able to provide you with a professional website at an affordable price. We’re always transparent so there are no hidden fees. What we quote you is what you pay. Satisfaction and performance guaranteed! With no contracts to sign and guarantees like that, why not let us take care of your online presence while you focus on welcoming all of your new laundry customers? Click the logo or link above to find out more information. 

Andrew's Bio

Andrew Cunningham (Andrew Cunningham Enterprises, LLC), has a solid background with over 36 years of building, buying, selling and operating laundromats in Southern California. In 1995, Andrew and his brother raised $30m so that they could create a new concept of co-branding in the laundry industry.  Lucy’s LaundryMart™ was a unique store chain which pioneered and set the standard for co- branding in the industry. Since 1989, Andrew has been a professional consultant in the laundry industry and a licensed Real Estate Broker in California. In 2000, he created Andrew Cunningham Enterprises, LLC which is his platform for selling and buying laundries and for teaching owners and buyers alike, the ins and outs of purchasing and operating laundromats. His laundromat knowledge is extensive as is his list of clients who have succeeded in the industry. He is an expert at helping existing seasoned laundromat owners evaluate their existing operations with the goal of maximizing their profits and raising customer satisfaction. For those just starting out in the industry, perhaps buying their first laundry, Andrew brings with him years of experience, a wealth of information, knowledge, and experience. Few, if any other owners or operators even with years of experience provide the level of insight and expertise he offers. He is frequently hired to complete “Due Diligence Reports” used in the process of buying laundromats.  He is recognized by the Coin Laundry Association as an industry Leader and awarded this title in 2000. The Coin Laundry Association recognizes Andrew Cunningham as a teacher and mentor and at their request developed a training video for laundromat employees. Andrew can be reached at 310-951-4556 or [email protected].

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Episode Transcript

hey what’s up guys it’s jordan with the
laundromat resource podcast
show number 43 i’m pumped you here today
because today
we have a human laundromat encyclopedia
on with us
it is an incredible show i cannot wait
for you
to hear this so whether you own
laundromats yourself
or you’re looking to buy your first one
you’re gonna learn a ton
of stuff i know i did i took a lot of
notes make sure you’re taking notes too
because at the end i’m going to ask you
what’s the one thing
if you can narrow it down to one thing
that you’re gonna pull out of this
episode to put into practice because
that’s where it’s at
success follows action so learn
something learn a lot of things today
but make sure you put something into
action we’ll talk about that at the very
end um i want to give you a very quick
update
uh diligent capital investment i
mentioned it
in my in in my interview on the podcast
a couple of episodes ago
i just wanted to give you a quick update
on it um basically what that is is that
um
a group of us have put together uh an
opportunity for people who want to
invest passively in laundromats
to pool our money and and buy some water
mats together and just wanted to let you
know that that’s this thing is already
trucking and if you’re interested in
checking that out a little bit more
check out diligence
capitalinvestments.com
the link will be in the show notes at
london resource dot com
show four three forty three um or
if you’re on youtube it’s down below um
so check that out if that’s something
that’s interesting
to you and without further ado let’s
jump into our quick
one one-minute marketing tip before we
jump into it with
andrew cunningham the human laundromat
encyclopedia hey what’s up guys john
here with your one minute marketing tip
of the week
and your tip today is simply this your
brand is your opportunity
to shape the way your community thinks
about you
um and i want you to ask yourself two
questions
number one what do you want your
community to think of you
and two how do you want your community
to feel about you
if you run everything you do through
those questions
you’re going to help yourself build a
very strong brand
for instance when you’re going to train
your employees ask these questions
before you train them if you’re going to
pick color schemes
of your stores and paint ask yourself
these questions
if you’re building a new logo or a
website ask yourself these questions and
you will build a brand
that is strong and trustworthy and
people will keep coming back too
if you need any help building a strong
brand let jordan and i know at
laundromat resource dot com
slash get online andrew i am super
excited to have you here thanks for
coming on the show man how you doing
i’m doing great thanks for having me oh
oh man it’s my pleasure
my honor uh i we’ve talked a little bit
on the phone here and there it’s good to
see you face to face here well on zoom
at least
and uh and get to chat laundry mats with
you and i know that we’re gonna have a
lot of ground to cover
and i can’t wait to hear all this
experience you have in this industry and
the wisdom you’ve compiled and your
perspectives on things i’m very
intrigued by them
but before we get into all of that which
we will get into all that
and i just got to say hey you know what
buckle in because i know we’re going to
be
we’re going to be on a ride so if you’re
listening to this you know get the
notepad out because you don’t want to
take notes
but before we get there why don’t you
tell us a little bit about you
and who you are and then we’ll talk
about how you got into this business
well um i’m one of 13 number six
wow and uh born and raised california
primarily fullerton in here local high
school whole nine yards
spent five years in aspen right out of
high school that was my college degree
and uh moved in with my brother in san
francisco and went into business and
then moved back down here
my younger brother was working for a
company called mpe
and that turned out to be morton pollock
enterprises
and he sold washers and dryers there was
a division
but there was a pws which was pollock
wickham and steinberg
and uh he was working for them when he
was driving a corvette now he’s
21 and i’m 26 and i’m looking at my
younger brother going
i don’t get it i i think i could be
driving that corvette not him so
i uh uh i interviewed with mort and
uh he hired me and uh i didn’t have a
drive
a broker’s license or even a salesman’s
license at the time so
uh i went to work surveying laundromats
for six months for pws
you can learn a lot by surveying a
laundromat even before you get in the
business
uh what do you mean what do you mean by
surveying the laundromat can you tell us
what you mean
what were you doing well uh you would
drive up to a laundromat and you’d count
the parking spaces
and you’d look at where it was located
in line or was it on a corner
did it have a signal was there a
crosswalk
which are important aspects of what we
do
where the competition was where uh the
people were coming from crossing the
street same side of the street
um and then you’d go into the laundromat
you’d rate
how it looked what it looked like copy
the equipment down
ages make an estimate of the age of the
equipment
um at the time a lot of them left the
serial numbers available and you could
look at them
now they take them off so no one knows
which is you know
and then uh you’d break the van price
down and
and uh and then you’d turn that i turn
report in and that was pretty much
what you did yeah you got to know it and
you left a business card for the laundry
owner to see if they wanted to sell or
they need your new equipment and
that was pretty much your job so awesome
after i yeah after i did that um i
finally got my
real estate license and i went to work
selling laundromats from
84 85 to 90.
and then in 1990 my brother bill was
working for pws at the time and he was
the number one salesman selling new
stores
and i became eventually became number
one salesman for
existing stores brokerage then we both
left in 90 and created cunningham
investments and uh we had a uh
he bought a condominium right on the
beach in redondo beach and we overlooked
the ocean while we did our business
daily business
and uh rough start man that lasted
that lasted for about three years when
uh we got frustrated with the fact that
we weren’t making as much as we could or
should i mean i left pws making great
money and then for two years
you know it was starting to do business
it was really difficult
um we came up with an idea to launch
a uh a chain called lucy’s
lucy’s laundry mart and we did our first
store in inglewood and i believe in
late 94 early 95. freestanding
laundromat
and um about um
5 000 square feet and
big big big at the time uh
12 14 parking spaces and that turned out
really well
and we did uh private investors and you
know probably eight to ten people that
invested
and um we were
operating the store and we were filling
up the drink in the snack machine
almost daily it was getting depleted
that much
so we came up with a concept that we
actually had four thousand square foot
of laundromat we had a bowling alley
next to us
which was just a long and narrow strip
that we we
needed to separate
the building in two parcels because the
county said if you have
one single purpose building your sewer
fees would be 200 000
if you have two tenants it would only be
100 grand
so we said okay we’ll make two tenancies
a and b which
b was just nothing more than a store a
large storage locker
so after filling up the drink and snack
machines for as much as we did we
decided to open up a convenience store
inside the market inside the laundromat
and
um you’re talking about 10 12 14 hours a
day
on an excel spreadsheet how many candy
bars am i going to sell how many chips
are we going to sell how much sodas we
can sell
so it was bath by fire on the
laundromat side as well as the the
convenience store side
yeah and we got that market up and going
and uh within six months it was doing
about thirty thousand
um we were out selling the local markets
in milk that’s how much
we were doing and then we uh did uh
third in normandy
and then we did uh figaro and coldin
and both very good successful stories
and then we went out and raised venture
capital
uh to the tune of about 30 million first
time ever
um to do co-branding which was the
laundromat convenience store but
starbucks liked the idea so starbucks
came on board
and wells fargo liked the idea so wells
fargo came on board
and now we had a long dramatic
convenience store a wells fargo bag and
a starbucks under one roof
so co-branding started to get born in
southern california i’m not sure about
the east coast because i’m sure there
were some people doing some things but i
wasn’t aware of it because
i was buried in what we were doing right
yeah and then um
we raised like i said 30 million in
venture capital and they launched the
chain and they got it up to 27 stores
and then i left the company and bill
stayed on
and then eventually
pws bought the chain and sold the
complete chain off
and uh the rest is history i mean it was
a nice
venture and we got to do some things and
it kind of showed that you could have a
market or a convenience store inside of
a laundromat
and they could complement each other
yeah i i can tell you that
at both third in normandy which did 60
000 a month in washing dry
and uh inglewood which did about 30
we did about uh 25
in soap so in inglewood we did seven
thousand dollars a month in soap sales
and then
in uh um third in normandy we did close
to uh
fifteen thousand a month in soap sales
so it was
it was a it was a fit it made it it made
sense
yeah huge and yeah huge sense and then
um
bill went on to work do um a a
broker a developer a real estate
developer and i stayed in the business
i left for about seven years and then i
came back
and i’m back in the saddle again now and
working uh my magic doing brokerage and
consulting and
operational aspects which is really
where my strength is i like to
to help people out and show them how to
make more money once they get a
laundromat
well hey that’s why you’re on the show
right now man
i love it i love it well i mean that’s a
crazy story though man a wild wild ride
and i know that
you know you probably got into pws right
at the right time because i know they
were booming we had
um don and david stark on this yeah
early on and they they came on and they
talked about how they were
cranking out laundromats like crazy oh
yeah
and they were just donna donna was the
uh secretary executive secretary for
all three of them um mort it was
mart’s office uh uh john wickham’s
office bernie steinberg’s office and
mark pollack’s office
and donna sat in the front so if you
wanted to speak to either three of them
you had to go through
the gatekeeper yeah you’re not going
through her easily oh it was not easy
i loved it i love those guys and david
was doing the construction
yeah he he said he thinks he probably
built around 800
laundromats and it wouldn’t surprise me
and speaking of which i if you’re
listening to this right now i’m going to
link to
uh their podcast episodes because they
did two they
did a two-parter with them and they i
mean it’s an incredible it’s incredible
story so
make sure to check those out if you
haven’t yet yeah so i’ll link them down
in the show notes or if you’re on
youtube well i’ll link them in the uh in
the description down below check those
out for sure
awesome stuff they know their stuff too
anyways small
small laundromat world but you got in
right you know right at a boom
and i got i got trained by some really
really good people
i mean there was a certain method to the
madness and how they did it
we had a salesman there named john marks
and john was probably
15 years older than i was so i’m in my
uh it’s at 85 that’s 10 years i’m 28
john’s probably 38 40. and and uh
he probably at any given time had two or
three longer events in escrow
always brokerage always and we had a
nice staff we had probably a staff of
15 sales and they were they were
cranking them out they were cranking out
new stores left and right under the
laundry land
and bernie did the leases john did the
financing and more did
the rest so it was a it was a nice
marriage and it was a good job
uh good people and you learned a lot and
uh
um i think some some of that’s missing
today i think that
uh um as you and i spoke about the other
day
um i i think that there’s a handful of
brokers out there that
um take a keen interest in their clients
well-being going forward
but a lot of people uh a lot of brokers
and sales people
they’ll sell a laundromat and they’ll
basically
be gone the next day and that new owner
will end up talking to people at parts
departments and talking to
other owners as they meet at the parks
departments to figure out all their
problems when
um a broker the person who sold the deal
should be stepping in and showing them
how to run it how to operate it
from that perspective and then you get
people doing the same thing over and
over again
and it and it it grows
yeah you know you know what i what i
call that
is uh when when somebody is
yeah because we have these brokers right
who will sell
these laundromats especially here in
southern california i think it happens
everywhere they’ll sell the laundromats
to you know first-time buyer don’t
really give them any help
kind of oversell it the buyer gets in
they realize it’s not really what they
thought it was going to be it’s actually
going to take a little bit of work and
it’s not just collecting quarters and
that’s it and
and so after a year or so they decide
they want out because it’s not what they
thought it was so they take it back to
the broker and the broker
sells it over again and they keep doing
that cycle
and i call that the laundromail like
that there’s brokers making their living
doing that it’s a big part of the reason
i mean i got sucked into that when i
first got into business and it was a
rough go for me
um but it’s a big part of the reason why
i do what i’m doing now is because
that’s a that’s not a good sustainable
business model
you know where you’re going to be
helping people out it makes a lot of
sense to help people
succeed in their business because you
know just
strictly business sense if you can grow
if you can help somebody else grow their
business they’re going to help you grow
your business so as a broker
you should be you know helping
your clients succeed because they’re
going to help you succeed they’re going
to bring you with them
right right right yeah it’s important
that you know one of the first
you know there’s a lot of things that i
tell these folks when they get into the
business and there’s
it’s from operational aspects too i say
the first day you own a laundromat is
the first day you’re preparing to sell
it
and i say that because it’s important
that you keep
good books and records as you go forward
so that
truthfully when a seller talks to an
agent and says i’m ready to sell my
laundromat
or i’m thinking about selling it what
value is there
that owner should just hand him the
books
and it basically is here’s what i
grossed for the last year two years
here’s my profit and loss statement and
then you go through all the expenses and
you make sure that the expenses are
properly represented
as you look at it and and i find today
that
it’s it they don’t do it and so most
owners
scramble when you talk with them and you
say well what’s your profit and loss
statement
and i mean right now they say well can
we exclude 20 20 20 for covet and i go
no you can’t exclude that that’s
part of the the value that’s part of
what what you did i mean it
good or bad that’s what it is um but you
find out that that
that their the profit and loss
statements are not properly represented
and it causes problems because they
bought it under a certain premise
and now they’re trying to sell it for
the same premise and it doesn’t work
that way
and so you find out that you know
um the profit of law statements aren’t
what they should be and had they been
trained in the beginning
the proper way to collect this data they
would be handing you a book saying here
what’s my value right so that’s missing
today
yeah and it also makes a lot of sense in
terms of value i mean
your business is a lot more valuable if
if the
if a buyer is able to finance it right
you i mean that’s why
housing prices have continued to go up
right because there’s
access to easy financing for housing
prices so instead of having to come up
with
a hundred thousand dollars to buy a
house you know you can come up with
you know like three three thousand five
hundred dollars
you know with a with a a loan
a down payment for a hundred thousand
dollar house or whatever or twenty
thousand dollars whatever the leverage
is right
right so when you can get your
laundromat financed from
uh with having a loan which you can do
if
which a buyer can do if you have good
records good
solid records it’s going to make your
laundromat more
valuable just by having those records
yeah
yeah yeah so it’s important that that
you actually start to compile your
records
and you you actually get to teach the
owner
um what people will be looking for like
they were looking for
again that goes back to to you working
with the broker that you’re working with
and the other thing is
you know when you look at someone’s
profit and loss statement for the first
time
and you go over it and then you as an
owner have questions and and i always
have questions
there isn’t there isn’t a question i
can’t you know don’t have
but when you try to get the information
or you can’t get the information or it’s
not
prevalent you sow seeds of distrust
so if it’s not um uh
the insurance isn’t the correct stated
amount
then you look at the labor and it’s not
the correct stated amount you start to
sow
seeds of doubt with this buyer that what
else are they not showing you
and what haven’t you been able to
determine is correct or incorrect
and now you have a breakdown of that
fabric
of having a good sale and having the
buyer be comfortable with what they’re
getting
and so you you as a broker have got to
build that
portion up and and then it goes into the
operational aspects of the laundromat
and
you have three correct two yeah two
right now yeah
and you’ve been at it for ten years
seven
so a lot of yours has been oh oh my god
look what happened today
i mean oh my gosh yeah especially early
on but yeah
there’s some there’s some horror stories
i’m sure that you just go i can’t
believe this
oh yeah yeah i mean things things don’t
surprise
me so much anymore but that’s only
because i’ve been desensitized to the
surprising things
yeah it’s um it it’s it’s uh when you
get to the inner workings of a
laundromat
um and you start to look at um and let
me give you an example
um i think that one of the biggest
failures of most laundromat owners today
is they don’t have enough logic cards
and they’ll tell you
well they steal them and i say okay so
you
are a small uh five and dime
or you’re a small hardware store in
rural america
and you know most of your customers they
come in and they all write checks to you
and guess what a couple of checks bounce
every month or
every year that’s the cost of doing
business
that’s what it is and i i cite an
example that basically says
i talked to an old-timer named vic rose
in la and this is in the
80s and fit probably had i don’t know 10
or 15 laundromats in the valley
and um i remember having a conversation
with them and i said
what’s a good number for laudery cards
and uh he went on to tell me a story
about
having a barbecue on a saturday
afternoon with all your family and
friends and you go to the grocery store
and you’re with you know your kids and
you’re gonna go grocery shopping for the
barbecue and you
go up to the front door of the
supermarket and there’s no shopping
carts
his question is are you going to go back
to that grocery store to do your
groceries and the answer is no i
can’t put my groceries in a basket why
would i want to shop there
and the same thing goes for a laundromat
um most laundry
most most customers come in and they
grab that laundry cart
and they don’t let go of that laundry
cart until they are finished
yep the kids playing it the kids sleep
in it the baby’s sleeping it
i mean it’s they own it and then people
say well what’s the right number
and uh i remember telling the story in
florida after giving a
seminar for the cla and um
i told them that it was uh
10. logic cards per thousand square feet
and then i went and i went on to the
floor of the seminar
and rick rollins r b wire pulls me aside
and says what did you do
and i go what do you mean what’d you do
and he goes people are lining up here
asking if
your statement’s true and i go well i
heard it from vic rosen a long time ago
so i’m going to assume it’s true
it’s just there’s never enough and so he
he he brought it down to seven to ten
cards per thousand but it’s still a true
statement if you have a 3 000 square
foot laundry
you should have 25 logic cards and
people say where are you going to put
them i said put them down the aisle
they’ll pick them up and they’ll take
them wherever they’re going to go
but no one will be without a logic card
and that’s really an important part of
the operational aspects of laundry um if
you
um if you take a look at a laundromat
like a casino
and you have slots and you have poker
and you’ve got blackjack and you’ve got
roulette you’ve got top loaders
20s 30s 40s 50s 60s 80s
1200s they’re all different
they’re all different vending areas and
the question is once you have them how
do you move them in and out of your
laundry
to get the most productivity out of your
laundromat
and that includes keeping them a repair
and that you know jumps into another
whole area of
when to buy and why to buy and um but
but but if you look at it that way you
just want to move that client
in your laundry and so if you’ve got
more of others and less
less of some or whatever the case may be
and you have a traffic jam
then you’re going to want to look at how
do you address that traffic jam so you
walk into your laundromat you say
you’re 40 pounders you got seven of them
as an example
and they’re constantly busy people are
waiting for them
well are your 30s not in repair
or are they priced right are your 60s
the machine above
priced right maybe it’s time for you to
jack up the price in the 40s and force
them back in the 30s and
force them into the 60s so you alleviate
the traffic jam so people can get in and
out of the laundromat
which is the key as quickly as possible
so you can do higher volumes
and that goes to the next statement that
goes to
what’s what’s the max
and people toy with it and uh
every laundromat has a glass ceiling
every laundromat will hit a
numerical number that is the maximum
that they could do in that store
and that’s based on where you are who
you’re who you’re
how much parking you have who do you
share the parking with
nail salons restaurants liquor stores i
mean
it all depends on what it is and then
it’s the equipment mix of what you have
inside but every laundromat has a glass
ceiling
you can only fit so many people in a
laundromat at any given time and that’s
the match you can do
so when you start to talk about you know
i’m doing
four and a half turns per day i i kind
of shrug my shoulders and say that’s
nice
i mean that’s an okay number and people
will tell you well you know if the
injuries
four five or six i’m i’m doing great and
i go okay well
divide six into how many hours you
you are in business you know eight fifty
percent so i only have fifty percent
usage of
doing eight turns a day if your average
cycle’s an hour
and i’ve had conversations with
equipment
guys and you know they want to argue you
know
all the different features that you have
on the machines today and i say but the
bottom line is this for easy math
it’s an hour per cycle seven and a half
to load
seven and i have to unload and put it in
the dryers fifth
45-minute cycle plus or minus it’s
we’re talking about numbers that you can
look at that you can say
here’s the goal that i want to get to in
my store
so now you say can i do seven turns a
day can i do
six turns a day and the question is you
might be able to
depends on all the variables that we
just i just spoke about
on do i have enough to get them in the
store and how do i keep them there
and you keep them there by giving them a
clean safe
well-lit place to do their laundry and
it’s a female driven business
and so you have to cater to them now
when i talk to the people in
la in the hispanic neighborhoods i
always tell them to put combat mirrors
in the corners of their laundromat and
they go why because the hispanic women
are short enough they won’t see over the
80 pounder
and they don’t know one where their kids
are and two who’s around here and they
want to feel safe
but if they can look up and see a mirror
now they get to see the whole store and
what’s going on and there’s a little bit
less anxiety and more comfort that it’s
okay in the store
that’s a good tip i like that so
go ahead no probably i’ve got you know
yeah no i’m
i’m curious i mean okay so you’ve
intrigued me right so you’ve you said
hey four four and a half turns yeah fine
whatever right
but you know really you could be doing a
lot more than that
right potentially it provided the other
factors you know your equipment makes
your parking all that stuff kind of
lines up right so
so let’s say a laundromat is
under performing their potential turns
per day
what can someone do to help them reach
that potential of their laundromat
well one of the first things that i’d
sit down with them and say who are your
competition and where are they and what
are they doing
and so i’ll do a grid that that i’ll
take
um depending now depending upon where
you are you uh
if you’re in rural america you’re gonna
go probably three to five miles out
if you’re in downtown l.a you’re going
to go a half a mile out
i mean it’s just the density of
population and i drive
in four different directions and i
survey all the competition and then i do
a spreadsheet that shows
how many top loaders how many and what
at what price
and and then how many uh
front loaders there are and the
different sizes there are so i can see
one if there’s a hole
in other words is the area of vacant
40 pounders or 60 pounders or is that
the least amount that they have
so that i can probably assess what’s
going on in the neighborhood what they
need
and then i’ll also look at your vend
prices and for me i like to maintain a
dollar
per size in between each machine
so if you’ve got a top loader and you’re
at two dollars and you have a 20 pounder
i’m sorry i’d be at three
right be at least 275 and then the next
machine would be 375 the next machine
before 70 but and i would go all the way
up
to try to maintain that dollar because
what will happen is when they come into
your laundromat
you’re going to see where they believe
is the best value for them
they’re they’re not dumb they’re just a
little bit poor
but they know where value is and so
they’re going to go where they think is
the best value for them
in that laundromat and that’s where you
get your logjam when you look at that
and you go oh my god those are
doing seven turns a day on those
machines but the machines below them are
only at five or four and the machines
above them are only at three and two
i want to force them in the other
machine so i can actually get people
in and out of my laundry mat quicker if
they’re all waiting for those
so you raise it a quarter well sometimes
people go i’ll still pay the extra
quarter because i still see the value
well you just made more money if they go
to this
machine above you made more money if you
go to the machine below you alleviated
traffic so you don’t really lose
you just are moving them in your laundry
to create more flow
so you talked about um maximums you know
if you took a
2 000 square foot laundromat or a 3 000
square foot laundromat
and you figure that the average family
comes in
um to your laundromat and um it’s
probably one and
it’s probably at least two people for
the most good
if you’re in a college town or what have
not it’s usually
one or two guys or gals because they’re
doing a buddy system to do the laundry
but if you have a family it’s probably
two to three people well you take a 3
000 square foot store
and you start to put in these different
families and quads
and you probably can only get 20
25 people in that 3 000 square feet
and that’s your that’s your limit that’s
your cap and they’re going to be there
for hour and a half two hours
depending upon their size so you’ve
already have now there’s your ceiling
so now now the question is how are they
affected
inside your laundry do i have enough
folding do i have enough dryers
so each one of those areas once you get
out of the top loaders or front loaders
is that where do they go do you have on
a folding is it two-tiered folding are
they using benches for folding are they
using
the the washing machines for folding in
which they’ve seen they do
um and then once and then the dryers
you’ll have enough capacity to do the
drying for what they’re
for what they need in my store and
there’s the threshold i think you could
probably be
maybe 10 more poundage in your washers
than you do your dryers and after that
you’re in trouble
and i’m against putting machines in
walls
now i remember i’m only i’m only
southern california i’m not east coast
because i know that they have bowling
alleys and they’ve got dryers on one
side washers on the other side
i got that but for the most part when
you’re building a square laundry box
dryers can only go against walls and so
i do my best to avoid putting machines
against the walls
because i want that saved for dryers and
i don’t have them now i will have them
eventually
so i kind of i’m planning ahead
and then from an operational span
standpoint what can i what can i do for
these folks well
i don’t think dryers ever can have
enough makeup air
i dryers are tested in a gymnasium
and they get all the free oxygen they
want
and then we force them behind a wall
that’s three feet wide you can barely
get your shoulders down for a repairman
to get in there
to do the repairs and they’re starving
starving for air
and so you look at you know some people
are lucky they get to put holes in the
walls and they get to draw
fresh air from the outside right behind
the dryers and everybody’s happy
but the reality of it is that’s really
not how it works in fact
it actually it it goes against
the grain a lot of times when you talk
about engineering a laundry
with dryers and the tip for the day
is that i think that you if you improve
the makeup air to the back your dryers
you probably can save five to ten
percent of your gas bill
now i know that’s a lot people go oh my
god i’m spending 1500
a month in gas um but the truth is
they’re just starving for air
and currently if you don’t have
an access to the outside from the walls
behind your dryers
you’re drawing your makeup combustion
air from
above the t-bar ceiling and then
sometimes
from the laundry itself where your
tenants are where all your customers are
and my recommendation is that you
buy three or four
bathroom exhaust fans and you put them
above
all the doors that go into behind the
dryers that you have access for for
repairs
and you put them on a timer and they
just come on and what they’re basically
doing is just sucking air from the
inside of the laundry
into the back of the dryer so they don’t
work so hard
to breathe and and and that starts to
feed them with the air that they need
because
you have combustion air and up outside
and you have makeup air
directly i mean sorry the other way
around you have makeup air above it and
you have combustion air behind it and
they just
circulate so you’re taking the makeup
area now becomes
combustion air and the combustion air
now is burned
and it burns and it throws up i mean
ready for this one this is a this is a
killer
it throws up lint and stepped on oxygen
so the oxygen is 98 98.5 percent
and when it comes out of that nice
beautiful candy cane that gets dumped on
your roof
it’s around 92. but the killer
is they have the relief vents
on your roof right next to those candy
canes
and that stepped on oxygen and that lint
gets sucked
right back into the laundromat yeah
and now you have poor circulation
stepped on oxygen and lint covering your
laundromat
not only is it covering the large amount
on the co2 bar ceiling and in behind the
dryers
it’s also now dusting your entire
laundromat on the inside
and what has to happen is you
you have to be able to
prevent that from happening yeah if you
can
yeah well i mean it’s it’s a huge uh
yeah i mean lint
is just a big problem i think it’s a big
problem why you know i get asked all the
time why
we don’t use water recyclers so much of
water
you know purification systems right to
recycle the water like car washes
you know and lint is just a huge prob i
think lint is probably the biggest
reason that we don’t
do that it makes it not cost effective
to do that for most laundromats
and maybe they’ll solve that problem
maybe they’re working on it but
i’m working on solving that problem
right now i i have something that’s
gonna
that we’ll do another podcast but i have
got something else here that will
that might be able to mitigate that that
lint situation
but you mentioned water recycling and so
when i
was in charge of operations for lucy’s
um we had there was a there’s a store
at 8th and bonnie brae and it was a
combination of lucy’s
and it turned into a wells fargo
kiosk and a burger king
and burger king liked our format because
in our format it only cost them about
300 000 to put a burger king in
in that application versus a million if
it was a freestanding one i mean
they really liked it there was an
apartment building just
to the east of us and i’m talking about
15 feet off the property line
and the laundromat was up against the
property line so basically you had 15
feet and now you have
all the apartment windows of all the
tenants okay
and um
we had a lint problem and it was dumping
all that lint on the roof and then
getting sucked into these so we had to
put a lint collection system on the
laundromat
to the tune of about 150 000 and
literally
big huge bags of lint got collected i
think it’s still there
but you you you mentioned the the the
water
the water purifier well they wanted us
to put a clarifier which is the big box
at the bottom
and the front of your laundry went that
collects all the lint
well we tried to do recycling and it was
a quarter of a million dollars and it’s
like it doesn’t justify
the cost of what you’re talking about to
get water purification and then the
county
of the health department says that you
have to have
so many parts per billion uh
out nine logs so it goes point zero
zero zero out nine and
eight is what they dump in the ocean and
nine is what you get to drink
okay laundromats are probably somewhere
uh
zero zero zero unk and it’s a it’s a
three or four and
you can’t touch it that’s why they would
like you to have
some longer mats are now required to
have clarifiers not a lot of them but
probably i don’t know 25 percent of the
laundromats in la now have clarifiers
it’s to collect all that stuff that gets
dumped into the sewer system and they
have a hard time cleaning out the sludge
so it’s not cost effective for for water
purification
uh for two reasons one is to to do it
the correct way
the cost of the installation of it and
plus it’s hard to
get that water purified to that level
that the health department would allow
you to
recycle it or use it the other thing is
whether or not it would be an open
system or a closed system a closed
system meaning
that if it broke down you would be
without water whereas an open system
you’d be able to funnel in
fresh water to compensate for it while
the other part
was broken down and you got it fixed and
so the cost to put those two together
was becoming cost and effective so it’s
always been that way you look at it you
go man too much money to spend for it
doesn’t make any sense
right so yeah now if you’re the only
laundromat in town
and you were doing a couple hundred
thousand well you know
you would probably want to spend the
money right
yeah so well hey i would love to change
gears
slightly here uh i i get so i do a lot
of consulting and stuff but i get a lot
of calls from
struggling laundromat owners and you
know who’s
you know business just isn’t doing well
maybe they’re even losing money
um and i’m just i’m curious i mean you
have so much experience so much
knowledge
what would you say to somebody whose
laundromat is losing
money every single month and they don’t
know
what to do they don’t know where to turn
i would probably start back at the
basics i’d go back and survey my
competition
and i’d look at how how i fared
to my competition with regards to
cleanliness
newness i mean there’s a lot of things
you can do in a logger map that’s not
going to cost you a lot of money
you can paint you can keep it cleaner
and so i would probably look at um where
have i failed
um some things you have um
you have some barriers number one is if
you’re paying too much rent
um there really is no fix for that and
uh
i think the golden rule or the or i
should say
the the litmus test is
um four times your rent
is what you should be doing in volumes
and nothing lasts
your rent should be 25 basically yeah
and if you’re if you’re at
30 or 35 your landlord’s your silent
partner and it’s just going up rapidly
and the way to combat that is
and this goes this is a comment to all
laundry owners this isn’t just the ones
that are struggling
if mcdonald’s or any of the major
corporations needed to raise prices they
don’t check with anybody they just raise
the prices i mean i can’t
tell you that um you know i go to a
starbucks i get a
i got a short and it’s 2 15. but down
the street it’s 2 35 and over here it’s
250
and everybody has different pricing
structures based on what their rent is
i mean it’s what their expenses are and
what’s the ratio to there
so as an owner operator you want to try
to stay ahead of the curve and the only
way to stay ahead of the curve
is how can i raise my event prices and
what are you offering your clients
when you do raise your event prices you
don’t need new equipment to do that
you need to offer a clean safe place
that they can do their wash
in a relatively quick amount of time
and you should have a game plan that
every year you’re raising one of your
machines
just it’s it’s a you need to keep that
hedge off of that rent because if that
rent gets up in the 30s and 40s
you’re going to have a hard time staying
open and you’re going gonna have a hard
time selling it
and you may end up with that laundromat
for a long time because
you rent is too high and so the next
question is
what do i need to do to make it back
down to the percentages and you have to
go survey your competition
and see what your competition is doing
and then you need to cut your costs like
i mentioned on the makeup air and you
need to look at
do i have any gas hogs do i have
is it time to replace my equipment and
we should jump on that and talk about it
um equipment has two lives
economic life and physical life
and the physical life will always
outstrip the economic life
what do you mean by that can you explain
that a little bit yeah um
with enough baling wire and spit you can
pretty much keep a wire
washer or dryer going forever but the
problem is
in doing that is that you have a couple
of factors that work against you one is
your repair man’s getting wealthy okay
you have customer dissatisfaction
because they don’t trust your
equipment’s going to work when they go
in there so they may be leaving you for
another laundromat
because they don’t trust reliability of
your equipment
okay you may not be giving refunds on a
regular basis
or getting it back to them quick enough
and that now you’ve
you further damaged your relationship or
your relationship with your client took
a hit and so
um the physical life will be there
the economic life is is that when it
gets to a point
where the cost of new equipment
is equal to the cost of repair replace
the equipment
and now comes the big test
the big test is what are you going to
replace it with
now i’m not particularly talking about
the brand i’m talking about
if you surveyed your competition and you
know what your turns per day are
you’re going to change the mix of your
laundromat based on what your clients
needs are
and you may not no longer have 15 or 20
top loaders you may have five
and you may have go from 12 30 pounders
to
20 30 pounders based on
competition based on what your client’s
needs are
based on your turns per day but the goal
here is to make sure that
at what point in time do i change my
equipment out it’s where
the costs along with the lost revenue
costs you can replace it for the cost of
new equipment and that’s when you’re
replacing your equipment
that’s not talking about any of the
depreciation or any other benefits you
get from replacing equipment
so replacing equipment isn’t just oh my
gosh i got to replace the equipment
it’s a thoughtful process that says
what’s going on how much am i spending
every month for repairs
how much are spending a month for labor
and then
what would be the cost of new equipment
if i replaced it and then
what do i replace it with based on the
statistics and based on this data
i love that because i i think a lot i
mean people ask me all the time right
like how do i know when to replace
equipment and i like this kind of
systematic approach because we’re
we’re told all the time like you know
replace equipment after a certain number
of years or
your equipment’s just looking aging so
replace it but
i love what you’re saying because this
gives us numbers right it gives us
a hard like definite
here’s when you need to replace them and
it you only need to replace them
when it makes sense economically to
replace them
right numbers don’t lie people do
numbers are solid you can look at them
and you can go oh my gosh i didn’t know
it it always um uh
gives me great pleasure when you talk to
somebody who really hasn’t studied turns
per day and
you know i have a form that i give them
in excel that’s really easy and
you know people well we’re getting
we’ll talk about a card and coin but i’m
going to talk about coin because that’s
really what what i do
they basically weigh it and then they
just give you the amount and i have a
form that actually takes the amount
converts it to dollars and divide by the
machines divided by the number of days
divided by the event price and there’s
returns per day
and so they get kind of giddy when they
get to finally get to see that they go i
never knew that
you go oh and how long have you had the
laundromat oh about two years they go oh
and who’d you buy it from i mean
yeah it’s like here’s your package this
is what
this is what you should have been handed
or should have been discussed
when you originally bought it um i want
the call um
do you think i should be doing 40s or
50s
or 40s or 60s and you go okay well
what do you need let me see what your
your action is what’s your competition
let’s other is there a hole
i remember doing a store in um
uh out in the uh riverside area
and um we did a survey of the
area and i found i found
that when we did the survey um the area
was
void of 60 pounders i mean basically um
out of four laundromats there was eight
60 pounders
and i looked at i looked at the client
and i said you know
i’d put five or six eight sixty pounders
in this store because the neighborhood
doesn’t have them
and it turned out to be a a big benefit
for them because
they’re doing more volume than they did
before and it’s because of those 60
pounders
but we wouldn’t have known that had we
not surveyed the area and looked at
whether or not there’s a hole in the
neighborhood
plus it gives you the chance to go and
see what your competitors are doing
and why they’re doing what they’re doing
any and
the other thing is and i’m just jumping
around here um
it just came into my head someone says
um should i buy that laundry
and i i’m hesitant to tell them to buy
the laundry
and i’m hesitant because it’s not my
decision it’s your decision i’ve given
you everything that i possibly can
however i’ll take another one for you if
you can’t go to that laundromat
friday night at 10 o’clock get out of
the car
walk into the laundromat and feel
comfortable don’t buy it
just don’t buy it that advice would have
saved me
a ton of heartache
because
i i’ve had some interesting and
interesting situations
uh in the laundry that like figure one
colder which is
uh figaro and a century approximately
and this is
back in the 80s but um i
there there have been some scary moments
that you just look at it and you go is
this worth it
and um it was part of the chain and you
know it was okay but but
you still so when i talk with people
they oh yeah i want to buy a laundry i’m
going to do this and this and that
and then they’re all excited and they go
look at it well we like what’s the next
step and i says the next step is i want
you to go friday and saturday night
and i want you to get out of the car and
walk around that parking lot and if you
can do that you feel comfortable then we
can go to the next stage
if you can’t we’ll find you another
locker man yeah and i
i was interviewed on my own podcast by a
former guest and we were talking about
that
and you know uh peter mayberry was the
guy who was interviewing me and he said
hey
you know it’s just important for people
to know not every laundromat
is for everyone not any not not everyone
can do
any laundromat right there are areas so
unless you’re a you know a vigilante
laundromat owner who wants to come clean
up the neighborhood you know
which i ended up being an un
an unwilling and unwitting uh you know
guy who had to come in and clean up this
laundromat because i got sold into a
frankly a dangerous situation right and
and there are those
laundromats out there so you do need to
be careful you know
and i i think that’s amazing advice
especially
uh for you know someone who
is not used to that like a rougher
neighborhood
or you know it’s easy you know for
somebody who lives here in orange county
to want to go buy a laundromat in south
l.a
but if you’re not used to you know
making
making that transition from those two
different cultures because they’re very
different cultures
that can be a rude awakening it can be
very difficult for someone to do
it is in fact um interesting you should
say that
um i tell people that you should you
want your long-term route within a half
an hour where you work or play
because what’s going to invariably
happen
is it’s going to be a saturday afternoon
and you have a whole house full of
guests
post coping and um
you’re having a grand old time and you
get that phone call saying
there’s a problem with the laundromat
there’s a flood now
we’re going to go back to dg we’ll go
we’ll talk about employees
so you go honey i got to go well your
laundromat’s an hour away
so now you already lost two hours from
this dinner party and depending on how
long it takes you to resolve the problem
that you have
you’re gone for at least three hours
from four o’clock now you’re back at
seven o’clock half your guests are gone
so i tell people if you can get a
laundromat that’s within
30 minutes of where you work or play the
other thing is
and i’m gonna jump back when i jump back
to employees
um when when a
laundromat owner takes over a store for
the first time
um they don’t have a clue and i can’t
tell you how many people have taught how
to use a broom
correctly didn’t you
i believe it yeah and how to teach me so
so what i what i do
and there’s a couple things that i do as
a broker that one is i get everybody
involved in what they’re doing and i
hand them a kind of a booklet that
basically says
here’s an overview of what you should
know and here’s an overview of what you
should provide
and one of them is a um an hourly
a daily a weekly a by
a bi-monthly a monthly quarterly and
semi-annually and an annual list of
responsibilities for the employee for
the attendant what they need to do
and then you also have to teach them and
nobody takes the time to teach their
employees they
have a thought process that says they
know how to use a broom or
they know how to clean up but what
constitutes an emergency and what do you
do
during this and how do i shut off this
or another good tip for laundry owners
um if you have a situation where you’re
you get um brownouts or you get power
outs
power outages um i instruct the
employees to turn off every breaker in
the panel
except for the lights and the reason is
is because
when that power comes back on it could
be a huge surge
more than you normally take and it’ll
fry computer boards
and unless you have a device on your
panel
called an eemon demon which is the real
name it’ll
stop the surge and only deliver the
correct amount of power
you’re going to fry computer boards when
the lights come back on the employee can
go back in and turn all the breakers
back on and all the machines are back on
but if you don’t i mean and this
happened a lot in la
the dryers just got fried the computer
boards got fried well it’s 110 bucks at
the time
to replace 20 computer boards and it was
like
why didn’t somebody tell me this well we
didn’t know it until now but
so it it go it points to
your employees or your first line of
defense and it’s very important that you
give them the right tools and that
includes
training them on what constitutes an
emergency what to do in an emergency
to what their responsibilities are i
mean if there’s a fire
employee get everybody out do the all
these steps and everybody has a step to
follow
and i think that if most owners would
begin to start to take that approach
i think you’d start to see volumes go up
and i think people will be sticking
around a lot longer because
they have well-informed educated
employees that are doing exactly what
they should do given the situation
that’s awesome awesome advice because
you know i i think you know a lot of
laundromat owners
i i mean i think it’s starting to change
a little a little bit less
mom and poppy there’s still i mean i
still say it’s probably majority mom and
pop laundromat owners
right but there’s more and more that are
multi-store owners that are starting to
put
together these systems and these
trainings for employees but i think a
lot of
mom and pop owners aren’t really
thinking about that they’re just
thinking hey i’m going to hire somebody
to come clean
and you know resolve minor issues
that customers have which is fine but
when you start to think
about it more like a business which is
what you’re saying basically like think
about it
as if it’s a business because it is a
business right
instead of a cash machine which is how i
think a lot of owners
especially first-time owners who get
into the business who are sold that by
brokers or distributors or whoever
right you know to see it as a cash
machine but you need to shift that
mindset a little bit and i love what
you’re saying about training these
employees
but i think it’s something that
stereotypically we’re not good at as
laundromat owners
and you know training employees even
knowing what to train
employees and i don’t think there’s a
ton of resources out there
for that uh right now there’s some i
think but not a ton
right it’s it’s it’s a part of the
industry that needs to be
um uh analyzed and what’s the best way
to approach it just like
yeah the uh the lint situation so we we
all this industry has a couple little
interesting quirks that need to to be
looked at a little bit deeper i
personally have a a guy that uh
worked for me uh at lucy’s
and uh um i’ve been known to hire
have him take my clients on a saturday
and grab all the employees
and spend two hours with them and show
them how to
to do the basics so that the employees
understand it
the other thing another reason why you
do this
is that you know you need some kind of
manual if you have employees and in the
old days
people were paid under the table and
nobody really cared about the employee
they were dispensable until
until government got involved and said
there’s no more
independent contractors you’re either an
employee you’re not and
you know i like i when i talk with
people i kind of chuckle sometimes and i
go
i have a rule for you if they if you
supply them with a broom
they’re an employee period so they show
up
with all their own stuff and they come
in when they want a different issue
they’re an employee and and you have to
treat them like that
well you can’t just get rid of your
employees then
there has to be cause so if you
start out with a um a booklet that
basically says here’s
the rules and regulations that you as an
employee show up on time and you go
through the whole list
and it’ll take you a little to put it
together but it won’t take you long
to realize what your mistakes are where
your holes are
within six months you should have a
pretty nice kind of
contract for your employees that you
modify
all the time and you just put that in
there that you reserved right to modify
this contract anytime or this
manual anytime and and you get them to
acknowledge it and you put it in
whatever their native language in so
they can sign it
and then you you can build a case on
that and
and the building the cases is just you
know late late late
late didn’t do this didn’t do this
didn’t do this this sheet wasn’t
done and now you at least have some
cause to be able to say
i can’t use you anymore i’m gonna hire
somebody else
and uh it’s it’s um it’s
it’s an insurance policy
the more you hold on to this and you you
you
make it like that business that you and
i are talking about it’s not
it’s interesting they think oh
laundromats no big deal it’s a fun thing
it’s cash flow you know
like you say it’s a business and
the tighter you run it the more
profitable you are going to be
in the long run and it goes with
training and it goes through
you know um the repair guy
great story and i tell this to everyone
here’s another pearl for you ready
the number two most important person
besides your employees
is your repair guy
now everyone in this industry
can tell you oh my gosh
do we have a repair problem they don’t
show up on time
they don’t have the parts with them i
mean ad nauseam well i have news for you
it didn’t start out that way what
happened
is some people wouldn’t pay the repair
people on time
or would argue what their rates were or
would argue whether or not he actually
spent the time on the machine
et cetera et cetera et cetera my
attitude is this
that’s your most important person in the
operational aspect besides your
employees
and take care of them
when they show up give them half their
money if you want in the beginning
when they show up and they give you a
bid that’s going to be three bearing
jobs and it’s fifteen hundred dollars
give them the seven hundred dollars for
the parts
on a friday afternoon when you’re really
busy
and a machine breaks down if you take
care of your repair guy and you call
them on the phone
they’re going to drop what they’re doing
they’re going to come and see you
because you pay them on time
and there isn’t a hassle and that’s how
you build that rapport with your repair
guy
and your business succeeds you succeed
you don’t have broken down equipment you
don’t have pissed off customers because
i’ve taken care of my repair guy and
that’s the most the second most
important person i have
in this industry and so i see it happen
all the time
where’s charlie well he’s not here why
not well you know he had other things to
do
that doesn’t make any sense in my book
something’s inherently wrong with
a repair person who says they’re going
to be there doesn’t show up so
one of the first things i tell my
clients is make sure you take care of
your repair guy and make sure that
they’re
they’re paid when they they hand out the
invoices
and it’s legit um i think that in our
industry here in southern california
we could use a uh a boost in the number
of repair people that are
currently repairing equipment holy cow
we can i don’t
i struggle i’m always looking for repair
people i take care of my guys i pay him
i’ll pay him cash i’ll pay them what
front like whatever it takes and i
cannot hang on to repair
people i’ve asked for recommendations
and
it’s tough man even even with the
distributors
that have repair people that cost more
money
i can’t even get them to be consistent
it’s crazy so so we have a hole there
somebody come be a top-notch repair all
you gotta do i wanna tell you
all you gotta do is be on time and do
what you say and you will have more
business and then you will know what to
do with
you could create a whole business
hire people make sure they’re on time
and have clear communication if you
can’t be somewhere
just let you know let that model that’s
all you need to do
you don’t even have to be that good at
repairing to be honest
like no you just have to be okay
adequate and be all the time yeah and
show up
you know that that is a that is one of
the things that that this industry
has um suffered with it it is a uh it’s
a problem
and and now more than ever and for all
the folks out there wanting to start
want to get in the business to start
a different company there’s there’s also
the new all the new systems
now i’m i’ll be honest with you uh it
has been um a blind spot for me
on all the technology because and the
reason is
is that it has
developed and propelled itself
exponentially in this industry
that you have the the debit card and the
and the in the uh
the the easy card system or whatever the
system is
um uh that that it’s taking this
industry over
and it’s a flash now who repairs
those so now you’re
channeled into whatever company that is
whatever software program they have
whether it’s that company alone or is a
repair person out here
are they too busy do they have too many
clients so there’s another area
for someone that’s savvy in computers
that understands
software’s to come in and have their own
little
slice of life here because that’s part
of the industry and that stuff’s
breaking down and whenever you have
electronics now wireless is different
but a lot of it’s hardwire
to begin with in the back room you still
have lint and you still have
moisture and that always causes a
problem it’s it’s a
it’s it’s it’s something we can’t get
away in a locker man
until we resolve the lint issue which
we’ll get to it at a different time
but that’s the problem you have so you
have not only do you have repair of the
hard equipment
of bearings and coin drops and and
mechanisms and and
hoses and belts and all the other things
you actually have the electronics of it
and the software of it and who can stop
a machine and go through
and do a software repair or hardware
repair uh right there on notice or do
you have to wait for
uh uh the next day because it’s past
five o’clock new york time
that you can’t get a rep to do it so
there’s another area
that this industry in at least in
southern california right now
uh could use a boost in to to get some
money or get a company that basically
says we can work on all those things
well i tell you i’m this close to
quitting everything else i’m doing and
starting my own repair
company because i think i could probably
make a lot more money doing that
i’ll sell my laundromats and make a lot
more money fixing machines
holy cow man absolutely yeah absolutely
crazy well uh real quick i mean i have a
couple of we have a couple little
segments i want to get to in a second
but real quick
you mentioned earlier uh you want to
talk coin versus card
and i’m just kind of curious on your
take on that i mean you just touched on
it briefly right there but
i’m not part i’m old school
but um i think that um
i think there’s a time and a place in
the evolution of the card systems and
what have not that it’s beneficial for
particularly multi-store owners because
it uh
it improves one is it takes away
it takes away the possibility of theft
from people handling money
two um there’s a accurate accounting of
it
and you don’t have to worry about it i
mean i’ve seen some systems where
basically they just show me here’s my
bank statement
here’s what the bank deducted here’s
what i made yesterday and then it goes
further and this is what my
turns per day on each machine was uh and
not just the
the the the size of the machine as a as
a general but each machine doing the
turns and and then you get in the
conversations of
um why are those machines doing more
trends well they’re in the front or
they’re in the back or they’re next to
this so they’re next
whole different again that’s that matrix
that you get to play with once they’re
in the store like a casino you’re just
moving them within the parts
um but for coin and card um and then
there’s a hybrid and i like the hybrid
and um i just like coin i’ve always
heard that
cash is king and and um i i kind of um
again i’m old school on that i don’t
mind taking a little bit of time to
count quarters um it may be
unsanitary now it may require you to
bleach your money
uh may require you to wear gloves where
you handle it
i mean um i’ve been known to uh actually
wash
wash uh uh money out of the changers
and try optimism for launder or
and put a rubber band on the pillowcase
and wash the money and dry it in the
dryer
and and you actually have clean money i
mean and it’s it’s you know
it’s like i can touch it and use it
right um but but but
we’re talking about actually washing
right we’re not talking about laundering
money and having cleaning yeah i
i’ve actually i’ve actually i just want
to be clear on that that we’re
talking about physically putting it in a
washing machine
with some tide or ariel or something
yeah bleach bleach actually soaking it
in bleach and just
rinsing it and putting it in a pillow
case when drying it and having it come
out crispy
and then you can get you know but you
know i’ve done it
um not anymore but i have um
but it i mean because money is dirty i
mean it touches so many different hands
and you have no idea where it’s coming
from and and
i think a lot of people like the fact
that you can wave your ae
or your debit or your credit card in
front of the
thing in your machine set which i think
as we evolve
i think that’s where it’s going to end
up in the long run although i still do
like coin because i think cash is king
and
for all the for all the variable reasons
of that um
i’m kind of more of a hybrid guy but
it to talk about that you have to make
sure that it works for you and you have
to make sure you have equipment that
works for you
and that gets back to the repair part
which is vitally important
i want to do an uh a little separation
there um one of the interesting things
that we talked about in the beginning
which was
when you buy a laundromat your first
step is getting ready to sell it
um one of the things that that i’ve
noticed in the industry today
is that um i’ll look at the the listing
for sale the laundry for sale
and i’ll see um the equipment is
anywhere between 12 and 18 years old
and um if you’ve maintained it and it
looks good
you know again you’re trading dollars
with a bank
versus with your repair guy where’s your
money well spent in order for that
equipment to work
but i find on the profit of law
statements you’ll see something like 350
and you’ll go i’m sorry 350
for what 350 for repair and i’m like no
no that might be and 350 dollars
for a week might be 350 for
the parts but it’s not 350
for the repair and they go well the
seller says he fixes his own equipment
and i kind of chuckle and i say well all
right so let’s
change businesses
you own a car rental now remember
the laundromat and a car rental aren’t
that much different people are going to
go up crazy
no you’re renting equipment to the
public it doesn’t matter what it is
it could be um hammers and jackhammers
and chainsaws but you’re renting
equipment to the public
just happens to be cars and so
the thought process for the person who
fixes their own equipment
and doesn’t put it on the profit and
loss statement
is so you own a car rental and
at the end of the day your eight cars or
12 or 20 cars or rented out you got five
in the shop
and those five cars two needs a
transmission and one needs a couple of
oil changes and you need a brake job
so when you close the doors at six
o’clock you’re gonna put on your green
jeans and you’re gonna go out there work
till one or two in the morning repairing
your own equipment
and then wake up tomorrow and do the
same thing again he goes that’s not how
businesses are run
there’s a line item for that and the
reason there’s a line item for it
because there’s a cost associated with
that now i think that it’s fantastic
that you have the time of your life to
be able to go and repair the equipment i
think that’s wonderful
and i recommend that all laundry owners
repair their own equipment
to a certain point
and if you do that you should pay
yourself for that
so when you pay yourself for that
whatever the going rate is that’s what
it should be
reflected on that profit and loss
statement and i find that
10 out of 10 times when i look at a
listing
and there’s three things that i look for
on a listing and
and and almost every time i look at them
it’s blank or it doesn’t have anything
or the numbers are
woefully um uh uh misrepresented
um and and and so i
i i take the time to either talk to the
other broker or i take the time to talk
to the seller and say
you know uh it’s difficult to sell you
you’re breaking down
trust because most people expect to see
this expense on the
report and it’s not there and um and and
then
then you have an uphill battle um with
the seller
with the broker and then you actually
have a
um a hand uh confidence-building
conversation with your buyer
to explain to them what’s happening and
what the real numbers should be
and how it builds on top of it um what
people
i think fail to understand both sellers
and
brokers and buyers um for every 500
that isn’t stated on the profit and loss
statement
that the buyer incurs once escrow closes
on an expense that you didn’t catch that
is a constant
deduct every month um if you’re buying
out of four or five buying out of five
four multiple
um that’s six thousand a year that’s
twenty you just overpaid by twenty five
thousand 000
for that laundromat that you shouldn’t
have because you missed something or
somebody understated something so it’s
vitally important
that when you slow down i know you’re
all excited
i know you all want to buy a laundromat
i mean i have a half a dozen buyers
right now that are
you know you got anything in orange
county you got anything in the valley
you got to be in la and
the question is well here’s one and
here’s one here’s one and the first
thing i do is i go nope
nope rent-a-gross ratio is off no
they’re understating this nope they’re
understating that and i go
so they want 350 000 in the laundry and
my estimation is only worth 275
because there’s a hole
i treat it like it’s my money if i’m not
going to invest in it why would i
recommend
that somebody who wants to get in the
business who has some hard-earned cash
to invest in a lot of right why would i
want to sell them something that i know
that it’s not going to produce that kind
of revenue
on a monthly basis and they’re not going
to go after the seller they’re going to
go after me
and go after me meaning we’re going to
have that come to jesus conversation of
why didn’t you tell me
why did you miss this how did you miss
this i mean i have 35 years in this
business
i can’t miss anything
it doesn’t bode well yeah you know
and and i want i want them to stay with
me i want them to call me up and say hey
i got a problem
what’s the problem i don’t know what
machines to add oh great what are your
turns per day great let’s sit down and
have a conversation about your store
and then it goes through did you survey
do you have this do you have this let me
see the reports let’s talk about it
so i think that’s a huge yeah i think
it’s a huge point
i mean i love that you said for every
500 bucks you know that’s 25 grand of
equity that you’re overpaying
uh because i think people don’t think
about it
like that right and and it’s really easy
in this business
to miss 500 bucks either in overstated
income or
understated expenses which you know
it’s just easy to do because it’s really
difficult sometimes to pinpoint exactly
what a laundromat is doing unless
you’re working with somebody who has
this experience in the industry and can
tell
the gotchas like the repair costs right
unless first of all it’s that trust the
trust that you built up in the beginning
i i find that um probably a majority
uh 75 70
80 80 20 rule the old 80 20 rule
um that it’s not the it’s not the income
it’s the expenses yeah it’s the expenses
that are understated more than the
uh income is overstated because if the
income is overstated they’re paying tax
on it nobody wants to pay taxes
so they’re going to keep that as tight
as they possibly can
or even less which is a benefit to the
owner the guy who’s buying it
who he takes over the store and it’s
doing a thousand dollars more per month
it’s like
hey wow this is pretty good so but i
find that that
that the the the challenge for us
as brokers and as buyers is to make sure
that
um the line items are properly filled
out and you’re close to being what it
truly is
what the expenses are and there’s
expenses that you can’t get away with
industry and you know what they are
i mean you know um everything is
verifiable but
gas water and electric everything else
is a
fixed payment uh repairs for the most
part but
but if you’re on a contract with
somebody you’re paying him 550 a month
just to show up once a week to fix
whatever’s there and then it’s plus
parts
so even part of the part of that is a
fixed expense you can call fixed
rent’s fixed insurance is fixed labor’s
usually fixed because you don’t want to
fluctuate hours
by giving employees more hours and
that’s the other thing
what’s your coverage and um
are you paying them the going rate at
14.50 or 15
an hour in l.a now or orange county i
think it’s 14 or 15 an hour
um and how many hours do you have your
coverage and
then the conversation becomes between us
is when do you need coverage
and what is important coverage so old
rule of thumb
um and i don’t know if you’re familiar
with this but
uh saturday sunday friday monday tuesday
thursday wednesday
those are your busy days of the week
and you could go into a laundromat on
any wednesday and shoot a shotgun and
not hit anybody
like i get clients coming out well we
went to the laundromat on wednesday at
one o’clock in the afternoon
and there was nobody there they’re not
doing the volume wait stop
time out it doesn’t work that way
they’re all creatures of habit
yep go there saturday afternoon to four
o’clock
and then let’s talk so
you know they don’t know that so so you
talk about cyclicals and then you talk
about um cyclicals for the year
so i used to have a graph i don’t have
it now but
it used to show a a mean line
with the calendar january february march
april all the way across
and then on the left hand side it would
show 115
and 85 and you’d start in january
and you’d loop it down and it would go
right through the summer months so it
would be
just after school got out when we were
in school which should be
mid-june through july and august which
will be down to the 85
and then out of august it would start to
creep back up come september school
would start again
right back and then it would go up and
then you’d have this you’d have this
cycle you’d say okay
so they’re doing a collection in july
well the laundry’s off 50
it’s not doing the volume relax it is
it’s people wear less clothing during
the summer
therefore the volumes are down if you
were doing a collection in january you’d
be all giddy saying oh my god it’s doing
50
more than it should i’m buying i’m
stealing it okay but that’s
not how it goes because you’re doing an
average right
for what the volumes are so those are
some of the things that i talk to
uh clients with uh when i sit down with
them and say here’s
kind of a a benchmark for you to look at
when you look at laundromats and again
it goes back to
and then it goes daily i mean each
laundromat’s different daily
um but usually the afternoons are busier
than the lunchtime and the mornings are
sometimes busier
but remember they’re all creatures of
habit and
everybody has their time that they like
to go uh
to a laundromat and um nobody likes to
do laundry it’s not something that we
all like to do
it’s probably one of the least likely
chores i mean i can tell you i hate
doing laundry
well which is one of the reasons pickup
and delivery is starting to take off
right now which which is huge yeah um
and and um which didn’t exist
when i started it was
it wasn’t even a thought not even an
afterthought it wasn’t even a thought
um i don’t well somebody could probably
fill me in on this i don’t know when the
evolution
or the yeah the the the evolution of it
came in blew up i don’t know if it was
um 2005
2010 um but
um it’s a it’s arrived
um you know there’s a there’s a lot of
conversations on that
um and um i find that one of the
interesting conversations i’ve had with
people that have laundromats that do
wash and fold wash dry and fold
and then they’re like i need another
location and you go why do you need
another location
and they go well because i can’t do the
volume i don’t have a big enough store
and one of the first things to say is go
rent a laundromat from somebody else
make a deal with the guy down the street
that you you’ll take over his laundromat
from 12
until six in the morning you’ll he he
gets all your quarters whatever it costs
you to do your laundry doesn’t matter
i mean there’s more than one ways to
skin a cat instead of spending 250 000
for a new location and be liable for the
lease and all those other things that go
associated with it and what have not
so there’s more than one way to skin a
cat when you want to grow that wash dry
fold and
this is now becoming more of a wash dry
fold
clientele particularly in the college
towns and where
you have uh upwardly mobile people that
are pushing out
and they don’t want to do one i mean
it’s it’s
quite apparent based on the numbers that
i’ve seen on some of these stores you’re
like
you’re doing what and how much oh my
gosh it’s it’s
it’s amazing um and
learning that is another thing it’s a
whole different school of thought
and it takes a whole different mindset
yeah it really is like having two
different businesses i mean you’re using
the same assets but you’re running two
different businesses you have two
different
client avatars clientele types um
and so you know and you know one is a
logistics company which is pick up and
delivery
it’s a logistics business right right
and laundromat is not that
at all right so you’re renting equipment
out like you said
and um so it is it’s definitely a
different mindset
but you’re utilizing the same assets and
it’s a way to
it’s another way that you can get those
turns per day
up on your machines uh you know without
necessarily even drawing more
customers from your immediate age right
yeah right the question is is that which
machines do you dedicate
how do you dedicate it yeah do you
monitor all the logistics that’s it yeah
and you’re right you have a delivery
company and you have a labor company
okay and then you have the management
and and one of the
challenges that laundry owners face
today is
um when i when we started lucy’s um i
had the privilege
and the honor to work with john gorman
one of the original founders of taco
bell
and one of the things that stuck with me
was um
we asked john at what point in time do
you need a manager
and he says the average owner can run
five taco bells before he needs help
just to give you an idea i think that
in today’s marketplace since you do have
three organizations within one
organization
you as an owner have to choose which
part of the organization you want to run
in order to do it effectively
um so i and i’ve seen it and i’ve talked
to these owners
you’ve got an owner that has three
stores
two of them do uh one of them does just
laundry
wash a regular uh self-service and the
other one does self-service and wash
drying fold
and so you have in my book you actually
have
four companies within your company
the challenges is being effective and
being
um good at all of them and then
the the smartest one is taking a step
back and saying what am i really good at
and what do i need help at and then you
solicit the help
to get the other areas covered because
it’s hard to
to to run your three your three
laundromats as it is it’s hard to run
three laundromats
filling up soap and bleach and the candy
and the snack and all that stuff and
running that happens
now you’ve got a delivery company for
for four vehicles two vehicles four
vehicles
that you’re watching all the time are
they getting maintained who smashed it
how’s the insurance in places
i mean i see posts all the time which is
i didn’t know we had this scratch on
this van and there’s a big hole in the
side of it
could you at least tell me when you did
it i didn’t know what happened okay all
right
so so you have you have these segments
and in order to get better in order to
be
proficient at what you do you as the
owner have to step back and say
i’m at my breaking point
and now i need someone to handle what
you said which was logistics which is a
big portion of this business
where are you going how long does it
take you to get there but you know
and and and the routes and what have not
and then you have the people actually
doing the work
which is another segment um and then you
have the overall
financial books that you’re running for
the profitability of the business
so there’s four or five hats that as an
owner is wearing
and as the more stores you open up
the more you have to take a step back
and say where am i failing or
where do i need help at in order to
maintain and grow this company in the
right direction
and i think at some point in time you’ll
have owners that
are frozen they want to grow
but they’re frozen because it’s like
i’m 16 hours a day at this and i’m still
not
getting to that level of proficiency
that i need or i want
to see from it and you got buddies
elbowing you saying hey man have you
done this if you’ve done that or
or hey you know and you’ve talked to
guys like you own two stores or four
stores
and they’re giving you tidbits and you
sit back and you go home and you go oh
my god i’m not doing this right
or i need help and then it’s what does
it help cost me
and how much beneficial is it going to
be to me and what area do i want to take
over
and what area am i weak at that i want
somebody else to run for me
and that’s the challenges faced with
people that are doing the wash drying
fold along with self-service laundry
it’s uh something needs to be looked at
yeah yeah definitely a whole a whole big
beast
uh a lot of opportunity there especially
right now
um i think it’s just getting started
i mean it’s going but i think there’s
plenty of room for it to grow
but it’s definitely a whole different
beast i think it’s
the other one of the other segments that
you and i would like to probably talk in
another cast
about um what the industry needs
um from our perspective here and and
remember we’re
kind of myopic here west coast is a lot
different than the east coast in the
midwest i guarantee
in fact a funny cut funny note um i see
more people buying used equipment in the
midwest
than anywhere else i’m like i would
never buy used equipment unless
it was just starting a store and i
needed to see if that worked so that i
could build it up and buy new equipment
but they trade you know i mean i’ve seen
pictures of 40 year old sissels and
they’re like hey
well these work and i’m going what do
you have that dryer for
so anyways so there are some areas that
you and i
could talk about in in in improving this
industry
we talked about lent we talked about uh
a repair
we talked about uh two areas of repair
physical repair of the equipment
and and then actual repair of the um
electronics for lack of a better
description yeah and that includes dvrs
that includes security systems
um most of the security companies out
there you’re on a three-year lease
and uh if you uh bail after a year and a
half they want the 18 months of money
that they would have gotten had you
stayed on the
track you sold the business whatever
they want the 1800 to get out of the
contract it’s like
how does that work yes so so there’s
some areas here that we could look at
and discuss um on on
how to improve this leg of the business
to give
the owners that we know and the people
that we know in this business
a leg up on uh running their
laundry i love that i love that maybe we
could even do like a little running
series at some point or something let’s
talk about that
uh yeah that’d be i think that’d be a
lot of fun i think they’d be
really helpful for people yeah i think
so too well we have a little segment
that i want to get to
called the secret sauce listen up it’s
the secret sauce
secret sauce is this question is hey
what what tips can you give
to current owners what’s your maybe like
your number one or one or two tips that
you can give to current owners
to help them improve their their
business right now like i think i gave
you two right
two in the beginning two already you’ve
given a ton
you need more laundry carts and you need
to assess
which ones you need and i know you can
get extenders so they can’t take them
out the door
but i think laundry carts are a big plus
um
to keep your customers in place
um the other one was the makeup air
which i think is a huge uh
area um one of the things that i still
do to this day which you’re going to
think is funny
is when i meet with an owner at a
laundromat and we’re going to talk about
um i just stopped by charlie and say hey
charlie what’s going on i go hey i’ll be
at the laundromat okay i’ll go by and
see them
just to keep the relationship going and
you know maybe they’ve had a lot of room
for three or four years and maybe i
assisted them in buying it maybe i did
and i just know who they are and i go
and talk with them
and um i always can find something
operationally that i can point out and
say
if i were you i would you know here’s
okay and
and the makeup air is one and basically
i would take a
a piece of paper or a wad of lint
or something i could find in the trash
can like a bounce
and i’d go to the door that has access
to the back of the dryers and i get them
i bend down and put this piece of paper
or whatever i have right at the bottom
of the door and it would just get sucked
right in
so i said your dryers are they’re just
starving for air you can’t give them
enough air
so i tried to say look there’s
three things you can do dryers like to
do this
this is how they talk about the
circulation you get the combustion
make a pair to combustion air to exhaust
right
so at the top i would put in the
ceilings you put the egg crates
which allows the air to go up and in
front of the dryers and get sucked into
the top above the t-bar ceiling
and those are the the egg crate uh uh uh
ceiling tiles that they make and then i
put
if you don’t do that i put exhaust fans
above the
curtain wall above the dryers to suck
and force the air behind the dryers
and then at below i sometimes tell
people to cut a hole in that door
to allow the air to get to and fro
in the bottom of it to create a venteri
effect that will feed those dryers
and give them more air which
if they get more air and they’re burning
properly your gas bill is going to drop
so just a natural phenomena and then you
can always have
and you can always call your local gas
company in southern california so the
california gas
and you can have them come out and
they’ll tell you
whether or not your pilot lights are
burning at the right
color they’ll just look at it and go
too rich starved or whatever then you
can get a game plan together with your
mechanic on how to make sure that those
dryers
get what they need in order to burn
efficiently
and that those two points right there i
think are
the the laundry carts and the make-up
air will allow you to one save money but
actually um your customers will be a lot
happier
um and you’ll have a more satisfaction
in your laundromat
if you can do those two things i love
the secret sauce because
those are we’ve never heard anything
like those
two tips so i mean i think those are
great tips and they’re super actionable
right like you can go out
you know jump online right now and order
laundry carts and have them delivered
you know in the next week to your
laundromat so get out there and do it
i’ll probably go
order a couple more i’m not i’m not
quite at that 10 per thousand square
feet so i know i need to add a few
i’m going to give you uh an andy tour
okay
and i’m going to talk about logic cards
so um jordan calls me on the phone and
says hey i’m thinking about um
buying a laundromat and i’ll go okay
send me the setup sheet and i’ll get the
setup sheet and
then i’ll mark up the setup sheet and
i’ll send it back to you and we’ll talk
about the cash flow
and you go you know i still like the
laundry let’s take a look at it so
i when i drive up to a location now this
is it doesn’t matter if it’s
a new location that you want to build a
new store
or it’s an existing laundromat so i’m
driving down the street
and i look at the location and i pass it
and i drive
depending upon where i’m at half a mile
east a half a mile north a half a mile
west and a half miles up
and i will survey what’s there
now when i come back to this location
the first thing i’m looking for
is it on the corner does it have a
signal or a stop sign
is there a crosswalk is it in line
meaning is it down the street and it’s
not on a corner
and is there a competitor across the
street
are all the all the apartments or the
the rental houses across the street
people have to walk across well most
women and their little
chickens are not going to walk across
the street if there’s a lager mat on
their side
okay and the only way they’ll do that is
if they’re a crosswalk
and if it’s a big boulevard forget it
i’m also looking at
what are the natural boundaries is there
a river
is there a freeway is there a railroad
track
these are going to prevent people from
coming they’re natural barriers
okay particularly in the cities that and
the neighborhoods that you and i were
you used to looking at and seeing you
know you’re like oh okay
natural barriers and then i look at um
parking
exposure ingress and egress in the
shopping center
where is the laundry in the shopping
center is it in the crotch where the two
points meet
does it have a lot of glass are there
drink and snack and vending machines and
candy machines all blocking
the glass so that people can’t see out
and people can’t see
in another safety factor i don’t like
machines
i don’t like anything in my windows if i
can avoid it i get everything out of my
windows
i want the people in there to be able to
see out and i want somebody
to be able to see and to see what’s
going on because at night that’s what
you need
okay i’m going to go at night to see if
the parking lot’s well lit and if it’s
not i’m gonna mark down the lights that
are out and tell the guy and get the
landlord to fix those lights because you
don’t have any safety or security here
then i’m gonna look at who my tenants
are liquor store
barber shop nail salon dental store
these all eat up parking so
during my out normal hours they’re going
to compete with me for parking
after hours most of these aren’t open i
get the parking
but how much is that is my business 30
35 40
at night so i then get out of my car and
is it safe to get out
is there parking in front of the
laundromat
or is the parking in the parking lot and
i’m walking
20 or 30 feet to get into the laundry
and then i look at you and say
where are my laundry carts and i walk in
there and you’d be surprised you
and and you’ll laugh the next time you
go into a laundromat your competitors
you’re just going to start to laugh
you’re going to go this guy’s only got
11 laundry cards and he has 3 000 square
feet
how are you surviving i mean you want to
you want to spend what are they about 50
now buck 30 buck 50.
um uh um give me five just under a grand
750 right
you could pick up the average logic
customer is between 50 and 70
a month that’s a family of three and a
half okay
um so what if you picked up two more
people
because you have carts you have no idea
it’s it’s just another thing so now i’m
looking at carts i walk in the door
and i’m looking at the floor and i’m
looking at the ceiling now
ceiling tiles another oh another pearl
for you for your for our customers okay
you have a leak in the roof everybody
does
okay well it could be
it could be condensation okay
from the pipes okay it could be an
actual leak but you don’t know
and it’s not for you to worry about when
you replace that tile
don’t replace it take the new tile and
put the new tile underneath it
and leave the the water tile above it so
it acts like a sponge
and you will save on ceiling tiles
because it’ll absorb whatever moisture
is coming through because it already has
it just looks bad now you have a clean
tile up there for the most part for
another six months it’s going to stay
clean
when it starts to leak you take the old
one off you put another one underneath
it and acts like a sponge
simple way to save your ceiling and make
it look nice that’s a good tip
okay so now you walk into the laundromat
you’re looking around and what am i
looking for
i know that trash on the floor isn’t
gonna
push people away overflowing trash cans
will
because then it’s gonna go on top of the
counter then it’s gonna go here
also the uh night walk though the
watchman
newspapers that they nope you you don’t
get to advertise on my laundromat
unless you want to pay for it there’s no
rent there’s no this there’s no none of
those bulletin boards that they have
outside or inside
all trash no phones we all have cell
phones now
but i could tell you a story of when i
was at
when i first did lucy’s in inglewood
where um we had a drug problem outside
and there were four phones and
phones like newspaper racks they can put
anywhere they want they’re not regulated
but if you touch them
it’s grand theft it’s you they can put
them where they want but you can’t touch
them
so they wouldn’t take the phones out so
i just set up out
leaving every night i would take uh
silicone caulk and i would fill in the
corner slots
with silicone and it only took me about
a month and they removed the phones
even after i asked them to remove the
bones because it was a drug problem and
people weren’t coming to my logarithm
that was me and this was 1987 or
something like that
not an issue anymore for those of you
who don’t know there used to be phones
that you put
quarters into to be able to call people
these are called pay phones
right so now i’m in the laundromat so
i’m looking for trash i’m looking for
the ceiling
and now i’m looking at the overall
layout of the store
and as i walk through it i either
chuckle or i smile
because i’m looking at those are 35
pound milners
those are 35 years old i mean
okay um now i’m you know i’m okay
all right uh 16 quarters all right four
dollars okay all right okay
all right okay you’re in the right range
okay all right um and you see eight of
them and
four working and four look like they
just got
baseball bad beaten and you’re like i
don’t understand this
and then you look in there and you go
okay so i do a quick
poundage reading on the machines and i
don’t care what your machine is
10 20s 8 30s i’m doing my math
and then i just look at all the dryers
and i every dryer is a 30 pounder unless
they’re new ones
and i do the math and i see if they have
the proper amount of ratio of poundage
to poundage
again i like to have a little more
sometimes you have a little less
but now i’m looking at mix i’m looking
at flow do i have machines
that are against the wall so that um and
they don’t do it anymore they used to
i haven’t seen too many today but i like
to see a free-flowing laundromat where
people can walk in the laundry room
without getting stopped in
in the older days they used to have some
laundromats where the machines came out
of the walls
and if you were doing your washing you
were in there you had no way to escape
well that’s just making the person who’s
doing their laundry fearful that they
can’t get out of a situation if someone
came in the door
and said how do i get out of here so i’m
looking at the layout i’m looking at the
equipment
i’m looking at the age of the equipment
i’m looking at are all the lights on
do they have lights are they all working
are they all functional
and and then i leave the store and i sit
down on my car and i and i rate
ingress and egress and that’s how i look
at a laundromat
every time i go to a new laundry
and i count the logic cards
and i give it a grade and then i sit
down with you and say here’s what
my discovery was at this particular
laundromat here’s where i think you can
improve
you can call me today and say come down
to look at my login and tell me what you
think of them because i haven’t been
into your stores
so i’d be more than happy to do that so
but it just takes another set of eyes
not yours
and it’s one of those like hey i think
i’ll do this every six months i just
have somebody come in and look at my
store
from their perspective and it could be
another owner that you know in orange
county say hey
come by and rip my store apart
and and you get you get that i mean you
know
because you realize you’re really not in
competition with each other
right you’re you’re just trying to gain
the mass of people that need their
clothing washed
and how do i provide for them so your
competition is really yourself
how can i provide this neighborhood
and you and i can talk about in the
future we can do another podcast
of demographics how they impact you what
do they really mean what do you look for
um to um what’s the average family spend
um an example i’ll just give you a
little tidbit um
somebody said you know i i look at
renters and
i get it down to a number and i multiply
that number by
i divide it by the number of people per
household and in hispanic communities i
know that it’s probably double so if
they say there’s 3.5
there’s six people living in that house
it’s just
just the way they they work and
but that household is 50 to 70
per household so you’re doing 25 000
in your laundromat not including wash
dry and fold
and not including vending because
vending
is an adjunct to your wash i take that
25
000 and i divide it by orange county i’m
going to divide it by 60.
you’ve got 425 permanent customers
coming to your shopping center every
week to do their wash
those are your numbers and if you wanted
to you could sit down and put a
percentage to each day of the week
saturday sunday friday monday tuesday
thursday wednesday and you can figure
out
approximately how many people are coming
to your logger mat on fridays
as a percentage and then divide that by
16 hours you’re gonna go geez i don’t
have a lot of people coming in here
now the question becomes how do i get
them in here right
and and then it goes back to if i had
more parking
i could do more volume if i had more
volume i need more dryers i had more
dryers i need more washers and now it
becomes one of those
oh my god i’m chasing my tail here but
that’s
when you’re doing that then you’re doing
it right
i love that i mean again the systematic
approach is something that i think
is missing even with most brokers that
i’ve worked with that i’ve seen
they’re not taking the systematic
approach a lot of them are just kind of
basing off their experience and so they
have like these
you know general knowledge where they
can kind of get ballpark and stuff like
that but i love the systematic approach
and again
treating your business like a business
right and that’s what you’re doing
that’s what you’re saying
when you’re going through i mean i i was
taking all kinds of notes while you were
talking about your process and stuff
like that because i i think
even just having an owner do that for
themselves and i love the advice of
having somebody come in
every six months and just tear your
laundry mat apart it terrifies me to
death
to have that happen but it’s way better
to be critiqued by somebody who knows
and to be able to make
you know adjustments to improve your
business
than to be ignorant of that stuff and
feel and not feel that uncomfortable
feeling of saying
hey here’s some things that i’m not
doing optimally
that i could do better right it feels
scary to me
but you know ultimately if you want to
grow your business it’s like that whole
like iron
sharpens iron kind of thing right you
have somebody come in and telling you
how to improve your business it’s only
going to benefit you and
as important it’s going to benefit your
customers
and your community that your laundromats
in right
you’ll be you’ll laugh and i’ll i’ll and
i’m going to use you so that everybody
can see that you’re human
um what was the last time you surveyed
your competition
oh i was just i was thinking this i
don’t even want to talk about that i was
because i was thinking i was like man i
need to go back it’s probably been two
years at least since i’ve gone out and
looked at
the competition and you’d be surprised
um i’ll give you a story um i got a guy
in la
and um we found out that
he only has one competitor that
competitor has equipment the same age as
his equipment which is 20 years
so this neighborhood has not had a
resurgence of new equipment for 20
years that’s
shocking but it’s also
a benefit to him because we went in
there and said
what do we need to change how do we need
to change it based on the competition
and based on the machines that the other
competitor has we’re going to put new
equipment in here you’ll do just fine
because in that case since they haven’t
seen new equipment once they see new
equipment
it’s not so much that it’s new it’s they
know it’ll work
right yep even if it’s a quarter more
it won’t matter they’ll be at his door
so well
we don’t know go ahead yeah no that was
awesome man i mean that
that whole that whole secret sauce thing
was
incredible there was so much good stuff
in there uh i mean you’ve given already
a ton of
tips for newbies but we have a section
called pro tips
pro tips and that’s if you have a piece
of advice to give to somebody buying
their first laundromat
what would you tell them go there late
at night so you’re comfortable that you
know that that’s the laundry you want to
own
move very slowly and methodically
in your analysis and investigations
don’t give up
when it doesn’t fly right the first time
because it’s not going to fly right the
first time
trust the process with your broker
and realize that once you get to escrow
the escrow officer rules the broker
the seller and the buyer have no say
because the escrow officer has her own
set of rules that she has to work by
and she’s only asking for information in
order to close that escrow
don’t open escrow
unless you have a deal
unless you have verified several things
escrow in my estimation is good for two
things
three things you’re legally good to
transfer the business you’re going to
get a bill of sale
you need an assignment of lease and you
got your financing
and those are the only three things that
i look at when i talk to my clients
about
what escrow means the rest of it you get
to do collections you get to
learn about the business you get to be
trained on it but that’s all
what the escrow officer does and trust
in the fact that that’s the process
there is no control after once it gets
to escrow it’s out of our hands
yeah and most people don’t understand
that they think you can manipulate
something that’s like
she’s got her own rules that’s what
they’re for they’re a neutral
neutral party yeah awesome
awesome pro tips i think those are great
things for newbies to be thinking of
again a lot of
uh unique tips there that we haven’t
heard before on the podcast so
really really good stuff and we haven’t
really talked about escrow at all i
don’t think no podcast so
i mean at least bringing that up i
appreciate that maybe we can do
something later on down the line talking
about escr