How do you protect your laundromat’s revenue stream from competitors, lease terminations, rent increases, and more! Find out how to create a new business within your business that can protect your laundry business from external threats.
Welcome to the State of the Laundry Industry with ‘Laundry Matt’! Episode six: Future-Proofing Your Laundromat’s Revenue Stream.
This episode is about future proofing your revenue stream. Isn’t that why we started up laundromats in the first place? To have a revenue stream that we could depend upon, that we could retire with and to help our quality of life. What’s more important than future-proofing your income! We’re no longer just running a day-to-day job where you clock in and out. No, this is an investment. This is a business that has value. How do you future-proof the revenue? First, I want to start off with how I came up with the idea for this episode. Three times last week, this issue came up were I helped two different laundromat owners sell their pickup and delivery business. It was pretty amazing because without pickup and delivery and they were using our software, but without pickup and delivery, they would have had nothing to sell. This was something they built out of nothing that had value, that they could have taken with them. Or in this case, they wound up selling to another laundry operator who’s doing pickup and delivery.
With one of them, their lease was expiring, so if your lease expired, we’ll go into detail on that. I mean, that could be because they’re building a new shopping center, it may be because your landlord wants to own a laundromat and they’re looking at, Hey, I just don’t have to renew their lease and I could have a laundromat. There’s a lot of situations where your lease may expire outside of your control. In one case, one of our clients, his lease was expiring, and he was not too happy about it because he was making really, really, really good money on the pickup and delivery. He could have taken that pickup and delivery business, gone to another laundromat, or bought another laundromat and done the processing there, but he decided he wanted out. The good news was he had a five figure a month pickup and delivery business that was doing very, very well. He was able to sell the pickup and delivery business for a lot of money. So, it was pretty neat because his laundromat, with all those machines in there, he couldn’t take it anywhere else. It had almost zero value. He wasn’t able to renew his lease and without a lease, you know, how much is that worth? He had a business that he could have taken somewhere else, but in this case, he decided to sell it, but at least he had something to sell.
The second one, this is a little bit different. This is one of our clients that we provided a lot of guidance to. He wanted to hit it hard and kick butt. We helped him grow his business so much in six months that it actually became a little bit overwhelming. Maybe I shouldn’t mention that, but, you know, he had a nine to five job, and this pickup and delivery business grew so much in six months. He was planning on picking up the laundry after five o’clock before going home. He wound up doing so many pickup and deliveries that he wasn’t getting home. So, he said, “Hey, I need to stop pickup and delivery.” I’m like “Why? You’re growing so much.” And he said, “well, it’s growing. That’s the problem.” So, we were able to take his pickup and delivery business and sell it to another Curbside Laundry client nearby. So, they just increased their business a whole bunch and he was able to make a whole bunch of money from nothing. I mean, in six months he had nothing to sell and now he had something so, he’s happy and the new buyer is happy. I mentioned that story because it illustrates that your pickup and delivery business is a business, and you could run with it, you could take it to a new laundromat, you could sell it, but it’s something special.
Then a third person I talked to, he’s another person making five figures a month gross on pickup and delivery. He knows he won’t be able to renew his lease, in about four years. So, in four years, I’m not sure what’s happening, but maybe they’re building a shopping center, something out of his control. He won’t be able to renew his lease, but he knows that pickup delivery is a big business. I won’t be surprised if it’s making more than as laundromat, either way, he’s doing pretty good. So, he’s buying another laundromat so he could take his pickup and delivery business with him. That is just really cool. He knows he created this out of nothing. He’s got a thriving pickup and delivery business, and he’s able to, future-proof his income by moving that business to another laundromat. If it wasn’t for pickup and delivery and he knew he had to close down his laundromat in four years, think what a difference that would be. I mean, that’d be devastating. You put all this hard work into it, and it’s totally out of your control, but he’s not a victim. He knows he’s going to be able to take the lion’s share of the revenue and apply it somewhere else. I think that is just fantastic. And in fact, we got an email from one of our clients, thanking us. It said, “we would not be in business today without pickup and delivery.” Why? Because COVID hit them so hard. And, the dry cleaner nearby went out of business and other places went out of business, but her pickup and delivery was thriving and it carried her through a very difficult times. Again, pickup and delivery, future-proofed her business from a pandemic that she didn’t see coming, none of us did.
It’s so important to diversify your income because anything could happen. A new laundromat may open up across the street. Maybe they’re able to get their machines for half price because they have a special connection with the manufacturer and they’re going to have brand new shiny machines and how is your physical bricks and mortar presence going to compete against that? At our laundromat, for the longest time we had about 20-year-old, Wascomat machines, I mean, the Wascomat machines are great. They work great, they lasted 20 years, right! We didn’t really care too much about updating our machines because the pickup and delivery was doing so well. Pick up delivery could future-proof you against older machines because chances are your machines will get older and how often do you want to update and buy a brand-new machines and take on that more debt? We got brand new Continental machines, and our in-store business is more than paid for itself to update and get new machines. But then again, older machines, pickup and delivery could help overcome that as well. If you want to learn more about pickup and delivery, we have webinars at curbsidelaundries.com telling you exactly how to get into pickup and delivery, because we’ve been there, we’ve done that. We’d know how to do it. We know there are hurdles you’ll run into and how to overcome those. And don’t forget to subscribe to this channel because we’re always dropping new nuggets of information that we’re experiencing firsthand, both from ourselves, our own perspective and from our clients and what we’re seeing around town. So, thanks again for joining The State of the Laundry podcast.