You are currently viewing Episode 35: The Laundry Business Plan, Where is the Hedge?

Episode 35: The Laundry Business Plan, Where is the Hedge?

Speaker 1: 0:00

This episode is jam packed with business lessons, including how Bill got started with laundry pickup and delivery out of his Nissan Altima. And he grew it from just 10 pickup customers to over 700.

Speaker 2: 0:13

Yeah, it was like in your face sometimes , you know , the whole passenger side, you know, it was like, I would , I couldn’t make a right turn cause I couldn’t even see outta the whole right side of the car . But I was, you know, hustling and doing it myself. And I said, I’m gonna do this until, until I have good problems where all right , there’s too much for me to do.

Speaker 1: 0:29

Welcome to state of the laundry industry with laundry, Matt , Episode 35, the laundry business plan. Where is the hedge? So I’m really excited to have Bill on the program with us today. He is a very successful, he bought a laundromat over in Brooklyn and just ran a really, really strong pickup and delivery. And he is got a unique story, which is just curious , um, how you got into the laundry business in the first place.

Speaker 2: 0:57

Well, I had , uh, I was a , uh, I worked in the financial services down in New York. Uh , I had a family friend, the older gentleman was in a textile business, retired, but then he started buying laundromats. And so I , I approached him and I said, Hey, I think this may be something I want to do . He taught me the biz, he took me under his wing and , uh, really taught me the real way. And, you know , to be , uh, you know, discerning and even pessimistic at times to make sure you’re not getting, you know, ripped

Speaker 1: 1:25

Off. The number one role in any investment is how do you get your money back? Yes. Question number two, how do you make money? Yeah . So if you get, and I’ve seen that where somebody bought the wrong investment because they weren’t pessimistic or they weren’t scrutinizing the numbers, and he basically had to hit a grant slam every single day just to stay above water. You know, a lot of people are real hungry to go find that opportunity. And that’s such, you have such good mentor because he helped you stay, you know, stoic level headed and wait for the right thing that made sense for you .

Speaker 2: 1:56

Yeah, absolutely. I mean, I hadn’t looked for stores actively in Brooklyn , Queens, in the Bronx, in New York, and looked for over two years, almost three years. And I would call him up and say, Hey, I got one. And then 95% of the time he’s like, That’s garbage. Or he would say, he wouldn’t , you know, he would say, All right , okay, this guy says he , oh , he says he’s doing this much in revenue. Why is the, why is the water, You know, why is his water bill so low? You know, you can’t do that much business without using that much water. So the water, as we know, is the true tell . Or people would say, I’ll sell you this store for 500,000, but I want 200 in cash. You know, I would say, Hey, this is the deal. He’d say, Are you crazy? He says , You gonna drive around with $200,000 good cash in the car? He goes, Boy , what are you gonna go in a room and count it up? He goes, No, no , no . The way he looked at things, he would rather buy a store, pay a little premium for a store with a solid revenue stream, basically buying a revenue stream that he thinks he can improve upon.

Speaker 1: 2:54

Yeah . And I like what he said that he could improve upon. That’s one of the keys . Yeah , because if you’re just buying the revenue stream and you can’t add value, then you’re not really gonna get the best return on investment because, but if you could buy something and then add revenue to it, which is exactly what you did. So, I mean, that’s one of the reasons I wanted to talk to you about this and do this podcast with you is because you took , uh, a laundromat in how big , how many square feet was it? Just curious . Uh ,

Speaker 2: 3:20

It’s small. It’s about 11, 1200 square feet.

Speaker 1: 3:22

So about 1200 square feet. The amount of business you did outta that because of pickup and delivery was just astronomical. And what was really impressive to me is like, I remember we were talking on the phone quite a bit. Every time I talked to you, many times you’re in the car and doing the pickups on your own and growing that pickup and delivery, There’s a lot of software companies that are pushing Uber and they’re saying, Oh, you don’t wanna pick up the laundry yourself. You wanna go pay somebody else to do it. One of their things is they say, You have to spend a gazillion dollars, or, you know, $70,000 on a van and you have to hire a driver for this much. So before you know it, you’re in a hundred thousand or $200,000 to get started. And that to me is , is just not true because you’re a living testament. So

Speaker 2: 4:03

The way I got into the pickup delivery business was honestly through curbside. I had been in contact with you and your brother in the event that I was gonna buy a laundromat. Cause I , so I always had in mind to enhance any laundromat I bought with, you know, increased pickup , delivery. Cause I think that’s the way going forward. Store that I had was , uh, on the Brooklyn Queens border in New York. It was kind of like a hip area. Nowadays it’s, if you don’t have a great , uh, Yelp ranking and Google ranking, which most of us know you sunk, it was a lot of younger people around. Everybody’s on their phones. Nobody does anything dry, cleaning food, anything without checking it out first. And so that was huge to put it out there, to promote the store. That way when I bought the store, he didn’t have enough time to , to spend building up the pick up delivery. So they only had about 10, 15 customers.

Speaker 1: 4:48

W was that something you, you sought out right at the get go with pickup deliveries to grow that part? Or is that

Speaker 2: 4:54

Anytime I thought about this business, you know, maybe it’s coming from like, you know, commodities background. I wanted to hedge, you know, if I’m gonna buy the store, I would say to myself, Where’s the hedge? Right? So this store is this , It’s a sedentary type of establishment without pickup delivery, there’s a finite number you can do as far as business with what you have. And the area. If they were to build new condos and co-ops and projects around you that would, you know, be great. But you kind of, you know , simple yards . I said, How are , well, if I buy the place and maybe it doesn’t work as well as I wanted, you know, what’s my head, I have the place, you know, I have, I can do pickup delivery out of it. If I build up the customer list enough, I can, once my lease is up, I can, you know, in effect take the business with me. You can . So I’m hedged against the lease expiring against profit declining. You have a much better chance to increase the business with pickup delivery because

Speaker 1: 5:46

Of Yeah, especially what you’re saying. Hedging the bed is so important because a new laundromat totally outta your control could open up just down the street. And if your sole revenue source is the self serve business and it’s good. I love self-serve. It brings in it’s dependable and all that, but it’s really nice to hedge your bed and have multiple revenue streams. Cause in a way you just paid for 10 pickup and delivery customers. I mean, you probably didn’t even pay anything for that, you know, just came with the laundry and just curious what you grew too . So

Speaker 2: 6:13

I , when I left, I was up to, is just over 700 customers. Wow. Yeah, it was Google. It was Yelp. It was , uh, recommendations from curbside. It was you getting on the phone with me and walking me through how to do things. You guys stress once you have the, the customer base, the database with

Speaker 1: 6:31

Your customer ? Yeah. That , that Rolodex, you

Speaker 2: 6:33

Know, the Rolodex, then you can send out, it’s like find an excuse to talk to someone. You know, you could send out, hey , uh, $5 off. I would do that sometimes if it was a little slow or I want a little revenue jolt here. So I would run a little special. I would net a thousand dollars or something like that. You know, I always like to have avenues just buying the laundromat loan . Before I developed a pickup delivery, my thought was, Hey, I’m , I’ve got a 13 year lease. I’m paying rent for 24 hours a day and the store is only open for 10. You know, it’s a wasted asset to me. You know, I wanna run, I wanna run laundry out of there, You know, I wanna utilize all 24 hours.

Speaker 1: 7:06

It’s the idle resource that night. And the machines aren’t spinning. And that is actually the very first article we got in American coin op was at our Lauder map . We spinning the, the machines are spinning or turning all night long. And that’s because we’re bringing laundry to it. So when you first started pickup and delivery were , did you, were you doing out of a van? Did you buy, you know, the special wrapped vehicle with shelves and all that?

Speaker 2: 7:28

You know, I decided to do the pickup delivery myself because I had the time. I only had a , uh, Nissan Altima, which is a smaller car. I said, I’m gonna do it. The online , uh, placement upon your recommendation was, you know , the biggest thing.

Speaker 1: 7:42

You’re picking it up at Nissan Altima. And I could just imagine, like when I was talking to you, you’re like, Wait, hold on. I got a pickup and

Speaker 2: 7:49

Oh yeah , totally

Speaker 1: 7:49

Reconvene a couple minutes after you got the new clothes . And I was just imagining it in the passenger seat. I mean, was this thing stuffed to the brim or how did you

Speaker 2: 7:56

It was like in your face sometime , you know , the whole passenger side, you know, I was like, I would , I couldn’t make a right turn cause I couldn’t even see outta the whole right side of the car. But I was, you know, hustling and doing it myself. And I said, I’m gonna do this until, until I have good problems where all right , there’s too much for me to do, then that’s a good problem. Then I hired someone to come on and help me out.

Speaker 1: 8:16

See, I think that is just so brilliant. See , you grew organically and I , and there a lot of people, I think because because we’re , as laundry owners, we have the mindset of we’re gonna spend like so much money on capital assets, like the washing machines, and you can spend hundreds of thousands of dollars on that. So people think, Oh, I’m getting to pick up delivery. I want to go spend $70,000 on new van, 2,500 bucks , get a Rav $5,000 on the shelves. I’ve seen people go all out buying the vehicles before they have the business. And in your situation, I , we got started with Izu Trooper as a diesel, the license. There

Speaker 2: 8:48

You go. ,

Speaker 1: 8:50

The license play frame said zero to 60 and 45 minutes. And then on the flip side, we were shorter driver. And it is actually, my mom went to pick up some , some laundry and she’s driving a Tesla. The person gave her a $10 chip and , and , and is a aha moment for her that, oh, these drivers, they’re making , they’re making a little bit more than what they’re telling us. So do you, did you see any like, negative reactions to people with a personal car or no ? Was that an issue?

Speaker 2: 9:14

Absolutely. No, there’s not people, in my opinion, people don’t need to see a van show up. People don’t need to see a people want, they want you to be on time and they want their , their clothes back folded neatly. Yeah , you’re there for two seconds. It doesn’t matter what you’re driving.

Speaker 1: 9:29

Um , but the driver still is the face of your company. I mean, you’re doing the pickups , what, you know, special interactions you have versus like an Uber driver who may not even care about your , you know, the business.

Speaker 2: 9:39

Part of the reason I, you know, built up the successful in building up the , the customer base was yeah, my personal interaction. I had a stake in the game. So it was my business. So, you know, I naturally, you know, was very cordial with the customers thankful. And I think if you have an employee that’s happy they will represent the company well,

Speaker 1: 9:57

You know , that is such, so insightful because we had sort of a problem driver, problem employee. He kind of had attitude with some of the other people. I think he just wasn’t happy, you know, it just wasn’t the right situation for him. And then later on, and we were like, well , we kind of need , still need him and all that stuff. And then later on we start getting negative feedback from clients. It’s really important to have happy employees and creating that a good environment.

Speaker 2: 10:18

Absolutely. And, and Uber driver is not gonna pick , become delivery. I learned this from doing it myself. And if no one’s ever done it, it , it’s not perfect. People say, Hey, you know, can you come this time? Sometimes you’re little , a couple minutes late. Sometimes there’s miscommunication as to where they left the laundry. You know , sometimes they’re , uh, their partner or someone they lived was supposed to leave it there. Sometimes they said, Oh, I meant a different time. Right?

Speaker 1: 10:42

Oh . And then I’ve seen it because I’ve gone through the, actually these ride sharing programs have their own Reddit forums. And so you could actually see and hear directly from them. And it’s kind of what you’re saying, like , you know , return in terms of their happiness or non , their expectation normally is delivering food. Right ? And when they find out that they have to take a , some , a bag of heavy laundry up a flight of stairs, they’re mad. They’re like, and then they , they , they’ve even commented of like, somebody gave me their dirty laundry. How gross you could imagine . They’re not expecting that . What

Speaker 2: 11:13

About someone that’s not a good representative using Uber or anybody that doesn’t have a vested interest in your, your business is a disaster. First off, they don’t care. I mean, so the best you’ll get on a personal level is a thank you. Something like that. If it’s at all off, if it wasn’t there, an Uber driver’s gonna take off and say it wasn’t there. What do you want to do ? You know , I don’t,

Speaker 1: 11:33

You’ll never even tell you I’m

Speaker 2: 11:34

Not gonna stick around. If you have an employee, he may say, Hey listen, I’m here , I’m here at the stop. You might call the boss , Uh, I know this is an important customer,

Speaker 1: 11:42

The lawyer , or call the customer. I mean, there could be a lot of stuff.

Speaker 2: 11:44

I don’t wanna leave. I know this is an important customer. That’s someone who cares about the company. Yeah . You know , any kind of third party service, it’s just not gonna happen. You need someone who is , you know, who has an interest in it being done.

Speaker 1: 11:56

Right. Stay tuned for next week’s episode where Bill sell’s store for top dollar because of pickup and delivery. And to learn more about the curbside, laundries , wash and fold and pick up and delivery solution, go to curbside .