Cutting back in the wrong places
As 2008 winds down, it does not look promising that the economy will bounce back
quickly in 2009. If anything, it could continue to get worse for quite some
time. Recent third quarter reports indicated that house prices have fallen in
80 percent of U.S. cities. The number of new homes being constructed is down
alarmingly. The volatile stock market has been a steady source of panic of
late. In fact, when the Dow Jones Industrial Average fell 778 points on Sept.
29, it was the largest single-day point loss ever.
It’s hard to be optimistic and cling to hope in a time when everybody is struggling
and losing so much. The gravity of the situation is quite real and undeniable.
For cleaners, it is an acutely challenging time as many people are cutting back
on how many items they have cleaned, and how often they bring them in. There
are simply too few drycleanable garments to go around in an oversaturated
marketplace.
However, that will all change in time. For one thing, economic cycles are just
that: cyclical. Eventually, the economy will climb back up again. Until that
day comes, though, many less profitable drycleaning plants will be forced to
close their doors. The next several months will propel cleaners to evolve in
order to stay in business. Those left standing will be the ones that cut their
operating costs wisely and offer superior quality and customer service. The
businesses with the the most recognizable brand and market programs will hold a
distinct advantage over their competitors.
In times such as this, it will be very tempting for cleaners to slash their
advertising budget in order to try and make ends meet, but that will only make
things worse. According to columnist Bill Bishop (see page 16), when the
economy is down, the smart business operators keep their marketing up. In fact,
those that do will find that their message is more easily and readily received
as there are much less messages out there getting in the way.
Marketing is not optional. It is not seasonal. In good times or bad, it is
absolutely crucial. The cleaners who find a way to keep getting the word out
will position themselves well for a bright and prosperous future — when it finally does arrive.
Change? You’d better believe it!
Both presidential candidates promised “change” in the course of their campaigns, so it was inevitable, at least to the extent
that campaign promises can be taken seriously, that we were going to get “change” no matter who won. For the winning candidate, Barack Obama, “Change we can believe in” was the campaign slogan that carried him from start to finish.
We have no doubt that there will be change. What kind of change remains to be
seen, but cleaners should be prepared for a wave of pro-labor legislation
coming from a Congress firmly in the Democrats’ control. As a senator, Obama was a sponsor of the Employee Free Choice Act,
called “card check” by those looking for a simpler handle, or the Employee No-Choice Act by Frank
Kollman, who explains in his column on page eight how this legislation would
grease the skids for union organizing. A union labor force in your drycleaning
plant? Change, indeed!
Kollman discuses other areas of possible legislation that could bring unwanted
change to business owners, but not all change in the business landscape will
emanate from Washington. The Big Three automakers teetering on the precipice of
bankruptcy is a reminder that even companies that are “too big to fail” can, well, fail. Whether bailed-out or bankrupt, change is coming to U.S.
automakers, and that change will trickle down to Main Street. Actually, it
could come as more of a flood than a trickle.
It’s interesting to note that 100 years ago, around the same time the Big Three
automakers were forming in Detroit, a small drycleaning company was getting
started in Tucson, Arizona. That company, profiled on page 6, is still humming
along, testimony to the fact that hard work, sacrifice, dedication and
adaptability can see a company through, no bail-outs needed. Perhaps the slogan
should be “Change we can survive.”
