Good questions from an outsider
The year “Marches” on and hopefully your business has marched on as well.
Mark Cuban, a well-known entrepreneur, said the following, “Make your product easier to buy than your competition, or you will find your customers buying from them, not you.”
How do you make your company more convenient for your customers? If you do not consider this important, someone in your market is going to take business away from you.
I received an interesting phone call last week. This person wants to go into the drycleaning industry and has no knowledge of the business. He said he would email me a series of questions about the industry.
I found the questions of interest because they were coming from someone outside of the industry. I selected what I thought were the best questions to present to my readers because they can apply to those who are currently in the business as well as the novice about to enter.
Question: “In your opinion, why are there no national chains in the drycleaning business? I would classify the national chain as a Subway or Pizza Hut.”
My response: The reason there are no national chains is due to the lack of product sameness. You are not flipping burgers. Some very wealthy people who started Staples attempted to start a chain by the name of Zoots. They went bankrupt, before they could do a hoped-for IPO.
Men's Warehouse bought two large, successful, drycleaning chains in Houston. They have not expanded beyond that market.
The newest player in the drycleaning business is Proctor and Gamble. They have started franchises named Tide Cleaners. P & G entered the business in Kansas City and now have franchised locations in a few areas.
In my opinion, this will be the second flop for P & G. They have a car wash franchise named Mr. Clean, and that has gone nowhere.”
Question: “When you were running your drycleaning operation, was there a good amount of plant employee turnover? What procedures did you implement to reduce turnover and retain talent?”
My response: Employee turnover is determined, in my opinion, by employee pay and benefits. When employees start bringing in friends or relatives of employees to fill open positions, you know you are doing the right things.
As an example, I offered health insurance after 90 days of employment. For the first five years of continuous employment, I paid 50 percent of the premium. Between five and ten years of continuous employment, I paid 75 percent of the premium.
After 10 years of continuous employment, I paid 100 percent of the premium. I did not insure the families, I only insured the employee. If the employee wanted the family insured, they had to pay 100% of the additional premium.
As we had a largely Latin work force, during their first five years of employment, many would drive to Mexico on the weekend for care. Turnover was not an issue for me unless the person had presented false documentation related to citizenship, or the person was looking for a way to file a workers’ compensation claim.
Workers’ compensation claims are big business in California. I attempted to reduce those workers’ compensation claims by offering safety drawings on a monthly basis. Money was the reward for the winners of the drawings. An increasing amount of money was awarded every month with a grand prize at the end of an injury-free year of a trip for two to Hawaii.”
Question: “I have always been under the impression that there are a lot of individuals who would like to have more of their clothes cleaned professionally, but cannot justify the cost. My opinion is that there are a lot of people who are willing to spend $30 to $40 per month but not $60 or $70. What is your opinion?”
My response: The number of pieces drycleaned annually has been on a continuous drop. For the consumer with money, they do not ordinarily care how much they pay for cleaning.
My target market changed from the average consumer to the moneyed person. That is where routes came into play. The name of the game with cleaning, just like taking trips, is that the dollars used, are discretionary dollars
A woman I met on a cruise told me she stopped using her expensive cleaner. I asked why and she responded that she is using the money she saved for a masseuse to come to her home every week. She went on to say that now she cleans her clothing at the cheap cleaners.
Question: “Please go into great detail on what kind of cleaning material we will use and how much it will cost: chemicals, detergents, filters, etc.”
My response: The cleaning material you will use is dependent on the used or new cleaning machine that you purchase. Many different kinds of solvents are now available. If you want a marketing program to go with your solvent, then GreenEarth is the answer. If you want the best possible cleaning, and because you do not wish to use perc, then System K4 by Kreussler is probably best for you.
What is crucial is the support you receive by the company you purchase your equipment from and the support you receive by the chemical manufacturers. In addition to the solvent, you will need to purchase drycleaning detergent.
Once more, the name of the game is: Do you want a marketing program that is included in the detergent purchase?
Sanitone, in my opinion, has the best marketing program offered by detergent manufacturers. There are other companies, such as R.R. Street and Adco, which put out fine products.
Factory support is crucial. Ask the detergent manufacturer the following question. Is there a field technician who services your area and what is the frequency of the visits? Other than the initial purchases, your total supply costs per month should not be more than 6 percent of gross sales.
Mrs. Debbi Fields of cookie fame made the following statement: “The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it.”
She is one smart cookie…
Harvey Gershenson operates Sterling Drycleaning Consulting and is a former owner of Sterling Dry Cleaners. A second-generation drycleaner, he has been in the industry since he was in high school. He has served as president of the Cleaners and Dyers Guild of Los Angeles and has served on the boards of directors of the Drycleaning and Laundry Institute and the California Cleaners Association. He is also a guest lecturer for the California Department of Corrections. He can be reached by e-mail at email@example.com or phone at (310) 261-2623. His web site is drycleanerconsulting.com.