A few more questions answered
“There is a wonderful mythical law of nature that the three things we crave most in life — happiness, freedom and peace of mind — are always attained by giving them to someone else.” General Peyton Conway March made that statement, and when I first read that quote, I was awed that a military man would have that line of reasoning.
Think about what the man said and consider applying his philosophy to your life in everyday
Question #1: “I recently purchased a drycleaning agency. Do you have any suggestions?”
I asked the man if he had a business plan and he said, “No.” Does this store have a computer system? His response was “No.” Did you look at the books or the tax return of the seller? His response was “No.” The three no answers meant that this new business buyer struck out.
I gave him the following advice. First, buy a computer system. Second, collect customer contact information and permission to charge their credit card when garments are picked up. My next suggestion? Clean and repaint the call office area.
In addition, I told him to hang a banner on the outside of the store that could be seen from the street. The banner would state, “Grand Opening.” No matter how long the business has been in existence, many people may not know it is there.
I asked if the name of the business was on the front of the store. We all know that the answer was going to be “No.” I told him to read the lease and check with the property manager about adding the name of the business to the word Cleaners that was already attached to the building. XYZ Cleaners is significantly better than just the word Cleaners.
Last, but not least, I told this person to sit down and write a business plan. It could be as short as one page or as long as he wants to make it. The key for the owner is deciding where he wants to go and how he wants to get there. You cannot reach your destination without a road map, or with today’s technology, a GPS. I love my GPS, especially when there are street closures.
What I suggested are simple common sense things to do when taking over or opening an agency or plant. It is amazing to me that this person did not do any research prior to buying this business. A business broker saw this person as a naive business buyer and cared more about the sales commission than the buyer’s success.
Question #2: “Have you ever advertised on TV?”
Yes, I advertised on TV. I advertised on cable TV. With the use of cable TV, I could target the zip codes that I wanted my message sent to. I advertised on the TV show that had the highest demographics.
In a city as large as Los Angeles, advertising on broadcast TV is a waste of money. The same could be said about broadcast radio. If your business is in a small community, those two advertising methods can work very well.
Question #3: This one came out of left field and was completely unexpected. “Why didn’t I see you at the Clean Show?”
For Barbara and me this year has been crazy. We had an Asia Cruise booked a year in advance in April. My brother, Barry, his wife, Sandy, along with Murry and Gloria Kaplan of Bogota were joining us. I needed shoulder surgery for a badly torn rotator cuff that could not be repaired arthroscopically. Our next trip was to go to the Clean Show.
However, our granddaughter graduated high school that weekend so we thought we were going to New York. Wrong again. Barbara had knee surgery for a torn meniscus cartilage. We now have a Mediterranean cruise booked for the Fall, and hope nothing bad will happen to prevent that upcoming trip. The best-written travel plans do not always come to fruition.
Ready to sell?
The final question for this month is the following. “I want to sell my business. I am burnt out after 35 years in the industry. Is there anything I should do to prepare my business for selling?”
We started this month’s article with business acquisition so it is appropriate to end the article with the sale of a business.
My first question: Do you report all of your income? Her response was, “Most of it.”
This is typical for many small business owners. I then stated that taking unreported income diminishes the value of the business. Her response, “It does? Why is that?”
I told her that if a buyer wants to borrow money from any lending agency, that agency would want to look at the tax returns of the company. If there are no profits there might not be a loan available. That would mean you would have to loan the buyer the money to purchase your business.
Her response, “I don’t want to loan the buyer money to buy me out.”
She certainly was correct about that statement. Carrying paper can lead to all kinds of problems, unless you have an extremely strong loan document written.
I told this potential seller to stop skimming. I also told her to do a thorough housekeeping inside the business so that is spotless and dust-bunny free.
Readers, please check your equipment and see if it is dust-free. Too many of you never clean the back of the equipment. You are a cleaner. Keep your plant clean.
I went on to tell her to wait about six months before listing her plant for sale because of the change in sales and income. When the six months are up, I suggested she get back to me.
If you have a question or questions you want answered, please send me an email, Consultme@msn.com, or call my cell phone, (310) 261-2623. As you have read, I will respond to most questions, no matter the subject matter.
Keep cool this summer and spread happiness, freedom and peace of mind among those who are in your life.
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 firstname.lastname@example.org or phone at (310) 261-2623. His web site is drycleanerconsulting.com.