National Clothesline
National Clothesline
Risking failure in order to succeed
It was hockey legend Wayne Gretzky who once noted: “You miss 100 percent of the shots you don’t take,” which is quite true, of course. It is also true that some people take a lot of shots and miss quite often. For example, one NBA player refused to give up even though he lost a total of 366 games in his career and missed over 12,000 shots. His name? Michael Jordan.
He once said: “I’ve failed over and over and over again in my life. And that is why I succeed.”
When somebody perceived a weakness in Jordan’s game, he worked twice as hard to turn that liability into a strength. It was the lost games, the missed shots and the failed opportunities that inspired him to constantly improve. By the time he retired, his teams won 706 games (almost twice as many as they lost) and he made over 12,000 shots (49.7 percent of them), including over two dozen dramatic game-winners. Nobody analyzed his game more than Jordan himself. He was always aware of how he could put himself and his team in the best position for success. He also watched countless hours of videotape, listened to his teammates and coaches as well as the constructive criticism of competitors. He paid close attention to what worked and closer attention to what didn’t.
Drycleaning is no different. The more you are willing to examine your business, the better your odds of success. And, if you have others come in and scrutinize your company, those chances go up even more because strangers will likely have a different (and less biased) perspective on how you run things. That is the beauty of management bureaus. Fortunately for the industry, the Drycleaning and Laundry Institute has recently teamed up with Methods for Management to offer such groups for members in non-competing areas (More here).
Already, participating cleaners (More here) have reported enormous success after meeting and exchanging information with others about improving efficiency, profitability, employee and customer relations, marketing, branding and other areas. Simple observations and strategy suggestions by peers have helped many cleaners turn glaring weaknesses into undeniable strengths. Not every idea works 100 percent of the time, of course, but that’s part of the process and it is something Michael Jordan learned to live with, as well.
“I can accept failure,” he once said. “Everyone fails at something. But I can’t accept not trying.”
Getting prices in line with costs
A survey of nearly 2,000 cleaners in seven major U.S. markets by Checkbook Magazine found that the average price of a laundered shirt was $1.91 while the average for drycleaned pants was $5.66. Sounds about right, but there is something wrong. Why such a price disparity between the two items? Sure it may cost a bit less to produce that shirt than a pair of pants, but a $3.75 difference? We don’t think so.
Neither does Bill Bohannon, a Virginia drycleaner who turned his analytical eye to those shirts and pants prices to discern the real difference in the cost of producing the two items. He came up with a price difference of 25 cents per piece.
That may come as a shock to some. Others will flat out disagree based on their own calculations. Some will simply shrug and say that’s just the way it is, perhaps mentioning the old canard that shirts bring in the drycleaning. In any case, we highly recommend following Bohannon through his calculations which he details in an article in this issue. How do your prices stack up in the shirt-pants differential? Are you charging too little for shirts? Too much for pants? And most important, are you happy with your current bottom-line profit?
We suspect that for many cleaners today, the answer to that last question is “no” and the numbers may explain at least part of the reason why. Those “low-cost” shirts are eating away at the bottom line.
The fix is not easy. Over the years, drycleaners have trained customers to expect low-cost shirts. Indeed, a professionally cleaned and pressed shirt is one of the best bargains out there. Today’s equipment in the hands of a skilled operator can put out a shirt that is as good or even better looking than new. But try raising the price for that shirt to make it commensurate with the drycleaned pants and watch customers take their business down the street where another cleaner can probably put out an “as good or better-than-new” shirt for the same old low price.
Decades-old pricing practices can’t be reversed overnight, but understanding the actual costs to produce various items should inform future pricing. Don’t go broke producing a great shirt at little or no profit.