As the saying goes, you can’t put the cart before the horse. In the case of the Funk family, the cart turned out to be a drycleaning business, but the horse was, well, still a horse.
Long before Carter invested in his son Chris’s budding cleaning business, he watched him succeed in competitive horse riding. In fact, Chris held the number-one ranking for Young Riders in the sport at a young age.
“He was actually a very competitive horse rider who won the national championship in the three-day event while in high school,” Carter explained. However, after he graduated, things changed. “He realized that he needed to get into business to support the horses.”
“He really just started with a pickup and delivery route. He already had a truck to pull a horse trailer so he got another little trailer to pick up and deliver clothes,” Carter noted. “He wanted to grow it into a bigger business and he wanted to build a plant and, of course, I was going to be the one to finance that.”
Carter preferred to watch the numbers of the business to make sure additional investments would prove successful. Meanwhile, Chris’s competitive drive kicked in and he worked hard, making a lot of good contacts.
In 2001, his father provided financing for the purchases of a laundromat. Chris doubled the revenues in less than 12 months. In the following year, they expanded by buying the assets of Dockside Cleaners, which increased their volume considerably.
That paved the way for the building of their own drycleaning plant in St. Augustine in early 2003 and ended their dependence on other cleaners to do the work. In a very short time, the two men had come a long way in their business venture, but it was only just beginning.
When the Funks opened their first plant, they were given some pretty sound advice from the man selling it.
“The advice that he gave to me was: Business isn’t going to come to you. You have to go to the business. So, if you go out and look for the business, it’s there and you will outgrow your plant in a year,” Carter recalled.
The man wasn’t lying. That’s exactly what happened. Still, the father and son combination recognized early on that there was a fine line between aggressively seeking out more drycleaning volume and overextending your resources. The Funks have always seemed to avoid this funk by crunching numbers first.
“We’re spreadsheet geeks, I guess you could say,” Carter laughed. “We probably haven’t acquired anything without a couple of scenarios first... a worst case and a best case.”
Another strength of the two men is that they possess a fair amount of business acumen that helps them see the bigger picture.
Chris graduated from Flagler with a business degree and Carter earned an engineering degree from Case Western Reserve and an M.B.A. from West Virginia University. He worked for 30 years in the energy industry, including a stint as CEO for Consolidated Natural Gas.
From the beginning, the two men recognized the seasonal nature of drycleaning and wanted to find a way to ensure long-term sustainability.
“We started a couple of things, diversifying ourselves from the seasonality and from the pure dependence of the economy,” Carter said. “One of them was hotel accounts and the other was that we started doing restoration. We had success with both.”
Landing an account with the brand new prestigious Club at Hammock Beach hotel (which the company still holds over a decade later) was fortuitous, but no accident. The Funks were not ones to stand idly by. When an opportunity presented itself, they did not hesitate.
“We were doing the guest services and the employee uniforms and the higher end of the laundry for that hotel, but we weren’t doing the pool towels and some of the lower end stuff because we couldn’t compete with the commercial laundry that they were using,” Carter recalled.
However, the company took the week off during Fourth of July during that year and left the hotel with 7,000 pounds of dirty, smelly pool towels that desperately needed cleaning immediately because they had completely run out.
“We got everybody we could get,” Carter said. “We got all the washers running that we could get running, filled trucks up and brought them to our plant and just worked on a steady stream of towels. Every one of our employees agreed to work on the Fourth of July and we got all of their towels back clean.”
Offering restoration also proved to be a wise move. These days, it still accounts for 60 percent of the company’s overall volume. After selling the laundromat in St. Augustine in 2004, the Funks purchased two Certified Restoration Drycleaning Network franchises in north Florida in early 2005 and another one by mid-year.
By that time, the two men had also bought Pelican Cleaners, the original plant in Jacksonville that Chris had used for much of his delivery service.
The business had grown at such a fast rate that the Funks faced strategic dilemmas of having enough space and equipment. Then, a little serendipity stepped in.
“Deluxe Cleaners approached us. We didn’t approach them,” Carter said. “They had equipment. They had a ton of good, experienced people. They were probably about a 90-year-old business. It was exactly all of the components we were looking for.”
The acquisition also gave them a name that had been long embedded into the community with a good reputation. The Funks had already come a long way from owning one plant with only a few employees and they would go on growing for years to come.
In fact, these days Deluxe Cleaners is running strong as a horse. It includes eight locations, 70 employees, four trucks and eight routes. They are also the only Award of Excellence cleaners within 50 miles of their zip code.
The strategy has always been to track the numbers and expand while maintaining a delicate balance.
“One of our goals all along had been to realize the economies of scale of a larger operation without losing the friendly, personal touch of the small mom-and-pop corner drycleaners,” Carter noted. “That’s a bit of a challenge because the two don’t go hand-in-hand easily.”
Even when the balance is maintained, it seems like there is always a need to keep new business coming in the door. Fortunately, the Funks never run out of ideas.
Another occasional source of business has been government contracts.
“We have a General Services Administration agreement in place, which is pretty difficult to do,” Carter said. “They do extensive background checks. They check your company. They check you financially. You actually have to have ten of your customers be surveyed by an outside agency to determine your customer satisfaction levels.”
Having the GSA-approved credentials has been a great advantage. Because Deluxe Cleaners is pre-screened, it is much easier for government purchasing agents to hire them. It has led to some fairly large jobs.
“We did one that was at Camp Blanding,” Carter recalled. “A bunch of troops were going to deploy to the Middle East. It was actually a multinational task force that met there for training before they went over. We needed to do 500 pounds worth of laundry in a three-week period.”
Of course, the work is anything but steady, but it’s just one more way to keep things as busy as possible. It’s that attitude that has helped them even when the recession first began.
“I don’t think anybody anticipated that the economy would get as bad as it got, but the stuff we have done to try to protect ourselves has worked,” Carter added.
In addition to being one of the largest (if not the largest) cleaners in northeast Florida, the Funks also opted to start a Suncoast Realty business at just the right time.
“When we started, there weren’t that many people doing it because we started in 2010,” Carter said. “So many people around 2008 got burned so badly. It was pretty wide open. I had looked at it before the bubble burst. We would go to houses where it was almost shoulder-to-shoulder standing room only. When we went back in three years later, we were the only ones there.”
It’s hard to believe that so much success began with a young man trying to figure out how to afford to take care of horses. Looking back, though, it seems the sport was a good way to prepare for the business world.
Competitive horse riding breaks down into three challenging components: stadium jumping where the fences are high and placed closed together; dressage, a test of obedience and discipline; and cross country, an endurance test with fences on a seven-mile track. The sport required dedication, precision and courage.
Carter has always felt admiration for how well his son performed under pressure: “He bounced on a horse before he was walking. He’s pretty focused on whatever he does.”