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Beyond Survival: Laundry Business Growth in 2022 (Conclusion)

“The past two years have, basically, been about survival. What should my laundry focus on to move beyond survival and help achieve growth in 2022?”

Commercial Laundry: Phoebe Ellis, Lace House Linen, Petaluma, Calif.

I love this question, and it is such a timely topic as 2021 is winding down. We finally feel as if we have settled into our sales/production/customer needs as we entered Q4. We have been receiving outstanding linen orders as well which has helped with our inventories. 

We have used the time to perform preventative maintenance on much of our equipment. We have cleaned up and eliminated items offered so that we can better manage our production schedule. We are almost fully staffed, and 98% of our employees are vaccinated.

With all of this in mind, we are excited to think about growth in 2022. 

When we think back to 2019 sales volume and customer demands, we get a bit anxious and overwhelmed. In order to support those large dollar amounts and demands, we were working seven days a week and had over 100 employees. 

In March 2020, we were forced to downsize dramatically, and we have been very strategic and creative with re-building our business during the past six months. We are focused on services and customers who we can take care of and who are solid partners. We know now what we do well and how much laundry we can handle and how much laundry we want to handle!

Looking toward growth, we will focus on specific service areas where we can build our current routes and offer a limited line of specialty napkins that we know that we can wash and process. 

And we have learned that is okay to say “no” to potential business for valid reasons. 

We are encouraged by new restaurants opening in our region and old customers re-opening with increased linen orders. We are excited about the prospects for the new year and feel ready to grow effectively and efficiently.

It is hard to believe that this article is for the December publication; what a year it has been. I have enjoyed the opportunity to participate in this panel, and I hope that I have provided some insights. I know that I have gained much knowledge from the other panelists and the entire industry. 

Cheers to all—wishing loads of growth for our industry as we move into 2022!

Consulting Services: David Graham, Performance Matters, Fort Mill, S.C.

Happy late autumn ALN readers!

Let me start by saying that you cannot let the holidays lull you to sleep. Enjoy the family and festivities, but, especially those of you starting fiscal 2022 come January 1, you must get your business off to a strong start. 

If you falter at the beginning of the year, recovery will be difficult, and you might make some very bad decisions due to stress, particularly on the sales/income/revenue side of the business and then everything is uphill from there. Specifically:

Search for Free Rental Revenue—Do you have billing errors? How many times have I seen a $3.00 mat being charged out at $.30? This $2.70 “misbilling” equals $140.40 in annualized billing. 

I recommend that you do this by printing a separate set of invoices and doing a scan of every line looking for inconsistencies. Incentivize the people reviewing the invoices. A $50 gift certificate for every $50 found in errors gives you a return of $2,550 when annualized. 

If something looks “way off,” then go to the current service agreement and do the math. I have had audits in large operations that have generated $2,800 in additional justifiable revenue.  Doing the math once again, you have just generated $145,600 with no associated merchandise, labor, or utility cost. I should just say no associated cost.

Search for Free Loss/Damage/Abuse Charge Revenue—Are you not billing losses for a customer? It could be as simple as a missing check box in your customer’s profile in your route accounting system. 

Maybe you are simply afraid to enforce the terms of the agreement as this guy might quit. People who lose, damage or abuse merchandise are the anchors that weigh on your profits. Why rake someone over the coals with loss charges to offset the non-paying customer? 

The bottom line is you will maintain the non-paying customer and ultimately lose the over-paying customer. This is a recipe for disaster.

Managing Expenses, Not Cutting Expenses—Do you have a professionally calculated budget? If no, develop one.

To take last year’s numbers and lower expenses by 5% and raise sales by 5% is not budgeting. You must analyze the market and your vendors. It is a waste of time and will lead to frustration on your team. 

This is a top-down approach and never ultimately works. Think bottom-up and empower your teammates to contribute. They, believe it or not, know more about their processes than you do, or I do. 

Capital Expenses—Include your team in your capital expense (Capex) planning. You must perform a return on investment (ROI) on each capital project (government mandates probably excluded).

Google “ROI” and there will be many examples of how to perform this function or reach out to me. Capital expenses can run up to six figures, and not having a process in place to find the best deal, with the best returns, by the best vendors is squandering at best.

In closing, you may note that I focused more on sales/income/revenue than expenses in this article. The reason is simple: All success starts with a growing top line! Growth and expenses are somewhat easy to manage and will lead to greater profits and give you, the valued leadership team, more money to reinvest in people, processes and performance.

Merry Christmas and Happy New Year!

Healthcare Laundry: Tammy Barrett, HHS Environmental Services, Bonita Springs, Fla.

Laundries are now beginning to have a moment to pay attention to its quality of linen, which is of great concern to all customers. It’s time to invest again with customers for feedback on linen initiatives.

I’m hoping laundries will now also have some time to value the hard work of their employees as well. Over this two-year period, all businesses suffered shortages. This required extra attention from the remaining staff.

Thank you for letting me share this year.

Equipment Manufacturing: Charles Spencer, G.A. Braun Inc., Syracuse, N.Y.

Congratulations! If you’re reading this article and planning for 2022, then take a moment to appreciate that you’ve survived a challenge and are ready to look forward.

Moving forward will not be easy; however, there are some things you can do to ensure continued success and future growth. 

The competition has, in most cases, been thinned out. The strong have survived, and it’s time to feed and recuperate.

This year more than most, I’d make sure that budget is tight, labor is realistic to include overtime you may be incurring due to staffing shortages, and leave something extra in utilities and transportation, as these costs seem to be increasing beyond the normal 2-3% cost-of-living adjustment (COLA). 

Pay extra attention to capital purchase return on investment (ROI) for equipment that can give you additional capacity and save you labor dollars. Ask for ROIs from anyone you anticipate purchasing equipment from and put that burden on them. A good salesperson can, and will, jump right in and show you the value of their equipment.

Finally, don’t overlook the sales budget: 

  1. Find out what capacity you have available in your plant production and …
  2. Contact anyone and everyone in your market and find out who’s looking and get their details. 
  3. Review and then categorize these into three columns: Must Have, May Take and Pass. 
  4. Get as many of your Must Have’s before moving on to the May Take and avoid the Pass altogether … now is not the time for more risk.

If you fill the plant with your Must Haves, then stop for now. If you go to the May Take column, remember that they’re in there for a reason … you can still pass if have any doubts. You’ve been steadfast and wise to survive the past few years, so trust your instincts and you’ll do fine.

Finally, it has been my pleasure to share some of the experience I’ve gained from operating plants and selling equipment for nearly 20 years for Paris Companies and G.A. Braun Inc. The year 2022 can be a growth year for you, and I look forward to seeing your successes when I’m out there on the road!                

Miss Part 1 with thoughts from experts in long-term care laundry, chemicals, textiles and equipment/supply distribution? Click HERE now to read it!

Have a question or comment? E-mail our editor Matt Poe at [email protected].