Panel of Experts

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Should I Take on a New Customer? (Part 1)

“What do I need to take into account when considering new business?”

Chemicals Supply: David Barbe, U.N.X. Inc., Greenville, N.C.

New customers are exciting! More business is wonderful! Beyond the obvious considerations of more labor, handling equipment, and space, from a chemical supplier’s perspective, there are many other things to consider. If the possible new business is similar to what you are already producing, great. The additional work should be technically easy to incorporate into your operation.

However, if this is a new type of customer, new materials are involved, or new soil types are present, proceed carefully.

Make sure your chemical products are appropriate. Consider the classification of the new goods to be washed. If it is something unknown to you, consult with your chemical supplier to see if it is similar enough to your current work to cause no issues. Different soils may require a different detergent. Or, you may need a different alkali than you are currently using.

Changing products may impact your current work, but your supplier may be able to offer products that will handle the proposed mix of goods. Remember, you might need additional finishing products such as starches or sanitizers. Hospital work often requires peroxide bleach rather than chlorine. Yet, chlorine is generally less expensive and safe for most materials, if used correctly.  

Changes to your chemical products may tax the capabilities of your chemical dispensers. If needed, can your dispensers inject another product? Your chemical supplier may be able to change your dispenser and offer multiple alkalis, detergents and bleaches for a wide range of goods. However, keeping more products in inventory, especially some that are used for only a few classifications of goods, can be costly. You may want to try various chemical products for a short period to determine their flexibility.

Don’t forget wastewater impacts. You may have discharge limitations of pH, solvent or other items. Sometimes, this can be minimized by careful selection of chemical products, formulation and careful operation. Additional treatment equipment may be needed.

Finally, does your washer have enough chemical signals and formulas available? Many older washers have only five signals and can hold a limited number of formulas. Laundries that wash a wide variety of goods often have problems being able to program enough formulas into their washers.

If needed, do you have steam? Will you need to program gentle agitation or a higher-speed extract than currently used? Again, consult your chemical supplier. They may be able to modify existing formulas to handle new classifications. Of course, that may impact the costs of work you are already doing. You may need newer washers or even a different type of washer.

If you are taking on enough business to require more washers anyway, purchase machines that will handle your new business and consider designating specific goods to certain washers to maximize your efficiency. Wash formulas and chemicals that are exactly suited to the goods will result in a more satisfied customer and less expense to you!   

Uniforms/Workwear Manufacturing: Scott Delin, Fashion Seal Healthcare, Seminole, Fla.

As the rental laundry market continues to be highly competitive these days, we continue to turn every stone possible in an effort to write more business and add to our customer base. However, as much as all of us want to grow our business, we need to come to the realization that not all potential customers are the right fit for any given business model.

Several key factors should be taken into consideration when soliciting and/or taking on new customers:

  • Size of customer
  • Product mix
  • Current price structure
  • Geographic location—ease of service
  • Length of contract

Based upon the size of one’s laundry operation and current production capacity, it is important you look at the size of the potential customer and volume this new potential business will add and how that will impact your current operation and workflow.

Will the size and dollar volume needed to service the customer properly have a negative impact on your production flow and also impact the quality of product you produce?

In a perfect world, do the items needed to service any new customer fall in line with your current product mix and offerings? In reality, you will run into the situation when there are many new items that need to be added to service a new potential customer. You will have to determine how much inventory you must purchase and add to your current volume in order to properly service the new business. Before doing that, you should ask yourself if the size of the potential account makes sense and warrants the additional expenditures needed on your end to meet your needs for servicing the new customer.

With the market being as competitive as it is today, we need to take a long, hard look at the current pricing structure for this potential new business. Is it profitable business? What impact will the pricing quoted have on your bottom line, and how does it affect—if at all—your current business model?

Geographic location means a lot when providing quality service these days. If a customer is not located in your area of service, you will need to consider a special route or vehicle to service the account, pending the size and location of the account. If you do not service other accounts in that area, then you must compare the cost against growth potential to make running your trucks and vehicles there worth your investment.

Length of contract is something that should also be considered, as you might have to make a large investment to service the account. You must consider the option to negotiate a long-term agreement or term pending, which offers the best value for you and your customer.

The bottom line here is that we are in business to make money. The key to growing our business is to provide consistent, quality service at a competitive price without losing money. Our goal is to not only provide service that will meet our customers’ expectations, but to exceed them as well.

As much as we all want to grow our business and add volume to our plants, we need to look hard at current capacity and plan accordingly. If you add business for the sake of just adding business and then service it poorly, it can have a negative impact on your operation and, more importantly, your reputation for quality service.

Check back tomorrow for the conclusion, with input from our commercial laundry and textiles representatives.

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