Case Study: Adding value to your car wash with a laundromat

Savvy business owners are always looking for ways to build their businesses by incorporating new services or finding creative ways to add value for their customers. When entrepreneur and local business man Fred Greenway purchased an empty lot in Exmore, Va. to build a car wash business, he already had it in the back of his mind that a sister business, a laundromat, would one day be a natural complement to his car wash. So he did what a smart businessman does, and built the ability to grow into his plan. The lot he purchased was not only a prime location for local exposure; right off of the highway and adjacent to one of the small town’s larger shopping centers, but it was large enough to accommodate future construction.

Greenway’s car wash, featuring one automated bay and three self-serve bays, opened to strong business in late 2001. Greenway soon realized that while the self-serve bays were relatively maintenance-free, the automated bay was an ongoing source of frustration. The equipment was constantly in need of repair and the frequency of the “out-of-order” sign on the closed door wasn’t sending the right message to potential or existing customers. It was while deciding how to deal with the automated bay issues that Greenway started rethinking his laundromat plan.

Greenway had previously engaged a local engineer to look into the feasibility of building a large laundromat behind the bays but the project was on hold when he realized that the best solution might be right in front of him—he could use his available resources and convert his automated bay into a laundromat.

Making It Happen

Greenway conducted his due diligence and talked to several laundry equipment distributors before partnering with Danny Massey, owner of Easco Laundry Systems. Greenway had known Massey from the local business community and felt comfortable enlisting his help on the project. Massey pulled demographic data on the market to help determine equipment and utility needs. Then he drew up a floor plan that worked for the available space—16 by 32 feet, with additional space recovered from the old equipment room and repurposed as a drainage trench.

Greenway closed his automated bay in September, 2009 to begin renovation. His self-serve bays remained open and fully operational so he continued to make money and his car wash customers got to watch the transformation. The first step was to dissemble and remove all of the car wash equipment. Ever the enterprising businessman, Greenway sold the parts to other car wash owners over eBay and recouped part of his initial investment. Next, he installed a glass storefront at the 10-foot-wide entrance to the bay and built a stud wall for air vents at the back opening. He cut an opening in the side wall that faced the highway for additional natural lighting and to open up the building to drive-by traffic. With fresh paint and a new tile floor, the space was ready for washers and dryers.

Sometimes Less Is More

The equipment buying phase was where the distributor’s counsel was critical. Greenway felt intuitively that lots of small machines would generate the most income. Massey convinced him that he needed an assortment of equipment to meet his customers’ needs and recommended a mix of 30- and 55- pound capacity washers with 45-pound stack dryers. “This was a great recommendation,” Greenway said. “The larger machines are very popular and my customers can choose the best equipment option for their needs.”

The relationship between a laundry owner and his distributor shouldn’t end when the equipment is installed and the store opens. Greenway views his relationship with Massey as an ongoing business partnership. Massey stops in on a regular basis to see how things are going and Greenway calls him with any questions he has about his market or his equipment.

Greenway’s laundromat opened for business only two months after he started the renovation. He enjoys a robust customer base and is extremely satisfied with the performance of his car wash/laundromat hybrid. His initial instinct that they are compatible businesses has proved correct. “Getting rid of the automated bay turned out to be a good move,” said Greenway. “When the recession hit, the car wash business went down, but adding my laundry offering brought my revenue right back up.” His laundromat has increased traffic at his car wash, and he now makes more money from his laundry than he ever did from his automated bay.

What Does This Mean to You?

Greenway has found the car wash/laundromat a perfect fit. For those of you who might find this an intriguing idea, his advice is straightforward:

–      Find the right property. The old saying “location, location, location” is true.

–      Be diligent when it comes to understanding your wastewater system and local jurisdiction over sewerage—this can be a deal breaker.

–      Really check into what your monthly utility bills will look like. A laundromat has different water and energy demands than a car wash.

–      Find the right distributor. He will be your long-term partner and you need to trust his industry knowledge and business recommendations.

For more information about the vended laundry business, visit www.ipso.com.