Stan Caplan: The lot system vs the day system

An efficient work flow for busy drycleaners: Part I

Getting work out when promised is one of the major problems facing busy cleaners. Also, too short, or too long, turn-around time can cause major problems.

Short turn-around times cause extra pressure and tension on production workers and it result in poor quality due to no time for "do overs." Most of the time, there is customer disappointment when the work load is extra heavy.

Long turn-around times cause customers to request more "quick service specials" in order to get their garments back within a reasonable time. This causes the plant to give priority production time to someone who really does not need the order the next day and who does not even pick it up until several days later (to ensure timely delivery).

Also, people are prone to go somewhere else for faster service.

Short turn-around time and long turn-around time often demand overtime work in order to meet the promise date.

Day system
Some people refer to the "day system" as the "day lot system," but either way it is most inefficient for plants receiving more than 50 to 70 orders per day. In the busy season, this system creates an assembly department a mile long. Orders are all bunched up and the invoice clips tangle up together.

Marking-in takes too long since full-time markers are not usually utilized. However, when markers are utilized, it usually is much later than the beginning of the work day, and the orders are usually piled up. Orders received later in the day are usually marked in before orders received earlier in the day. This defies the rule of "first in, first out."

What is the answer?

First, we must observe a viable promise day and meet it. In this regard, never ask the customer when he or she wants the order returned. The answer will usually be "As soon as possible," even though the order is really not needed until several days later.

What day should be set for delivery?

This depends on the he amount of work anticipated compared to the amount of work the plant can successfully produce within a full work day.

Let's say that the manager sets the goal at 500 garments capacity per day and any work beyond 500 will require overtime, which should always be avoided. Overtime adds more cost to labor, and it burns out your workers. Women workers usually have a work load waiting for them when they get home from the plant (cooking, cleaning and taking care of the children). And their husbands get upset when the wife (or "live in") has to come home late and exhausted.

The plant manager will tell the store manager to promise work for two days (with one-day specials) until the capacity goal is met. Then after the goal is reached, the work is promised for three days, etc.

Getting back to how we should talk to the customer about promising work, the counter rep (on Monday) should ask: "Is Wednesday afternoon all right?"

If the customer really wants the order on Wednesday, Thursday or Friday, he or she will say "yes." However, if the customer really needs the order the next day, he or she will ask: "Can I get it tomorrow?"

Naturally, your answer will be, "Of course. It will be ready tomorrow at 4 p.m. I will put it on special."

Surprisingly, this procedure really will reduce the customer demand for specials.

In other words, the amount of work for the plant for the next day is determined by the actual amount received at the counter. What comes in on Monday must all be marked in before the Tuesday work day begins (early morning before the first load is run).

In the day system, the work is cleaned in no organized sequence and the finishing also has no organized sequence.

Consequently, orders do not get completed until the second half of the day with very little bagging and filing done until that time. Chaos, pressure and disgust are in the air for the entire day.

If the day's work gets completed at the end of the day, the inspection, assembly and filing will have to either go into overtime, which is unacceptable, or it will need to be continued until the next working day (the promised day, actually).

Extending the turn-around time beyond the normal two days for the maximum capacity for production (in this example, 500 garments) is unacceptable.

What is the answer for a busy plant?

Lot system
The lot system is the answer. The key words to the lot systems are "lot discipline." From the receiving counter through bagging, lot discipline must be strictly maintained. Personnel are no longer concerned with promise date. It is the time when the designated lot is to be completed. And the entire group of lots are to be completed before the work day is over.

When workers see a garment that is promised for several days hence they will cast it aside rather than process it. This is one of the major shortcomings of the day system. Most operators use various colors of marking tags to denote the day the garment is due, but I used the various colors to denote the day it was received. This usage of color can quickly identify a straggler garment, which takes priority in processing, and nothing is actually cast aside.

This processing priority for straggler garments is the result of lot discipline for both systems

If a garment from lot #3 is sent back for spotting or repressing, then the order containing that garment will be placed onto the "short line" as an incomplete order when that same garment is quickly returned (spotted or pressed) to the assembly area, the operate will go immediately to the (incomplete) short and complete the order to catch up to the former lot.

Implementing a lot system
First it is necessary that each person understands the lot system and how it functions. Bring all the workers together and explain working as a team to process a small, but given, amount of work called a "lot," which is a single unit moving through consecutive departments of the plant until it reaches assembly/bagging.

Explain the responsibility of each person, beginning with the customer service representatives (CSRs).

This column will continue next month to explain the actual operation of a viable lot system, beginning with the counter (customer service areas) and running through the plant.

NOTE: My video "The Caplan Method of Stain removal," which includes my comprehensive text with handy spotting board reference, is available from Dennis McCrory, Successful Management Group, (800) 646-5736, PIN 4615. This video has already been translated into Korean and is now being translated into Spanish. Also, my latest video on step-by-step shirt finishing, utilizing the sequence I developed for top quality with no touch-up and top production, will soon be available from Dennis McCrory. Both single-operator cabinet and two-operator double buck cabinet units are demonstrated. Attractive detailing, packaging, padding, steam pressure and timing are also discussed. The video shows how to properly dress each pressing machine and the proper breaking and forming of a collar.

Ray Colucci: Make the most of the tools at hand

I don't believe that it comes as a surprise to anyone, but I'm still puzzled as to why some members of our industry never take full advantage of advertising, which is a necessary tool for achieving success.

If we had taken a few lessons in management, we would have learned about the cost of doing business. Somewhere in that list of expenses we would have allocated a proper amount for advertising and a growth factor in our business.

Everyone, of course says, "Can we afford it?" They treat it as an add-on luxury expense. When things get tight (like the cost of fuel oil), the first thing we cut is advertising. In reality that should be the last thing we eliminate. Instead we should increase the advertising budget when business is down.

We have to ask, "Is our present advertising effective?" Try to chart where and when we spend those necessary dollars. Most important, what worked for us before, and will it work for us again? Is it time to change our image?

The place to start is always at the beginning. Review each item, and see where it fits in with your overall pricing and profit margin.

When you're finished with that review, start to see where you can sustain a continuous growth picture and look to a more effective advertising policy. This is where your creative juices can start to flow. Fortunately, our industry is blessed with several excellent means of getting our message across -- and with little or no expense.

To begin with we can look at all the traditional means. Those include our local papers and, in some cities, TV ads are available at a very inexpensive rate and can be very effective.

Those things cost money, but incorporated into our business are several direct outlets that are virtually cost-free.

We can start with that rack of clothes, cleaned and finished to perfection, that are always a welcome sight to our customers who have receptive minds and can't wait to wear again and display.

Here we can develop an assortment of clever and timely ads. Simple colorful hand tags can be a quick read, and inexpensive to print up and to install. What is most important is that they are directed to an established clientele.

They can be on any subject that will name you as the "Friendly Drycleaner" and as "Your Clothes Friend."

You can support a favorite charity, encourage political involvement (without taking sides), champion a cause that your customers support, or cheer the local team's athletic ability.

Nothing succeeds or catches a customer's eye better than your displaying good citizenship. A good example are "The Coats for Kids" programs that get free publicity. They cost very little in time and effort but give an incalculable amount of reward.

The other factor is to change the message so customers are constantly aware of your timely concern, be it a civic message, a new service, or a special discount. You implant in your customers' minds that you are always concerned about their welfare, not just the revenue you derive from their patronage.

Walking billboards
A four-colored plastic garment bag becomes a walking billboard.

I say drycleaners are blessed with several means of getting their image across. If you run a route, then you have at your disposal a moving billboard just riding around town for all to see. Here you can advertise special services, civic messages, specials on seasonal prices, and even employment opportunities.

I admired one drycleaner who was starting a new route. To advertise the new service, he had the local cheerleaders rehearse in the parking lot on a Saturday with his new delivery truck clearly shown in the background. Of course, the papers ran the picture as a local news event announcing the service. Talk about free publicity!

The cost? Cheerleader uniforms cleaned free and free monograms of their first names.

Your good news
Want more free publicity? With all the disparaging bad news our newspapers offer, it's no wonder the social column editors are eager for any kind of good news.

How about the drycleaner who discounts the cost of cleaning an heirloom wedding gown, provided that the grandmother, mother and young bride pose for a picture of the gown. The drycleaner can announce the event, tell the story behind the gown, the technique used to guarantee the process of heirlooming and the safe handling of the most delicate fabrics.

Can you see the picture? All smiles! Everyone likes a good story It's the page your customers turn to when they want some good news.

I know a very successful drycleaner who turned around a dying business with this promotion. In a slow time of the year, he offered to dryclean and press at no charge any garment with a tint of red until St. Valentines Day. It went so well that he offered the same deal for anything with a hint of green until St. Patrick's Day.

Everyone likes a bargain and everyone loves a holiday!

The important thing is to turn around the horrible image our industry has been getting. The statistics of stains that not only never came out but somehow got worse, and the comments of a counter person telling off the customer: "What do you want lady? We didn't put the stain in!"

I didn't make up that story. TV news stories in some of our major cities reported those tales of woe where as many as six out of 10 people surveyed had the same experience. All on the 6:00 news!

If having it on the Six O'Clock News isn't bad enough, we have to fight the environmentalist press that tries to give us the image of being major polluters and t that perc is a carcinogen, although that has never been proved.

Isn't it time we recognize that advertising is totally necessary and that we should not only advertise more but with an eye towards the improvement of our image? We should make it seem that "taken to the cleaners" is the best experience we can give our customers!

Dan Eisen: Stretch your spandex knowledge

Spandex is a man-made fiber described as a segmented polyurethane. Spandex (known as Elastone in Europe) is the generic name for all man-made elastic fibers.

Spandex is used in small quantities and is always combined with another fiber, natural or man-made. A fabric enhanced with spandex will retain the appearance and heat of the primary companion fabric.

Elasticity and recovery from stretching are the most important properties of spandex. This gives garments stretch, drape, support and comfort in wear.

Spandex yarn can be uncovered or covered with the textile yarns in both woven and knitted garments for men, women and children. Denims and other casual wear garments often incorporate spandex fabric.

Spandex is also used for the bodice and waistline of gowns and dresses for fit and to give the garment a puckered or matelasse appearance.

The most common trade name for spandex is Lycra, produced by Dupont. Other trade names for spandex are Glospure, Numa, Unel and Vyrene.

Fabric problems
Although spandex is more serviceable than rubber yarns formerly used, it presents numerous problems. Manufacturers of spandex yarn can vary in denim, stretch, and resistance to drycleaning solvents and heat.

Shrinkage. Although spandex yarn does not shrink, garments and fabrics can be overstretched during production. This gives the garment the potential for shrinkage when drycleaned or wetcleaned.

Poor dyeing. Dark color spandex-blended fabrics are often poorly dyed. It is not uncommon for one or two garments to contaminate an entire drycleaning system with dye. When spandex yarns lose dye, the garment attains an appearance that looks like linting or staining.

Loss of elasticity. When the yarn snaps, the fabric will stretch, lose elasticity and pucker. This can occur in wear, drycleaning or routine spotting.

Identification
When the amount of spandex used is less than five percent, the spandex yarn does not have to be labeled in the fiber content label of the garment. Examine the stretch characteristics of the garment as well as labeling. See above for common trade names of spandex.

Inspection
Look for the trade names of spandex in the fiber content of garments. (See Fabric Facts.) Check the waist band area of men's trousers and women's slacks for loss of elasticity, baggyness and broken spandex yarns.

Check garments for loss of elasticity and stretching on arm areas, waistlines and uneven hem lines.

Broken spandex yarns may protrude from a fabric as the appearance of tiny rubber fibers.

Explain to customer that spandex-blended garments can shrink and weaken after several drycleanings. The fact that the garment was previously cleaned does not necessarily mean that the garment will not weaken.

Check garments with a matelasse look for broken yarns, loss of the puckered effect and stretching.

Drycleaning
Dryclean according to the look of the fabric. Fragile garments and silks should be drycleaned for one to five minutes. Use net bags when needed.

More durable garments should be drycleaned six to eight minutes. Always dry at 140 degrees F.

Spandex yarns will weaken if solvent is retained and the garment is subjected to a pressing process. Dark colored, blended spandex fabrics should be drycleaned in a bleeder load that sends the contaminated solvent to the still.

Spotting
Limit the use of excessive mechanical action which can break the spandex yarn. Avoid excessive brushing which can cause closely woven or knitted fabric to expand

Do not use chlorine bleach as this will degrade the spandex yarn.

Keep the steam gun at least 5" from fabric to avoid yarn damage.

Limit the use of dry lubricants (OTPR), and amyl acetate which can cause weakening of the yarn. Limit the application of chemicals that require high heat for activation.

Wetcleaning
Spandex fiber is resistant to most chemicals except chlorine bleach. The primary fiber and fabric determine the wetcleaning process. To reduce shrinkage, use cool water and mild detergents. Dry in a warm dryer (never hot) or block garment over a hanger to dry.

Finishing
Use light steaming. Avoid use of hard head pressure, hot-head presses and hot irons. Do not place knitted fabrics on steam air finishers. Do not pull elastic fabric tightly on the buck of the pressing machine. Otherwise stretching will occur. Use puffers for touch up.

Summary
Manufacturers of spandex fiber are concerned about how the spandex yarn is used in fabrics. If the garments are overstretched, the garments will lose color.

Manufacturers of spandex fibers can produce both durable and weak fibers with different degrees of stretch and serviceability. When the wrong fiber is used in a fabric, stretched and weak yarns are unavoidable. The problems with spandex blended fabrics should be discussed with the customer.

Stan Golomb: Five sources of drycleaning sales

There are various sources for generating sales in the drycleaning business. I will deal with all of them in a series of articles. For now, I will list the five main sources of business.

1. Full service package plants, where all the work is done in the plant on premises, including shirt laundering.

2. Drop stores or receiving stations. These are non-producing plants that are simply used for receiving work. The work is then transported to a central plant for processing.

3. Routes. Most of you understand a route operating in conjunction with a processing plant. It can be owned by the plant or use the plant name with all the work being processed by the plant. Some routes operate with a driver-owned truck.

Then there are combination routes that service the drop stores and also serve customers at their homes or offices.

4. Wholesale cleaning and laundry is doing work for another operator at a discount off their retail prices. The wholesale work can come from stores or routes.

5. Agency work is doing work for a supermarket where the market provides the space and help for a discount off their retail prices. Or, in rural areas that are not large enough to support a cleaner, a drugstore, barbershop, beauty shop or any retail store will act as an agent for a small commission, usually 20 percent.

For this particular article, I will deal with the package plant. This type business started to flourish after World War II when it was easy to get into a business with government help on the G.I. Bill.

World War II ends
A few years after the war, equipment changes came into play and package plants were opening up everywhere, including city markets that were previously dominated by wholesale cleaners and tailor stores.

The advantage of package plants was that all the work was done on the premises, except for shirts that were farmed out as wholesale. Over the years, this evolved into self-contained laundries that did their shirts in-house.

Package plants with high volume were and are the most profitable entities in the industry.

The reason is that there is no vehicle or driver or drop store expense. And once the plant passes break-even, the profits soar.

To illustrate that point... the fixed expenses are just that... fixed. They include:

• Rent
• Bookkeeping
• Advertising
• Energy
• Supplies

As an example: Let's say this plant in today's market needs to do $3,000 a week to break even. There is no profit at this level.

However, the next $1,000 a week should produce $700 in profit. Here's why:

Production should go up 20 percent.

Energy should go up 2 percent.

Supplies should go up 5 percent.

Total this up and you get 27 percent increased costs. I will be generous and allow a 30 percent increase in costs, which would explain the profit of $700 net for the added sales of $1,000 a week.

Let's take this to the next step. This plant now generates a total profit of $700 a week on sales of $4,000 a week. This is a 17.5 percent net profit and above average for the normal plant in today's economy.

In addition to this, the on-premise owner and manager is drawing a salary commensurate with the job he or she is doing. This should be in line with what someone else would be paid to do the same job.

These are facts. You can cut them any way you want, but even the best run plants in the world don't show that high a profit with the exception of very large, over-the-counter package plants.

The next $1,000 a week would add another $500 in profits as now there might be a need for added equipment, more hours and perhaps some overtime.

Now we have a package plant that broke even at $3,000 a week, with a profit of $35,000 a year at $4,000 a week, or about $200,000 a year.

And going up the next step, that same plant could earn a net profit, before taxes, of $60,000 on sales of $5,000 a week.

There are exceptions to these facts, such as prices charged, equipment and production of the employees, but the figures I listed are real and exist in a multitude of plants we keep records on.

I'm sure some will take exception to my comments on package plants but remember, there are exceptions to all statistics.

For example: If someone is using a lay-down shirt unit to finish dress shirts, they can only get 20 shirts an hour. Paying $8 an hour, this would come to a cost of 40 cents a shirt just for pressing.

A plant with a single-buck cabinet unit would get at least 40 shirts an hour bringing their shirt cost down to half that, or 20 cents a shirt for finishing.

So those of you who wish to challenge my numbers, be specific and make your argument based on your selling price, wages paid, whether you farm the shirts out, and what your price is. I'm talking about shirts here, but you should get the point.

Next month, I will discuss another source for generating sales in the drycleaning business.

Stan Golomb now offers a free e-mail information program. To sign on, just send him your e-mail address along with your full name to sgolomb@ix.netcom.com

Frank Kollman: Who is exempt from overtime?

Under the Fair Labor Standards Act, employees must be paid minimum wage for all hours worked and overtime after 40 hours.

Exceptions are made for certain employees; these exceptions, however, are based on many factors. Very few employers are aware of these factors.

First, under Department of Labor regulations, no employee is exempt from overtime or minimum wage unless he or she is paid a salary. If the employee is hourly-paid, even $50 an hour, the employee is entitled to overtime. In addition, the employee cannot be docked salary, except in extraordinary circumstances, like an extended absence from work.

Second, only executive and administrative employees are exempt. Actually, there are exemptions for professional employees or outside salespersons, but these exemptions are not normally found in the drycleaning industry.

An executive employee is exempt from the FLSA if he receives a salary of $250 or more per week and his primary duty is the management of a customarily recognized department or subdivision, which includes the regular direction or supervision of two or more employees. If the employee's salary is between $155 and $250, he must:

1. Manage a customarily recognized department or subdivision.

2. Regularly direct or supervise two or more employees.

3. Have the authority to hire or fire employees (or to effectively recommend hiring and firing).

4. Customarily and regularly exercise discretionary powers.

5. Devote 80 percent or more of his time in activities directly and closely related to his managerial duties (in other words, NOT doing work of the rank and file employee).

If an employee is paid a salary less than $155, regardless of his duties, he is not exempt.

An administrative employee is exempt if he is paid a salary of at least $250 and (1) he performs office or non-manual work related to management policies or general business operations of his employer and (2) his work requires the exercise of discretion and independent judgment. If the employee's salary is between $155 and $250, he must:

1. Perform office or non-manual work related to management policies or general business operations, exercise independent judgment and discretion, and either: a) Assist a proprietor or bona fide executive or administrative employee; b) Perform work along specialized or technical lines under general supervision; or c) Perform only special assignments or task under general supervision.

2. Devote less than 20 percent of his time to non-administrative activities, such as working in the plant.

If an employee is paid a salary less than $155, he is not exempt.

If you have employees that are working overtime and not being paid for it, you should decide whether they meet the tests set forth above. If they do not, you should take steps immediately to correct the problem. Change their duties, raise their salaries if necessary, change their hours, etc.

The Fair Labor Standards Act is enforced by the Department of Labor. In addition, employees can sue their employers under the Act, and if they recover, they are entitled to receive liquidated damages and attorneys fees. In the case of ordinary violations of the Act, two-years' worth of back pay can be awarded. In cases where it is established that the employer wilfully violated the Act, three-years of back pay can be awarded.

Review your current policies with your attorney. The cost of guessing incorrectly can be great.

Frank Lucenta: A hot head press on suede and leather

What piece of equipment can you use to press wrinkles out of your suedes and leathers? The ultimate pressing tool for suedes and leathers is the hot head press.

You have learned how to use the hand iron like a little hot head press. Now let me explain how to use the hot head press itself to press your suedes and leathers.

With the hot-head press there is no live head steam to be concerned about. However, the head temperature is an important consideration. If the head temperature is too hot, the excessive heat could damage the skin, the finish or the color. Therefore, it is of extreme importance to limit the head temperature of the hot-head press when it is used to press suede and leather. The proper temperature setting for the hot head is 250 degrees F (120 degrees C).

If the hot head press is heated electrically, the head and buck temperatures are set by electric thermostats or rheostats that are part of the press. However, if the hot head press is heated by steam, and most of them are, then the head temperature is set and limited to 250 degrees F (120 degrees C) by installing a steam regulator and a steam pressure gauge in the steam line that brings the steam to the hot head press.

Once installed, the steam regulator should be adjusted to lower the steam pressure going into the hot head press to 50 psi (3.5 kg/cm2). This steam pressure setting will translate into a temperature of approximately 250 degrees F (120 degrees C) at the press head.

The results when pressing suedes and especially leathers on a hot head press set at this temperature are superb. Skins are smooth and leathers regain their shine as well as a slick, soft and supple feel. If you are going to do a lot of suede and leather cleaning then pressing on the hot head press is a must.

Any laundry or silk hot head press can be adapted to press suedes and leathers. Pressing wrinkles out of suede and leather can be done nicely with an existing hot head press that is normally used to press laundry or silk items.

The laundry hot head press does not usually have buck steam or vacuum. But it can be used for suede and leather as well as laundry items if it is has a steam regulator, steam pressure gauge, by-pass valve and steam line to reduce the steam pressure to 50 psi (3.5 kg/cm2) when pressing suedes and leathers.

The reason for the bypass valve and regulator is to allow the laundry hot head press to be switched from laundry pressing, which is done at 375 degrees F (190 degrees C), to suede and leather pressing, which is done at 250 degrees F (120 degrees C). When doing laundry pressing, steam at 100 psi (7 kg/cm2) is allowed to flow directly through the steam cut off bypass valve to the press.

However, when the press is to be used for pressing suedes or leathers, the 100 psi steam is diverted through the steam regulator by closing the steam bypass cut off valve to reduce the steam pressure to 50 psi (3.5 kg/cm2) and the head temperature to 250 degrees F (120 degrees C). Of course, the head should be allowed a little time to cool down after closing the steam valve and before pressing suede and leather.

This bypass is also necessary when a silk hot head press is to be used for both silks and suedes and leathers. Here the steam pressure must be reduced from 80 psi (5.5 kg/cm2) used to press silks, to 50 psi (3.5 kg/cm2) for pressing suedes and leathers.

The silk hot head press is a lot like a suede and leather hot head press. It has buck steam and vacuum built-in and both features are desirable for suede and leather garments.

The vacuum can be used to cool the skin after pressing and also to hold the skin flat in place before the head comes down. The buck steam is useful for pressing loose cloth linings on suede, leather and fur garments. It can also be used to provide a shot of steam to some of the less delicate cowhide and pigskin suedes and leathers before pressing to help get wrinkles out.

Notice I said a shot of steam (like on a form finished) before the head is lowered, not after the head is lowered. However, buck steam can be used as usual for pressing suedes and leathers if the buck steam pressure is reduced to 40 psi (2.8 kg/cm2) with a steam regulator.

Dennis McCrory: Better late than never? No way!

Everyone can recall a time when the clock-radio or the alarm clock has failed to wake us. We awaken suddenly and are shocked to realize that we are running late. We jump out of bed, skip the extra cup of coffee, or breakfast altogether, and rush to work like a scalded dog.

We have a personal commitment to arrive at work on time. This is a parameter which we have set for ourselves and one, we hope, our employees have adopted from our example.

Unfortunately, any manager or plant owner has come to realize, through experience, that not everyone shares that commitment to punctuality. (Is that an understatement, or what?) The consistently late employee is content to arrive for work with little or no excuse, and usually not even an apology.

The nature of our business requires considerable interaction of work effort among employees. The counter person accepts and marks in the clothes -- before the cleaner can clean the clothes, before the pressers can press the clothes, before the matcher can package the clothes, etc.

There are a few situations where one person does the whole job alone. And even then, there is a time frame when orders are to be completed for the convenience of the customer.

Basically our businesses are like houses of cards. If one person is missing, or even late, our entire operation collapses. Additionally, cost effectiveness requires that there are fewer back-up people. No business can afford a backup person for every slot.

For obvious reasons, cross-training of personnel can be a lifesaver. Don't neglect this as the most valuable use of off-peak work time. No business can afford a different backup person for every position.

Even if another worker is available to be brought in to fill a vacancy, either the quality of your work is going to suffer, or the most qualified person is not doing that particular job.

What about vacations and legitimate sick leave? Cross-training is the most viable solution to these inevitable situations. Work can be rescheduled and the disruption held to a minimum. Tardiness does not have to be an extra problem added to the burden.

No excuse is acceptable
Don't allow yourself to be put in the position of deciding which excuse for lateness is acceptable and which is not. Start with the premise that no excuse is acceptable. Remember, "neither snow, nor hail, nor gloom of night." Nor should broken down cars, public transportation strikes, "my grandmother died" (for the third time) or whatever, be an acceptable excuse. We know of other employees -- no matter what the impediment -- who arrive on time, or even early.

Most of us have, or have had, employees who find a way, no matter what, to make it to work on time. Regardless of the problem, they have a perfect or near-perfect record for being on time for the last umpteen years. In fairness to the people who have an excellent on-time record, there should be no acceptable excuse from others. Once one excuse is acceptable, it somehow gets used again and again.

The consistently late employee is a detriment to your business. Not only is his job suffering from lower productivity, but what does this situation do for the morale of your other employees who are punctual but are rewarded no differently than the other employee who could care less if they were on time or not?

A suggested strategy
Institute a payment schedule that includes an "on-time bonus."

I once had an employee who seemed to be the perfect worker, except for consistent tardiness. He performed his job well. He got along with the other employees. He showed a genuine concern for the work he did. But his one downfall was that he was consistently late for work. Even he admitted that this was a fault he had trouble correcting.

In an effort to preserve this employee, while still maintaining the necessary control of my business, I changed his pay scale to include an "on-time bonus.' He previously was earning about $10 per hour working seven hours Monday through Friday and five hours on Saturdays. Basically, he was working six days a week for a total of 40 hours and earning $400 per week. I lowered his hourly pay to $7 per hour, and gave him a "bonus" of $20 per day for being "on time." Thus, he earned $280.00 for working a 40 hour week and an additional $120.00 for being on time for six days a week.

Notice that I decided to take a positive approach to this situation, rather than a negative approach. I worked with the employee, explaining what I was doing and why. I let him know that this was my way of helping him as opposed to a way of punishing him for being late. I never suggested that I was going to "dock" him for tardiness. Only that I would "reward" him for being on time.

Did it work?

Yes. Not only did I help to make this employee more productive in his own position, but I was able to maintain the morale of my other employees by showing them that there was indeed a consequence for not showing up to work on time: a decrease in earning.

Protect yourself
When dealing with habitual tardiness, remember that the law will protect the employee, unless you maintain adequate records of tardiness. An employee can get back pay and allowances if it can be shown that there was a lack of a written record. At least two previous warnings must be documented in order to terminate an employee for being consistently late.

In addition, disciplinary action cannot be shown to be discriminatory. All employees have to be aware of the disciplinary consequences and any penalties have to be applied equally. A written policy and procedure that is uniformly enforced is the best safeguard.

Alan Robson: How a route can kill your cash flow

Last month's column about developing a route business generated a great deal of interest and a multitude of inquiries. Most are looking for a silver bullet that will bring them instant success.

Before you get too excited about routes and run out and buy a route van, you will have to do your homework.

The first question is: Where will you concentrate your route effort?

You need to start in upscale neighborhoods with single-family homes. Outline the streets you want to concentrate on and make sure you do not deviate from that area until it has been completely developed.

The next question is: Do you have the capacity to process more work?

When properly planned and executed, you can add $4,000 to $5,000 a week to your sales volume and you can do it within six months.

Sooooo -- do you have the space? Do you have the equipment? And can you hire the people needed to do the work?

Next question: How much working capital will you need to grow the business?

As we all know, it takes money to make money. In order to successfully grow the routes, you need to answer the following question:

How many customers do I want to add to my route each week?

1. Less than 10.
2. 10 to 20.
3. 20 to 30.
4. More than 30.

The quickest and most effective way to develop a residential route is with direct sales people, not route/sales drivers or telemarketers.

On average, direct sales people will cost you 6 percent to 7 percent of annual sales. If you want to increase annual sales by $200,000 per year ($4,000 per week), you will need to invest $14,000 on sales personnel ($200,000 x 7 percent = $14,000).

Funding $14,000 over six months should not be a problem. Your biggest challenge will be in managing your cash flow.

Let's continue to work with sales growth of $4,000 per week. What do you need?

The average route customer will spend $10 a week or $500 a year on drycleaning. This means you will need 400 established route customers. To secure 400 new route customers within a six-month time frame, you will need to pick-up clothes from 535 customers. Of those 535 customers, 20 percent will drop off, leaving you with 400 new customers.

So, how much will these 400 new customers cost you in both real dollars and in cash-flow dollars?

When trying to sell someone route service, most drycleaners offer 50 percent off all cleaning for the first month of service. The foolosophy here is, "This will give the customer 30 days to make my service a habit."

This is overkill! Fifty percent off the first order is more than generous. With this offer, the customer's first order will average $40 to $50 worth of cleaning. Now, we all know that additional sales cost less per piece to process in the short run.

In the short term, these incremental sales will give you a 35 percent margin. This means that a $40 order will cost you $26 (40 x 65 percent = 26).

In order to attract the new customer, you gave them an offer of 50 percent off the first order, which means that you will be paid $20 for an order that cost you $26.

Losing a few dollars on the first order is not bad. What is bad is determining when you will get paid the $20 for that order.

There are two ways to bill your customers: 1) monthly billing; or 2) by credit card.

Conventional wisdom says to offer new customers monthly billing because you might drive them away if you require a credit card.

Where is the logic? You pick up and deliver drycleaning to your customer's home twice a week and then you cripple your cash flow by offering them monthly billing?

How does this cripple your cash flow? This is how: the first week in May you start with 25 new customers. These customers send in an average of $40 worth of cleaning with the "50 percent off" offer. You will then bill them $20 for this order on May 31. For the remaining four weeks in May the customer sends in an average of $10 per week. This means that the customer will be billed on May 31 for a total of five weeks worth of drycleaning, or $60.

Remember, 80 percent of the customers that you picked up from became permanent customers. You picked up 25 new customers the first week and 20 (80 percent) became permanent.

Therefore, the first week's worth of billing is $20 x 25 customers = $500. For the next four weeks, it is $10 x 20 customers = $800 (4 x 10 x 20 = 800).

The first week in May produced $1,300 worth of billing for the entire month. With the same sales effort and results taking place in the second week of May, you will be adding an additional $1,100 to your billing. This will continue until the end of the month.

Therefore, the total billing for May will be between $4000 and $4,500.

When you bill your customers, they will have 30 days in which to pay you. That's in a perfect world!

The fact is that on average, your customers will pay the bill 40 days after they receive it. This means your customers will be paying you in July for work that you did in May.

As you continue to expand your business in June you will begin to feel the squeeze on your cash flow. You have paid your employees, vendors, taxes, rent, etc., long before your customers pay you.

The best way to keep your cash flowing is to require credit cards. Many drycleaners are reluctant to require credit cards from their route customers because they are afraid the customer will refuse. The cost of not requiring credit cards is too high!

Residential routes are a terrific way to grow your drycleaning business. The demand for drycleaning today is very soft due to the increase in casual wear and the increasing number of people who work at home. Success in this industry will only come to those who are aggressive enough to go out and capture a greater share of the market.

My firm, Biz Builder Services, has created a Route Sales Program for drycleaners who want to expand their business and grow their profits. For more information, go to www.bizbuilderonline.com.

Remember, in the game of business the more you know the better you can play the game.

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Maintained by: Hal Horning