DENNIS MCCRORY:
Who decides if the price is right?

Are you offering people a price-shopped service or one that is results-shopped?

The distinction is critical. Price-shopped items are essentially commodities: "things" (like a can of peas, for example). People buy "things" wherever they find the lowest price. Period.

But a results-shopped item is totally different. If your customers are looking for a particular result -- a certain level of satisfaction -- then you, as the seller, have much more flexibility, and a better chance to make a nice profit when setting your prices.

My recommendation is to always try to move your business towards the results-shopped category and away from the price-shopped crowd.

What to do to grow
Let's say that you are at least temporarily trapped in the "commodity pricing" web. What can you do to get out of that sticky situation? Here's the answer.

If you must price low, price even lower than your competition, but make your price contingent upon the customer buying some other service -- or some combination of services -- that have high profit margins.

For instance, if everyone around you is selling laundered shirts for 99 cents, try selling shirts for 89 cents -- with the requirement that they have one piece of drycleaning for every shirt they want laundered at 89 cents.

Here's an example from another industry: a guy named Drew Kaplan ran an incredible ad for his direct-mail electronics company that asked, "Can You Be Bribed?"

In the ad, Drew offered a digital watch that was selling everywhere in the country for $30 for only $5.99. But to get the watch at $5.99, you had to buy a dozen blank cassette tapes for $29 that he made about $16 on. Drew's cost on the watch was around $7.25, so he lost a $1.27 there. But since everybody purchased at least one set of tapes, and many actually bought more, his cumulative profit was excellent.

Basically, he was selling $20.25 worth of merchandise for $34.98. That's a healthy 42 percent gross profit.

You can do the same thing Drew did if you do it in a way that makes your customers celebrate the great buying opportunity you're giving them. But don't feel compelled to price all of your services low. Lowball only one or two items that are most price-sensitive. And only do that if you feel you're really losing a large quantity of business to low-priced competitors.

With pricing, the thing to fix clearly in mind is that you might have to be a "commodity" in the first part of a transaction, but you rarely need to be a commodity beyond that point.

Bundle your services
You should refuse to compete on a commodity basis. If everyone else is selling a laundered shirt for 99 cents, don't sell a single shirt alone. Bundle it together with other services at an incredible price -- a price where you can make a good profit while offering your customers superb value.

And promise me you'll always test your prices, because you might discover that you're underpricing out of sheer, unreasoned intimidation.

There's a great story that makes that point in a book called Influence, by Robert Caildini.

Caildini wrote about a retailer who sold turquoise jewelry in a gift shop in Sante Fe, NM. The jewelry didn't sell well. So, the owner decided to cut prices and liquidate the inventory. Before going on vacation, she left a note, telling her clerk to cut the price of everything by half while she was away.

But the clerk misread the note. He thought the storeowner meant that prices should be doubled! So he marked prices up, not down. When the owner returned from her trip, she was amazed to find that just about every piece of jewelry in the store had been sold.

Why? Because the prices she had used before the change weren't in synch with the jewelry's perceived value.

What's the moral? Test. Test. Test. Nobody can tell you what is the ideal price to charge for your services -- except the customer!

Test your market
The only way to ever know what price is too high, or what price is too low, for your services is to test it in your own marketplace. Don't be dissuaded by one or two complaints. Find out what the market will bear.

My hope with prices is that you will test yours so that you can position yourself to price right. The market will always tell you whether or not you made the correct choice. Just don't be afraid to try.

I have seen higher prices out pull lower ones by as much as 400 percent and I have seen lower ones out pull higher ones by a similar margin. Without testing, you're guessing.

Unless you're willing to price in an innovative, proactive way, you'll always be at risk of selling your services at a loss. You'll also be at risk of failing in business.

Winning the battle but losing the war
Most cleaners fight price wars just to generate customer traffic. But unless you have a well strategized plan of action behind what you're doing, you can't possibly profit from a price war. In fact, in most price wars, nobody wins.

Instead of rushing into a price war, I urge you to "position" your customers to make repeated purchases from you. Do that when they make their first visit, but make sure that the additional services they buy from you aren't being sold at a loss, or at only a meager profit. More likely than not, you don't have to discount that deeply or broadly.

Don't psych your own prices down.

They may be tough, but most customers won't deny you the opportunity to make a profit. More often than not, we psych ourselves down the price scale.

Wouldn't it be sad if you found out next month or next year that you had been denying yourself 50 percent more profit on half or three-quarters of the services you sold just because you were afraid to ask customers to pay what your services are worth to them?

If I'm wrong, you'll know it in a week or two from the results of a test. But what if I'm right? Please don't take any chances. You've got too much to lose -- or gain!

RAY COLUCCI:
How to compete against low prices

The one question that constantly comes up is "What am I going to do about the low prices my competitor is charging?"

What I find strange is that the most successful drycleaners I know are those with the highest prices! Do they know something we don't know? Do they run their plants so much more efficiently and profitably than we do? Is their quality so consistent and so much higher than ours? How do they continually command a much higher price?

Conversely, does the discount cleaner have such a hold on his production, or lower paid employees than we do, which would permit those low prices? Are his rent and utilities so much lower than ours? More important, if true... How? Why?

If we take a careful look at the history of our industry we will find some indisputable facts. One of them is that the highest price cleaner not only is constantly operating more profitably, but somehow never seems to be bothered by downturns in the economy or threatening recession.

I have concluded also that their clientele (notice I speak of his clientele not customers!) are of a much more affluent nature and can afford the best wardrobes and demand the best in services to maintain them properly.

One thing about those blessed with higher incomes is that they want and look for consistent quality. They are eager and willing to pay higher prices for a perceived value and will reward those who provide a high standard of excellence.

Price is always a factor, but it will be disregarded if quality has to be sacrificed.

Better cleaners, better prices
I also enjoy hearing the comment: "They are very expensive, but their work is excellent!" This confirms my theory that in order to receive such a compliment it's smart to charge a little more than everyone in town. It seems like a badge of honor and supports continued loyalty.

With loyal customers (I mean, clientele) come the problem of maintaining a smooth running shop, classy appearance with background music, and uniformed, smiling counter personnel who remember names, sharp packaging, and competent managerial skills. It is always a pleasant experience when going to these drycleaners.

Should you ask the successful expensive drycleaner his secrets, he might say, "Just look around!"

You won't find dust or dirt anywhere! Certainly not on the counter. No soda cans or wrappings around the pressing equipment, the lighting is replaced when needed with no dusty or flickering bulbs, good ventilation, and a polished, spotless floor.

Who said a drycleaning plant should always look clean? We spend a third of our lives in our plants, shouldn't we have a clean environment?

Management will have exploited every nuance of where the clientele is coming from, just what services are required and just how to provide it. The marvels of "computerization" will have long been a welcome friend in running the business.

Management will know at the flip of a switch how much good customers will spend and how often, where to solicit new customers with classy ads, use informative hang tags on each order, what charities to contribute to and an occasional classy looking newsletter plus a piece in the local newspaper.

If you think of the best expensive restaurant in town, you'll see an amazing parallel between the two establishments.

I also assure you, the drycleaner with similarity in this comparison will be a more profitable venture with less help and restrictions in the course of doing business, shorter hours, plus a far smaller need for creative talent and skills than a better return on investment. Believe me.

The fallacy of discounters
This article was written to expose the discount drycleaner and to show the fallacy of running a business with the lowest prices in town.

First off, we know the discounter is not making money. We are all confronted with the same restrictive laws that townships inflict on us. A "loss leader" will attract some new business, but the bargain hunters soon vanish.

We all have the same problems with unskilled labor that require training. And skilled workers demand more compensation and benefits.

We are all faced with the expensive updating of equipment, or face heavy fines for not updating.

Furthermore, the discounter's customers are not bringing in garments "just to, freshen them up." Most are heavily stained and require pre-spotting and re-cleaning. Most white shirts must be hand-brushed on the collars and cuffs.

If someone does make the switch, they will soon confess, after inspecting their garments, "You get what you pay for!" If they don't value their garments, they may return to the discounter, but not with something they want to wear with pride.

So it's a fact. Not only do discounters have to work harder for the job, they also are paid less for the effort and always attract cheap bargain hunters.

How do you beat them?
What's the answer? If you're involved or directly confronted with a low-price competitor, it's time to have a "wake up call." Review your entire operation. I mean everything!

Start with your overhead, your fuel, solvent, utilities, equipment maintenance, and take a good look at your productive labor cost.

Next, start a final inspection program (write for my Mystery Shopper information. Let someone else judge you). Now make sure you are portraying the right image and in the best way.

Be certain all are doing their best -- your help, your counter, everyone -- and everyone is making a conscientious effort to do the best.

Then it's time to change or review your packaging. On the market today are three- and four-colorful plastic bags, even with seasonal changes. For a hundred dollars or so, a one-time plate charge, you can design a custom print with your new logo. The cost is justified usually by a hundred-roll order, delivered and paid for at 25 rolls at a time.

Your image can be changed by establishing the years you have been in business. This can be advertised as your anniversary sale with a picture of you and the mayor in the local paper.

Have the local high school economics teacher with class review your plant on a tour. Have "We're so Clean !" as the theme of a class composition contest.

The prize? No charge cleaning a prom dress or the family wedding gown, with lots of pictures of the event. Make use of colorful garment hang tags announcing your new evening route service.

After all this, carefully review your true cost of doing business and start raising your prices by small increments of 25 cents.

If you do things right, and get your cost and quality control in a consistent manner, you will experience not only a steady increase in profit and business but a substantial influx of a better clientele. Your old established customers will be pleased at your new image and express their appreciation with nary a comment of a modest price increase. You in turn will have the satisfaction of serving the nicer clientele, doing less tedious work all with more profit.

Discounter's demise
Here is my last fact.

The discount cleaner must and will go under (history has repeatedly proved it). If he raises his prices without improving his quality or image, the faster his customers will leave. Sooner or later he will tire of working for substandard wages, which his stained and soiled volume dictates, and the laws of "You get what you pay for" will prevail.

It takes time, but it will be determined by how fast you can portray your new image. In the last 20 or 30 years, I have seen coin-op drycleaning, wash n' wear, dollar drycleaners -- you name it, and they all went under. Has anyone purchased "Woolite" in the last few years?

Meanwhile the professional who withstood the contest and did his best to shore up his image and quality, survived and grew stronger. He became more profitable and got respect with a superior and more stable clientele.

The harder you work... the luckier you become!

DON DESROSIERS:
So now you are a shirt wholesaler

This is part two of a three-part series on wholesale shirts. This month's chapter is for the shirt wholesaler. Last month, we talked about the shirt wholesaler's customer, so this month it's the vendor. The third and final part will also be for the drycleaner who is currently using a wholesaler. That chapter will help him or her decide if this is the right course for the future: Should I get into the shirt business?

The information contained here is for everybody who does shirts for any stores they do not own.

Consider yourself a "wholesaler" even if you do mostly your own shirts, but also some additional shirts for someone else. If that happens to be your situation, you may not consider yourself a "wholesaler" and perhaps rightly so, but there will be information here that you can put to good use.

I understand that you are substantially different than the guy who does wholesale exclusively or the guy who gets most of his shirts from the outside. Nonetheless, I consider you a wholesaler for the purposes of this column.

Wholesale shirt laundering must be the most bizarre business in the history of commerce. What other business can you think of in which so many customers become providers, almost as a matter of fact?

You do not go from buying milk at the convenience store to getting your own cow and making your own milk to buying a second cow and making milk for the neighborhood. You do not go from renting a tuxedo to buying one to buying a bunch of them so that you can rent them to your friends. But you do go from using a shirt wholesaler to doing your own shirts to doing shirts for your competitors.

How weird is that? How and why does that happen? What makes the shirt business so completely different than any other, that more than 50 percent of you do shirts for stores other than your own?

I can think of nothing other than the ill-conceived thought that shirts are immensely profitable. The concept of volume solving every problem and reducing every cost is so wrong and very ill-suited to this particular business, yet everyone seems to be in denial about this.

Let me make it clear, though, that if you are underutilizing your equipment and your staff, surely volume may go a long way in saving your hide. But what is equally important to understand is that no matter what volume you are at, never count on doubling your profits by doubling your volume. Never do this, ever. It will be the death of you.

You are reading the writings of a guy who went from 1,100 shirts per week -- steadily progressing for 10 years -- to a peak of 20 times that: 1 million shirts per year. You would be sadly mistaken if you think that profits multiplied 20 times.

No economies of scale
Remember that the economies of scale do not work in this business, and do not forget it. As you expand, rather than simply multiplying profits, you will need to hire and/or enhance your office and management staffs, to name but one of the new challenges that you'll face. Your job will go from supervising the rank and file to supervising your management and your administrators.

The economies of scale do not work for two reasons: First there are far too many variable expenses and too few fixed expenses involved in doing shirts. That means that the only savings that volume could afford you would be from the fixed expenses.

The variable expenses will increase proportionately with the volume -- they vary with volume, which is why they are called variable expenses. These expenses include line items like utilities, hangers, poly, and soap; labor hours, equipment repairs, pads and covers and a host of other things.

The more shirts that you do, the more you will spend on these items. The amount that you spend varies based on the volume. Hence the adjective "variable."

If this business was largely fixed expenses -- perhaps a very large capital expenditure to get you into the business and then relatively minor expenses afterwards -- then maybe you could do shirts for 29 cents each if you were doing 50,000 per week. But that is all fantasy. At this point, that is nothing but a fairy tale.

The other reason that the economies of scale do not work is that, although you experience theoretical savings on the fixed cost line items, they too, will increase.

The new expenses will range from the creation of new supervisory positions to new expenses for new and improved equipment, (be they innovations or hard-core necessities) to back-up equipment (extra boiler or additional compressor) to disproportional increases in equipment repair due to heavier usage.

Do you doubt that this is always true? It is fairly easy to prove. Do you think that every shirt launderer in the country doing low volume is struggling to make a profit while every one doing thousands of shirts is swimming in cash? Of course not.

Who makes the money?
The ones who charge enough to cover their expenses and contribute to corporate profit make money. The ones who don't, don't.

What is so hard to understand about that? So often when profits are scarce or non-existent, the immediate conclusion is that more volume is needed. How about trying to become profitable at the volume that you are at? Why is that so seldom the conclusion?

If you are under-utilizing your staff and/or your equipment, then volume may serve you well. But it may be a very specific number of shirts, not infinitely more volume. It is possible that adding, say, 1,600 to 2,000 shirts per week will make maximum use of your equipment. But more than that will mean adding more equipment, more labor or in some other way altering the proportion of cost vs. revenue.

Simply put, you must get a very firm grip on your cost and check it every day.

Last month, this column was addressed to your wholesale customers. I suggested to them what they should be expecting from you regarding service and quality and I gave them a clue as to what your life in the wholesale business is like.

Keeping the same format as last month, let's look at these same issues from your viewpoint.

Consistent, predictable service and quality. You are in a very tough business. I know this as well as, if not better than, anyone else. But no matter what, as hard as it may be, you must be predictable.

If I ask you to rate the overall quality of your shirts, what would you say? Good to very good? Most people say that. Fair? Well, you know, I think that I would rather rate my shirts "fair" than "good to very good." "Fair" suggests that you are always the same. It might not be as good as you want it to be or wish that it was, but if that is your rating, it suggests that it's always the same. "Good" or "very good" is better of course, but "good to very good" suggests that you have peaks and valleys.

This is not a good thing. If you send your customer very good shirts on Tuesday, why couldn't you do that on Wednesday? It makes a customer question your operation as a whole. Did you do a good job by accident? Did you do a poorer job because you don't care?

Aim for consistency first. If you decide that you will do a consistently poor job, three things will happen for sure: 1) you will not get my approval; 2) I won't want my shirts to be done by you; 3) your customers are unlikely to ever be disappointed with you. They won't expect much and they won't get much.

It's like eating at McDonald's. What would happen to your thought processes if, the next time you go to McDonald's, you get the best meal that you ever had, anywhere? You will not be able to help but wonder why every other time that you've gone there it has been awful. You won't be thrilled to get a great meal this time. You will be retroactively angry about the lousiness of the previous meals.

By vending a consistent product, you will not annoy your customers by having a variable standard.

What service is reasonable?
Depends who is asking. Generally considered acceptable is two-day service: deliver tomorrow everything that you picked up yesterday. That gives you a full 24 hours to service the goods.

You will consider this to be prompt service. Your customer will consider it to be the cross that he must bear and his customer, the retail customer, will at times consider it to be completely unacceptable.

Unacceptable? Look at it this way: Let's say that you service XYZ Cleaners at noon everyday. At one o'clock on Monday, a customer drops shirts off there. You pick them up at noon on Tuesday, process them on Wednesday and then deliver on Thursday.

Sounds pretty good to you, you did all that you needed to do to the shirts in one day, but it sounds like four-day service to the customer. Four days? How much faster can you go? You can't. Throw in a weekend, never mind a long weekend, and it's Thursday to Tuesday. The customer will joke with the counter girl and ask if he will be charged for room and board.

Imagine how much more gross this becomes if and when you deliver an order late. This is the classic struggle between the wholesaler and his or her customer. You're doing the best that you can, as fast as you can and your customer eyes you as the reason that his customers say he has slow service and, for that matter, you are the source of all of the complaints that he gets from customers.

The only time that you get reprieve from this is when your customer has "played the field" a bit and knows that your competitors are slower and poorer. Additionally, it helps if they are intelligent and they then view your plight objectively.

What about quality?
What do you think? Don't say or think this: "That's what you get for 80 cents." Or "I do a good 'wholesale' shirt." Or this (a classic line, an oldie but a goodie): "What do you expect for 95 cents?"

All of these excuses suggest that there is a difference between "wholesale" shirts and shirts that someone would do for their own customers. You may be quick to insist that there is. I will disagree. Do you really think that it takes more time to do a good job? Not really. Sure, you can cut the touch-up girl when the "wholesale" shirts are being done, but I don't think that you do. Sounds more like a training and supervisory issue to me.

If you think that, "That's what you get for 80 cents", remember that you set the price at 80 cents, not the customer. Although, it surely is true that you are pricing your product at a level that the market will bear, you agreed to do the job at that price. You did not say that you wouldn't touch up shirts, and you didn't say that you'd leave a ring around the collar and you didn't say that you lose shirts now and then. You said that you'd do their shirts for xx cents, and "doing" them implies a lot.

Don't expect to get away with excuses for shoddy work. Try this angle: put the horse before the cart and do a good job. You will, bit by bit, be able to raise prices and your customers will know that you are better than your competitors and are worth the money because you deliver on your promises. Forget about deciding to do a good job when you get paid enough. You'll be long out of business by then.

Don't treat your customers like ignorant outsiders. They are hardly outsiders. They have to face customers and present your product to them in good faith. You will anger them if you embarrass them. They should school themselves about the shirt business. If their education comes from you, I strongly recommend that you give them straight dope or you will soon find yourself very low on credibility.

The trust that your customers place in you is your biggest and most valuable asset. Do not put that at risk simply because you cannot, during a moment of weakness, admit that you have erred.

What about price?
So what should you be charging? "As much as you can," is the easy answer. Set up a spreadsheet that will make it easy to calculate your cost per shirt every day. See how it fluctuates? See how wasted labor affects it? See how overtime raises it?

Don't waste your time doing more shirts for less profit. What is the point? The only purpose that it serves is to keep the perceived value of a professionally laundered and pressed shirt down. Try to put forth the most professional image that you possibly can. Have your driver wear a uniform. What about a professionally laundered and pressed shirt? When was the last time that you saw a UPS driver out of uniform?

Get your billing system in order. There is only one software system designed specifically for wholesale shirt laundries (call me). Get that.

It will enhance your image and will show that your customers that you are interested in your business and in making his life easier and you will increase the perceived value of your wholesale shirt. How's that for a switch?

DAN EISEN:
Turn problem prints into profits

Prints are back in full swing. Designers will be showing varied prints ranging from abstract florals to playful stripes and larger, more traditional bouquets. Prints can be applied to any fiber or fabric, but silk and cottons expect to be increasingly popular.

Many manufacturers and designers are recognized by their unusual pattern and designing.

The printing of fabrics is similar to dyeing. Instead of being applied to the whole cloth as in dyeing, print color is applied only to specific areas of the cloth to achieve a planned design. Printed fabrics are more popular in spring and summer fashions, especially in bright and vivid colors.

The types of printing processes used are direct printing, resist printing, sublistatic printing, discharge printing and screen printing.

The printing processes used can put color directly on a fabric, use wax to resist dye or use a bleaching agent to remove color in a planned design. Color can be added to fabric in the form of soluble dyes or insoluble coloring particles referred to as pigment.

Printed fabrics are used in all types of clothing and household fabrics.

Printing problems
Two types of coloring agents are used to print a fabric, but similar problems may occur.

1. Dyes. Dyes are soluble coloring substances that penetrate a fabric. The fastness of the print depends upon a) the affinity the dyestuff has for the fabric; b) the fixing or setting of the dyestuff; and c) the amount of excess dye not absorbed by the fabric.

When these printed dyes are not fast, they can bleed or fade from moisture drycleaning solvents or routine spotting.

2. Pigments. Pigments are insoluble coloring substances that are held on the surface of the fabric by an adhesive binder. The permanence of the pigments depend upon: a) the durability and setting of the adhesive, and b) the affinity the adhesive has for the fabric. Pigment prints are subject to dye loss from friction and mechanical action in normal wear and drycleaning.

This type of dye loss is referred to as crocking.

Drycleaning solvents may remove the dye due to the solubility of the adhesive binder used.

3. Identification. Pigment prints can be distinguished by examining the reverse side of the fabric, which discloses less penetration of color than other prints. Examine prints for crocking dye loss and bleeding in areas subject to friction and perspiration such as underarm, collar, waistline, pocket, cuff and hem.

Check for bleeding and loss of print on stained areas and possible amateurish attempts at stain removal by the customers. Note any of these problems on the customer's sales slip.

Drycleaning
Do not use moisture when cleaning printed dyed fabrics, as this increases the possibility of dye bleeding and transfer. Solvent temperature should not exceed 80°F as print dye solubility increases in hot solvent.

Surface printed fabrics
These should be given a two- to three-minute cleaning. Surface prints are usually more soluble than other printed dyes. Hydrocarbon solvents are usually safer to pigment prints than perc.

Spotting
Pigment prints. Avoid the use of dryside spotting agents such as paint remover and amyl acetate. This will dissolve the adhesive, causing loss of print. Use wetside lubricants and spotting agents with limited mechanical action to prevent dye crocking.

Printed dyes. These prints may be fugitive to water and wetside spotting agents. Test for dye fastness before using. Put printed fabrics over a towel when using a steam gun. Note if the dye has transferred from the fabric to the cheesecloth. If dye has transferred, use air to dry the wet area quickly to avoid bleeding or transfer.

Dryside agents are usually safe to these prints but are extremely hazardous when water is applied.

Wetcleaning
If the fabric permits, pigment prints are usually safe, providing that the mechanical action is limited.

Other prints should be tested for the effects of water (see Spotting above).

When wetcleaning, cotton print garments should not be allowed to soak, since this increases dye bleeding. Keep the garment agitated, rinse thoroughly and dry to 90 percent. The use of any acid with wetcleaning will also help stabilize dyes.

Finishing
Use routine finishing, according to the fabric.

Summary
Prints can be applied in any type of design or pattern. The coloring agent may be a pigment or a dye. It is important to distinguish between pigments and dyes since the drycleaning and spotting procedures used are different.

Pigments are held on the surface of the fabric by an adhesive binder. The serviceability of pigment prints depends on the durability of the adhesive. These prints are subject to color loss from friction and mechanical action in normal use or drycleaning.

Drycleaning solvents may remove pigment prints because of the solubility of the adhesive.

Prints applied with dyes may penetrate the fabric but may have poor stability. These dyes can be removed or bleed when in contact with moisture in normal wear, drycleaning or spotting.

STAN GOLOMB:
A half century with entrepreneurs

It was 50 years ago that I first started dealing with entrepreneurs. I'm talking about drycleaners who owned their own business. And now 50 years later, I'm still doing business with entrepreneurs.

Most of you reading this article are entrepreneurs and, in my opinion, are true heroes.

It takes a special type of person to assume all the responsibilities of being your own boss and running a successful business.

As the owner of a drycleaning plant, you have invested not only your money (and more than likely, are carrying a significant debt load) but have committed yourself to the following:

• Hard work.
• Long hours.
• Responsibility to your help.
• Responsibility to your customers.
• Responsibility to meeting all the government mandates.
• To pay payroll taxes.
• To being under almost constant pressure.

I could go on and on about all the sacrifices you, as an entrepreneur, have to make with your blood, sweat and tears.

And when you start a business, you should know that statistically, the odds are against you.

Only one out of ten small businesses will survive for a ten-year period.

Entrepreneurs are the backbone of the American economy. You provide for most of the jobs and taxes and you are everywhere. You and people like you are in every city, town and hamlet in the country, and your neighbors are just like you.

Fortunately, there are millions of you and you have helped make America what it is today.

With that said, I want to tell you that I became one of you in 1962 when I, too, became an entrepreneur. I'm now 76 and have started to write a book about how entrepreneurs have fared over the years.

Since 1957, I have written millions of words. Back then, I wrote a sales training manual called, "Peter Piper the Powerful Persuader." I had been teaching a course in sales at Northwestern University Evening School of Business called Persuasive Communications.

At the time, I was working for R. R. Street and Co. I also ran a class for distributor salesmen and passed along the lessons I had learned and was teaching.

After conducting this course one afternoon a week for 16 weeks, my boss, Ernie Heidersbach, vice president of R.R. Street, asked me to put my lessons down on paper.

I started to and found that writing about the academic formulas used for organizing and making a sales presentation were boring. It was no fun writing, let alone reading, and I realized I would have to write in a way that people in the real world could relate to.

So, I created a mythical character I named Peter Piper and had him learn his lessons with the help of Ben Cook, his neighbor. In the story, Cook had recently retired as sales manager of a large company and took an interest in Peter. This way I was able to make this story interesting enough so that it could be printed in book form.

That was my first experience at writing.

Those of you who have been reading my trade paper columns for the past 25 years know that my subjects vary from month to month based on what's on my mind at the time.

About eight years ago, I wrote my second book, a hard cover called, "How to Find, Capture and Keep Customers." This book sold out, mostly to entrepreneurs or to companies that bought the book to give to their customers.

My publisher, who is the author Murray Raphel, just completed his most recent book called "52 Selling Rules" and it is terrific. If you would like a copy, it's only $14.95. You can send a check to me and a copy of his book will be on it's way to you.

Murray asked me to follow up with a book about marketing. I started to write, but it came out rather dull, so after months of anguishing over how to do this, I finally came up with a format.

I decided to write about a fictitious couple that opened a drycleaning business. I'm calling them Jack and Jill and they are based on real people I have known and dealt with over the years.

Jack and Jill are interchangeable with Penny, the lady who opened her own beauty shop; Joe, who started a dental practice; or George, who opened a neighborhood restaurant.

You know people just like them -- they are typical of the business people in your neighborhood. They are members of the local Chamber of Commerce. They are the customers of your local banks and they are your next-door neighbors.

If you own a business, you know that their problems are the same as yours.

Like you, they need customers and, like you, they need to make a profit or they can't stay in business.

My book will deal with the day-to-day methods these mythical people use to handle their affairs and how some grow to become very wealthy while others fail.

Not everyone has the disposition or desire to be an entrepreneur. There's nothing wrong with that. We need all types. Just like if you hire a sales person for your counter but their personality is not good for that job. That doesn't mean that they are not a good worker. It simply means they will do better at a different job, perhaps working in the plant in a production capacity.

I am planning to continue to write my column in the National Clothesline.

However, I would like to ask for your help. Perhaps you can submit a story about your success or failure as an entrepreneur. Then, someday, you will be able to read about yourself (with a fictitious name) and know you played a part in a book for all entrepreneurs.

FRANK KOLLMAN:
Tricky rules govern "overtime"

Every employer knows that there is a federal minimum wage and that overtime (time-and-one-half) must be paid after 40 hours.

Beyond that, employers have a difficult time understanding their obligations under the federal Fair Labor Standards Act. There is good reason for that. The wage and hour laws are complicated, and it is easy to violate the law without even knowing it. Here are some of the most common employer mistakes.

Employers believe that employees can agree to take less than minimum wage or waive overtime. This is false. Even if the employee comes to his employer with an idea to get around the wage and hour laws, the employer can be held liable for back pay.

Several years ago, an employer was forced to pay overtime for hours worked over 40 in the work week, even though the employees themselves suggested the idea of working a few extra hours each week to accumulate time to take deer season off without using vacation time. The federal government did not care.

Employers believe that if they pay an employee a salary, that employee is exempt from overtime. That is not true. Employees who are paid a salary are exempt if they perform duties that qualify them as executive, administrative, or professional employees. The existence of the exemption depends on what they actually do. If an employee is not paid a salary, he is likely not exempt from overtime and the minimum wage, regardless of what he does.

Employers believe that overtime must be paid after 40 hours of pay. On the contrary, overtime must be paid after 40 hours of actual work. If the employee receives vacation pay for eight of the 40 hours, he is not entitled to overtime until he actually works 40 -- not 32 -- hours.

What about deductions?
Employers think they can deduct any amount they want from an employee's paycheck, provided it is authorized in writing. Deductions cannot, however, have the effect of bringing the employee below the minimum wage for the week. The only exception is for cash advances or loans. In those cases, the federal government treats the advance or the loan as compensation already paid. Deductions for tools or uniforms the employee is required to have are not allowed if they bring wages below the minimum.

Counting the minutes
Employers believe that they are not responsible for paying employees who start work early and leave work late, especially if it is only a few minutes. This is not correct. Employees must be paid for all the time they work. Hours may be rounded to the nearest five minutes, ten minutes, or quarter-hour. This means, however, that if any employee works eight minutes over his regular quitting time, an employer may be responsible for up to a quarter hour of straight time or overtime, depending on the total hours worked in the workweek.

Employers believe that meal periods do not have to be compensated where the employee is required to eat his meal while being "on call." If the employee does not have 30 minutes of uninterrupted meal time, the federal government requires that he be paid. Meal periods and breaks, however, are matters of state law. Only a few states require breaks or meal periods for employees over the age of 18.

Employers believe that overtime is based on the minimum wage. This is false. Overtime is based on the employee's regular rate. That includes the employees hourly rate, plus any other compensation, including bonuses and piece work, divided by the number of hours that amount is intended to compensate.

Employers sometimes think that they do not have to keep track of hours worked. Rather, employers who fail to keep records of hours run the risk that a court will decide that an employee's "records" establish the number of hours worked.

Employers should not take unnecessary risks concerning payments for their employees. If mistakes are made, the employer may be responsible for back pay, an equal amount as liquidated damages, and attorneys' fees. It pays to pay employees correctly.

FRANK LUCENTA:
A practical guide to mixing color

Mixing color is an art that is sometimes required in order to match the original color of a worn or faded suede or leather garment.

There are many garments that will not require color mixing because their colors are primary or neutral colors and primary or neutral color dyes and finishes will be sufficient to recolor them.

For other colors, color mixing may be necessary. Where color mixing is required, the necessary skills and knowledge can be acquired in a short time with persistence, determination and practice.

A basic knowledge of colors and color blending can be acquired from the following paragraphs. They provide some basic scientific facts that will help clear up some of the mystery and apprehension that may surround the subject of color mixing.

With knowledge and practice, the art of color mixing will become familiar and will no longer appear to be mysterious or the cause of apprehension.

Basic view of color
In our day-to-day experience, we see color in two forms; colored objects and colored lights. For convenience we can give the name pigment colors to any colors we see on objects like fruit, rocks, ink, dye, paint, paper, cloth or leather.

We can give the name light colors to any colors we see as lights, such as the sun, the moon, a star, a flame, an electric bulb or a neon sign.

While light is the real origin of all colors, we will touch upon it briefly and then concentrate on dye and pigment colors, which are what we work with in coloring suede and leather.

The first thing to learn is that the white light that comes from the sun actually contains all of the colors of the rainbow. These colors of the rainbow are called spectrum colors.

The next thing to learn is that we see all objects by reflected light. An object is seen as a particular color because it reflects that color and absorbs all the other colors.

The following definitions have been developed as part of the science of color to identify and describe dye and pigment colors:

Primary colors. A primary color is the one that cannot be made from mixtures of other colors. There are only three pure primary colors in the world of science. These are red, blue and yellow. All other colors are combinations or mixes of these three primary colors.

Secondary colors. A secondary color is made by mixing equal amounts of two primary colors. There are three basic secondary colors. These are purple, orange and green. They can be mixed as follows:

Red + blue = purple.

Red + yellow = orange.

Blue + yellow = green.

Intermediate colors. An intermediate color is one that results when a primary color is mixed with a neighboring secondary color. There is an intermediate color between each primary and secondary color.

For example, mixing blue and green results in a blue-green color because it is a mixture of blue and a mixture of blue and yellow (green) making a mixture of two thirds (2Ž3) blue and one third (1Ž3) yellow.

Neutral colors. A neutral color is one that shows no color in the ordinary sense of the word. Black, white and gray are neutrals. A mixture of all three primary colors makes black. The fact that three well matched brilliant colors can neutralize one another is an important point to remember.

Tertiary colors. A tertiary color is a mixture of equal amounts of two secondary colors. There are three tertiary colors, one for every two secondary colors. By calculation we can see that all three primary colors are involved, but not in equal proportions.

For example, if we mix green and orange, green is half blue and half yellow, while orange is half red and half yellow.

The mixture will be one quarter blue, one quarter red but one half yellow. The mixture will be partly neutralized by the mix of equal parts of the primary colors which results in black and the surplus of yellow gives the mix a yellowish brown color commonly called dark olive.

Complementary colors. Complementary colors are the result of mixing a primary color and a secondary color (made up of the other two primary colors).

By combining these colors they tend to neutralize each other and most often produce a grayish color.

For example, if red (a primary color) and green (a secondary color), (which is a mixture of yellow and blue), are mixed in equal amounts, the mixture of the equal parts of all three primary colors will neutralize each other and result in black leaving a surplus of red to give the mix a dark red color.

Hues. A hue is a pure color free of any neutralizing factors. Primary, Secondary and Intermediate Colors are all called hues.

For example, we described a hue when we call it a red, blue, yellow, orange, violet, green or any intermediate color like blue-violet. Hues are brilliant colors that contain no black or white to neutralize them.

Shades. A Shade is anything darker or grayer than a true color or hue. Shades are produced by adding black to a hue or basic color. Common shades are brown, rust, tan, olive, charcoal, dark blue, dark red, dark purple and dark green.

Tints. A tint is anything lighter than a true color, hue or shade. Tints are produced by adding white to a basic pigment color or hue or by diluting or reducing a basic dye color or hue with a colorless diluting agent.

Common tints are pink, light blue, pale yellow, beige, rose, lime and gray.

Color combinations. With proper instruments, scientists can detect thousands of variations in the colors in the spectrum. However, the human eye does not have the ability to distinguish between more than about 40 pure colors. But by using the primary and secondary colors plus black and white, it is possible to make thousands of different colors!

Now that you are armed with all this information about color, happy color mixing!

Alan Robson: Put some structure in your business

The drycleaners I talk to and work with from coast to coast tell me that their biggest concern is finding and keeping good employees. Everyone knows that employee turnover is extremely expensive.

The good news is that there is some relief in sight. The bad news is that you will have to improve the way you manage people to take advantage of the improving labor market.

The U.S. economy continues to baffle the financial experts. The Gross Domestic Product (GDP) was up 2 percent in the first quarter of the year as unemployment continues to rise. Unemployment actually went up to 4.5 percent in April. What may be even a bigger story is that "Help Wanted" ads are at an eight-year low.

Some employers have gone to Internet advertising but, for the most part, that is used to supplement, not replace, newspaper advertising. With the potential of having more than just "warm bodies" to hire.

This is an excellent time to review the management structure of your company; the way you communicate with your employees; and the quality/work standards in your organization.

Developing these management functions can be a real chore or a whole lot of fun... it all depends on the attitude you "put on" as you address each area.

First, the management of every organization needs to be structured around the functional areas of the business. Second, you must learn how to communicate more effectively with your employees. Third, policies, procedures, rules, quality standards and work standards must be defined and documented.

I can hear some owners saying "What I need is more sales volume -- not structure."

The fact is that 75 to 80 percent (that old 80/20 thing again) of the drycleaners across the country are experiencing declining sales volume.

Why?

There are a variety of reasons, but far too many consumers I talk to tell me that they are tired of getting their clothes back from the cleaners in worse condition than when they brought them or not getting them back at all.

Many consumers are avoiding "dryclean only" garments because of the poor job the cleaners are doing. Consumers' biggest frustration comes from a lack of consistency. In order to achieve consistency, you must have structure and in order to retain customers, you must deliver consistently good work.

Structure = Consistency = Profitable Growth

The vast majority of cleaners are intelligent, hard-working business owners with a great deal of integrity. The difficult part is staying focused on the structural needs of the business when you spend the entire day in the trenches. To get your business structured you must plan the work and work the plan.

Set aside one hour a day, every day (five hours a week), to get your company organized. Next, identify your biggest concern: absenteeism, cash flow, the quality of your work, employee turnover, etc.

Prioritize your concerns
If attendance is your major concern, establish a policy like the one shown in the box at right.

Establishing company rules and regulations is the easy part. The hard part is in consistently following through. Everyone has employees whom they get along with better than with others and we all have a tendency to look the other way when these people bend/break the rules. Not administering the company rules consistently across the board with all employees is a disaster!

A recent USA Today article quotes GE's CEO, Jack Welch, as writing in his annual newsletter to shareholders, "A company that bets its future on its people must remove that lower 10 percent, and keep removing it every year." Retaining marginal employees or individuals with bad attitudes drags the best people down. Get rid of the bad apples and you will reduce turnover of good employees.

Research shows that the majority of your employees want to make a positive contribution to the company. Talk to your people. Explain to them that your biggest expense is payroll costs. Ask them for their input on how to reduce payroll costs by being more efficient in the way the work is being done and in the way pieces move through your plant.

I've said this before and it's still true -- if you add $100 to your top line (sales), you will add about $20 to your bottom line (profits). If you reduce expenses by $100, you will add $100 to your bottom line. When your employees help you reduce costs, you can share a portion of that savings with the involved personnel with a one-time bonus.

Now you are beginning to organize your business with company rules and regulations and you have opened up the lines of communication with your people. The next step is to start documenting procedures.

Make sure that all your employees know what an acceptable shirt looks like and make sure that they know what is unacceptable. Likewise, do the same with the drycleaning department.

If poor cash flow is a major issue for your company, write down where every penny is being spent. Almost every company lets at least five to seven percent of sales dollars slip through cracks. Once these dollars are gone, they are gone forever.

Take a real close look at your payroll. If payroll is more than 40 percent of sales then: a) your productivity (output per operator) is too low, b) your wages are too high, or c) your prices are too low. I have one management group member who did not raise his prices in January 2001. This was the first year he did not raise prices in eight years. His sales for the first quarter of 2001 were up 16 percent over the same period last year.

This cleaner represents the 20 percent of cleaners who are experiencing growing sales. The curious thing about him is that although sales were up 16 percent, profits were up just two and a half percent. As a result of financial performance, this owner raised his prices in April. Now, his sales and profits are both growing.

What are the top 20 percent of cleaners doing to increase sales volume? They are consistently delivering quality garments and quality service. That is exactly what it takes in today's market.

Alan Robson is a private consultant dealing with the specialized needs of the drycleaning industry. For more information, contact him by telephone at (508) 753-6619 or send e-mail to him at: alan@bizbuilderonline.comor visit the Biz Builder web site: www.bizbuilderonline.com.

STAN CAPLAN:
Buying equipment? Do it right

Purchasing equipment can be one of the most important single events in your business career. You spend a lot of money for equipment designed to increase your production capacity, enhance your plant efficiency, improve your quality and save on production costs.

But what happens to destroy all that?

The answer: Poor, or improper, installation can cause a good piece of equipment to function incorrectly, resulting in poor quality, lost production and unnecessary expense.

The most disastrous thing a plant owner can do is to get a blanket price for installing a plant, or a large installation, without giving the bidder complete specifications on pipe sizes and grades, valve types and pressure ratings, trap ratings and sizes with placement of necessary gauges, size and use of takeoff risers from headers, complete insulation of all pipes and fittings, use of small blow-off valves at built-in strainers to bucket traps, proper pitch of all steam and return headers, proper attachment to floor of all individual pieces of equipment, etc.

A complete plant can be installed for any amount of money depending upon the quality, type and amount of material used.

The first thing you should do is familiarize yourself with the engineering details of the installation together with the necessary information regarding the quality and nomenclature of all the material required.

If you are lucky enough to have a highly experienced installer in your city, one with good credentials and an impeccable reputation, you should hire him, even if his price is higher than others of unknown or doubtful ability as long as your chosen company agrees to follow your specifications.

Therefore, you should never ask installers how much they would charge to install a plant based upon the layout you furnish them. In that case, the lowest price will usually be a "short cut" job on poor quality parts and unskilled labor.

Also, the person, or company, who prepares the equipment layout/floor plan should also be the one who furnishes the installation specifications. If you employ an architect to design your plant, he will furnish you with architectural plans and specifications for mechanical and electrical installation including an equipment layout and floor plan acquired from an independent fabric care consultant or from the equipment sales company bidding on the equipment to be purchased.

Most popular equipment sales companies will handle the acquisition of the architectural plans and specifications for you as part of their bid for the equipment purchase if they employ, or contract for, a mechanical engineer.

Specs and bids
However, the actual installation specifications regarding the use of proper material for piping, fittings, valves, traps, slanting of headers, etc., should be made, or reviewed by, a qualified fabric care consultant with an engineering background and plant experience.

Then, as all governmental agencies do, you will put the specifications out on bid to all those persons, or companies, desirous and capable of doing the job properly according to your specifications and for the lowest price.

However, bear in mind that the bidder has to make a fair profit to stay in business, and chiefly, to be motivated to do the very best job possible.

When installing a new complete plant, you should first consider the volume you expect to get. If you already have branch stores, wholesale accounts, routes or other sources of business, you should add about 15 percent for increased volume as a result of improved quality and efficiency from the new plant layout and new equipment.

If the new plant is to be located at a different place from your present operation, and you are keeping the present location as a branch store, you should add to your volume the sales expected to come from the new plant's attached store.

Every effort should be made to convert your expected volume of dollars and pounds into individual garments to be processed.

Next, you should try to break the pieces down into types of garments: Men's (pants, suit coats, overcoats, sport shirts, sweaters, laundered shirts and pants, etc.) and ladies' (dresses, skirts, blouses, coats, jackets, etc.).

Take into consideration the demographics of your neighborhood to determine the type of garments and the volume of business you can expect. In all cases, you should avoid low-income and "blue collar" areas.

Try to cater to people who work in dress clothes rather that casual attire such as lawyers, teachers, government office workers and politicians. Even though the current trend is to "dress down" at the office, almost all sales employees are still required to dress "up" with some large corporations still clinging to the old dress codes. Even if the trend is casual, especially after work, you should provide the proper capability for that increased type of volume.

Drycleaning plants must provide for a total department for wetcleaning in order to follow the care labels.

Plants in the Sun Belt and Southwest should provide for a laundry pants finishing unit in addition to a shirt unit

The customer service area should be air conditioned and engineered to be divorced from the plant, therefore, it may be a good idea to perform the assembly and bagging operations in an enlarged air conditioned customer service area to connote some action for the interest of your customers.

Of course, the customer service area should provide for tailoring services with fitting room, etc.

The equipment list
The second part of your planning should be preparation of a complete equipment list showing the accessories and options required for quality, production and economy. Here is where you consult with someone familiar with the various types of equipment for various types of jobs.

If you have thoroughly researched the market for the right equipment, you should write specifications for its general application to the job required, no specific make or model would be mentioned; it would be generic-type equipment.

In addition to the basic power plant, cleaning and finishing equipment, etc., your equipment list for a complete plant should include:

• Clothes carts.
• Pants trees or hooks.
• Canvas or Fiberglass baskets on casters (assorted sizes based on volume).
• Supply table for bagging area.
• Bagging machine.
• Ventilation equipment (fans, evaporative coolers, etc.).
• Counters in customer service area.
• Computers/cash registers in customer service area.
• Tailoring area equipment.

Any furniture, fixtures, appliances (in the break area) and administrative office equipment should be excluded from your plant and customer service area equipment list.

As recommended in my previous articles, don't buy equipment that is undersized, stripped and inadequate.

Specify a pressing machine, for example, to include a hand all-steam iron, sleeve finishing board and water spray gun.

Specify a drycleaning machine with three base tanks, pump with a strainer, oversized disc filtration, oversized carbon filters, heat pump (where applicable to solvent used), plenty of dial-type gauges, solvent coolers and any accessories offered to give maximum efficiency, economy and environmental safety.

Your equipment choice should be based solely on quality of build, stability, time-saving conveniences and labor economy. Remember, the lowest price is not always the lowest cost.

Copyright © 2001, National Clothesline
Maintained by: Hal Horning