National Clothesline

he year 2002 has proven to be a tough year for many industries, including the drycleaning industry. Reflecting on the past 11 months reminds me of how privileged I am to be working with such an outstanding class of entrepreneurs.

The drycleaning industry is unique in a multitude of ways, as are the people who have made this industry their vocation as owners, employees and allied tradespeople. I’ve worked with drycleaners whose families have been in this business for five generations; others new to the industry, and everyone in between. It is indeed a unique industry, but no matter what your background, a slow economy affects all.

As the economy continues to suffer from “consumer insecurity” most drycleaners are experiencing lower piece volume.

Gone are the days where you can hide your inefficiency by simply adding “more volume.” As sales continue to lag, all the inefficiency looms even larger.

In an article that I wrote in the November 1998 issue of National Clothesline, I stated Robson’s First Rule of Business for Drycleaners:

“Provide your customers with outstanding customer service, excellent cleaning, superior finishing and quality packaging. By following this rule you will be in a position to charge more, you will capture a larger share of the market and you and your employees will earn more respect and more money than any other drycleaner.”

It is as true today as it was back then.

This rule should become your company’s First Commandment. To adopt this rule is one thing — to live by it on a daily basis is quite another. Transforming this into action takes a conscious effort to improve on the things you are already doing. When you do this, everything will improve — from customer retention to your weekly cash flow.

From the end of World War II until 1973, productivity in the U.S. zoomed by 2.75% a year. From 1973 to 1995, productivity grew by only 1.5% a year. In 1995, productivity (output for each hour worked) shot back up to 2.5% per year where it remains today. The catalyst for this increase in productivity was the acquisition of computer hardware and software. The continuing growth in productivity lies in how this computer technology is being used.

For those of you who have point of sale computer systems, it is time for you to put those systems to work. When properly used these computers will help improve customer service, increase the productivity at your front counter and in production, and improve your ability to track pieces and dollars by profit centers.

For those of you who do not have POS computers, shop around for used computers. Many drycleaners are upgrading; some are closing drop stores that are losing money; and some are going out of business. The new computers have more bells and whistles, but many of the older ones are still very functional.

The first step is to find someone on staff who likes working with computers. Schedule ten to 15 hours a week for that person to begin extracting data.

Start with the front counter function of your business. Track customer activity by drop-off and pick-up. With this information you can schedule your counter personnel around the needs of your customers.

Most drycleaners schedule their counter people around the hours that the counter person wants to work or is available. By scheduling the counter staff around the needs of your business you can find the ten to 15 hours a week that you will invest in computer work.

Next, re-train your counter staff to ask customers for their names — not their phone numbers. Then, train them to verify that Mrs. Smith is the correct Mrs. Smith by confirming the customer’s address. Insist that the counter staff use the customer’s name at least twice during the transaction.

In time, your counter people will recognize more and more of your customers by name. While you are in the process of retraining your employees, remind them to smile, which costs absolutely nothing and buys more good will than a 50 percent off coupon.

Using the information that your computer provides, monitor upcharges. By increasing your upcharges a mere five percent, you increase your profits and improve your cash flow. Once again, this does not cost you any money or time.

Begin monitoring the amount of time your counter people spend marking in. The industry standard is 70 pieces per hour. This is important because all the work that comes in every day needs to be marked in that day. By monitoring the number of pieces being marked in per hour, you can reduce labor hours at the front counter. By marking in all the work that comes in each day, you will know how many hours your production people will need to work each day.

When everyone knows how many pieces there are to be processed; when they know how long it will take to get the work done — and, when they know that you know — the work gets done on time without you standing there cracking the whip.

The next assignment for your in-house computer guru is to run the New Customer Report every week. This is done so that you can check to ensure that you have an address for every new customer. This information gives you a huge advantage over your competition.

Armed with this information you can identify the neighborhoods where your best customers reside and target market those carrier routes. You can also send out welcome postcards to your new customers and contact them if they don’t return.

Using this customer information, you can begin to develop residential routes that will help grow sales. Remember, when you decide to go into routes – insist that your route customers give you a credit card number to bill. The last thing you need is to extend credit and wait for your money.

The most successful business people I know are the ones who are persistent and who are constantly striving to improve on even the little things. The year 2003 is just around the corner. This will be a good year for those who continue to keep one eye on the little things and one eye on the big picture. Relax, enjoy the holidays and recharge your batteries for a new year with new challenges and opportunities.

In the game of business the more you know the better you can play the game.

Alan Robson is a private consultant dealing with the specialized needs of the drycleaning industry. Contact him by telephone at (941) 408-8819 or send e-mail to him at: alan@bizbuilderonline.com or visit the Biz Builder web site: www.bizbuilderonline.com.