Forums: Discussions for entrepreneurs and small business.

Recently I was looking to purchase a passive business and did so through a business broker.  I bought a dry cleaning business (pick up & delivery store) from a motivated seller.  The advantage the store has is that it is located in a busy area with plenty residential communities surrounding it.

The cleaners does a quick 1-2 day turn-around (going well for customers), on site seamstress that does alterations, wedding gowns, shoes/hat cleaning and repair, leather and zipper services etc.  Is has a full offering.

Part of the reason to sell by the seller was declining business trends over the years.  The cleaners is located in a kitty corner area (like most gas stations are located) and one would think it would inherently generate heavy traffic.

I have had the cleaners since September and have not seen traffic increase at all.  The same customers come and go.  I tried calling/approaching many small businesses etc for pick up and delivery services to add extra income to the business but everyone in the industry is doing the same and most places are already doing business with someone (difficult for a newcomer to break in the industry)

What are some of the ways this dry cleaning business can be given a boost?  What is the best and most economic form of advertising/PR to get the traffic needed to increase sales?  What strategies are best for this type of business?  In my opinion foot traffic is the main thing.  It is the bread and butter of a business like this and therefore it becomes crucial to capture all dry cleaning customers around your location.  Any tips/suggestions on how to capture all this market share nearby?

This actually is an interesting question because it refers to commodity items. A commodity item, in this context, is totally understood, has no real unique characteristic, and isn`t something anyone thinks about at all other than when they want it.

Dry-cleaning is a nothing kind of thing. Nobody wakes up in the morning, jumps out of bed, runs downstairs to gether together the family, and shouts, "Eureka! Today.....we Dry CLEAN!" :-D

So how does someone build up such a product and business? I think it`s going to be that Unique Selling Proposition, the USP folks have mentioned on various topics. Since the dry-cleaning product is a common thing, the only remaining area would be the *perception* of the business itself.

We have several dry-cleaners here in the small town of Batavia, IL. Like many suburban communities, the roads run along and one town blends into another, so "Batavia" really is just an area. That means we also have many dry-cleaners in Aurora, Geneva, St. Charles, Naperville---all of which are "just another dry cleaning location."

I`d start with questions like, why does anyone take anything to a dry cleaner? Obviously, to get it cleaned...but I mean what are the possible answers that would bring out perceptions?

The reason I use the one I do is that they also offer on-site tailoring. I perceive a value-added offering, and they stand out from all the other 1-hour dry-cleaning places.

Aha - Unique Selling Proposition... someone`s singing my song. eGuru, see my signature for more information on creating a profit-pulling USP.

One thing quickly came to mind as I read your post - when you acquire new customers, make sure you keep them.

If you don`t already, work towards acquiring some sort of CRM system (Customer Relationship Management). So when a customer comes in for the first time they go right into your computer and can be contacted through direct marketing in the future.

You might consider implementing a membership card of some sort that provides discounts over time to regular customers.

Is there a tailor in the neighborhood? A seamstress? Higher end clothing stores?

Consider approaching them and negotiating some sort of joint venture. Maybe they could include a pamphlet with all purchases that says - XYZ Clothier recommends eGuru Cleaners. 

Also, consider some type of continuity program with your existing clientel (and new ones too). Each month, whack their credit card for $10 bucks and in exchange, they get a gift certificate for cleaning valued at $15 dollars. If they allow you to whack their cards automatically each month for $40 dollars, they get a gift certificate valued at $50 (which equates to $10 in free cleaning -- this won`t carry over to the next month of course).

THey get value and a reason to stay. And, some months they may only spend $30 bucks on cleaning and other months they may spend $50, but at the first of each month, you`re already started off with a huge deposit in the bank (even if they use or don`t use your service that month).

If you know what your average customer spends, then you can create certificates that are more appropriate. The figures above are just examples. This way they get serious value and you won`t necessarily have to "compete" on price.

Continuity programs can be applied to basically any business. A lady I did some work for did this in her restaurant business quite successfully. I can`t remember the numbers, but her customers were automatically whacked $25 per month and given a $50 gift certificate. It was an upscale restaurant and she knew very well that the average ticket was a couple of hundred bucks and in many cases, they brought friends and family with them to dine, so that $25 in free food was a drop in the bucket.

See how a continuity program can work in your business....it`s sure nice to have about $25,000 in your bank account at the first of the month before you done your first piece of business...now thats what I call living it up :-)

Cartess

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Website Startup Coach: Step-by-Step Coaching to Help You Build a Profitable Business Online!

Guys - thank you for getting the ball rolling...

Craig - this is exactly what I am in search for.  we do offer on site seamstress/alterations of all kinds, leather, repair, zipper, hat, shoes services as well as bridal gowns / restorations etc. i am in search for that one extra thing i need to get the upper hand.  more so, i believe the business just needs more exposure to traffic for people to walk in.  we got the best prices, getting the traffic now is the challenge.

Shawn - excellent idea reg. CRM/discount program.  any suggestions on the most cost effective way to implement such system?  would you suggest considering doing it offline in simple pc tools such as MS Excel or keeping a manual log where the customer can sign each time they engage in a transaction? i really cant think of an automated software out there for this? 

targetting specialty stores is on my list. from the little bit i have tried i have seen that most already are doing business with other cleaners.  it is a saturated industry after all.

Cartess - very good idea.  pay in advance and clean later. what is the best way to administer this program?  what are the tools that should be used?

again, thanks everyone and hope to learn more regarding boosting sales

A number of dry cleaners in my neighborhood have some sort of point of sale/CRM system. I give my phone number and my contact info, purchase history, and current order are pulled up on the computer. (And of course I have been using the dry cleaner that runs her shop with pencil and paper... $1 shirts on Wednesdays.)

I don`t have a working knowledge of specific CRM programs that might be useful...

I do, however, know that Microsoft offers small business solutions at affordable rates. I know they have retail point of service software targeted towards single location businesses.

SAP offers an all in one business management solution aimed at small businesses called Business One. This gets more expensive though.

As for tracking customers with pencil and paper I would advise against it if at all possible. For such a high traffic business it seems like it would be a nightmare. Tracking customers with a spreadsheet program also seems time consuming.

Maybe others in retail on this forum can suggest CRM solutions that aren`t too cost prohibitive.

Here`s an idea that might be completely ridiculous - In an effort to encourage repeat customers implement a `hanger return program` (I have no idea if hangers are a significant cost to a dry cleaner). When customers bring back their hangers they receive 5% off their order. You could advertise the program right on the paper that is wrapper around the hangers...

With a commodity business, I think it comes down to partly what you offer as an added value. But mostly, it just plain comes down to being noticed. I think you could look at possibly painting the storefront in some bold colors, based on city ordinances, or perhaps an awning, or some lighting.

Most people think of dry cleaning as "laundry." They notice you, particularly if you`re in their daily path of errands. Then when they have a bundle, bring it in.

The other possibiility is to have some sort of crazy advertising thing, to drum up some business. But that too is only to heighten visible awareness in the short term. Ultimately if you`re selling convenience, quality, friendly service, and price, that`s pretty much it. The rest is slow, steady increase of business, 1 customer at a time.

guys,

again thanks for the wonderful thoughts.  we are considering all sorts of options and will run it by you.

any thoughts on the value insert coupons? (valpak does this for $350 a month for 10K listings).  are magazine cut out coupons better?  when to best distribute these ? (what time of the week).  finally, is there an option to distribute flyers through the US post office if i came up with my own flyers?

thanks

The post office actually offers some fairly impressive direct marketing tools at usps.com. You can create flyers, letters and postcards right online.

A good way to research print advertising in your area such as ValPak and clipper magazines is to collect them over a period of time and see which adds consistently show up. Chances are these are the successful ads. Call the businesses and ask the owners about their advertising campaigns.

What about a pickup and delivery service? Used to be standard, years ago, but I don`t see it so much these days?