So, Where Do We Go From Here…

Is there anyone among us who could have even come close to predicting the events of the past couple of years? I know we try to plan for things that could go wrong but, come on, who in their right mind would have expected the events we have endured? Covid, lockdowns, labor shortages, world unrest, political turmoil, rampant inflation, rising interest rates, supply chain issues, the list of challenges seems never ending.

But, here we are; and we march on. Sometimes it’s a struggle just to get up and face another day. However, we do it… not just because we must, but because there is something in our DNA that compels us to move forward.

Many folks may consider us the lucky ones. We’re still here. We open our businesses each morning to serve our clients to the best of our abilities, all the while, dealing with the challenges we have always endured, but also facing new obstacles that lie ahead.

For example, just when we thought COVID-19 might be something we could put in our rearview mirror, we hear stories of outbreaks in other countries that could result in further actions by our government. Are more lockdowns ahead? Will people be afraid to return to work and attend social gatherings? How will our political leaders react? Are more assistance programs in our future? I don’t think any of us know what the results might be. And much of what happens may be local in nature.

Old problems seem to have been exacerbated by the pandemic (and the resulting responses to it). We all know how difficult finding staff has become. At a minimum, labor has become much more expensive and there are fewer workers applying for help. State minimum wage laws have been creeping toward a $15 per hour rate and the current federal administration is looking to make $15 per hour a federal minimum wage standard. Supplies are more expensive and, as most of us have experienced, it is difficult to find certain items. When our suppliers have been able to fill orders, we discover prices are higher than the last time we ordered, often significantly. Gas, electricity and other utility costs are skyrocketing. And we all know what is happening at the gas pump.

Occupancy costs? Many of us are tied to leases that go up as inflationary indexes rise. After landlords have taken hits from restructuring leases during Covid and tenants going out of business, many are asking for higher rents and longer terms when current lease terms expire. Of course, higher inflation rates will push interest rates on debt higher, too.

Many of our peers in our industry haven’t survived the impacts of the pandemic and some of our businesses are on financial ground that is trembling beneath us.

I hope I haven’t totally depressed you by now. That is certainly not my intention. Although there are many obstacles ahead, we have already overcome many. There are always challenges to conquer. It’s part of being an entrepreneur. Stand tall and be proud that you have successfully weathered the past couple of years. For those of us who remain, that fact in itself is reason to be cautiously optimistic about what lies ahead.

At this point you may be thinking that I’ve been sipping too much of grandmas’s cough medicine. I can almost hear you asking, “How can you say to be optimistic, with all of the stuff (family friendly word) going on around me?”

Let’s take a look at recent history and you’ll see why I am personally optimistic (albeit, somewhat cautiously) about the future of our industry. While it is true that the number of dry cleaners is decreasing, and as an industry, demand for some of our traditional services may have declined, there is still a need for the services we provide. Because of future consolidation, I am of the opinion many surviving dry cleaners will see a rise in volume over time.

As the pandemic shows signs of waning, our customers are returning to the office, also causing piece counts to rebound.

The past months have also caused consumers to deal with substantial inflation. As prices across the board continue to increase, dry cleaners should use this as an opportunity to charge more for their services. Why are we any different than any other industry? Fast food chains, gas stations, clothing and grocery stores – all are charging more for their products. Yet many cleaners I talk to are very reluctant (or at least nervous) about charging a fair price for the services they provide. If we are providing the quality, service and convenience our clients expect, they’ll want us to be successful – and will understand the need to charge more as our costs increase.

To prosper in the months and years ahead, we must, as the owners and operators of dry cleaning and laundry facilities, look for opportunities to generate new sources of revenue that we may not have considered in the past. The pandemic trained many of our clients on the benefits of delivery services and other non-contact means of buying goods and services. Amazon and major retailers are investing less on brick and mortar and more on delivery services. Banks are training us to rely more on online websites and fewer visits to branch locations. Now is the perfect time for us in the garment care business to start offering or expanding pick-up and delivery services and utilizing technology to help serve our clients better.

There is also a shift taking place in the realm of home ownership. In many parts of the country the increased price of homes is making it difficult for many to purchase a home. As a result, more and more folks are becoming renters instead of homeowners. This shift can have a major impact on our industry. Renters tend to want more convenience. That is a trend that could help dry cleaners recover in the months ahead. It also means our customers may tend to become more transient and move to and from our market areas more with increased frequency. Marketing to this client base will become more and more important since many will remain our clients for shorter periods of time as they move into or out of our communities.

I also am aware of cleaners expanding into home cleaning and maintenance services, offering wash, dry and fold laundry which they may have not done in the past, rug cleaning, embroidery, selling flowers – the possibilities are limited only by imagination and client needs. The key question to ask and to answer is what do your clients need that you can provide for them. How can we make their life a little easier or more rewarding for them?

It may also be a good time to look for areas of inefficiency in your operations. Too many times we can fall into the trap of doing something just because that’s the way it’s always been done. Maybe it’s because of my background in banking, but I have always found that looking at how paper is handled is a good place to begin looking for inefficiencies. Paper has to be purchased, printed, stored, handled, filed and ultimately disposed of. That’s a lot of handling and includes steps which may or may not be necessary. In fact, we are currently looking to revise certain procedures which will reduce or eliminate handling of tickets or other documents through increased automation.

I also suggest looking at steps performed by your team members when it comes to looking for procedures that may have been relevant in the past but are no longer necessary. In our own operations, we recently evaluated our order assembly process and determined several of the procedures in place were either redundant, inefficient, or invited mistakes to be made. Ouch!

Know your costs. Now more than ever, it is important we know how much it costs to produce a finished product. In these times of escalating costs of labor, materials, overhead and fuel it is imperative to keep a watchful eye on your expenses. Armed with this knowledge, you can be in a position to make informed decisions that can impact the profitability of your business.

To wrap this up, here is where I believe this is all heading. I believe the worst is behind us as far as the COVID pandemic is concerned. There are obvious challenges facing our industry that warrant our continued attention. We need to be strategic in our decisions and look for ways to efficiently generate additional revenues through traditional and new sources. Because it looks like inflation is here for a while, we also need to look for ways to provide convenience, service and value to our clients while monitoring our processes for inefficiencies and looking for opportunities to improve. By looking closely at what is happening in our markets and fulfilling our clients’ needs, I sincerely believe our industry can prosper in the months and years ahead.

Leave a Reply