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March 2005

Comparing The Risks Between A Mobile Dry Cleaning Business And A Retail Store

Do You Have What It Takes

Seven Ways Not to Sell

Interesting Tidbit

Comparing The Risks Between A Mobile Dry Cleaning Business And A Drop Store

Another way to start a retail dry cleaning business is to open a drop store. There are stores reporting sales of ------------------------------$4500.00/week after just a few weeks of operation and other drop stores reporting sales in excess of $50,000.00/month. ----------------These drop stores however are the exception. They are far from the norm.

Based on a $2,000.00/month lease, a drop store becomes most profitable when it's weekly sales exceed -----------------------------------$3,500.00/week, but the risks incurred are far greater than those you will encounter with a Mobile Dry Cleaning Route. --------------------While it is not unusual to have a Mobile Dry Cleaning route exceed $3500.00/week, the profitability greatly increases as a -------------result of lower expenses. Let's compare the expenses of both operations:

Expenses

Drop Store

Mobile Dry Cleaning Route

Lease

Store Front – 3 yr.. Minimum @

$2000.00/month with Annual increases

Van- - Lease or purchase

$350.00 to $450.00/mo

Furnishings and supplies

$20,000.00 to $30,000.00 amortizing payments over three years will cost $550.00 to $833.00/month + Interest

Van lettering, racks

$1,500.00 or $41.67/mo +interest for three years

Utilities, phone, insurance, water

$900.00/mo.

$800.00/mo.,

Labor

70 hrs/week @ $8.00/hr.+ taxes = $650.00

Owner operator no additional labor

Dry Cleaning costs

40 to 50 % of sales

40 to 50% of sales.

Advertising

Must spend money on coupons newspaper ads, mailers etc to attract new business. $300.00/mo

Can generate new business with business cards, flyers and personal contact. $100.00/mo

Another important consideration is when opening a drop store you are required to sign at least a three year lease and --------------------personally be responsible for payments. Even if your business closes, you are responsible for the remaining rental ---------------------payments. As a mobile dry cleaner, if you should cease operations your only responsibility is for your van payments which ------------you can either keep for personal use or sell for the remaining balance due.

Now, using the above table let's take a simplified look at the profits for each operation having weekly sales of $3,500.00 or

$14,000.00/month:

Drop Store Sales $14,000.00 Mobile Dry Cleaning Sales $14,000.00

Expenses $11,950.00 Expenses $ 8,391.67

Profit $ 2,050.00 Profit $ 5,708.33

The above figures are only estimates of the expenses encountered for each operation and are presented merely as a

comparison to demonstrate the possible differences of the two operations. In the case of the Drop Store the lowest

figures portrayed were used to show expenses and in the case of the Mobile Dry Cleaning, the highest figure portrayed

was used. Actual expenses and profit margins will vary from those shown.

Do You Have what it Takes?

You see the Doctor, Dentist, small business man and other entrepreneurs driving their "beamers", Lexus, or Mercedes and you say to yourself, why can't I do that? Why can't I start my own business and make lots of money like these people? What do they have that I don't?

You can have what others have! You can start your own business and work to possess those luxuries. Vacation homes, luxury automobiles, swimming pools, whatever it is you desire, you can have. However, there there are steps you must take to obtain these desires!

First and foremost, you must develop confidence in yourself and your abilities. Individuals possess individual talents. Know and understand your personality. Make a two column list of your attributes. One column list your negative qualities - things about yourself you feel hold you back from success and in the other column list your positive qualities - those attributes which make you want to succeed and will contribute to your success.

Take your time. Be honest with yourself. Ask those closest to you to help. Others see your negative and positive traits much more clearly than you. Ask for honesty from the participants but don't get angry if you are told things that aren't to your liking. Simply laugh it off and say you will have to work on those "little" problems.

Once your list is complete, focus on your positive qualities. Everyday remind yourself of your goal - to demonstrate those qualities best suited for your success. Accept failure as a battle lost, but win the war with your persistence. Each day is a new day and each day of effort will bring you closer to success.

Strive to possess the following ten characteristics:

An eye for opportunity: Many entrepreneurs start by finding a need and quickly satisfying it.
Independence: Even though most entrepreneurs know how to work within the framework for the sake of profits, they enjoy being their own boss.
A willingness towards hard work: Most entrepreneurs start out working long, hard hours with little pay.
Self-confidence: Entrepreneurs must demonstrate extreme self-confidence in order to cope with all the risks of operating their own business.
Discipline: Successful entrepreneurs resist the temptation to do what is unimportant or the easiest but have the ability to think through to what is the most essential.
Judgment: Successful entrepreneurs have the ability to think quickly and make a wise decision.
Ability to accept change: Change occurs frequently when you own your own business, the entrepreneur thrives on changes and their businesses grow.
Make stress work for them: On the roller coaster to business success the entrepreneur often copes by focusing on the end result and not the process of getting there.
Need to achieve: Although they keep an "eye" on profits, this is often secondary to the drive toward personal success.
Focus on profits: Successful entrepreneurs always have the profit margin in sight and know that their business success is measured by profits.

If this is your profile, then you probably are not reading this message because you are already busy going about your business. However, if you are still struggling continue with the discipline of changing yourself. Those of you who are serious about your future will succeed. The others may be happier leaving the challenge to another and continue working in the employee environment. Neither choice is wrong, the question is will you be honest with yourself and content with your choice.

Seven Ways Not to Sell

We all make mistakes when selling our product or service. Here are the most common mistakes people make. I have to admit I have made many of mistakes listed in this article even though I have been teaching this stuff for almost a decade. I hope you can learn from them.

1. Failing to discover the customer's preferences. The best way to control the sales interaction is to ask questions. This is also the best way of learning whether or not your product or service meets the needs of your prospect. Quality questions that uncover specific issues, problems, or customer preferences are essential in helping you establish yourself as an expert.

2. Failing to understand the customer's needs. Not every one needs a regular pick-up and delivery service. There are however, many customers who will send large orders periodically. You don't want to ignore this source of business but you don't want to annoy the customer by showing up to frequently. I found that when I stopped too frequently for some of my customers, they felt embarrassed that they had no garments for me and would eventually ask me to discontinue service as they really had no need for my services. Nothing was farther from the truth. These customers would have large orders on occasion and it was my job to find their cleaning habits and miraculously be there when their hampers were full. I accomplished this by suggesting that perhaps my schedule was too frequent and would they prefer I check with them once a month or when there was a particular sale in which I thought they may be interested. If I hadn't seen the customer for a few months, I would stop and manufacture a special sale just to prompt them to look through their closets for soiled garments. I said that I would extend the sale an extra week to give them time to

go through their garments and would stop next day I was in the area. Be specific about the day you would return.

3. Talking too much. Too many sales people talk too much during the sales interaction. They espouse about their product, its feature, their service and so on. I found that when asking the prospect about their garments and what it was they wanted in a dry cleaner the dialogue was much more intensive and a sale usually resulted.

4. Giving the prospect information that is irrelevant. Make the most of your presentation by telling the prospect how he/she will benefit from your product or service. If you effectively followed the first three steps, you will know how your service can relate to the prospects specific situation and you can focus on meeting those needs.

5. Not being prepared. Have all relevant information at your fingertips including; pricing, testimonials, samples, and a list of questions you need to ask. Create a checklist of the information you will need and review the list before you make your call. You have exactly one opportunity to make a great first impression and you will not make it if you are not prepared.

6. Neglecting to ask for the sale. If you sell a product or service, you have the obligation to ask the customer for a commitment, particularly if you have invested time assessing their needs and know that your product or service will solve a problem. Many people are concerned with coming across as pushy but as long as you ask for the sale in a non-threatening, confident manner, people will usually respond favorably. Use phrases like:

"Try my service and compare it to your present cleaner. I am sure you will be pleased with what I provide." "Do you have a blouse or slacks I can dry clean for you and you can use to compare my service with others?"

7. Failing to prospect. This is one of the most common mistakes independent business make. When business is good many people stop prospecting, thinking that the flow of business will continue. However, the most successful sales people prospect all the time. They schedule prospecting time in their agenda every week.

Even the most seasoned sales professional makes mistakes from time to time. Avoid the seven blunders and increase the likelihood of closing the sale.

Interesting tidbit

In George Washington's days, there were no cameras. One's image was either sculpted or painted. Some paintings of George Washington showed him standing behind a desk with one arm behind his back while others showed both legs and both arms. Prices charged by painters were not based on how many people were to be painted, but by how many limbs were to be painted. Arms and legs are "limbs," therefore painting them would cost the buyer more. Hence the _expression, "Okay, but it'll cost you an arm and a leg."

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C.E. Hill- MDCSP