JetXpress Laundry in Elgin, Illinois
The Sky’s the Limit: Two Airline Pilots Watch Their Chicago-Area Laundry Business Take Off
As commercial airline pilots, Bill Norteman and Jim Cowen have no problem with heights.
As the co-owners of the JetXpress Laundry in Elgin, Ill., they also have no problem with reaching new heights in terms of vend pricing for their marketplace.
Currently, Norteman and Cowen charge $2.39 for a 20-pound washer, up to $7.99 for an 80-pounder.
“I can tell you the vend prices of every single store in our area, and we deliberately priced ourselves as the highest, because we believe we can sustain it.” Cowen said, “We have not had to lower our prices, and business has been a steady climb for us. I just don’t understand the mentality of some of these operators who argue that they can do 15 turns a day.
“That’s great,” he added. “But if you’re losing five cents on every turn, what are you doing? I’d much rather do two turns a day and make five cents than do 15 turns and lose five cents.”
Norteman noted that JetXpress – a card-operated store – recently included cycle pricing into the mix, which raised vend prices “significantly” on the extra cycle.
“We haven’t seen a single bit of drop off in business,” Norteman said. “We are the price leader. Sure, there are some customers who are very price-sensitive. They walk in, see our big machines, see the price and are a little upset. Our biggest competitor is the low-price leader in Chicagoland, and we don’t have any problem competing with them. We don’t get all of the customers, but we certainly get enough to keep us full. The customers don’t mind paying a little bit more.”
Other than dabbling in some residential real estate investments, both Norteman and Cowen had strictly aviation backgrounds before becoming part-time laundry owners.
The two, who have known each other since the mid-1990s, are pilots for United Airlines, and before that, they both flew for a company that served corporate executives.
In 2002, they decided that they wanted to go in on a business venture together. Their research started out with them looking into car washes, sandwiches shops and a number of franchised operations. The search ended when they began looking into the self-service laundry business.
“We wanted something that would have some controls,” Norteman said. “The biggest control that we saw was not having teenagers with their hands in the till. Of course, we wanted something that would provide a reasonable return on our investment. And we both travel, so we needed something we could manage from afar because there are times when neither of us can be there.”
“One of the things that really turned us off on the franchise idea, like a sub shop, was that you don’t really own a business,” Cowen added. “All you do is work for the franchise. The franchise takes anywhere from 10 percent to 14 percent of your gross, whether or not you walk home with a dime. They dictate your hours, everything. That’s a big turnoff.”
And when the two began chatting with another United Airlines captain, who is also a laundry owner in the Chicago area, Norteman and Cowen were sold.
However, once they decided that a laundry was right for them, it took approximately two and a half years before the aptly named JetXpress finally opened for business.
“During that timeframe, we were under contract for two existing laundries that fell through,” Cowen explained. “We were under contract to build a new laundry, but the landlord pulled the plug at the last minute. And we were under contract for some land to build another store, but it came down to the city removing some restrictions, which it would not. I never really knew the Chicago area that well until that two-and-a-half-year period. We drove all over the place.”
The store’s eventual location in Elgin, which is in Chicago’s far western suburbs, was proposed to Norteman and Cowen by their distributor, Laundry Concepts, based in Addison, Ill.
“Location-wise, it’s not ideal, because I live an hour north and Bill is an hour south,” Cowen said. “But as far as demographics, it looked very strong for us.”
The JetXpress client base is about 68 percent Hispanic and another 12 percent to 15 percent African American, with the remainder representing white customers, according to Norteman.
“Elgin is very much a blue-collar city,” he explained. “It has commuter train access to the city of Chicago, so there is some high-end residential in the area. However, a large number of residents are in the low- to middle-income bracket, and that’s our primary target market.”
The 5,800-square-foot laundry is surrounded by fast-food and Mexican restaurants, discount stores, an auto parts store, a currency exchange, a doctor’s office and a newly constructed Boys & Girls Clubs of America location – in addition to a lot of single-family and multi-unit homes with large families and an extremely dense population.
The laundry itself was a vacant, former Rent-A-Center located within a small shopping center, which boasted a total of about 15,000 square feet of retail space.
The only major hiccups during the approximately 90-day renovation process were some bureaucratic red tape and last-minute change in the store’s water source.
“About a month and a half into the renovation, the city decided that we couldn’t bring in the water in the way we originally planned to,” Cowen said. “They were now requiring us to bring it in off the street, which shut down a major road for three days and tacked on quite a bit more expense to the project.”
To make up those renovation costs and to help Norteman and Cowen more effectively compete with the 13 other self-service laundries located with just two and a half miles of JetXpress, the co-owners have been aggressive advertisers since Day One.
The two have run full-color ads in a couple of local Spanish-language publications, as well as placing announcements in the back of two Catholic bulletins circulated in the area. They also have taken advantage of local radio spots and direct-mail coupon packs.
In fact, Norteman estimated that they have sent out at least 50 marketing pieces.
But they haven’t ignored in-store promotions either. At Christmas, JetXpress awarded a bicycle to one lucky raffle winner. The store also offers a free, 15-minute dry in one of the store’s 30-pound dryers for every wash, as well as 10 minutes of free drying time in the 45-pounders. In addition, the laundry recently instituted a “wash to win” program through its card system.
And not only does that card system enable Norteman and Cowen to better market their business, it helps them simply run the laundry despite their hectic work schedules.
“I know we’ve lost a handful of potential customers who don’t like the card system, but I can say that we would not be able to manage this business without it,” Norteman explained. “It makes it so much easier for us, especially when Jim’s in Des Moines and I’m in Boise, or vice versa. It’s peace of mind. It’s been great.”
Beyond being card-operated and the largest laundry in the market, customer service is an aspect that the co-owners have focused heavily on.
“When we were flying on the corporate side, we were everything,” explained Cowen, who employs seven part-time attendants. “We were the pilots. Sometimes, we were the fuelers and the baggage handlers. We cleaned the airplanes. We did it all.
“And we have a great group of attendants at JetXpress. They do a phenomenal job of keeping the place clean and keeping our customers happy.”
No doubt, safety is a key for Norteman and Cowen.
“We put 2,000-watt light bulbs in the parking lot to light it up at night,” Cowen said. “We have a video surveillance system. We’re always attended.”
JetXpress, which is open daily from 6 a.m. to midnight, also offers its customers two computer kiosks with high-speed Internet service, four 37-inch LCD televisions and a large compliment of vending machines and arcade-style games.
“We don’t have anything you wouldn’t find in any average laundromat, but we try to do it better and nicer,” Norteman said.
And, to this day, JetXpress remains a work in progress for the two co-owners.
For instance, after opening, Norteman and Cowen ran into an equipment mix problem, regarding the number of laundry carts and folding tables that were specified. As a result, they more than doubled the original number of carts at the store, and nearly doubled the number of tables.
“We were sitting there one day watching customers and traffic flow,” said Norteman, citing another example, “when we realized that our customers were having a terrible time rolling the carts from the inside of the store to their cars. The level was wrong. So we brought in a cement repair company and fixed it.”
With everything rolling more smoothly now, will these two high-flying entrepreneurs open a second laundry?
“I’ve brought several things for Jim to look at in the past year, and he hasn’t been excited about any of them quite yet,” Norteman said.
“We’ve looked at a few projects out there,” Cowen added. “But we didn’t jump on the very first thing offered to us the first time around. It seems like there is a laundromat on every corner, especially in good areas. I have no problem looking. And if the right one comes along, we’re there.”
But with these two laundry owners, as with their first operation, it eventually boils down to vend pricing and the bottom line.
“Really, we need to see some movement in vend prices,” Norteman admitted. “Until the big companies in Chicago decide that they need to make a little more and raise their prices 15 percent, well…”
Spoken like a true pilot – always aiming for the clouds.
JetXpress Laundry – Elgin, Ill.
15 Huebsch 20-pound frontloaders $2.39
25 Huebsch 30-pound frontloaders $3.49
19 Huebsch 40-pound frontloaders $4.59
7 Huebsch 80-pound frontloaders $7.99
23 Huebsch 30-pound stack dryers 39 cents for 15 minutes
14 Huebsch 45-pound stack dryers 39 cents for 10 minutes
Card Concepts card system
NATCO water heating system
1 American Changer bill changer
40 R&B Wire Products laundry carts
20 customized folding tables
Ceramic tile flooring
1 Vend-Rite Manufacturing soap vending machine 79 cents per box
2 soda vending machines
1 snack vending machine
4 37-inch LCD televisions
2 Internet kiosks
Children’s play area
Wash-Dry-Fold Service: 85 cents per pound; 10-pound minimum
Distributor: Laundry Concepts, Addison, Ill., (800) 845-3903