Do What You Like Best – And Never Give Up

By Bob Nieman, CLA Member posted 01-03-2017 09:52

  

An Interview with Chicago Laundry Business Veteran John Vassiliades

JohnVass.jpgJohn Vassiliades, president and CEO of J. Vassiliades & Co., began his career in the self-service laundry and drycleaning business more than 40 years ago. During that time, he has owned multiple stores throughout the Chicago area, while also working for a time as both an equipment distributor and a manufacturer’s representative. Vassiliades is a licensed real estate broker responsible for brokering nearly 1,000 vended laundries.

In addition, he is the former executive director of the Coin Laundry Association and CLA Insurance, a program he helped create to provide reasonable insurance rates to the underserved laundry business community. Also during his tenure at the CLA, Vassiliades shared his broad industry knowledge by authoring one of the business’ most popular how-to books, “Today’s Coin Laundry.”

How and when did you first get involved in the self-service laundry industry?

I got into the laundry business quite by accident. I was looking for a part-time job while I was going to college in Salt Lake City. There was a company there called Ajax Presses, which made pressing machines for drycleaning, as well as self-service, coin-operated pressing machines.

I went to work for them as a draftsman and worked my way through college at Ajax. When I graduated in the early 1960s, they wanted me to stay on as a sales manager for a district, and eventually I was promoted to national sales supervisor. I was traveling all over the country in this position. However, after my wife, Elaine, and I had our first child, I wanted to cut back on my travel schedule. So, I decided I wanted to purchase a laundromat.

One of the dealers I have been working with through Ajax was a Chicago-based company called Select Automatic, which was one of the largest Speed Queen distributors at the time. In 1973, I told the owners at Select Automatic that I was looking to buy a store, and he put me in touch with one of their salespeople, who showed me coin laundries in the Chicagoland area. But, after a few days of looking, I called the owners and suggested that I work for them instead, in order to better learn the business and the market. They agreed, and I ended up selling quite a few laundries and equipment for them. I also realized that I liked the laundromat business quite a bit.

Instead of buying a laundromat, which was the original plan, I decided to break off on my own and start a brokerage business, because not many people were doing that at the time. That’s how I got started, and I’ve been doing it ever since.

Over the years, I’ve tried a lot of things as well, including being a distributor for a time for both the Primus and IPSO brands. However, my real love always has been brokering and, for quite a while, owning stores.

I became a laundry owner after being approached by one of my neighbors. He knew I was in the laundry business and told me he wanted to become a store owner – but he only would do it if I became his partner in the stores. I agreed, and we built five stores together. In fact, we’re partners to this day on those buildings. We owned and operated the laundromats for more than 20 years. We’ve since sold off the businesses but kept the buildings.

What attracted you to the laundry business?

Again, I got into the business quite by accident. I suppose I was attracted to the fact that it was a business that required few employees. It had the self-service aspect to it, where the customer actually does the work and the owner is more or less just making machines available. It didn’t have any accounts receivable, and the accounts payable were very small – basically just utilities, rent and labor. And I also liked the fact that an owner could operate multiple stores at once. You could schedule your time and didn’t have to be married to that store like you would be with a restaurant, where you have to be there from the time it opens until the time it closes.

How would you describe the “early days” of the industry?

In the Chicago area in the early 1970s, it was a bit like the Wild West. Stores were being built all over the place. They were 1,000- to 1,500-square-foot stores, with washers on one side and dryers on the other. They couldn’t build them fast enough. While I was still with Select Automatic, I recall one year when more than 40 stores were built in the Chicagoland area during just that one year.

Unfortunately, some of the laundries were being sold to people – mom-and-pop operators, as well as professionals – who thought the laundromat business would be a great investment and got into this business for all the wrong reasons. After a while, many of those stores turned out to be pretty nasty looking, and this created some problems for the industry. The laundromat business developed a relatively bad reputation through the years.

During the 1970s, there were some old timers who had gotten into the business long before I came here, and they were building more stores for themselves. So, there were groups of businesspeople who were serious about staying in the laundry business and making it a success.

And then there also were many people who again were getting into the industry for all the wrong reasons. Naturally, there was a lot of turnover of stores during this time because of that, and this opened the door for the laundry brokerage business.

What are the biggest changes you’ve noticed in the industry since you’ve been involved in it?

With regard to the laundries themselves, the stores have become larger and more diversified in their equipment and their services. There are much better-looking stores. A lot more money is being spent toward having a nice presence.

I think another big change in general is an influx of operators with a more professional approach to owning self-service laundries. We’re attracting smarter, more business-savvy entrepreneurs who are treating the laundry business like a true business and not just a hobby. These new operators look at the numbers. They know you can’t just open the doors, throw away the key, and let the people come in and do what they want.

For the most part, I believe today’s laundries need to be attended. Of course, there are some areas where you can still run unattended or partially attended stores. However, in the majority of markets, laundromats should be attended. Store owners are providing machines and a service. If they don’t offer both and do it properly, customers aren’t going to come back.

Why do you think this industry now attracts more professional, business-minded individuals than in the earlier days?

The industry has matured, and the cost of going into business is a lot higher than it was in the past. In the early days, someone could put up $20,000 to build a store and finance the rest. Today, the cost of getting into the laundry business dictates that you’re going to be talking to people with more wealth and the financial wherewithal to get involved in this or many other types of businesses.

They’re looking at different business models. What’s going to offer the least amount of worry and headache – with regard to employees, inventory, perishables and everything else? Very often that answer comes back that laundromats, which remain one of the best businesses you can have out there.

For example, some people will consider opening car washes, but cleaning vehicles is not as necessary a service as cleaning clothing. In addition, the car wash business can be very iffy due to weather. Personally, I’d rather be in the laundromat business.

Plus, I think the overall image and perception of the industry has improved over the years. This is thanks to the notoriety created by the Coin Laundry Association; high-profile articles that have appeared in the Wall Street Journal, Businessweek and other media outlets; and even movies and television, which have showcased laundromats in various situations. The industry is growing out of that negative stigma.

What are the most dramatic equipment enhancements you’ve seen over the years?

One of the first big improvements was going from single-pocket dryers to stack dryers. This gave laundry owners twice the income within the same amount of square footage. Essentially, it doubled the output, and operators were able to get more out of their stores.

The advent of the large washer/extractor, versus the toploader, was another major enhancement. When I first got into this business, it was rare to see more than two or three frontload washers in a store. And, because the toploaders didn’t extract well, you would see separate extractors in these stores. Customers would take the laundry out of the toploader and place it in the extractor, which would spin the load to remove almost all of the water – then the clothes would be tossed into the dryer.

Another improvement is the fact that washers in general use a lot less water. Originally, they used almost three gallons of water per pound of laundry, and then it was lowered to about two and a half gallons – and now I think they’re less than two gallons of water per pound, which is phenomenal.

Of course, there is also the fact that the machines are getting bigger. The biggest machine you could find in a store way back when was probably a 35-pounder, or maybe a 50-pounder. Today, it’s not unusual to see 50-, 75-, 85- and even 120-pound machines. Clearly, the demand is for the larger machines.

Another dramatic change has been the introduction of soft-mount, high-extract machines. Soft-mount units can be installed on wood floors or even over basements. And, of course, the high-extract component speeds up the drying cycle.

Another change involves air conditioning. When I first got into the business in Chicago, I don’t think anyone was using a refrigeration type of air conditioning system. Nearly all of the stores were using evaporative cooling units, or “swamp coolers,” which don’t work at all in this climate. They might work well in Texas or Arizona, but they don’t work here – and that’s all the owners were using. Fortunately, these days everyone has refrigerated-type air conditioning, and that’s made a huge difference.

Of course, card systems and credit/debit card acceptance have taken hold in this industry as well. I think that technology is something to take a close look at when going into a new store, and there also have been some retrofits as well. It makes the owner of the store a better manager of his or her business. The business is easier to control. That technology has been a positive factor for the laundry industry.

Lastly, in the early days, using solar power to heat your water or to provide electricity was pretty much unheard of. Today, we’re seeing more and more of that. I think it can be a big plus for laundry owners.

How has your particular business and activities evolved over the years?

To some extent, being a business broker is easier these days. I used to lick stamps, put them on envelopes and mail out requests for people to sell their stores. Then, I’d follow up and literally go door to door in some cases to drop off these requests.

Of course, that has changed completely. It’s all computerized now, with websites and emails. The majority of my business today is done off of my website.

However, there are drawbacks to today’s way of doing business. Some people like to hide behind their emails and their texts. I still prefer to do things face to face – that way I can read a person a lot better and understand what they’re looking for and what they want to get out of their stores. For that reason, I always encourage face-to-face meetings. But I’ve definitely been able to handle a lot more business thanks to today’s technology.

At the end of the day, it’s still the same business.

What is the most enjoyable part of what you do?

I like putting people into business, helping them out. I like to see them make a success of their business, especially when they take over older stores that need a lot of work and improved management.

This is why I offer free consulting for a year to everyone who buys a store from me. They can call me anytime and ask me any question. I want them to succeed – and not only because then they might buy another store from me or tell somebody they know who might be looking for a laundry. I just enjoy seeing that success. It’s the American dream.

What is a typical working day like for you?

There is nothing “typical,” and I think that’s why I like it. However, if there were such a day, I suppose it would involve checking my emails first thing in the morning and making sure I answered all of them the best I could. Then, I would look to at my schedule to see what meetings I had set up for the day – whether it’s with a buyer, a seller, an attorney, a banker, an insurance company, or whomever could help facilitate a particular deal or sale.

In many cases, I’m quite involved because I want to make sure a laundry deal happens, and I know what it takes to make it happen. It’s why I can help potential investors a bit more than the typical real estate broker who mainly sells houses and just an occasional laundromat.

How large is your brokerage business these days?

At one time, I had a 3,500-square-foot office in the Chicago suburbs, with nine people working with me. However, I discovered that I was just spinning my wheels. We sold a lot of stores and made a lot of money, but it didn’t filter down to me.

So, for that and other reasons, I decided to do it on my own, which is how I had always run my business before. I tried to go big, and now I’m just doing it myself again. It should be noted that, when I had all of those other people, three of them were my sons – and they’ve all since moved on to bigger and better things.

In general, how have self-service laundries changed over the years?

They’re not only physically bigger, but they provide more services. There is more of an emphasis now on drop-off laundry, as well as any other service that would apply.

I also think the emphasis on properly training laundry attendants is extremely important these days, more than it ever has been. The laundromat simply is a better environment for doing laundry than it ever has been.

The stores look good. Some of them are just outstanding – they’re beautiful places in which anyone would want to spend some time. They’ve got large flat-screen televisions and children’s play areas. They provide food, coffee, soft drinks and snacks. That’s a tremendous change since the laundromats of the early days, and I think the evolution will continue. Stores will improve as we go along.

Have laundry owners changed since you’ve been in the business?

As I alluded to earlier, the professionalism has increased. There also have been more owners than ever who operate multiple stores. Once you get into this business, you’re either going to love it after five years, or you’re going to hate it for whatever reason. But the people who love it will buy a second store, and then they’re committed.

I can think of quite a few owners just in the Chicagoland area that have multiple stores, and I think this trend will continue. Once you’re committed to the business, know how it works, feel comfortable with it and like doing it, you’re going to buy a second store.

In fact, one of my biggest professional regrets was not building more stores at the time I was building laundries. We stopped at five and, looking back now, we should’ve just kept going – because we easily could have built a dozen or so.

From your standpoint, what are some of the hot-button issues facing laundry owners today?

Water is a big issue in Chicago and everywhere. When you get right down to it, in some areas of the country people are starting to recycle water. I’m not saying that will happen all over, but water is a huge issue in many parts of the U.S.

In addition, shifting demographics has become a real challenge in some markets, where certain groups of customers have moved out of particular areas. Neighborhoods became gentrified – and the laundry owners in those markets needed to adapt by changing their services, perhaps emphasizing drop-off laundry. That’s a definite hot button.

Other issues include utility costs, labor issues and the minimum wage. Those are all important topics that we need to consider in the future. I don’t think any of them are going to get any less challenging. However, smart operators will overcome them.

Personally, what are your interests away from the laundry industry? How do you like to spend your time?

Much like the laundry business, that’s been changing, too. Elaine and I used to spend a lot of time traveling. However, these days we’ve been spending a bit more time with our grandkids. So far, we have four grandchildren from two of our sons, and our third son just got married this past September.

We have a place in Wisconsin, and we love being on the water – boating, fishing and swimming. And, of course, Elaine and I still find time to travel to new and unusual places. We’ve been all over most of Europe. We enjoy that a great deal.

Do you have a philosophy that guides the decisions you’ve made in business… and in life?

I like to make people happy, and I like to offer my services to different organizations. I volunteered my time for quite of few years to serve on the Board of Directors of the Coin Laundry Association, along with holding the position of executive director for that organization for a time. During those years, I helped develop the CLA Insurance program, as well as having a hand in creating this magazine. I also devote time to my church and other organizations.

My philosophy for myself and our kids is simple – do what you like to do best and never give up. I’ve run into a lot of brick walls over the years, but if I ever stopped I wouldn’t be doing what I’m doing now. I don’t envision myself ever considering retirement. But, then again, I don’t even consider what I do as working.

What have been the biggest mistakes you’ve made in this business?

The one mistake that stands out is not building enough laundries when I had the chance. I think it would have been a great time to do it. It was a time when building was still very affordable. We were building our own buildings and putting our laundromats in them. I could have 10 or 12 of those buildings today, instead of five. However, at the time it seemed to be a good idea to slow down.

Another mistake was trying to expand my brokerage business and complicating it with other services, such as selling equipment. If I stayed strictly with the brokerage end of the business, I would have been better off. I should have kept it simple and done the thing I do best.

What has been the most gratifying aspect of your life in the laundry business?

It’s been all of the people I’ve met and worked with. With the CLA, I traveled all over the country to meet laundry owners. Here in Chicago, I feel I know the majority of the people who are servicing the laundry industry, along with so many of the leading owners.

Even more gratifying is getting calls from operators who have questions or need help. If I can help them, I’ll see that they succeed. That’s what makes me happy. Those are the things that I’d like to continue to do, because where else are you going to get that kind of satisfaction.
That’s what it’s all about. Overall, I honestly do this for the joy of helping others.

What does the future look like for the self-service laundry business?

Over the many years I’ve been in this industry, there have been times I’ve felt good about it, and there have been times when I’ve felt, “Why am I in this business?”

At one point, there was a lot of overbuilding in the industry. However, I think that has settled down quite a bit now.

Another one of those tough times was during the oil embargo in the late 1970s, when it was impossible to get natural gas permits to build stores anywhere. Every store had gas allocations, and once you used up that allocation, you couldn’t get any more. To combat this, some distributors began building stores with electric dryers, which was insanity. Those stores quickly went bankrupt.

For the future, I’m as excited as I ever have been. I think the stores are only going to get better, and the owners getting into this business are only getting smarter. I’ve seen some stores now that really take advantage of their websites and the unbelievable opportunities created through digital marketing. Also, as I’ve mentioned, we’ve got better equipment coming out all the time, and the new services many operators are providing are very exciting.

What would you like laundry owner’s reading this interview to take away from it?

From an owner’s or potential investor’s standpoint, it’s important to understand that this truly is a business. It’s not a hobby. It’s not something you can do effectively on the side. You don’t have to spend all of your time in your store, but if you neglect any business, including this one, it eventually will slip away from you.

Get into this business for the right reasons – to service the people, to make money and to help improve the industry overall, as you continue to improve your laundries.

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