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Carter Hoerr advised on 26 Dec 2011
Experienced Business Manager; National Expert, Online Meal Ordering
Barbara offers good advice: do your homework before you head off into unfamiliar territory. You could easily stretch yourself too thin and risk damaging your current, profitable business...
The type of organization you mention is notoriously difficult to sell into, so don't assume that the prospect of higher margins justifies the time and effort. Whereas in the residential market you're probably appealing as an alternative service, in the institutional market you'll have to displace a current vendor. Purchasing is done through long, complicated RFP processes, and you'll have to win business contracts by offering lower pricing, higher service levels, and more.
(If we haven't scared you off already!) Be diligent and do your market research. Identify every business in your service area that requires laundry service. Call each one and determine how they do their laundry today, and find out as much as you can about who they use, how much they pay, how often they bid it out, who their decision makers are, etc.
Then proceed cautiously based on a real understanding of what the market opportunity is. Good luck!
The type of organization you mention is notoriously difficult to sell into, so don't assume that the prospect of higher margins justifies the time and effort. Whereas in the residential market you're probably appealing as an alternative service, in the institutional market you'll have to displace a current vendor. Purchasing is done through long, complicated RFP processes, and you'll have to win business contracts by offering lower pricing, higher service levels, and more.
(If we haven't scared you off already!) Be diligent and do your market research. Identify every business in your service area that requires laundry service. Call each one and determine how they do their laundry today, and find out as much as you can about who they use, how much they pay, how often they bid it out, who their decision makers are, etc.
Then proceed cautiously based on a real understanding of what the market opportunity is. Good luck!
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Hi Bryce, if and when you decide this is a route you want to pursue, you may want to check out www.mylazybones.com which is already doing what you're suggesting. When it comes to universities which I'm more familiar with, I think it's best to get in touch first with the Office of Student Housing at each university to see if there's a way to either partner up with the school or be allowed to advertise to students directly. If you will be picking up laundry from dorm rooms, it will be easier if the university can agree to you having some access to its premises. If the school is not interested in partnering up, it may agree to let you advertise directly to students. I believe the company I mentioned earlier deals directly with students. Advertising that can help spread the word on campus could be through flyers in new student packets, buying advertising space on the schools' newspapers or facebook pages, or even handing out flyers on campus the old traditional way. This is a service lots of students would pay so it's definitely something worth looking into. I hope this helps.
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Let me weigh in here from a business coaching perspective. First of all do some research on what the difference is between having a clientele of residential clients vs. commercial clientele. What is the impact going to be on your existing business as far as personnel, equipment, time-frame, etc., cost of doing business? Do some research on the internet - Google "commercial laundry services" and check out what companies are doing - what kind of service do they provide; what is unique about them; ask yourself - what do I need to learn about commercial business? Is there a potential client in your area you could meet with or is there someone who can introduce you to this prospect. Typically you will be dealing with the person who handles procurement, vendor management, facilities management, office management, etc. Set up a meeting to explore what they are doing, what they would like to see in a vendor such as your company, what is the volume, what is the turn around requirement, etc. Referral business is the best as people like to do business with genuine, likable, reliable and trustworthy people. When you get to the point of presenting a sales proposal - make sure it's all about them - what you can offer that is unique and different. And most importantly you need to know what they are doing now and position your business to support their needs.
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It would be great if you target small hotels and shops at first and tie up with them by providing an optimal rate card for long term contract. Example 3 months contract will entitle $aaa and 6 months $bbb and more than 6 months $ccc. Additional things you can offer can be free pick up and delivery.
Once you gain expertise with these small shops think about competing with other providers for large scale institutions.
Once you gain expertise with these small shops think about competing with other providers for large scale institutions.
Most recent advice
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Christina Kyprianou advised about 1 year ago
Hi Bryce, if and when you decide this is a route you want to...
Hi Bryce, if and when you decide this is a route you want to...
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Carter Hoerr advised about 1 year ago
Barbara offers good advice: do your homework before you head...
Barbara offers good advice: do your homework before you head...
Excellent advice but I would add that in any considered business venture, whether start-up or expansion or adding new lines of business, always develop a 3+ year business forecasting model and cash flow projection before you begin. Simply put, will the efforts (that require either direct or indirect costs/opportunity costs) be justified relative to any perceived revenue gains especially when you factor in risk! Quantifying risk can be introduced quite easily be using expected-value analysis. And yes, good luck!!