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January 4, 2012
Fight Trim and Pay Fair Share of Taxes (Part 2 of 2)

PEMBROKE, Mass. — Tax time is here again. Before I give you some tax tips, I want to tell you to pay your fair taxes. I know that not all of you do.

Having said that, you should take full advantage of legitimate deductions.

Some Available Deductions

Basically, profit determination is a process of starting with revenue and deducting all expenses and costs from all activity that went into creating that inflow stream. Any amount of expenditure is deductible if it helped you, in any way, shape or form, to run your business.

Don’t forget to include:

January 3, 2012
Fight Trim and Pay Fair Share of Taxes (Part 1 of 2)

PEMBROKE, Mass. — Tax time is here again. Before I give you some tax tips, I want to tell you to pay your fair taxes. I know that not all of you do.

While visiting a dry cleaner’s store, he said to me, “I pay myself a salary of $25,000, $500 a week. But I can’t make it on that. So I take another $20,000 out of here,” pointing to his cash register.

I looked around his small shop. This owner has worked hard 15 years to make his living. He’s doing no more business now than he was a decade ago, and he still does the lion’s share of volume himself. He works 50-55 hours a week processing clothes.

I ask myself, has he not progressed because he skims the top? Is he not interested in building a business? Is his only goal to make a living?

Would it have been different if he drew a fair salary, paid his fair share of taxes, and stayed focused on the business? I can’t say for certain, but I bet his unwarranted withdrawals have had something to do with his lack of progress.

November 22, 2011
How to Give a Raise

PEMBROKE, Mass. — Raises are not exactly a hot topic these days, particularly in the dry cleaning industry. But here is a story of something that happened to a young person I know, and it’s worth reading.

This person—we’ll call her Liz—had been working at a dry cleaner for a year when she asked for a raise. She wasn’t the usual type of worker. She was a college graduate who had taken a lowly job at a two-plant, four-store chain in the hopes that she would move up the ladder. The owner, a sharp businessman, realized her worth and didn’t want to lose her. He sensed that she could grow to become one of his top managers. On the other hand, business was down. There were no raises.

The owner called Liz into his office and closed the door. “Liz, these are hard times. My business is down 10%. I’m hard up against all my costs. Things will improve, but not tomorrow or the next day. On the other hand, you’re a good worker. So I’m giving you a 50-cents-an-hour raise because you’ve asked for one and because you’re been a loyal employee. And, finally, I don’t want to lose you.

September 28, 2011
Sell Something Other Than Drycleaning

PEMBROKE, Mass. — Family Drycleaners, in Hull, Mass., sells children’s toys in its front-counter section. Dolls, games and wooden toys are its stock in trade. Management says this adjunct business does well because no one else in town carries children’s toys. If a customer wants a nice wooden toy, say, as a gift, they have to buy it at Family Drycleaners.

Such selling of unrelated products goes against the conventional wisdom of Drycleaning Management 101. Do what you do well—process clothes efficiently and cleanly. Peddle ancillary trade—alterations, shoe repair, etc. And, if you sell anything in the front, make sure it’s related to garment care—lint brushes, stain stick, clothing bags and the like.

Sometimes, you go against conventional wisdom because selling unrelated products makes sense. In Marfa, Texas, there is a Laundromat/coffee shop/ice cream parlor—a three-in-one business. The reason it works is because Tumbleweeds Laundry is the only laundry, the only ice cream shop and the only “pure” coffee shop in the small town of 2,200.

August 25, 2011
Doing the Small Things Well

PEMBROKE, Mass. — Are you frustrated? Has the business got you down? Are you tired of dealing with the same old complaints?

Do you think your employees are taking advantage of you behind your back? Do you feel like not coming into work sometimes? Do you dream of doing something else, anything else?

Yes, it’s a tough business and a down market, so your feelings aren’t unwarranted. Doing 15% less volume than you did two years ago makes it harder to see the possibilities of progress. Moreover, it is no fun to see profit evaporate, when it was a solid percentage for years and years.

So, what are you going to do about it? You can feel sorry for yourself and complain whenever anybody will listen. But another approach—the half-full glass way—is to take pleasure in doing small things well. This changes your focus, allows you to concentrate on specific tasks, and enables you to arrive at a Zen-like mental state.

What small things am I talking about? Every day, as a worker/manager, you perform small miracles.

August 3, 2011
Industry Observations: Don’t Sell Out Yet

PEMBROKE, Mass. — I meet lots of drycleaners who are looking to sell. There’s nothing wrong with that, but there is a time to sell and a time not to sell. This is a time not to sell. Wait a few years, and it should be a better market. You might even double your price if you wait. Here’s why.

The current economic situation is quite tenuous. Now, nobody is ever really sure what’s going on, but the last few years have been particularly iffy. In 2008, the economy almost collapsed. We have not experienced such a crisis since the Great Depression. Government tinkering averted a complete meltdown, but the fear of that almost-catastrophe lingers.

The economic situation is looking up. Major companies such as Microsoft, Intel and Exxon have billions in their tills. The stock market has recovered, and the future looks promising. If you’d invested $100,000 in the market at the depth of the recession, you might have $140,000 now.