Outsourcing- An Update – Planet Laundry Magazine
As I mentioned in a previous post about a recent vacation I have been working on outsourcing many of the functions of my Laundromats.
The unattended Laundromats are not too bad as things are pretty consistent but the partially attended Coin Laundry is much more dynamic. There are many more items to consider such as payroll, shifts, holidays, inventory and stocking of vending machines and Drop Off supplies.
Add to all of the this the normal bookkeeping, payroll taxes and various other forms and reports there is a lot going on.
As I was setting things in place for the vacation I was approached by the Coin Laundry Association magazine, Planet Laundry, about and article on outsourcing.
Here is the main part of the article.
Is Outsourcing the Way to Grow Your Laundry Business… and Get Your Life Back?
Being an entrepreneur, you clearly enjoy wearing several different hats. In fact, the very minute you opened your store, you probably took on a dozen or more jobs all at once. All laundry operators – and small-business owners, in general – occasionally feel like “I am the business!” However, it also stands to reason that you might not handle all of those business-related tasks equally well. What’s more, it’s dangerous for a growing operation to run this way for too long. You will surely fail to maintain the business over time, not to mention you can lose touch with your family… and your sanity.
“I wanted the flexibility this industry provides, but I found that, over the past year or so, I was falling into a ‘job’ mentality and just doing all the work,” said Ken Barrett, a laundry owner in Anniston, Ala. “Recently, I’ve been expanding to other projects and started running out of time for the laundromats and my family. I had fallen into the ‘Superman Syndrome,’ which affects most entrepreneurs. You’re afraid of releasing control, because you feel no one else can do it as well as you can. As it turns out, other people can do many things better and faster.”
Barrett is among a growing number of laundry owners who have looked to outsourcing to more effectively build their businesses. (The term “outsourcing” is sometimes confused with simply adding staff to handle daily tasks. This article will examine outsourcing as the practice of hiring independent individuals or firms from outside your business.)
Taking the first steps toward outsourcing can be time-consuming, but figuring out how to build your business with help from outside professionals can offer increased efficiencies and economies of scale.
“Progressive entrepreneurs realize the unstoppable power of outsourcing to handle aspects of their business that are essential, but simply don’t make sense for them to deal with personally,” said David Walsh, an entrepreneur and author of “Source Control,” an e-book on effective small-business outsourcing. “Small business, augmented by a global pool of human capital, can compete directly with the biggest players in their space, and win.”
What to Outsource
Chances are you’re already outsourcing some business tasks, such as payroll administration or background/criminal checks for employment. These days, almost any task can be outsourced, with many qualified professionals leaving the corporate world to work as freelancers or contractors. However, just because you can outsource a task doesn’t necessarily mean you should.
“Don’t outsource something just because you don’t want to do it,” explained Jim Lanzalotto, principal at Scanlon Louis, a marketing and strategic outsourcing company. “Sometimes there are things you don’t want to do but they are important to your core business.”
Consider what non-core activities you might be able to outsource. This will help you stop doing things you hate doing (and are probably not that good at), and it will free up your time to focus on the things at which you excel. Leverage the talents of others, rather than trying to do it all by yourself – after all, your time is most valuable asset.
Here are some of the most commonly outsourced small-business tasks:
Marketing: Marketing is the fuel of a small business. Your marketing efforts tie directly to your sales results. You can outsource your marketing efforts to a consultant or public relations specialist. Some marketing professionals will help you create an overall advertising and marketing strategy, develop downloadable content for your website, conduct email marketing campaigns, and pitch the media on your business.
Payroll: Unless you run an accounting firm, you shouldn’t be doing your own payroll. You can get in trouble faster with the IRS for not paying your payroll taxes properly than not paying personal income taxes. If you hire an outsourcing company to do your payroll, you can rest assured that you and your staff will have no issue when income tax season rolls around at the beginning of each year.
Social Media Marketing: There are plenty of marketing consultants and social media marketing agencies that can handle developing social media strategy, content development and social promotion for your laundry business. Just remember that social media is a long-term strategy, so be prepared to invest 12 to 24 months to achieve your goals.
Bookkeeping: Bookkeeping is the number one task that small-business owners routinely neglect and struggle with managing in their operations. Don’t let this happen to your laundry business. By the 15th of the month, you should know how well your business did last month so that you can make any adjustments. By outsourcing your basic accounting services to a seasoned bookkeeper, you will have the ability to use updated financial information to run your laundry.
Administrative Support: Utilizing “virtual assistants” is a cost-effective way to get routine tasks handled. You can use a virtual assistant for maintaining your personal schedule, database, preparing mailings, email newsletters, blog maintenance, invoicing, and voicemail and email management. You can even leverage a niche-focused virtual assistant to do bookkeeping and receipt management.
Of course, within the self-service laundry business, equipment maintenance and repair also are at the top of the outsourcing list. …..
Washin Golden Springs
I outsource my bookkeeping. My accountant has a laptop at her office, which I supplied. This allows my files and programs to be separate from her other activities. The list of responsibilities includes:
• Confirming attendant times remotely in the time clock.
• Importing the times into QuickBooks.
• Running payroll every Friday – direct deposit and emailed paystubs eliminate the need to deliver anything to the employees.
• Payment of all state and federal taxes.
• Logging into the bank and adding comments to all transactions.
• Downloading all transactions to QuickBooks.
• Providing a weekly report of any attendant late clock-ins or any other abnormalities.
• Reconciling bank statements monthly.
• The next step will be to change the mailing address of the utility bills to her office so that they can make the payments directly from the bank.
My bookkeeper also handles my refund program. I scan all of the paper refund slips into a DropBox account, as well as any voice messages. The bookkeeper adds all of the information into a spreadsheet and checks for excess refunds to one name or specific address. When I stop by, I sign the checks and they get mailed out.
Doing the simple, day-to-day tasks requires little effort, and it’s easy to fall into a routine and forget why you got into this business in the first place.
Finding the Right Partners
Before handing over the reins, be sure you’re working with the right partner. A good starting place is your own network; ask other laundry owners – or your accountant, lawyer or banker – if they can recommend a provider offering the services you need. Online networks like LinkedIn also make it easy to expand your personal networks and to ask for recommendations.
In the absence of a good recommendation from a friend or acquaintance, professional associations or trade groups often can recommend the right partner for your needs. In addition, a number of online services – such as oDesk, BidModo and eLance – service as virtual marketplaces for contractors and business owners to connect and begin working relationships.
Whether you use a web-based marketplace, a personal referral, or a personalized matchmaking consultant, the key to identifying the right contractor is to know exactly what you’re looking for.
Reaping the Benefits
Although there are risks, outsourcing ultimately offers laundry owners great advantages. The process allows you to build a team of skilled professionals without adding the expense of full-time employees, and to avoid getting bogged down with tasks that can be completed without your attention. It’s an affordable, proven strategy for growing your business without letting it take over your life.
Stop making yourself crazy by trying to do everything at your store. If you outsource just a couple of business functions, outsourcing can pay for itself in no time. Do your research, check their references and ask for referrals from fellow laundry owners before hiring anyone. Once you start outsourcing a few non-critical tasks in your business, you may wonder why it took you so long to do it.
“Outsourcing is frustrating, difficult, tiring, time consuming – and the best thing you can do to grow your business,” Barrett said. “You may actually be what’s getting in the way.”
“Is there a task that I wouldn’t outsource? Yes, being the visionary and driving force of the business and deciding how I want to spend my time.”
I hope this helps provide some insight into the “behind the scenes” operation of my stores.