ďYesterdayÖlove was such an easy game to playÖnow it seems so far away.Ē (Paul McCartney)
Those same words also sum up the way many drycleaners feel about their businesses, today! Everything seemed so much easier. Only, yesterday. We canít just keep doing the same old, same old. Itís time to re-think things and do some re-calculating.
Most people are threatened by change. Donít want it. And can be overwhelmed by it. A relatively small number of businessmen welcome change. They feel, ďthe faster the better.Ē Because it inevitably leads to more opportunities for those who survive.
Change brings with it, a shift in power-
The industrial revolution is an example. It led to a change in power. Before that revolution, the power was in the hands of those who owned the land. By the time it was over, the power was in the hands of those who controlled production.
Now we are in a period of change that is much bigger. Partly because it will take place over a very short time and partly because it will affect a much larger number of people. In the coming years, the power will be transferred to those who understand how to use information. How to find it, organize it, and use it. Fortunately, everyone has an equal opportunity to obtain this information.
Those of us in business have the hardest jobs ahead. Not only is the game being changed, but the playing field as well. That is, the marketplace of those who own service businesses is rapidly changing. Itís important that we understand these changes in the marketplace and prepare ourselves to benefit from them, rather than be left behind.
A maturing population will be a key factor-
A significant change in our markets will be due to the overall aging of the population. While 28% of the US population is over 65, what percentage of your customer base is over 65? Now you see the problem.
According to the Bureau of Labor Statistics, some other ways this maturing trend will affect the economy are: the number of professional, managerial and administrative jobs will continue to decline, as will unemployment, due to the lack of an available workforce.
On the brighter side, there has been an unprecedented growth of affluent families. Just in the last 10 years, the number of families earning over $25,000 annually, grew by 79%. The Conference Board (a business think tank) projects another increase of 70% in the coming decade. This phenomenon is creating a larger market of people who can afford the nicer things of life.
A service/information economy-
For a number of years, we have been changing from a manufacturing- based economy to a service/information-based economy.
The fact is, industries, such as steel and auto making, are moving from the developed countries to the less-developed countries. This trend, as you know, includes the textile industry, which has all but completely moved to Asia. The manufacturing that is still done in the US is mostly automated and robotized. After all, robots can operate for less than $10 per hour, compared to nearly $50 per hour (including benefits) for the people they replace. And they donít strike, take sick or maternity leaves or even care about occupational hazards.
To summarize these changes - we are right in the middle of a wave in our economy that is changing in the following ways:
It is becoming more mature (older).
It is becoming more affluent.
It is becoming more of a service and information economy and less of a manufacturing economy.
The information revolution-
The most powerful force reshaping the world today is the availability of information. Itís a mistake to think of the information revolution as just a computer revolution. Understanding how to use this information is just as important as the ability to get it.
Surviving the next twenty years-
The following are several suggestions for survival and prosperity over the next two decades of change. These all relate to the changes Iíve been talking about. Together, they can be used as a game plan for your businesses to thrive in the coming years. These will enable you to take control of the changes weíre seeing, even anticipate them, and position your businesses to benefit from them.
Business planning: Once upon a time it was possible to operate a business without a formal business plan. Itís unlikely, that you can continue to run your business ďby the seat of your pantsĒ during the next 20 years. As business becomes more and more complex and the number of variables grows, the need for a formal business plan becomes imperative. Suitable models can be found on the internet. Begin working on yours as quickly as possible.
The marketplace: Successful drycleaners of the future will be intently tuned into potential markets and will study them in depth. Next, you will need to do a market analysis (The Golomb Group can do this for you), a competitive analysis, and a determination of the exact position your business will have in the marketplace. This process will help you structure your business to be in a well defined, growing market and to offer services that satisfy real, existing needs of that market. The need to be precise and specific about markets is even more important during times of change.
Quality not quantity: The market is changing to a more quality conscious clientel, and not a quantity one. Itís no secret that the average person has less and less of their wardrobe that requires professional care. Those who do still use a drycleaner regularly, are looking for quality work. Today, more than ever, there is an unprecedented need for quality services. We urge all of our clients to position themselves at or very close to the top of their market. Not only does this attract a true growth market, but itís actually more fun to be there.
Building an information base: Merely having a computer, even at the counter, is not sufficient to keep up with the information revolution that is taking place. Complete information: names, addresses, phone numbers and spending habits (purchase amounts, dates and frequency of visits) should be maintained for every customer. Iím often dumbfounded by the number of drycleaners, who have computers at the point of sale, but refuse to buy or upgrade to a software program that is capable of maintaining and sorting this kind of information. They are letting the opportunities, afforded by change, pass them by. A significant portion of your advertising and promotion should be based on this information.
Management: Developing a written management policy, an employee handbook, if you will, will repay you the time and effort spent, a hundred times over. Yes, it is a monumental task. But, letís face it; no matter how hard we try, or how much we would like it to happen, itís impossible to train every new employee , exactly the same way, without written instructions.
The giants of the service industry; Wal-Mart, McDonaldís, etc. make it look easy. The truth is: if they didnít have a written, step-by-step procedure that outlined the most efficient way of doing everything, they would be out of business.
Developing operating and management procedures is a tedious job. It can take years to actually reap the benefits, but, at some point, things will begin to click. A company that successfully completes this task can become invulnerable to competition.
A vision: Finally, you must develop a vision for your company. It has to be a well focused vision that you are capable of communicating and selling to your fellow workers. Most of us have a vision for our company, but havenít effectively shared it with our employees. Until they fully understand where it is you want to go, see the benefits to them, and agree to help you get there, your vision will never be realized. You canít do it alone.
Only those cleaners, who develop and implement the six steps Iíve outlined above, will achieve the greatest success in the years ahead.