What are appropriate demographics to succeed?

T Monahan

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What are your observations on appropriate demographics to make it a go in rug washing?

Without mentioning names or specific cities, here is one reality of an operator that I know personally:

He is established in an area that has demographics of a service radius of 25 mile with a 50,000 population base. Inside this base there is at least 2500 households earning $150,000 annually. (He thinks that is key) There is a college and also a medical center inside that radius. (He thinks that makes it unique too) Giving these elements and circumstances, his plant generates $250,000 in rug washing and related sales each year for a number of years now consistently. His volume justified having a wash tub and centrifuge to handle the load to keep staff down to two people doing pick-ups and deliveries and washing when they are not doing that. Note: They pick-up and deliver for free for anything over a $250 order. One other person handles the phone and some repairs. The price points on cleaning per square foot are as follows: $2.25 for synthetics and $4.00 for natural fiber and $5.00 for hand knotted with fringe. (Oh yes, he does have competitors that take a slice from his pie too) He still has capacity to do more with his current staff and facility size.

Can you imagine if he had a bigger population to draw from what he may be able to do? I might add he is not a franchise operation with big marketing power.
 

TomKing

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Thanks Tom Good information. Do you think a way to think might what is the ethnic demographic, the age of the city, housing type? I heard some say recently you might think how many centrifuges per 100,000 people can a city support. your thoughts?
 

Mikey P

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You know that feeling when at the end of a long day and you have three more square feet to go...and the truck shuts off with a full tank??



Sometimes lady luck can smile on you..

20150625_180754.jpg



Ten feet away...



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Im such an amazing success..
 
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Shane Deubell

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Sounds like they are doing awesome for a town that size. Kinda surprised, would think much much more is needed.
 

T Monahan

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Here are some of my observations:

It appears that the income bracket per household (Perhaps $150K and more) and the type of draw of the infrastructure of the community has a bearing on who lives there that may have rugs to wash. Such may include colleges, medical centers, fine stores for commodities and consumable goods, fine restaurant dining. Add other businesses that create jobs such as research and development for things related to the transportation industry (Boats, cars, trains and planes), and computer related technology (Both hardware and software). Residents that are on senior management teams related to the fortune 500 companies. These residents must have accessibility at some point to rug galleries or stores that sell rugs. Well established owners of older homes are often connected to a family that hands down such items. Having clubs for people that have an appetite for art seems to spill over to having fine rugs on their floors. Whether big or small, some of the successful rug plants I have visited seemed to be nestled in these environments.

It appears that homeowners that contract services like wall to wall carpet cleaning, dry cleaning, duct cleaning, house maid service, landscaping and other home services are good candidates to own at least 3-5 rugs worthy of washing. They would contract their rugs to get them washed well given the proper education on where to take them for such services.

What have you observed?
 

Shane Deubell

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My friend here cleans at least 600 rugs year, maybe more.
I think he can do way more still and if i were him cut back on carpet cleaning and advertise rugs more.
 
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T Monahan

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We all know that McDonald Hamburgers studies an area before determining where to install a facility. It's not surprising that Burger King or Wendy's or even both will set their eye on this and set up across the street from the leader. Look at Starbucks and how they plan and thereafter install their shop location. Sometimes in larger areas or busy pedestrian areas they are just a block apart for each other. Why? They figured it out mathematically. The same is true when you consider Home Depot, Lowes and other big box stores. Furthermore, the evaluation goes on when you consider the top ten clothing stores, furniture stores, fine restaurants and other businesses that garner some of that discretionary household income. Medical facilities do the same thing base on some numeric value in a population consideration. Big business count on the demographics to steer their decision to engage or abandon the plan to set up shop. There is an intangible that is counted on to come through for them as well after the commitment to locate. That intangible element, that is hard to find data on, is called 'social proof' or put a different way, 'informational social influence.' That is why how one delivers his service or product is critical to the review that the buyer will make with his sphere of influence. You may have demographics on your side, but you better have excellence of service during and after the sale.

Regarding rugs: There has to be some commonality. I just haven't heard anyone spell it out yet. One thing I believe is that the bigger the household income, (Say +150,000 dollars) the more probability exists for multiple rugs to be washed each year or possibly two. Especially is this so with indoor pets.

Does this make any sense? Could someone from their own experience shed more light on this for clarity? Or did you, like me just fumble into rug cleaning and hoped it worked out without making a study of the area you chose to service?
 
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ruff

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There was a little cafe here in San Francisco called the trio. Three women started it.
It was a small space, everything business wise was "wrong," yet it did fabulously.

One of the women was one of them very "business" oriented women. You know, demographics, trend studies, shifting business mood studies, you know the spiel.

They sold the very successful Trio and opened a new restaurant down the street that perfectly implemented all that business wisdom.

They were out of business in three months.

Not sure if it answers your question, Tom.
Personally speaking, I may not be the right person to ask.
 
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ruff

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I am sure there is, Tom. And I'm sure I know only a very small part of the story.

My point, I guess, is that research, planning and preparation is great, but it will only go that far.

Passion and persistence will at times carry you a whole lot longer.
 

T Monahan

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Where are all the industry people that often have a point of view to sell to improve one's performance in the market? Especially those that feature their talents to include the identification of the goods and services desired by a set of consumers? In other words the market gurus?

This is their opportunity to shine by giving some sage observations!
 
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rhyde

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Where are all the industry people that often have a point of view to sell to improve one's performance in the market? Especially those that feature their talents to include the identification of the goods and services desired by a set of consumers? In other words the market gurus?

This is their opportunity to shine by giving some sage observations!


I'm sorry did you say something?
 
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The Great Oz

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Until a guru shows up I'll toss in some opinion and observations.

"Making it" in a small population area will vary in too many ways to count. If your overhead is low, it is likely due to being in an area of lower income than a comparitively higher cost area. You can charge less to match the income level of your area and still make a reasonable profit. Your investment in rug education will probably not need to be extensive, since your clientel will be buying their rugs at Target. Likewise, your investment in equipment can be low, since low cost labor is available. You can choose to expand your service area to take in surrounding population areas, which will then require a higher level of investment in everything. I've known guys that were succesful in small cities and opened a branch in the nearest bigger town to take advantage of the affluence, and fell on their faces because the higher expectation level of the higher income customer was more than what they could provide.

In a larger or more affluent area, you'll have to pick your niche, as there will be a constant flow of people blowing their hard-earned savings going out of business as rug/carpet cleaners and you'll have real competition from people that know what they're doing.

An affluent area of older homes owned by local Captains of Industry is great, since fine Oriental rugs look good in those houses and the owners want to look like they've had money forever. High-tech, high-income areas... not so much. Younger affluent people buy hugely expensive but disposable woven rayon rugs from Restoration Hardware, or they'll buy rugs from Target. They just don't care about anything but the look. And, they are still coupon clippers when it comes to buying services. They'll join Angies or amazon local for the discounts, even if they couldn't spend the money they have in ten lifetimes.
 

rick imby

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I have a friend that opened 10 or 12 grocery stores in the early 70s. They let the customers mark the product, they just put up signs and put the product on the shelf.---Buying club--

First one was a home run. Second and third fouled out, 4th did ok. 5 store was a grand slam... He never hit another home run but ended up with 2 good and 2 great stores and sold out for big money.

Several factors on what makes it work or not. Some quantifiable and some just plain luck.

Great employees that interface with the customer would be number one criteria...

With rugs I would think you must at least make sure there is one or more successful rug sellers in the area.
 

Papa John

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Tom, I think You and The Great OZ answered your question. It seems most of our clients- middle to lower-upper class just want to be practical-- they buy rugs as a floor covering and not as an investment.
they have "active" lifestyles (pets and kids) and they just want to get the rugs clean enough because they know they will soon be dirty again-- and the pottery barn rugs they buy generally aren't worth a proper washing-- so they go with our in home service.-- we try to sell them the in plant cleaning though. we have changed our disclaimer to try to scare them into the plant cleaning.-- some rugs we will only clean in plant..
 

PrimaDonna

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Same people who will pay to have those rugs protected by a "speciality protector"....where price is no object.

You know the type, Tom. (Wink)

Success depends on many factors. Being in a certain demographic is not the only piece to the success puzzle. That being said, opening in or marketing fine rug cleaning to the worst section of a neighborhood is not going to work.

Location, relationships, knowledge, expertise, credibility, ethics, attitude, mentors, an executable plan, luck, right place at the right time are just a few things that contribute to success no matter what demographic you are targeting.

Are your chances of success better if you can tap into the right demographic....absolutely. But knowing hiw to tap in to them is what is crucial.
 

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