by Speed Queen
last updated 18/09/2020
Better Than A Bank
by Speed Queen
last updated 18/09/2020
Looking for a solid and sensible semi-passive investment? Take a look at Speed Queen
With a background in finance, Catherine Wickham had always wanted to invest in her own business, but wanted something that would enable her to continue in her corporate career. A few years ago, while on holiday, she walked into an unattended laundromat to catch up on her holiday washing. As she sat watching her clothes go through the wash and dry cycles, she noticed the large number of customers coming and going and thought to herself, ‘Wow, what a great business model!’
She initially looked at purchasing an existing laundromat business, but an accountant suggested she didn’t need to pay for someone else’s goodwill when she had the skill to create her own. That’s when she discovered Speed Queen.
‘My husband James and I spent a lot of time researching the market,’ Catherine says. ‘Speed Queen are the market leaders with very robust but stylish machines and innovative technology that now enables cash-free operation and remote management.
‘When we contacted them, the Speed Queen team were also extremely helpful in assisting us through the process of setting up a brand-new laundromat. They assessed locations to see how viable they were, produced concept drawings, ordered all the machines and helped with payment solutions. They also managed the all-important council consent process.’
Just what you’re looking for
Royce Little, Speed Queen’s head of laundromat sales, says laundromats offer, ‘Everything you could want in a business opportunity – there are low rents; zero staff; potentially cashless operation; and remote management.
‘While the washers and driers themselves are incredibly robust, it’s the way that we have matched them to new technology that has boosted the overall appeal of this business opportunity. It means that you could theoretically live in the Bay of Islands and operate a business in Invercargill.’
And going cashless not only enables complete remote operation, but also eliminates any security and health issues associated with the handling of cash.
Excellent work/life balance
All these factors added up to a deal-maker for Catherine. ‘Having a semi-passive business was extremely important to us as we both have full-time jobs and don’t have time during the week to focus on a hands-on business. It meant a lot of thought had to go into our planning to ensure the smooth operation of our laundromat, which we launched under the name In A Spin in the seaside town of Orewa, north of Auckland.
‘Thanks to the technology, we can be anywhere in the world and still successfully run our business. Pre-Covid, we were on holiday in Fiji and still able to assist customers with problems straight away because of the Speed Queen app on our smartphones.’
The app allows Speed Queen owners to access marketing and support functions, obtain operational reports and resolve issues within the laundromat, including responding to customer queries and managing individual machines. If a token happens to get stuck or an ‘error’ light appears on a machine, the owner can instruct the customer to load their washing into another machine, which can then be started remotely.
There’s further peace of mind for owners via their smartphones too, with the ability to monitor laundromats through in-store security cameras.
‘It’s been perfect for us as we are a busy family and it’s important to have a work-life balance,’ says Catherine. ‘I focus most of my attention on marketing and the customer experience, but I find this can easily be done in the evenings or the weekends.’
Stable and secure
Even the Level 4 lockdown didn’t affect the business badly. Catherine says they considered themselves lucky to be deemed an essential service, which meant they could continue to operate during the weeks of lockdown.
‘We didn’t have to make many changes: just increased daily cleaning, adding sanitiser pumps, limiting the number of customers in the laundromat at any one time, and additional signage to ensure our customers stayed safe. We did have reduced revenue for a short time but were still able to pay all our bills on time, making this a very secure investment.’
20-30 percent return – or even more
Speed Queen laundromats are pretty much turn-key businesses, says Royce. ‘We won’t give the green light to anyone unless the fundamentals are right, including site selection, demographics and parking.
‘The required deposit is around 30 percent – which is generally between $75-100,000 – and there is a solid financial package available for buyers. The return on investment is around 20 to 30 percent – that’s a lot more than you’ll get from a bank, and we’ve had some owners do much better than that.’
Right now, Royce wants to hear from people who have the desire to build a successful Speed Queen business in any part of the country. Current investors include a retired CFO, some dairy owners who opened one next to their shop, and a group of young executives who wanted a money-earning sideline without interrupting their careers.
‘A Speed Queen laundromat is a solid and sensible investment that offers a high level of business security through uncertain times,’ he says. ‘Contact us today to find out more.’
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