Ancillary Services ManagementProvider Spotlight
Scheffres Laundry Service
Scheffres Laundry Service is a company that approaches customer service with trust and transparency. I recently discussed a load of laundry information for multifamily owners and managers with serial entrepreneur, Michael Scheffres. Michael comes clean and reveals how he developed three separate companies.
CHILI – Ok, let’s be contrarian and start at the beginning. Talk about your first job.
SCHEFFRES – My first job out of college was a property manager at HG Smithy.
CHILI – You didn’t have a job before that, like a paper boy or working at an ice cream shop?
SCHEFFRES – As a teenager, I worked summers for my father’s laundry company collecting quarters from the machines.
CHILI – I thought they were still using washboards at the creek back then. Sounds like you have laundry detergent in your veins.
SCHEFFRES – Oh yeah. It was the family business. I started working full time for my father after that property management job in 1974. Sadly, he died shortly after that and I took over the company.
CHILI – Didn’t you work with CSC for a while?
SCHEFFRES – Yes, but before that, I ran my father’s business and sold it in January 1986. I sold my second company to Coinmach (now CSC) and I started my current business, Scheffres Laundry Service in 2008.
CHILI – You’re a serial entrepreneur and sold two separate companies and started up a third. Impressive. What’s your worst job over all those years?
SCHEFFRES – I may be Pollyanna, but I never really had a bad job. In fact, I’ve always looked forward to coming to work each day.
CHILI – What about best job?
SCHEFFRES – It’s not a business like athletics, where you have good years and bad years. When we get a new client, I feel on top of the world. If we miss a new opportunity, I’m despondent. But most days are pretty darn good, and the business is steady.
CHILI – When you started collecting coins for your father in the seventies– how much did a laundry load cost?
SCHEFFRES – Usually there were coin slides for a nickel, a dime, and a quarter – push it in and for forty cents you could clean your bell bottoms and tie-dyed shirts.
CHILI – Were those coin-only machines often broken into then?
SCHEFFRES – At a few locations we couldn’t stop the vandalism, so we had to give them up. But for the most part it wasn’t a big issue. Now with more security and card/app technology it’s rarely an issue.
CHILI – What about in the last 10 years? What changes have you’ve seen?
SCHEFFRES – Clearly technology is the biggest change. I am not a technology guru, so I surround myself with people on top of those trends. I never envisioned machines operating by phone. Now installations include app capability where you can see what machines are available, get refunds and report service issues. In the old days I had an office, a secretary and five service guys. The phone was not smart, but my secretary was – she beeped techs who called in from pay phones and then she dispatched them. The beeper and phone were state of art technology then.
CHILI – How did the in-unit washer/dryer amenity trend impact your business?
SCHEFFRES – Apartment owners are always in an amenities war. They saw this as a huge competitive advantage to attract residents starting about ten years ago. There are still many buildings with community laundry facilities but most newbuilds include in-unit machines. Our business is still steady but it’s harder to grow.
CHILI – What’s the upshot of the Covid lockdown on your business?
SCHEFFRES – At first, nobody knew what was going on. We started with social distancing signs and our service team is still wearing masks. They’re being cautious and following guidelines. In the beginning, there was little financial impact. But then as businesses started closing, people didn’t have any place to go, so usage dropped. It was significantly down.
CHILI – How are things now?
SCHEFFRES – Happily, after six months we are almost back to normal usage. Throughout the entire period, we paid our owners their commissions on time and didn’t miss a beat there.
CHILI – Let’s shift gears. What are the key factors when you prepare proposals for new business?
SCHEFFRES – Say there is opportunity to bid on a job with an incumbent provider and we don’t have an accurate measure of current financials. I don’t want to get that job solely based on providing the highest payout. I want to get a job because an existing customer or someone who heard about us, likes our customer service, and appreciates prompt and accurate payments. I’ve been around a long time, as we recounted earlier, so trust is the most important consideration. If they know me, they can come back and say I’m a little short on the money. Maybe we can talk about it and work that out. That’s my approach.
CHILI – Has that approach worked?
SCHEFFRES – Well we started 11 years ago with zero accounts and now have over 18,000 machines. I’m proud of what we accomplished.
CHILI – Talk more about the payment system technology changes.
SCHEFFRES – We have a system now which can be coinless, and in the future will be capable of selling lottery tickets. Twenty years ago, payment was almost 100% cash. Now it’s flipped to only 20% coin and we are trying to get to 100%.
CHILI – What’s stopping that?
SCHEFFRES – Some owners, for example, those with an older customer base feel that not all customers are ready to go coinless.
CHILI – Large companies like CSC, can fund the cost of new technology across a big user base. How can smaller companies like yours compete?
SCHEFFRES – Third parties develop technology and provide it to smaller and mid-size companies, so we stay competitive. And clients know, when we say we’re going to deliver something, we will follow through. Other companies may have minimum compensations, or hidden administration fees and we don’t do that.
CHILI – Is there anything else I should have asked and did not?
SCHEFFRES – Until we get past the impact of the lockdown, we are all jumping through hoops. Our business is generated through local industry and property management associations and groups. Since those meetings and gatherings no longer occur, it limits our growth and even our day to day business. We are like everyone else – looking forward to getting this behind us.
CHILI – Let’s wrap up with some fun facts about Michael Scheffres. Are there any books, movies, or podcast that had a big effect on your life? Or other recommendations?
SCHEFFRES – My wife is a big influence on my life, and she was telling me she wants to read more Ben Mezrich’s books. He’s the guy who wrote “Bringing Down the House” about MIT card counters who took Vegas for millions. The movie “21” was based on that book. And one other thing – I’m a sports collector. Don’t get mad at me because you are a big Duke guy, but I just bought a UNC 1982 NCAA championship team-signed basketball.
CHILI – I won’t get mad, it’s amazing with all those great players like Michael Jordon and James Worthy. It took a bonehead play by Fred Brown for Carolina to win a championship. I was going to wrap up by asking you for a joke so we can end on an up note. But in this era of the cancel culture, I don’t want to take any chances. I will just thank you for your time. Although since you are in the laundry business, I’m sure you would have kept it clean.