Way back in junior high school, I had an economics teacherthat gave a very powerful lesson that changed the course of my life.This teacher handed our mimeographed copies of a book a universi-ty classmate had wrote about the effect of the Baby Boomers werehaving on society. I remember this class vividly, because the teacher started out his lesson with the comment each and every one of youin this class are going to face unprecedented challenges in your lives like no other generation before you have. And, my teacher was absolutely correct.
"Way back in junior high school, I had an economics teacherthat gave a very powerful lesson that changed the course of my life.This teacher handed our mimeographed copies of a book a universi-ty classmate had wrote about the effect of the Baby Boomers werehaving on society."
Years later, I came across a book called Boom, Bust, and Echo,written by a demographer by the name of David K Foote. This bookexplains a lot about what has happened in the North American marketsince the end of World War Two. I’m sharing this book with you be-cause it absolutely nailed every phase the North American economyhas gone through, ad currently describes the massive trough we findour world in today.
North America had a massive advantage at the end of World WarTwo. While much of Europe was ruined from war, factories levelled, millions of people killed, entire economies laid to waste, NorthAmerica was experiencing unprecedented growth building weapons, growing food, supplying the war effort to defeat the enemy. No factories were destroyed, infrastructure was intact. When the wareended and troops returned, they renetered society, started families,and oh did they start families. Not just merely replacing themselveswith two kids, but three, four, or more per household. Those kidsswole the population forming a buldge we called the baby boomers.And, those baby boomers changed everything.
As the baby boomers went through school, there was not enoughschools, so the scholl system expanded to accommodate and educate.When University years came up, Universities expanded to take in ll these people. When they graducated, the work force expandedto provide jobs. Housing expanded to provide houses, which meanscities and neighborhoods grew. Along with it demand for consumer goods also went up, meaning more clothes, more cars, more toys, more STUFF. And, of course that meant more demand for drycleaning and laundry. Oh those glory years of increasing demand year after year after year.
But now, the Baby Boomers are reaching the end of the glory years. Retirement and old age is causing huge demand in healthcareservices, seniors’ homes, and because so many people have left thework force, drycleaning has been in decline since the 1990’s.
Drycleaning is a mature market. Its bester years are yesteryears.And, its going to be this way for some time until the Baby BoomEcho comes roaring through. In the meantime, folks like you and I,are stuck in a trough, sandwiched between the Greatest Generation,and the Baby Boom Echo of their grand kids (that are the next mas-sive horde that’s going to cause havoc once again in thenear future).
Yes, markets have been shrinking and declining. You have likelyseen it yourself in your business. Piece counts are down, and withrecuced piece counts, reduced income. You have felt the pressure ofrising rents, rising costs, rising abor costs, while juggling the fallingpieces and revenue. As if a pandemic closing offices and businesseswasn;t enough, now we face our customers going into theor goldenyears wearing sweat suits or diapers, none of wich really have anyneed for our services.
So, how does one survive this? The cohrts of our mass markethas moved on, and we have nothing to replace it with. I say, our onlychoice is to become extremely good managers of what resources wecan control. We simply must know our costs, our cost of productionour cost to produce a piece, and stick by it. We must demand effi-ciency, and productivity from our employees. Every dollar count,every minute counts.
You must get 35 or more pieces per operator hour out of yourpressers, but at the same time, you must also know what your costto produce that piece is because it makes no sense to be producing a pair of pants and charging five dollars for them when its costing youeight dollars per pair to clean and press them. You must know yourcosts, and then you must know how much you are producing. Theold Goesinto must be less than the Goesoutta way of running yourbusiness is much more crucia; yhan it ever has been before.
And, customers. Customers are declining. The fashion of work haschanged, dramaitically. Its now socially acceptable to wear a blacksweater or black shirt over blue jeans as office attire. Billionaires are wearing t-shorts, hoodies and plan old blue jeans as every day office wear, and the rest of the world is jumping on the band wagon because everyone wants to dress like billionaires do. Of course, that’s a lotless drycleaning coming in for you and I.
So, the solution is to raid our competitor’s customer list. If I don’thave enough customers, I’m certainly going to compete with youfor yours. I need to feed my business so I can feed my family, andif that means I have to beg, borrow and steal customers from you,I’m going to do it. And, competition is freaking fierce. You have noidea how far I went to compete for customers when I had my dry-cleaning shop. And today, that competition is even stronger. It turnsout, I’m really good at coming up with ways to target and attract acompetitor’s customers.
Money, Management, Measuring and Marketing are the key areasone needs to be absolutely on top of today, if you want to ride outthis trough between waves. Drycleaning is a mature market, and iassuch, its going to take a very steady, experienced, patient and skilledhand to steer through to the next generation. Unfortunately, far toomany currently in this industry do not have the skills, experience, orwill to learn or acquire these skills. Its only a matter of time beforewe are going to see desperate people who have been operating theirbusinesses at break even or sligh losses for decades wantin to retireand try to sell their businesses. Many of these businesses simplyare not worth buying because the equipment is run down and betto crap, or out dated and inefficient. A break even business is reallynot worth buying unless you can add the bought business customersto yours, and send the beat up crapped out equipment to the rmetal ecyclers. Break even locations either start producing, or you simplyhave to close them. For folks expecting to sell a break even at best opportunity to fund your retirement, I have really bad news for you, you are screwed….you have wasted your entire work lives.
But, for the survivors, those who are willing to knuckle down,make hard decisions, demand needed production from staff and de-mand needed money from customers, the future can be bright. Forthose who are willing to take the risk of entering a mature industryand building a viable profitable business that actually works, this is aonce in your lifetime opportunity. Right now, the greatest transfer ofwealth is happening right before our very eyes. The global disruptionfrom trade wars, higher gas prices, higher labor costs, wars betweennations and super powers, is certainly disconcerting and uncomfort-able, but then again, smooth seas do not make for good experiencedsailors. As was said during the Napoleonic war, the best time to getinto business is when blood is literally running in the streets. I believewe have reached bottom, and its time for things to start looking upagain, if we choose to make it so.
Key Takeaways
- Why This Shift Is Happening matters for readers making practical decisions.
- How Local Providers Stand Out matters for readers making practical decisions.
- Way back in junior high school, I had an economics teacher
- that gave a very powerful lesson that changed the course of my life.
