Recently, Karl Sakas wrote an interesting blog, Stumbling Onto The Millionaire Next Door.
I got a million dollar surprise when I picked up my dry cleaning . . ..Waiting in line to pay $1.79 per shirt, I noticed an unexpected envelope on the counter. The return address had a “Milliman” logo. That wouldn’t mean anything to most people. But from my job at the mutual fund I knew Milliman is an investment firm for institutional investors and high net worth clients. Apparently my dry cleaner was worth several million dollars. You wouldn’t expect the dry cleaner in a strip mall . . . to be a multi millionaire.
However, I was not surprised. In fact, in my first book, Marketing to the Affluent, aka marketing to the millionaire next door, I wrote. . . some of the more profitable types of business organizations . . . [the] wealthy. . . may be found among owners of such organizations as laundries, dry cleaning and garment services. . . .
In the mid 1980s, there were 6,940 partnerships in the laundries, dry cleaning and garment services category; 91.6% had positive net income. Overall the return on receipts equalled 24.1%. More than 20 years later, in 2008, there were 1,597,882 sole proprietorships alone in the “personal and laundry service” business category. Most (82.3%) had positive net income; return on receipts was 39.6%.
One of the top ten myths about becoming a millionaire is the “I’ll become rich if I just open the right business.” There is a lot more to becoming wealthy than merely the selection of a profitble business category. The wealthy dry cleaners with whom I have had contact typically own multiple stores often integrated with an industrial laundry establishment and/or they own other complementary businesses as well. They all have good business sense and are extremely hard workers. And they have to be, given the growing competitive nature of the industry and instability in retailing in general.
4 thoughts on “Dry Cleaners – Richer than their Customers?”
You never can tell by just looking at people if they are rich or not. But why bother about that. Better to just put your energies on how to become rich yourself.
So, sounds like they have a retirement plan for their workers. If he has several shops, the staff would have large combines assets. While I am a firm believer that you shouldn’t judge a book by it’s cover, being too easy a candidate for that myself, it seems you’re confusing their wealth with their corporate cash flow.
Unfortunately our laundry did not make the 83% profitable cut. But we are working on it. I can see the potential. Good article. I need to send this to my husband.
This article is very much out of touch with reality and written by someone who needs to spend at least a month working in a dry cleaners and then we will see what is written on the blog.
A more rounded view i would expect instead of speculation.
Unfortunately dry cleaners as with all retail businesses are now at the bottom of the food chain.
landlords and councils now decide if the owner will take a salary for his enormous efforts and it can all change at some board room table with the stroke of a pen.
Retail is slowly dying by 1000 cuts due to the internet shopping and app culture. This continuous high street and local community shopping demise, allied to spreadsheet driven investors/landlords/councils pushing for higher returns are placing enormous costs on the retail sector without any regard for the local businesses and the local employment these units bring to local communities.
Personally i continually warn young people about the modern perils of retail and encourage them to gain employment wherever they can, far away from the bottom of the food chain.
They can live a more secure family life and have time with their young families when the time arrives.