Anthony Elesi

Launching and Sustaining  A Small Business

When my brother and I decided to start a new dry cleaning business, the choice came with fear and uncertainty about the business venture and concern about what a life-changing experience it would be.

Neither of us had worked in the dry cleaning business, except for some training we obtained at a dry cleaner in Frederick, Md.

But we saw an opportunity to open our own business and do something about the high and increasing prices of dry cleaning in the Manchester area.

We knew our lifestyles would change, at least for the two to three years it would take to build and establish New Day Dry Cleaners. We had to put a lot of money into a lease with options for equipment and worker training. We also had to put a lot of money into renting a 4,000-square-foot space on a major street in Manchester.

We chose 223 South Willow St. for its proximity to major shopping and established stores. This has had the positive effect of drawing major traffic for our business.  Our estimation tells us that 65 percent of our customers come from drive-bys; hence the adage, "location, location, location" proves successful for us.

With such financial commitments, gone are the frivolous personal spending habits of dining out two or three times a week, pleasure weekend trips to various cities and states, and other ventures that we spent our money on that we did not really need. A major lifestyle change for me was leaving the comfort of a corporate environment - where I had worked for decades - and going into an unknown.

When I finally made the big jump and started to devote 100 percent of my time to the business, I found that it can be very rewarding, meeting with my customers and getting to know them one-on-one and by first-name basis.

It has been very exciting to be able to build those relationships.

Also, because I am hands-on at the store, along with two of my children, we try to address any legitimate issue or concern our customers may have. That personal touch is an advantage.

Above all else, quality is the key product and branding philosophy that New Day Dry Cleaners wants on customers mind at all times.

From day one, we aggressively priced some services to get people's attention and bring them into the store. A promotion of 99-cents each for business-shirt service brought many customers into the store who had been paying at least two or three times that amount. Business developed, people heard about us, and so we'd made a good start.

New Day does not do a lot of promotions, because our prices are already low for the Manchester area.  We do not believe in gimmickry, where we give people some token percentage off when they spend some amount of money with us.  With our model, all prices are low already.

However, we do targeted promotions for events, such as the one coming up on our third year anniversary, Feb. 17, when all business shirts will be $0.99 and most other items $3.09.  Those are our original prices.

Sometimes with low pricing strategy, people tend to equate that to poor quality. That is a misnomer. Low pricing and high-quality products and services are the core tenets of NDDC's success. Every other strategy is built around them.

Before opening our business, my brother and partner, Peter, and I considered many different business opportunities. Besides other industries, we considered buying an existing dry cleaning business, buying a dry cleaning franchise, or starting a new one.

But our desire to change the dry cleaning landscape in the Manchester area required starting a new business.

Peter and I have decades of corporate experience, and MBA degrees. I have been an Information Technologist in software engineering, software architecture and development, as well as quality assurance expert, project manager and consultant with Raytheon, Computer Science Corp., TJX Corp., Fidelity Investments and others.

I also ran my own consulting business for over 15 years.

Peter's corporate background also includes Fortune companies such as Blue Cross Blue Shield of Massachusetts, Matthew Thornton and Harvard Pilgrim health plans as an   actuarial analyst, financial analyst and health-care financial consultant.

We were apprehensive about going into a totally new venture in an industry that we had no experience in. But we did our due diligence, research and study, which led us to conclude that we could import a business model that already has proven successful in other parts of the country.  We also made some educated assumptions and we tested some of them.  For those that we could not test, we developed elaborate metrics to monitor them.  And we also developed numerous financial, quality control, production and process metrics to track and monitor our progress.  When any metric measurement showed abnormality from our assumptions or expectations, we adjusted our strategies accordingly.

We developed a business model for the local dry-cleaning industry that would give us advantages over our competition, predicated on on-site production that would allow for fast turn-around of the product. It also called for a pre-payment system.

From those initial policies, we built a customer base, keep prices low and virtually eliminate the loss of dry cleaning items. The pre-payment system urges customers to pick up their orders quicker, because they have paid for them already, thus diminishing the need to invest in new conveyors to store a capacity of cleaned items that customers are waiting to pick up, forgotten about, or don't have the money to pay for.

Our customers have gotten used to the pre-pay concept, and many have fallen in love with it, because as they come in, their clothes are ready and waiting before they even step though the door. That's because we have gotten to know our customers by name, and by the cars they drive, so as they are pulling in, we are retrieving their orders.  It allows people on their lunch break to come in and get their clothes quickly, so they can go about their business, or go back to work.

Many customers who had initially wanted to pay when they pick up their order have happily converted to our pre-payment arrangement.

Customer service is reflected in our hours of operation, too. Customers love how late we are open. By opening at 7 a.m. and being open until 7 p.m. Monday through Friday - along with 8 to 4 on Saturdays - our customers can come in early before they go to work, or later in the day on their way from work, or on Saturdays while they do their errands.

We do everything possible in terms of customer relations to make it easy for our customers to come visit us.

As with any new idea, there have been some pitfalls. There was resistance to change, where customers were not comfortable with the pre payment concept or with the idea of breaking loyalties that were developed over a long time, with other businesses. We are all creatures of habit.

And there was the myth that if the prices are low enough, the quality of the work must suffer. Over time, our customers have learned that it is not necessarily true.

We developed our business model with enough flexibility to adjust. Being a non franchised business, we are nimble enough to make quick decisions without waiting for decisions from a corporate office.

With our initial cash-only transactions, we quickly learned that this is a "plastic market" and some customers would rather use credit cards. So we introduced Visa and MasterCard payments. For customers not used to the idea of pre-payment, we introduced a pay-later policy, with prices slightly higher, but still very competitive.

Our original business model had called for "no frill" dry cleaning, with no alteration services, no pick-up and delivery service, and no credit card purchases.  Once we understood the market, our model started to evolve into what it is now.  We have added contract cleaning, such as our contract with the Manchester Police Department. And we are now doing residential and business pick-up and delivery services.

No matter how detailed and specific your business model and plan are, things can change when you start executing. So we kept our options open from the start, with the ability to adjust as conditions warrant.

As market conditions forced New Day Dry Cleaners to adjust and evolve, we saw our silver lining in the form of multiple revenue streams from contract cleaning, residential and office pickup and delivery, and other services we now offer.

The key as we move forward is to watch out for overhead costs.  We do not get into any service where we think our overhead cost will dramatically increase our overall cost projections.

As Ted Turner, founder of CNN said on "Meet the Press" in November, when talking about his founding of CNN, "Christopher Columbus did not know exactly where he was going, how to get there and what to do when he got there."

As with Columbus, he was suggesting that his plans and business models evolved over time and he adjusted to business conditions and was greatly rewarded.

Like Mr. Turner, we at New Day Dry Cleaners made sure we had the basics covered.  We had core principles we wanted to be known for: Quality products and services, inexpensive dry cleaning, timely turnaround (next-day service) and a friendly atmosphere. Everything has been built around those core principles.

Any business needs the capacity to make quick decisions that address any business condition that arises. Without that agility in changing your strategies, you will lose your advantage.

At New Day Dry Cleaners, we learned very quickly what our advantages were and we have made strategic changes along the way to keep those advantages from slipping away.

Without those advantages, NDDC will lose its branding and what we are known for:  Quality, inexpensive pricing, quick turnaround and a friendly atmosphere.

Without those, we will become like any other dry cleaner in town.

Anthony Elesi, who holds a master's degree in business administration and formerly worked in corporate Information Technology for Raytheon, opened New Day Dry Cleaners on South Willow Street in Manchester three years ago. His article takes you through te critical business components of starting a small business as well as the emotional trials and tribulations.

ANSWER:  Your question issue is the first thing we tackled.  First, it helped that we get along very well. We defined our responsibilities up front and the decision making responsibilities as well.

There are decisions we deferred to each other; operational, financial, marketing, advertising etc.  In each area, we decided who is responsible and that person has final say on any decision.  We both would discuss any issue before major decision of any kind, but the final say belongs to the responsible person for the area of interest.  Once decision is made, we both support it 100%.

Given that we are friends also, we did not draw up any lawyerly document, but we have our agreements written in our company's document of understanding, which are enforceable.

I hope I have been of help to you and I which you the best in any endeavor you undertake.

Thanks for writing me.

QUESTION:  What does your organizational chart look like? What are your reporting relationships with you and your partner/brother and how did you determine that?

ANSWER:  It's nice to hear from you.  We are a small company, so there is no organizational chart between my brother/partner and I.  We assigned responsibilities for each area and are responsible for making decisions for those functions; operational, financial, marketing, advertising, vendor and customer relations, etc.  We both discuss all business issues and offer inputs and counter inputs, but the final decision belongs to the person responsible for the issue at hand.  Once decision is made, we both support it 100%.  Needless to say that we get along very well before we both started the business and we used our corporate careers and experiences to determine who is responsible for what.

I hope I answered your question and that my response is of help and thanks for writing me.

Good luck in any endeavor you undertake.

QUESTION: Will you consider franchising down the road? 

ANSWER:  Thank you for your question.  Franchising is something we continue to evaluate and consider for future.  We believe there will come a time we would need to get closer to our customers and that will give rise to franchising opportunities.  For further enquiry on franchising, you can contact NDDC by email at cs@newdaydrycleaners.com.

I hope my response is of help to you.

QUESTION: How did you decide on the dry cleaning industry for starting your business and can you give some specific examples of research you did to support your decision to go into dry cleaning?  Why Manchester?

ANSWER: Our decision to go into dry cleaning was born out of opportunity to address spiraling dry cleaning cost in the Manchester market.  Out of our travels in the mid Atlantic, west coast and southeastern regions of the United States, we discovered the business model we implemented in Manchester; quality dry cleaning at a low pricing.  We conducted survey to determine if people will switch their dry cleaning businesses to us if our prices were low and we maintained high quality.  We also studied thee New Hampshire market and discovered there is no dry cleaning in the area with such model.

We also conducted price research of all major dry cleaners in the greater Manchester and adjoining communities.  Another study we did was demographics; age, income, education levels, potential white collar and blue collar customers.  And we did research on the traffic pattern of South Willow and other major busy streets.  Our decision to bring our business to Manchester was because of our root in the community.  My partner/brother and I did both our bachelors and MBA degrees in the state, and especially, here in Manchester.  We also have family ties here in Manchester and above all, we saw a business opportunity in addressing the high cost of dry cleaning in the Manchester market.

I hope I have answered your questions and that my response will be of help to you.