Finding Profit Where You Thought There Was None

Most textile rental operators looking to increase profit start in the same place: finding more customers. New business feels like the obvious answer because growth is visible. Add another account, add more weekly revenue, and the business grows. But new accounts can also be one of the most expensive ways to increase profit. There’s time spent prospecting and selling, product to purchase, accounts to set up, and service to begin before that new customer reaches its full potential. Meanwhile, there may already be meaningful profit sitting inside the business you have today.

The problem is that it can be difficult to see. This isn't about working harder, cutting service, or squeezing customers for every dollar. It's about finding the small gaps in a normal textile rental operation where revenue and margin quietly slip away. Find those gaps, and you may be able to improve profitability without adding another customer.

The Account That's Been Underpriced for Years

Almost every operator has them: long-term customers still paying rates that were established years ago and never meaningfully revisited. The customer has been loyal. You don't want to rock the boat. Before long, a price that made sense several years ago is still being charged today. Meanwhile, labor, fuel, utilities, insurance, product, and practically every other cost involved in servicing that account have increased. The real problem isn't simply that some accounts are underpriced. It's knowing which accounts are underpriced and by how much.

When pricing information is difficult to compare across your customer base, it's hard to answer questions like:

• Which customers are still paying older rates?

• Which accounts haven't received an increase recently?

• Are similar customers paying significantly different prices for similar products and service?

• Which accounts are generating enough revenue to justify the level of service they're receiving?

Having customer pricing, products, service frequency, and account history available together gives you an opportunity to identify the accounts where pricing has fallen significantly behind. The goal isn't to automatically increase everyone.

It's to know where the problem actually exists so you can make an informed decision.

The Extras Nobody Is Billing For

Here's another margin leak that can be almost impossible to notice one transaction at a time. A route representative is servicing an account and the customer needs two additional aprons for new employees. The route representative helps them out which is exactly the kind of customer service you want. The aprons get delivered. But does the billing always change with them? Maybe it's extra product. Maybe it's a replacement garment. Maybe a customer increases a quantity or requests something outside their normal service. Each individual adjustment may only represent a few dollars. Multiply those small adjustments across multiple routes, hundreds of stops, and 52 weeks a year, and they can become real money.

The answer isn't telling your route representatives to stop taking care of customers. It's making it easier to document changes when they happen. With MobileRouteManager, route activity and customer changes can be captured at the point of service and brought back into the RouteManager workflow. Instead of relying on handwritten notes, memory, or someone in the office discovering the change later, you have a record of what actually happened at the customer location. Good customer service stays. The difference is that the office has the information it needs to make sure the billing reflects the service being provided.

Service Creep: Doing More for the Same Money

Service creep is the slower version of the same problem. An account started with 40 garments and now has 60. A restaurant originally needed two mats and gradually increased to five. A customer that once received a particular level of service now regularly asks for additional products, special deliveries, or other accommodations. None of this necessarily happens because anyone did something wrong. It happens gradually and that's exactly why it can be so difficult to notice. Over time the amount of product, labor, and service going into an account can increase while the revenue doesn't increase at the same rate. Eventually you're providing considerably more value than you were when the account was originally priced.

The key is visibility. When you can review an account's pricing, products, service structure, and history together, you have a much better opportunity to identify where the relationship has changed. RouteManager keeps the information surrounding the customer account together, making it easier to review what you're servicing and what you're billing. Sometimes the most profitable account isn't the new one you haven't landed yet. It's the existing account you've been servicing for ten years that simply needs to be reviewed.

Inventory You're Replacing But Not Recovering

There's potential profit hiding in your inventory, too. Garments, linens, mats, and other rental products aren't free. When products disappear, get misdelivered, remain assigned incorrectly, or continually require replacement without anyone understanding why, your company absorbs those costs. Again, the problem is often difficult to see because it doesn't arrive as one giant expense labeled LOST INVENTORY. Instead, purchasing runs a little higher. Replacement orders are a little larger. Product life seems a little shorter.

And the cost quietly becomes part of doing business. Better inventory visibility gives you the ability to ask a much more important question:

Where is our product going?

InventoryManager helps connect product information with customer and account activity so operators have greater visibility into the inventory they're responsible for. For operations using barcode or RFID technology, that visibility can become even more detailed. The objective isn't simply to buy less product. It's to understand what you own, where it's going, what isn't coming back, and where losses are occurring. Once you can see those patterns, you can decide what needs to change.

Small Leaks Become Big Numbers

One of the reasons these problems are easy to ignore is that none of them look particularly serious on their own. A few dollars of unbilled product, one account that's slightly underpriced, a garment that disappears, a customer receiving a little more service than they used to. But textile rental is a recurring business. That changes the math, a $10 weekly revenue leak isn't just $10. Over a year, it's $520, across 25 accounts, that's $13,000 and that's only one type of leak. Recurring revenue businesses have an enormous advantage when they're operating efficiently but small recurring mistakes also compound. That's why visibility matters.

The Point Isn't to Squeeze Customers. It's to See Your Business.

Finding hidden profit doesn't mean nickel-and-diming loyal customers or turning your route representatives into accountants. It means understanding what's actually happening inside your operation.

• Which accounts haven't kept pace with your costs?

• Which additional services aren't making it into billing?

• Where has service gradually expanded?

• Where is inventory disappearing?

• Where are you providing value you're simply not getting paid for?

  
  

The operators who find profit they didn't know they had aren't necessarily cutting service or dramatically increasing prices. They're simply operating with better information.

Once you can see the underpriced account, the unbilled extra, the service that has crept beyond the original agreement, and the product that keeps disappearing, you can do something about it. And unlike landing a new customer, improving those areas can put more money on the bottom line using the business you already have.

Textile Technologies has been developing route accounting software specifically for the textile rental industry since 1993. RouteManager and its integrated modules help independent textile rental operators manage customer accounts, routes, billing, inventory, and day-to-day operations with better visibility into what's actually happening across their business. If you'd like to see how RouteManager could help uncover opportunities inside your own operation, schedule a demo and we'll walk you through it.