Jason Phillips of All Pro Linen, Ltd in Burley Idaho has experienced first-hand how disruptive change can be and how rewarding it is to adapt and thrive in a new business model.
Jason was a licensed drug manufacturer, blending chemicals for the dairy industry. He also supplied dairy farmers with needed supplies such as disposable towels and filters. Farmers have to meet stringent hygiene requirements to produce quality milk. The dairy towel is used to clean the cow’s udder before attaching it to the milking equipment. Local farmers used thousands of these towels every day.
By 2001 the dairy industry was undergoing changes that forced many farmers to sell their business or go bankrupt. Farmers began to ask Jason if it was possible to get towels that could be used and washed repeatedly in order to contain costs and to provide a greener solution. He noticed that some dairy farmers purchased their own washers and dryers along with microfiber towels after discontinuing their disposable towel orders.
On top of that, competitors who purchased chemicals by the semi and tanker truck had moved in, forcing prices down and erasing profit margins. To make matters worse, Jason lost the distribution rights to the disposable dairy towel that had been a mainstay of the business. It was time for a change.
He recognized the opportunity to provide savings and a resource conservation solution for the dairy industry. In addition to the fact that farmers wanted to conserve, Jason explains that there is a set amount of profit to be earned from selling disposable paper dairy towels. If a case is damaged or lost, it takes another ten case sales to recover the cost. Reusable textiles offered a better solution.
In 2005 Jason took the plunge and purchased a couple of industrial washers and dryers. All Pro Linen was in business. Jason purchases cotton terry towels designed to survive many wash cycles for ten cents. By closely watching his expenses, Jason is able to wash a dairy towel for slightly more than one cent each. All washes after the first ten are profitable. When washing over 100,000 dairy towels a day, the pennies add up quickly.
Before long, All Pro was also processing the calf coats used to keep calves warm in the winter months. This was another profitable expansion as there may be 10,000 calves at a single facility. He then added dairy coveralls to his growing list of services. Jason says “It wasn’t long before we were washing everything a dairy needs.”
All Pro continued to add more washers and dryers as the business grew and Jason learned to maintain and repair his own equipment which keeps costs down and profits up. Over time he found that he was providing half the dairy towels used in the Magic Valley with still more room for expansion.
Transitioning from selling disposables to renting wasn’t easy at the time. Coming from a non-laundry background, Jason was unaware of many industry best practices and simply invented processes and procedures through trial and error. Keeping track of all the overalls and different employees at each dairy farm was just one of the processes they had to develop. “It’s been a fun road.”
Two years ago Jason and his team moved beyond his dairy farmer customer base to pursue other aspects of a typical, full service rental laundry by offering mats, uniforms, chefwear, hospitality linen and cleaning and restroom supplies. These additions represents a little over 25% of his business but it is growing.
Jason admits that he has a lot to learn about the business. He attended his first Universal Unilink conference in September and, after comparing notes with many long-time IL Members, he was delighted to find that many of the home-grown processes he had invented weren’t far from the standard industry practice.
Jason says that “One thing I learned was the importance of contracts with my customers.” Currently Jason has customers sign an agreement to buy all uniforms purchased if they drop service during the first year; however, he is interested in exploring more traditional contracts. Thankfully, All Pro customer retention is 100% due to superior service so contract enforcement has not been an issue.
Jason’s earlier experience makes him ever mindful of the impact of failing to change as market conditions change. In addition to continuing to expand sales to current customers, he’s actively looking towards the future by exploring other markets while keeping an eye on every aspect of the business process.
Current new category opportunities include school sports uniforms. With two cheerleaders in the family, Jason spends around $800 each annually to purchase required outfits. Just as he found less expensive solutions for the dairy industry, he is focusing on finding alternate uniform solutions that perform as well or better.