Cleaning up abroad: Laundry entrepreneurs set their sights on the Middle East

David and Robert Stevens, twin joint MDs of family-run business Paragon Laundry, on why targeting the Middle East is a great business move, and other best and worst decisions.

by Emma De Vita
Last Updated: 09 Oct 2013

OUR BEST DECISIONS

 

Creating partnerships

Paragon has local laundries in Cheltenham, Nottingham, Yeovil, Ross, Newport and Kington, and we now have 40% of market share in our geographical area and a best decision was to set up, with two other laundry businesses, a national sister company, Brilliant Laundry, in 2005.

Knowing when to pull out

Expanding the business enabled us to tender nationwide business by partnering with other laundries. It also enabled us to go to hotel chains such as Travelodge, Hilton and De Vere to do all their laundry. We then got approached by a corporate customer who was looking for a laundry partner in Beirut.

In the end, we had to exit as it was too dangerous but we won a contract to run a laundry in Doha, which opened in 2010.

Targeting the Middle East

The one thing the Middle East has is money and the one thing we haven't got is loads of cash. We now operate laundries in Dubai, we're building a brand-new laundry in Abu Dhabi and we have projects in Saudi Arabia and Bahrain. In three years they will overtake Paragon in profit. Setting up in the Middle East is one of our proudest achievements.

 

OUR WORST DECISIONS

 

Putting too much emphasis on price

Almost at the same time as forming Brilliant, laundry was becoming commoditised in the UK and our worst decision was to focus on price too early. We became just another player; what we should have done is engage with hotels and ask them what extras they are looking for - the approach we've taken in the Middle East.

We didn't differentiate product early enough and it's taken us a long time to do that. Fifty per cent of UK laundries have gone bust or exited in the past 10 years, and it's down to the leanest and meanest operators now.

Letting finance problems build up

We had cash-flow issues in 2006 - everybody was fighting and there was overcapacity. We had a really tough year and while the banks were talking to us, we had to change. We took significant cost out and emerged healthier and meaner. We should have done that in 2003. If you do it before you have to, you do it better.

In 95% of situations, a joint MD would be a disaster because you would argue about who is in control. Being twins, we can argue but we can never fall out.

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