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.