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TRSA's 5-Year Plan for How to Enter the Eighties 
Managing a business is like piloting a ship. Often, it's a lonely task through uncharted waters. Of course, knowing where you want to go and having a map to get there makes the job of managing a business or piloting a ship much easier. But, the planning task is not easy. The planning process requires a lot of skills that somehow must emerge over and above those necessary to run the day-to-day operations of a business. A long-range plan, just as a correctly charted course, makes your business operation and your trip a lot smoother. TRSA has called in the chart makers -- a lot of talent -- which members can use in plotting their solo courses in the '80s. Long-range planning for the textile rental industry and TRSA began at the Board of Directors' meeting last May in Washington, D.C. At that time, the board recommended that the next Executive Committee meeting be held jointly with the TRSA staff to develop a five-year plan for TRSA. The purpose of this five-year plan was to preview five years ahead to determine where the industry and the association would want to be and to determine what must be done to achieve such Objectives. TRSA began with informal staff sessions early in the summer to develop the appropriate background for the Executive Committee meeting. After coming to grips with terminology, the staff groped its way individually to some information and analysis about the industry and the association. The TRSA staff went on a two-day retreat in July to meld its ideas together. In August, the Executive Committee met with the TRSA staff and, under the direction of consultant Robert Swift, the group took all of the parts and pieces and developed a cohesive five-year plan. The plan developed first with an analysis of the current situation — about the industry and about the markets for textile rental services. Then a thorough situation analysis was done about the current and expected economic, political, social, cultural, technological, and industrial environment. Next, industry and association strengths and weaknesses were analyzed, industry and association problems and opportunities were identified. Finally, the TRSA Executive Committee submitted a series of long-range (five-year) objectives together with a recommendation of priorities on each listed objective. The TRSA Board of Directors, at its fall meeting, thoroughly reviewed the TRSA Five-Year Plan, modified some of the conclusions and approved the plan's objectives and priorities. The result? — the document which follows. Most sections begin with the detailed background information supplied by the TRSA staff, followed by a summary prepared by the TRSA Executive Committee and the final objectives on page 66. TRSA's first Five-Year Plan for the industry and for the association is neither complete nor final —no long-range plan can ever be. Rather, it is considered a guide for future action and will be subject to critical yearly review and change. Copies of the long-range objectives and priorities have been turned over to TRSA Committees and task Forces for the development of action plans to meet association objectives. INDUSTRY MARKETS TRSA Staff Analysis INDUSTRY SALES —GROWTH OR NO GROWTH? A look at industry growth is often based on the theory that an industry can grow as fast as its customers grow. TRSA staff has looked into the growth of many important markets which our industry serves and, later, some comments will be made about each of the major markets served by the industry: restaurants; hotels and motels; health care; and, industrial garments.  The key markets which our industry serves have been growing rather dramatically in the past five or so years. The dollar volume of restaurants, adjusted for inflation, is up 25 per cent. In the hotel/motel field, lodging rooms are up six per cent and occupancy is at an all-time high level. The number of employees working in industry has increased by over 20 per cent in the last 10 years. It has also been estimated that the number of workers wearing uniforms has doubled. During this same period, some individual textile rental service companies have grown, some rather dramatically. It is not uncommon to have individual companies showing growth rates of 15, 20, 25 per cent or more per year. But, in total, the textile rental service industry has remained essentially static. In 1939, sales volume for the linen supply industry was approximately $95 million annually. When compared with the estimated sales volume of $1.4 billion for linen supply alone, the linen supply industry has shown a growth of 1,500 per cent. Our latest Business Growth Survey shows that, for the year ended 1978, sales volume increased 8.6 per cent over 1977. This information is based on reports received from 226 plants, accounting for approximately one-third of industry revenues. For the six-month period ending Dec.31, 1978, compared with the same period one year prior, the sales increase was 8.1 per cent. However, when comparing the number of pieces rented annually, little "real" growth is found except in pants, shirts, napkins, tablecloths, wiping cloths, and dust collection mats. Data made available in August 1979, by the firm, Energy & Environmental Analysis, Inc. of Arlington, Va., (the contractor hired by the Environmental Protection Agency to do the economic impact analysis of waste water effluent limitations for our industry), also suggests static growth for the industry. When adjusted for inflation, the industrial laundering and linen supply industry appears to show a moderate decline in adjusted receipts from 1972 to 1976. Opportunity for new business abounds. Customers of the textile rental service industry have grown rapidly. Yet, the textile rental service industry's share of its customers' textile rental needs is declining, as the industry's volume remains flat. Research conducted by one TRSA associate member shows that about 35 per cent of all lodging accounts today do all or a portion of their laundering on their premises. That's about 4,700,000,000 pounds of work per year. In the health care field — hospitals and nursing homes -- about 30 per cent do their work on-premise. This equals another four billion pounds of laundry work per year. Even free-standing restaurants are switching to on-premise laundering of their linen and garments, with about 20 per cent of these establishments doing their own laundry work in on-premise laundering equipment today. In the industrial garment field, a recent trade journal article suggested that there might be as many as 17 million uniforms being purchased for industrial jobs, and being washed at home. A detailed look, industry by industry, shows changes in our customers: The Restaurant Industry  The restaurant industry continues to grow, and that portion which is traditionally called "white tablecloth restaurants" or "full-service restaurants" appears to be now leading that growth. More women are working; there is an increasing number of adults in the over-30 age bracket; and, there is a narrowing gap between the price of eating at home and eating out. People have more money to spend than ever before, despite the problems of inflation.
In 1979, close to 20 per cent of all meals and snacks will be consumed outside the home. People who can no longer afford both dinner and a movie want to spend the entire evening eating and drinking. Diners are much more critical of restaurant ambience and even some of the fast food chains are experimenting with the sales of liquor and the transition to sit-down dining. All of this adds up to potential sales for those suppliers of quality napery and quality service. Health Care The American health care industry faces a future of budget cuts and cost containment pressures, either voluntary or federally imposed. The President has asked for a mandatory cap on hospital expenditures. The health care industry is actively seeking out suppliers who can assist it in meeting budget objectives. For the linen supplier who is dedicated to quality service and who can make the long-term commitment in terms of dollars as well as effort, the growth potential is great. Hotel and Motels The long-term outlook for hotels and motels is bright, following the best year ever in that industry. Although severe problems (such as energy) face lodging managers everywhere, a bright spot for linen suppliers is the continuing necessity for hotels and motels to upgrade their dining facilities. The lodging industry continues to upgrade its dining facilities, especially in the motel chains where it is now common to find theme restaurants complete with lighted candles and cloth napery. Industrial Garment Market Probably no greater potential exists for the textile rental service supplier than the so-called industrial garment market. The range of potential — from career apparel to coveralls — is mind-boggling. Many problem areas still exist. The U.S. work force is now fully 50 per cent female, and all of the problems inherent in providing quality service for this market have not been solved. These problem areas will be resolved, however, and for those textile rental suppliers who are interested and dedicated, this market has a wide-open potential. ENVIRONMENTAL ANALYSIS TRSA Staff Analysis ECONOMIC Continuing inflation at a high rate will result in the higher costs of operation in labor, merchandise, supplies, and money. Profit will be squeezed unless prices keep up with inflation or members develop more efficient operations. Money supply and interest rates will fluctuate as government and monetary policies try to cope with inflation. Unemployment will also fluctuate, but not critically. Oil is likely to be increasingly short in supply and prices will definitely skyrocket. The only uncertainty is by how much. Spot shortages will appear. Alternative energy sources such as nuclear, coal, hydro, and solar energy are still some time away to be feasible. Some companies may build more storage tanks and stockpile their own fuel supply. Labor — More and more labor will switch from blue to white collar. More women in the work force, better educated, more career minded, will require more benefits to offset high inflation. An increasing trend of unionization will require companies to deal more in good faith with unions in collective bargaining to avert strikes. Examples are in the trucking industry, steel workers, automobile workers, airline industry, etc. Because "good people" are a rare asset, industries will take an aggressive approach to capture them. Some companies will hire large numbers of unproven potentials, hoping the fast-track one will show up; others will pay premium to bring in sure bets. Competition for high-power managers will continue to be keen. More people are better educated than ever. More serious students are interested in getting a good job with a diploma and have higher expectations as to career, goals, and reward. Expect less loyalty and fewer company men; employees will want what is in it for them now, not 30 years later. POLITICAL The Political Environment will remain stable, but expect to see more and more pressure from consumer interest groups and more environmental issues — the clean life syndrome. More private industries are looking for leadership of trade associations in government relationships. Government regulatory agencies are looking to trade associations for data input. SOCIAL/CULTURAL Everyone wants more leisure time, more pay, more recreation. Life styles are changing — more people eat out more. Demand for consumer goods will continue to be strong. Although there will be some compromise due to inflation and high fuel costs, people are still chasing the American dream. The cost of hospitalization and health care will become more and more unreachable to the common household. Government will try desperately to put a lid on the cost of health care; anticipate more mandatory government control. Big push for national health insurance programs. Health maintenance organizations are yet to be developed, but the prospect may be good. Population growth steady — no baby boom, but there will be more old people, more nursing homes. TECHNOLOGY Look for another technology boom because labor cost is prohibitive, fuel supply is getting scarce and expensive, and there is a decreasing supply of skilled blue collar workers. All that leads to necessity of automation. The result is higher capital investment because less dependence on manual labor will require more versatile managers in the capacity of system analyzers. Industrial engineers will be needed with knowledge of man/machine systems coupling. Two critical elements are to develop the kind of technology that will replace expensive manpower and maximize usage of capital equipment. INDUSTRY ENVIRONMENT Further consolidation of small companies swallowed up by the bigs. As a result, existing companies get bigger and bigger, while the total number of companies begins to shrink. Greater demand for government representation by businessmen. Maturing industry facing onslaught of paper disposables and on-premise laundries. Survival depends on shifting the emphasis to other growth markets such as health care, industrial, restaurants, and woman's market, diversification into direct sales of disposables and garments. Greater demand for automation and fuel efficiency. Continuing problem of lack of qualified middle and upper management. Great need for education programs to develop capable personnel from within. Continuing problem of lack of image for the industry, unattractive to college graduates who are prepared for a "Fortune 500" company. Critical for members to develop an integrated personnel program of internal development of personnel to move into management as well as bringing in fresh blood a little at a time to shake up the dead wood. The key is to maintain consistency through internal development without running the risk of being stale. LONG-RANGE PROJECTIONS & IMPLICATIONS FOR THE INDUSTRY TRSA Staff Analysis ECONOMIC Continued moderate economic expansion in 1979/ 1980. Perhaps even a recessionary period extending from the last half of 1979 into the first or second quarter of 1980 as the current Administration continues fiscal policies to fight expected double-digit inflation. As a result, there will be lower demand for automobiles, homes, and major appliances. Yet, at the same time there will be moderately increasing capital expenditures by business. The years 1980 and 1981 may be a time for great opportunity and expansion for those member companies operating their businesses in a proper management manner and at a profit. These will continue to be critical years in terms of management competence and corporate survival. How well a company performs may be almost directly related to the ability of management to cope with these changing economic times. Conditions are still unsettled and no one can predict with any degree of certainty how deep or how long a current recessionary period will last. Also, "all bets are off' if there is another major Mid-East confrontation, or if the current oil supply is interrupted for any major period of time. Implications are that textile rental company managers should not make any major changes which, if programs are not successful, would create a problem severe enough to cause the demise of the company, (i.e., an expansion beyond current cash flow to cover current payments, etc.). However, for most managers who know what to do and then do it, the 1980-1981 period could be some of the most rewarding years in our industry's history. 1982-1985 could, in fact, be explosive growth years, but it is too early to predict with accuracy just how much and how fast growth will occur. POLITICAL Continued United States political stability, with a very real trend towards increasing political and fiscal conservatism, (balance the federal budget, etc.). Continued present Administration emphasis on fighting inflation on a voluntary basis, aided by the Federal Reserve. Attempts will be made to implement a national energy policy, but it is expected that little political action will result. Expect higher costs for energy as a result of interacting market forces and speculative increases. Continued overall energy shortages. Expected federal and/or state regulations (but not a total United States rationing program). Greater emphasis will be placed on regulatory agency action to contain health care costs. Expect EPA action on waste water regulations, with special emphasis towards industrial effluent. This may result in some possible local plant closings and higher membership operating costs. More emphasis will be placed on the problem of tax exemptions of hospital co-op laundries, and TRSA should be prepared to meet this challenge regularly in the next five years. Less regulatory agency action is expected on such issues as OSHA, CPSC, etc. There may be a lessening of air pollution requirements when they are found to be in direct conflict with energy needs. SOCIAL Greater numbers of women who work will decrease family size and increase needs for services of all types. There can be expected to be an increase in garment rentals for working women if proper garments are provided by the industry. Higher energy costs will increase the attractiveness of local travel. Weekend round trips, with a probable range of one tank of gasoline, will probably come to be the norm. This should not affect total hotel/motel occupancy but some non-resort properties located on interstate highways may suffer. There can be an expected increased use of public transportation (trains, buses, etc.). CULTURAL An older, more affluent population will increase its demand for all services, especially health care. Rising income levels will expand our existing business volume, especially in our service to the restaurant and health care fields. Expect, too, a rising demand for uniforms for employee identification as problems of security increase. You can expect a continuing liberal demand in the United States towards greater protection of human rights. The expected "softness" on the criminal element may result in increased levels of crime. Also, increasing levels of teenagers, especially teenaged blacks, are also expected to provide social unrest. ENVIRONMENTAL ANALYSIS The external environmental constraints will continue to be:
Less well-documented than these three external environmentel constraints are the less-publicized demographic changes which are occurring in America. These changes offer many opportunities for companies to develop new services, especially for increased quality service for the more affluent younger generation which considers eating out as part of the "good life"; better health care for the aging population; and, a better level of quality garment service, especially for women working in industry. Long-range business planners are looking carefully at the changes now occurring in the age levels of the population; income levels; educational levels; and, sexual life styles. There is no excuse for the failure of top management to examine the changes in society that will necessitate basic reorientation in product and service selection, design, and marketing strategy. All business firms must consider what it will take to meet the new demographic challenge. THE DEMOGRAPHIC STATISTICS Cultural lag leads people to think that today's market is more or less the same as yesterday's, and that tomorrow's will be only slightly different. But, see what the demographers are saying, and notice that most of their forecasts are based on events that have already occurred — like the post-World War II baby boom and the recent collapse in the birth rate. Here are some of the expected demographic changes:
SITUATION ANALYSIS STRENGTHS/ WEAKN ESSES TRSA Staff Analysis Recently, John Contney, TRSA executive director, prepared a forecast of what he sees as pluses and minuses for the next two to three years in the industry. The pluses he sees are as follows:
The minuses that Contney sees for the industry are as follows:
Contney's summary is that he believes the textile rental service industry is headed for greater expansion and profits in the next two to three years than ever before. The prediction, of course, is based on the assumption that there will be no major turndown in the economy, although a lessening of growth in the 1980-1981 period can be expected. Executive Committee Summary INDUSTRY STRENGTHS
INDUSTRY WEAKNESSES
TRSA STRENGTHS
TRSA WEAKNESSES
PROBLEMS/OPPORTUNITIES Executive Committee Summary PROBLEMS
OPPORTUNITIES Markets for our industry's services exist and continue to grow. (Note: Customers are demanding higher quality and service in all market areas.)
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