What’s Not in the Franchise Toolkit Is The Key To Your Success

One of the alluring features of a investing in a franchise is that it is a tool box. The details associated with starting a business have already been taken care of. Your tool box includes trademarks, access to established products,  proven marketing and sales methodology, (methodology being the key word here), defined equipment, inventory, and of course the  operating manual. The missing ingredient is someone to make it work and what makes business work is marketing and sales.

One of the misperceptions of franchising is the thought that all that one has to do is build it and they will come.  In my conversations with potential franchise buyers, I sometimes hear, “I want to own my own business; however, I don’t want to sell. I want a franchise where the customers to come to me.”

Owning a franchise or any business is all about marketing and sales. Even before buying the business you are engaged in marketing and sales.  You have to sell the franchisor on the fact that you will be a good steward of its brand, you have to sell the bank on your ability to successfully run the business and repay the loan, and when the doors of your business open, you have market your business to bring in the customers and then sell your customers on buying your products and services verse going to your competitor.

The franchise tool box provides a leg up over starting a business from scratch, however, if you’re not prepared to market and sell, than your business  – franchise or not –  is doomed from the start and you’re really not ready to start a business on your own.

Embracing Marketing and Sales

I have a technical background, I studied electronics and my early roles consisted of fixing broken stuff, no sales skills required. The first company I worked for in a customer facing role in which my responsibilities included selling, I dreaded the thought, my vision of sales largely consisted of the typical “Used Car Salesman” stereotype. Luckily, I had a CEO that helped me understand and get really comfortable with marketing and sales. The first thing he told me is “Sales is essential to leadership.  If you can’t sell the bank on your idea, you’ll never get money, if you can’t sell your employees on your mission you’ll never have loyalty and if you can’t sell your customers on your ‘why’ you won’t have a business for long.”   He said “Rich, you have to be passionate about what you offer…you have to believe.” Then he presented me a great analogy that made marketing and sales click for me. He told me, “Marketing and sales is the same as fishing. In order to be a great fisherman you have to first know what type of fish you want to catch, then you have to get to know everything you can about the fish. What attracts them, what time of day are they hungry, what scares them.  When you know these things you pick the right tools, location, and time and start fishing.” “Marketing is all the things you do to get the fish on the hook and sales”, he said “is the execution of actually getting the fish in the boat.”

Marketing and sales go hand and hand. Without marketing you do not have prospects or leads, but yet without a good sales practices your closing rate may be depressing.

Today marketing and sales skills are more important and more relevant  than ever before. For every business pursuing success, there are dozens of competitors, both down the block and across the world and they are all fighting for the same portion of the consumers dollar.  Today’s customers are much more demanding, educated and informed. The internet brings information about products and services to our fingertips. In addition, the internet also brings consumer feedback about those products and services. As a result, consumers have choices about who they want to do business with and your ability to reach and attract those customers are essential to your success.

As a franchisee your marketing activities include identifying customers in your market, advertising your products and services to raise awareness and build the brand. The typical goal of marketing is to generate interest and create leads or prospects. Inc. Magazine offers some excellent tips for marketing success:

• Know what you want to achieve before spending a penny
• Know your audience demographics and psychographics
• Don’t try to be an expert at everything
• Not every customer is worth keeping
• Getting a new customer is five times more expensive than retaining a current customer
• Select a “media mix” for success
• Learn from each campaign

Today, marketing is more important than ever. Your competition is not only down the block or around the corner, its online. Marketing requires a strategic mix of marketing methods tailored to your customers buying behaviors and takes into account a number of key elements, including competition, audience, message, and budget.

Small business marketing is both art and science. Done well marketing will bring the right prospect at the right time with the right need to your business.

Sales is focused on converting those prospects to leads to paying customers. Sales is about building relationships with customers solve there problem and you will generate repeat business as well as referrals. Try and sell them something that they don’t need, or doesn’t work as it may cost you – not just that customer but potentially future customers as well.  Remember one “Oh Shit = 10 “atta boys”

According to Forbes Magazine here are three powerful skills you need to succeed in sales:

1. Listening sincerely and without an agenda. The buying process is not about you and your wants and needs, it is about the customer. Too many of us come to the sales table with our own agenda. We are sometimes too busy thinking about quotas, promotions and commissions. It’s not about us, it’s about the wants, needs and expectations of the prospective buyer.

A sales person with an agenda tends to push too hard and often doesn’t listen well. Leave your agenda at home. Sincerely focus on your customer and how your product can best serve their hopes, dreams and goals. Zig Ziglar said it best, “You can have everything in life that you want if you just give enough other people what they want.”

1. Don’t talk someone into something, allow them to make their own buying decision. Doing what is right for everyone involved is the ethical thing to do. I’m reminded of a phrase from Dale Carnegie’s book, How To Win Friends and Influence People, “A man convinced against his will is of the same opinion still.”

Your role in the sales process is to present your product in a clear, concise and truthful manner—with integrity. The best customer is the customer who can make an educated decision based on what is best for them. A loyal customer is an educated customer. You are not in the convincing business, you are in the sharing business. Your job is to ethically offer the product, service or idea, explain the benefits and answer questions. Your customer or client will then make a buying decision based on the information they’ve been given. Making the sale is about asking questions, answering questions and building a trustworthy win-win relationship.

1. You can serve your client/customer best by finding out what they want, need and expect from what you are offering. Sometimes, we are so excited to share everything we know about what we’re offering that we forget it‘s about your potential customer’s expectations. What is important to you may not be important to them.

Sales is not convincing someone to buy something they don’t want. Sales is understanding the customer pain and delivering a solution. Understanding where your product or service fits in the consumer’s budget and also understanding the customer’s spending pattern and decision cycle.

Understanding How Consumers Spend 

As the franchisee it’s your job to go out in your community and learn what your target market consumers need or want, why consumers make the purchases that they make, and what factors influence consumer purchases.

You also must be aware that your consumers have a limited budget and choose carefully how they spend their money.

According to the U.S. Bureau of Labor Statistics, the average American family divides their budget in the following way:

What’s left over is what you are directly and indirectly competing for. Your competition is not only other companies that sell similar products and services, but businesses that appeal to the customers discretionary dollars. Today consumers are bombarded with an endless selection of products and services, making a good purchase decision isn’t easy.

It is incredibly important for you to understand and study the sales cycle and consumer’s behavior in order to attract and retain customers. Understanding the thought process buyers go through is key to effective marketing and sales.

Consumer Buying Behavior

Buyers will typically go through various stages to make the decision to purchase. Of course, depending on the purchase, the following stages will occur in varying degrees.

• Awareness
• Research
• Options
• Decision
• Post Purchase  (Buyers Remorse?)

The Missing Tool in Franchise Success Is You!

As a franchise owner you have to go into your start up either with these skills or be willing to learn and embrace them. The buck (literally) begins and ends with you.

Now you may be thinking, “Well, I’ll just hire a great sales team.” You can hire as many employees as you want, but know that every employee is involved in sales and marketing at varying points in the consumers buying cycle and they will look for your leadership and follow your example in how they engage with customers.  If you do not  learn and embrace excellence in marketing and sales, neither will they.

Franchisors have the tool box…ONLY YOU can make your business succeed.

Sources:

U.S. Bureau of Labor Statistics

Forbes Magazine – http://www.forbes.com/sites/womensmedia/2011/08/22/3-powerful-skills-you-must-have-to-succeed-in-sales/

Inc. Magazine – http://www.inc.com/articles/2000/03/17917.html

Before getting into why franchising is a good choice for veterans, let’s talk about why franchising is a good choice in general. Franchising is system for delivering consistently high quality and uniform methods of preparation. It provides an already proven product a brand name and a complete methodology for bringing a product to market. That is what Ray Kroc did at McDonalds and Ray DeLuca did at Subway and why franchising is a successful business model.

The methodology enables franchise systems to offer shorter start-up time, a built in support network, pre-established guidelines for the “back office” procedures which are generally the most challenging part of starting a business for most people. In order for a franchise system to flourish all this information about the “system” is  tediously researched, tested, and documented in an Operating Manual.

The other important trait for success in franchising is the ability to be a team member as well as a leader.  To achieve your goals you have to lead your business, your employees, your community as well as be a team mate to the franchisees that precede you and the ones who follow you.

So, what abilities and character traits do veterans possess that make them excellent franchisees and why should franchisors proactively seek out veterans as franchisees and business partners?

According to Defense Dept. 2005 White Paper Who is Volunteering for Today’s Military “…each year, about 180,000 young Americans enlist for active duty in the Armed Forces. Over 90% have a high school diploma, compared to 70% of their civilian peers, 66% are drawn from the top half of America in math and verbal aptitudes ,a strong determinate of training success and job performance.”

The military is much like a franchise in that it requires commitment, provides a structure, a standard operating procedure (SOP) and is a community.  In the military every aspect of training; how to walk, talk, dress, the training in a military occupational specialty (MOS) includes operations instruction. Everything from how to cook a potato to how to fly an F-18 fighter jet is delivered in an “Operating Manual”. Veterans are trained throughout their career in the discipline of following “Standard Operating Procedures” (SOP) to execute assignments and to solve problems. SOP’s are a source of familiarity for veterans and alleviates the “I don’t know what I don’t know“ questions of operating a business which mitigates some of the risks of investing in franchising.

An operations manual does not guarantee the business will not have its “hiccups”. The veterans training and abilities to overcome, adapt, improvise and not to let setbacks deter their focus on the mission is one of the many traits of every veteran.

Other essential traits include leadership and teamwork. Teamwork begins day one in the military. Veterans learn very quickly the ramifications of their actions to the others on their team. There’s one day, when I was in boot camp, which I can assure you was many moons ago, that is still fresh in my memory. It was a muggy, late October day in Paris Island, SC and we were standing our first company inspection on the parade ground.  We must have been standing there for at least a couple of hours as we were the last platoon in the company to be inspected.  The sand fleas were out in force that day and all of a sudden just as the Company Commander was walking our way, I heard a loud slap. One of the guys had slapped and killed a sand flea that had landed on his neck. Everyone heard it, it seemed to echo across the parade grounds. The Company Commander and a Drill Instructor did a bee line for the guy who had murdered one of their sand fleas and the entire platoon spent the rest of the day digging a six by six grave with one Marine Corp issue 24” Tri-Fold Shovel. Lesson learned: If one team member messes up, all will suffer the pain and consequences.  As you can imagine this lesson carries greater ramifications downrange, in combat.

When it comes to leadership, every young man and woman are given opportunities to take on tremendous responsibilities beginning in boot camp and throughout their military career. Whether its planning a mission, leading an infantry team into a fire fight or managing a team to ensure the flight readiness of a multimillion dollar aircraft, tank or planning logistics to move a battalion from one place to another. These assignments hone both management capabilities and teamwork are transferable and essential skills in preparation for success in any endeavor in or out of the military.

I have spoken with thousands of veterans and it surprises me that many veterans think franchising is all fast food and are surprised to find there are franchise opportunities across seventy-five industries. Everything from security, printing, painting, financial services, healthcare, early childhood education and many, many more.  My company Veteran Franchise Advisers (VFA) provides free financial assessment, franchise education, and skills assessment for veterans and their families to match them with franchise opportunities that fit their finances, lifestyle and goals. We coach veterans throughout  the franchise search and acquisition process and connect them with financing, legal, accounting, and business planning resources near to help prepare them to start their own business.

An excellent example of how VFA helps veteran achieve success in selecting a franchise are the Campbell’s. Terry and Debbie came to me in April of 2011. Terry was a career Army Armor officer.  He retired as a Lieutenant Colonel after 20 years of service.  During his career he commanded a tank company and cavalry troop; served on the military science staff at LSU; served as the US Exchange officer to the Australian Armour Centre; fought in Desert Storm as a tank battalion executive officer and ended his career as a Staff Group Leader at the Combined Arms and Services Staff School (CAS3) at Fort Leavenworth, KS. Debbie was a realtor. Terry tried his hand at insurance sales but became disenchanted with the company and left after six months to take a job as the human resource manager for a small family owned lumber and hardwood flooring company.  His prior experience with insurance sales helped him enormously with the benefits side of HR and his military experience provided him with the skills necessary to handle safety, training, organizational development and employee relations.  Eight years after he started work with the lumber company, the owners sold the company.  Under the new ownership the company began to grow rapidly.  In one acquisition the company doubled in size and expanded its geographical footprint from one state to four.  While it was an exciting time, eventually Terry decided it was in his best interest to gain more control over his future.   After five years with the new company he left to start his own business.

Terry and Debbie bought their Liquid Capital franchise in November of 2011.  Clients are critical to their success, so their clients take priority, but at this juncture most of their time is spent networking to find the clients they need to succeed. In a recent follow up with the couple, I asked why they thought veterans make good franchisees and why they choose the particular franchise they said, ”Veterans bring a level of determination and will to succeed that is more prevalent than in the general population.  I don’t know if such folks are drawn to the military to begin with or if the training we get develops the confidence to adapt and overcome, but, either way my experience in both the military and civilian worlds leads me to believe this is one characteristic that more veterans have than their civilian counterparts. The founders of  the franchise and the other franchisees have similar values to those that veterans acquire through their service.  I don’t know how many, if any, are veterans but the level of integrity and camaraderie is far beyond what I have experienced outside of the military community”

I also asked them to share with me a recent success “Most recently we helped a young entrepreneur meet financial obligations and pay off debt by providing steady reliable cash flow for his accounts receivable.  Because of his billing cycle, he often had to meet two payrolls before being paid for his services.  Our purchase of his accounts receivable enables him to not only meet payroll but also afforded him the opportunity to pay down debt.” Said Debbie.

I then asked how VFA helped them and Terry said “Rich listened, learned what makes us tick and what would be a good fit for us.  He found several good franchises whose cultures fit us then gave us the room to figure out what would work best for us.  They never pushed and always learned from each encounter we had with a franchise as to what it was that would excite us in a franchise relationship.  He refined his search based on what he learned and each succeeding franchise came closer to meeting what we were looking for.”

My final question to the couple was what advice they had for veterans thinking about franchising. Terry responded with “One of the advantages a franchisee has is he is encouraged to talk with as many current and former franchisees as possible and check out the claims in the franchise disclosure document (a good franchise broker such as Veteran Franchise Centers can help here).  It is called due diligence.  You owe it to yourself to learn as much about the franchise, both good and bad, by calling current and former franchisees is a good way to learn as much as possible.  It is also critical to find good professional advisers such as attorneys or accountants and engage with them early on in your search.  They can help you establish the true cost of getting started and help ask the right kinds of questions. You also need to know the market in which you are planning on serving. Make sure you  set yourself up for success by ensuring your market will support the type of franchise your are looking to open.”

It is without question that veterans make great franchisees. One of the challenges for veterans coming out of the service is they don’t know what they don’t know.  For example, Many veterans are unaware they can use their Thrift Savings Plan (TSP) or 401K  to start a business.  Many don’t know that there are franchises investments that start at around $10,000 and that there are loan programs that will loan up to $150,000 with 10% down.

Franchising can be an exciting journey of independent ownership, while still having the support and structure of a proven business model. With its rapid training, proven systems and need for operational excellence franchising may be an excellent career path.

If you are a veteran and thinking about starting a business, franchising is an option worth exploring.

Transitioning from military to civilian life presents new opportunities as well as challenges for veterans. Many veterans look forward to life after the military, and at the same time, have a lot of unanswered questions. “What am I going to do with this new phase of life? Will I be able to find a job? How can I start my own business?”

Over the next 4 – 5 years more than a million troops are returning home with these questions in mind. Franchise businesses are looking to recruit veterans into small business ownership because veterans make great franchisees.  Unfortunately, many veterans interested in starting a business don’t know about the variety of industries, investment levels or understand how well their skill sets are transferable to franchise business ownership.  In my conversations with hundreds of veterans over the last few years, most are only aware of the major food franchises.  Many I’ve spoken with, that are interested in entrepreneurship, were surprised to find there are franchises available in their field of interest.

Transition time is the perfect opportunity to explore franchise ownership and answer the questions you may have about your ability to own your own business. Knowledge is the key to mitigating investment risk and may make all the difference in your decision and selection process.

Why Consider Franchising

The continual growth of franchising and its impact on the GDP is really remarkable. (see infographic.) There is no question that owning a franchise as opposed to “going it alone” is a smart way to go into business. The amount of time and money that is saved by choosing a system that has a proven success rate, marketing, known brand, and support at setup and throughout the lifecycle are just a few of the components why franchising is popular. People want to be in business for themselves, not by themselves.

One of the greatest advantages of investing in a franchise over building a business from scratch is the ability to leverage your investment. While some banks will still loan funds to a qualified individual to start a business, The hurdles to actually getting funded are significant.  With the state of the industry, you now have to provide not only more but a higher quality of information to the lenders to improve your chance of getting a loan. Thinking about applying for a grant? Veteran or not ,the federal government does NOT provide grants for starting and expanding a business.

When investing in a franchise, the loan process is easier.  Franchise companies have a track record of other business owners who have run this type of business successfully.  In addition, franchisors usually have relationships with lenders and will help their franchise prospects apply for and obtain funding.  A franchise broker can also give you access to lending information, companies that they recommend and would (or maybe have) used, giving you direct access to companies and contacts that know the benefits of franchising and helping your chances of getting the loan to start your business.

 Using a Guide on Your Franchise Quest

Abraham Lincoln said “a man who represents himself has a fool for a client”.  The reasons behind this are simple, it is difficult to be objective when representing oneself in any capacity that is equal parts emotional and analytical.

Unfortunately, when considering franchise ownership many try to go it alone and don’t leverage the expertise and resources available to them. When you buy a house, you consult a real estate agent, when you go to court, you consult an attorney, when you have a tooth ache you see a dentist – why would you try and buy a franchise without consulting a franchise adviser? Buying a franchise is a major investment and an endeavor in which you should work with someone who’s familiar with the industry, has specialized expertise and understands the process of franchise acquisition as well have access to resources that may help you make the right decision in selecting your franchise.

Of course you can use the internet to find the franchise of your dreams, or can you? Today, there are more than 3,000 franchises in 75 different industries. When you Google “franchise opportunities,” you’ll find a staggering 36,800,000 results. If you were to spend one minute looking at each opportunity it would take nearly 70 years.

Finding the “Right” Business for You

Even if you manage to narrow down the franchise opportunities that you think are interesting and fit your goals, how do you know which is right for you? As I mentioned earlier, deciding to go into business is both an emotional an intellectual decision. You need to ask yourself some hard questions which are critical if you are to succeed.

• Are you a business builder? Or a business worker?
• Are you seeking a business to replace a job?
• How long before you need to generate positive cash flow?
• Do you have adequate finances and capital to invest into a business?
• Does your spouse or partner approve of owning a business?
• Does owning a business outside of your current skill-sets concern you?
• Do you work well in team environments?
• Are you comfortable selling?

These are just the tip of the iceberg of the decision process of selecting the right business for you and your family.

Franchise Brokers aka Consultants, Advisers, Coaches, etc.

Franchise brokers help people who want to buy a franchise. Typically, their role is to review the amount of money you have to invest and then directs you to opportunities that match your interests and resources. A broker also may help you complete applications and the paperwork to consummate the sale. Franchise brokers generally make money only if a sale is completed.

Some franchise brokers may claim to be able to match you with “the perfect opportunity” because they represent a wide range of business sellers. That may be true—or not. In some instances, franchise brokers represent only a few franchisors, and, as a result, their suggestions may be limited.

Some franchise brokers may claim that they will suggest only those franchises that meet certain standards. You may think this means that your financial risk is limited because the broker is weeding out the poor investments. In fact, some brokers represent any franchisor willing to pay them a commission for a sale. If you rely on a broker, be skeptical: you may be directed to a franchise that is failing or that doesn’t have a track record.

Finding the “Right” Broker for You

What should you consider when seeking a broker to represent you? Just like in real estate, there are two sides to the market place, the “sell” side and “buy” side.  The “sell” side represents the franchisors while the “buy” side represents the prospective franchise buyer and represents the best interest of the buyer. This will not always be obvious as some brokers will represent them selves as buy side even though their wallets belong to franchisor. One indicator of a “buy” side broker is that along with the typical role of the broker, they may offer additional assistance or access to resources such as legal and CPA consultation, help in financing, or directing them to resources to help the buyer write a business plan. They may offer tips or assistance to negotiate your franchise agreement. If a broker tells you that you there’s nothing to negotiate with a franchisor, then you know for sure you’re working with a sell side broker.

A good buy side broker carefully selects the franchisors they represent and helps guide you to the franchise that best fit’s your investment, skills and goals and not only the ones that pays the broker the highest commission. Also, you must consider that since not every franchisor wishes to be represented by brokers, some good franchisors are, by necessity, excluded from even the most well meaning broker’s analysis. A good broker will disclose this information and let you know up front of the limitations of their services.

As a buyer, you may also want to consider the brokers experience, not as a just a broker, but in business as well. Does your broker have unique knowledge that would be beneficial to you in your search and selection process? Does your broker have the requisite experience to help you to understand the pros and cons of the business and market that you are interested in?

A Business by a Veteran, for Veterans, about Veterans

Veteran Franchise Advisers sole mission is to provide free help and guidance  to veterans, spouses and their direct family members who are exploring franchise ownership. We work with you using a unique process to help you find and select a franchise business which is best suited for your goals and lifestyle!

As part of our consulting process, we will provide you with free franchise education, veteran financing resources, and expert assistance. Your franchise consultant will provide you with:

• Understanding the pros and cons of owning a franchise business.
• Learning about the business of franchising.
• Learning about different levels of franchises available.
• “Free tools” to help you in your franchise evaluation process.
• Determine the best business fit for your unique goals and skills.
• Basic financing information, finance options and resources available.
• Expert advice that is 100% free.

Veteran Franchise Advisers does a lot more than point veterans in the right direction. We provide business and skills assessment, franchise education as well as access to legal and accounting resources.  We also recruit and vet franchisors, review franchisors FDD to ascertain their suitability for veteran candidates. While VFA mainly focuses on helping veterans find a franchise to own, we also realize everyone is not in a position to make the investment at the time they are exploring options. Once we understand what stage the veteran is at we provide guidance to help get them where they would like to be in the future. Guidance may include education needed, credit repair, or business planning resources like the local Small Business Development Centers, SCORE, etc. Our goal at VFA is to help veterans succeed no matter which path they choose today and where they want to be tomorrow.”

Veterans, If you are considering business ownership, – especially those who are considering investing in a franchise as a business opportunity – you owe it to yourself to leverage all the resources available designed to provide you with the knowledge you need to make the “right” investment decision for you and your family.

Purchasing a franchise is often one of the largest expenses and important decisions a family will make. The challenge is that there are thousands of opportunities out there! And the right choice to match your personal and financial goals are typically not the franchise brands you are thinking about. A lot of the established brands are over-saturated, very expensive, and don’t give you the ROI you think that they would.

About the Author

Richard Ashe is a veteran of the United States Marine Corps, with 30 years of business experience.  He served in the Marine Corps from 1976 to 1983 in the infantry and then as part of a joint Marine, Navy, and Air Force project. After his tour in the Marines, he worked as an electronics technician for a communications company. Over the next 30 years he received a degree in marketing and worked his way up to serve as the vice president of global marketing for an international software company.

During his career, Rich has worked for and helped companies such as Chase Bank, Xerox, Compaq, and Hewlett-Packard expand or start new businesses. He also participated in four software startups and two businesses on his own.

Rich founded Veteran Franchise Advisers to continue helping veterans interested in pursuing business ownership. He became is a Certified Franchise Adviser 2011 and served on the International Franchise Association VetFran committee from 2011 – 2013.

Veteran Franchise Advisers is a strategic alliance partner of VetUSA and member of the Franchise Brokers Association.