Small Business and Franchise Success Stories

The economic downturn has affected businesses large and small in every sector, and buying a small business or franchise can seem riskier than ever. Some small business owners who bought before the downturn and who remain optimistic about the future have good advice for business buyers. Gary Henricksen, owner of Vermont-based Mail Rite, is one of those owners who recognize the long-term benefits of business ownership, even in a tough economy.
Henricksen spent over two decades in corporate America in companies around the country. He had considered buying a small business for six years before actually taking the leap. Within those six years, Henricksen went through two mergers that completely changed or eliminated his position. After years of moving, he and his wife were eager to stay in place for once, and this was one of the primary inspirations for Henricksen’s decision to purchase Mail Rite, a print and mass mailing service, in 2007.

“I was committed to not moving, and so I was looking for a business of an affordable size with a business model that had some relationship to my experience. I have been a marketing executive for 25 years and therefore a consumer of direct-mail services, and I felt that I had some sympathy for the customers. I didn’t want business-to-consumer, and this was a business-to-business opportunity, within an affordable range and within commuting distance.”

Because of the limited number of businesses for sale in his area, finding a small business to purchase was perhaps the easier part of the process of becoming an independent business owner. His wife was happy to stay in Vermont, but the loss of corporate benefits worried her. Still, she supported Henricksen in light of the alternatives. The biggest adjustments were yet to come, though, as Henricksen soon found out that being the president in a corporation was much different than being the owner of a business.

“I was used to running much larger operations with a lot of staff, a lot of capability. There was a lot of cash flow in the biotech business where I worked, and as senior manager I spent my time managing other managers, managing departments. When you come from a background like that into a small business with only 20 employees, you quickly find that your life at work has completely changed. It took me about six months to realize that I couldn’t spend my time just managing my spreadsheets and corporate policies. I most needed to get on the road and sell. That is one’s most important role as president of a small company: to be in front of customers.”

Henricksen’s salesmanship and leadership became all the more important when the recession hit. The company saw profits drop to three quarters before stabilizing, and even as Mail Rite’s clientele has grown to around 300 businesses and organizations, older customers are scaling back on their spending so that even now the company’s margins have not yet climbed back to where they were before the downturn. This stability has been maintained in part through Henricksen’s decisions to add color-printing services, which have increased some customers’ spending, and to cut less productive staff. This is never an easy decision to make, but Henricksen has seen quite clearly that it was the right one.

“There were some people who weren’t pulling their weight, and many staff had long wished that something would be done about that. When times got tough it was especially important for the staff that we protect the most productive and energetic people and make smart investments that didn’t damage our cash flow, and which will help us in the future. That’s been important to the most intelligent, energetic staff that we have.”

Henricksen’s views about the state of the market are quite practical. “I would say that part of it is that people are just happy to have a job and have stuck around in a more demanding environment without pay increases or bonuses.” Henricksen himself bought the company because he wanted more stability and control of his destiny, but he reminds potential small business owners that, “when you own your own business, you’re still subject to market forces, so you’re not completely in charge of your destiny.”

Having better control and more options when he decided to buy a small business were motivating factors in his choice to use Guidant’s 401(k) Small Business Financing.

To people who are considering buying a small business, Henricksen makes one of the most essential points, one which he and many other small business owners have learned through experience:

“When I talk to other small business owners who have done the same thing, they all agree that you have to expect discouraging times during the first several years, but when you get the business operating as you want it, it can be very exciting and very pleasurable. But that can take years.”

During that time, debt can be a major issue for small business owners who buy their businesses by borrowing. Hendricksen explains, “Make sure that you don’t take on too much debt, because you have to be prepared no matter how optimistic you feel about how the business is going to perform. You must be prepared for the possibility that things won’t go well at some point so you need to make sure that you will still be able to make those debt payments. That’s an argument in my view for putting more money into the business when you buy it versus borrowing more money. The more that you can keep your debt down when you buy a business, the better off you’re going to be.”

Regarding his experience with Guidant Financial Group, Hendricksen gives a highly positive review. “During the process, I felt that I got a lot of good guidance. It went smoothly and I felt that the cost was very reasonable, so to anybody who feels that they want to go down this path, I would definitely recommend working with Guidant.”

People seeking to buy a franchise may be surprised by which franchises are performing well in a down economy. Sometimes, the best-performing franchises are not the most obvious choices—rarely are they the most glamorous—but Cliff “Kayo” Folsom has now long been in an industry that is clean, fun and lucrative.
Kayo had worked for the Rocky Mountain Chocolate Factory for over two decades when in 1995 the company created a new division called Fuzzi Wigs Candy Factory, which is a play on Fezziwig, the name of Scrooge’s kind mentor in Charles Dickens’ A Christmas Carol. Rocky Mountain Chocolate sold the Fuzzi Wigs division in 1998. In 2002 Kayo left his vice president position at Rocky Mountain Chocolate to become president of Fuzzi Wigs and launch a franchise program.

But now Kayo isn’t just the president. He’s also a franchisee.

“It’s a good business model. I can see that some franchisees are making a heck of a lot more than I’m making as an equity partner and president of the company. It’s a really good business model and my wife was looking for a new business path. She was a paralegal for a local attorney and doing really well, but wasn’t excited about spending 9 to 5 working for someone else.”

The couple had already owned several small businesses, including three bagel shops and a custom homebuilding business. They enjoyed these things, and even toyed with franchising the bagel shops, but ultimately, buying a franchise business seemed the simplest and securest option.

“I’ve been in the candy business for 25 or 26 years now and it’s just a darn good, simple business model. If you run it right, you can make a really good return on your investment and have a lot of fun. There are no returns, no charge backs. Customer complaints are rare...People are happy when they come in and they’re happier when they leave. We do not deal with unhappy people. It’s a clean business. There are a lot of great reasons to do it, and if you’re in a decent location you can make really great money.”

There are 80 Fuzzi Wigs locations nationwide. In recent years, the company has seen 10-15 units open each year, but the number dropped to 5 in the wake of the downturn. This doesn’t bother Kayo too much.

“We’re not a high growth company. We’re trying to grow organically, at a steady pace, and 10 to 15 is a comfortable pace for us. We’re not publicly traded. We’re a private company, but with the problems in the economy, nobody is growing at any great shape right now.”

The franchise program isn’t growing much, but as for Kayo’s own store, even in this sour economy, profits have remained rather sweet.

“The candy business is somewhat recession-resistant. Our same store sales are just about flat year-over-year from 2008, and 2008 was almost a record year for us. So one of the things that is compelling about a candy franchise business is that even in down times, unless things get truly terrible, you can pretty much count on not taking the hit that everybody else will take.”

“At our individual store in Derango, tourism is a large piece of our business, so when the economy took the dive we were really concerned about what would happen over this last summer, but we actually met last year’s sales numbers through all of 2009. From June through October we’ve been running about 5 percent ahead. All of those numbers for 2008 were better than they were in 2007, so over three consecutive years we’re still showing the same store sales growth.”

Kayo is not alone. Other Fuzzi Wigs franchises are still booming even when the economy has fizzled.

“My partner has a store in Steam Boat Springs that is showing record numbers even while we have friends who own other businesses and franchises reporting declines: from 10 to 25 percent in women’s wear and toy and gift, and so we feel pretty darn fortunate.”

That may come as a surprise to people who view candy franchises as niche stores for a product that one can find many other places. Kayo and his staff are aware of that and so customer service is one of their priorities, because even if traffic is lower, the quality of each transaction can be improved.

“People are going through really tough times. They don’t need to shop here. They can buy candy elsewhere, but what they can’t buy is the fun, the entertainment, the enthusiasm, the customer service that we can provide in addition to great product selections. So we made sure that our staff was not treating customers as if they were a given, and to let them know that we are truly glad to have them there... You can get your average transaction up just by engaging people more, and then there is repeat business. You can do all kinds of things to mitigate the impact of a slower economy where you may see less customers.”

Kayo is, of course, not just a franchise owner with his wife, who runs most of the day-to-day operations at their franchise. As president of the company, he is still in a position to advise and counsel existing and new franchisees on survival strategies in a tough economy. As he and his wife emphasize to the staff in their own store, Kayo makes clear to other franchisees and small business owners the importance of customer service, keeping a prosperous looking store and not giving into self fulfilling prophecies of financial doom. He relates one story as an example of what not to do:

“I heard this story a long time ago about a hot dog vendor in New York City who opened another cart and opened another cart. He did so well that he sent his son off to Harvard, where he got an MBA. He comes back and is working in his dad’s business and tells him, ‘Dad, didn’t you know there’s a recession going on?’ The father says he didn’t know, and the son says that there is and they have to do things like cut marketing. The old man says, “Well, gosh, I didn’t notice! Our sales are fine, but I sent you to Harvard and you got an MBA, so I better listen to you.’ So he cuts back on advertising and all these expenses and he comes back to his son, and says, “Son, you were right. There is a recession. Our sales are going down.’ Things are not as bad as they’re often perceived, so keep your store fully stocked, don’t start cutting back on inventory. Do things with wisdom and moderation, but don’t start assuming things are bad and let that bring down the appearance of your business, because it may become a self-fulfilling prophecy.”

Cutting costs does not mean cutting corners. In fact, some franchisees may be in a prime position for growth and not even know it.

“We have some franchisees who are struggling, and so we focus on helping them get their expenses in line through negotiating rent reductions. It is easier than people assume right now. Landlords are really hungry for tenants, especially those who can expand. So if you have some expansion money right now, it’s a great time to get position for growth because you can see lease rates anywhere from 10 to 30 percent less than a year ago—maybe even more in some places. So if you can see a market that’s going to rebound and you have a little steel in your gut, you can get some pretty good deals out there. If things do rebound you’re going to be well-positioned then to take advantage of a good return in the next 10 years.”

That is the ultimate lesson to take away for many franchise owners and people who might buy a franchise business: Every business is an investment, and it may take time to see real returns. However, when you have a strong and reliable business model, one can be optimistic. That is one of the reasons that Kayo decided to go through Guidant Financial use 401(k) retirement funds to start a franchise.

“The return that I thought we could get by investing in our own business was going to be far greater than any return that we were seeing through leaving it to sit in a 401(k) or mutual funds or whatever the broker was putting it into. I thought I could probably invest our money better, and because I knew our business model, it was not a high risk investment at all for me. Also, there wasn’t a lot of money out there available for new businesses and franchises. Even though my wife and I have a great track record and I’m a president of the company, the banks weren’t crazy to loan to somebody starting a new retail candy store. It’s a common problem now for new business owners and franchisees. That’s our big struggle right now. We have franchisees who do want to expand and they may have you know 50 to 75 to 100,000 liquid, but they need another 100,000 and it’s very difficult to get it from banks.”

Investing retirement funds in a franchise has worked for Kayo and his wife and he recognizes that it could help many others, but he doesn’t sugarcoat the idea.

“I think folks out there that are looking to start their own business really should evaluate the return they’re getting on their 401(k). If they’re looking at funding a small business with retirement funds through a service provider like Guidant, they should certainly evaluate carefully, but know that if they do it right they can probably get a much better return out there. The bottom line is that it’s just a great time to be starting a new business because if you position yourself well, you’re going to get a great run as the economy turns around. It always does.”

Optimism and practicality are seemingly rarer and rarer these days. They may be one more reason that Kayo and his wife are still seeing good returns from their franchises. People looking to buy a franchise or small business can certainly learn from their example. A positive outlook, good customer service and perseverance can bring sweet returns.

When doctors told Chuck Tripp to “hang up his running shoes” after a serious fall from a roof left him with a severely broken ankle, he wasn’t taking it laying down.

“I told them I’m not missing anything, since I never wore running shoes anyway,” he jokes.

Thankfully, he’s kept his sense of humor, even when it was touch-and-go in the ER and he was still unsure if his ankle could be saved. Two surgeries, ten screws, and one 11-inch plate later, he’s still in the game – the weight-loss franchise game that is.

From the beginning, Chuck has been confident that his new small business, Inches-A-Weigh Diet Clinic for women, would return a healthy profit in the long run. Inches-A-Weigh is dedicated to helping women lose weight and keep it off by teaching them how to make lifestyle changes with programs specifically tailored to each individual’s weight loss objectives.

Even in today’s challenging economy, the diet industry in the U.S. is still a $200 billion business. Thousands of people looking to start their own small business or buy a franchise are quickly capitalizing on this huge market as evidenced by the recent proliferation of clubs such as Curves®, Anytime Fitness®, and Planet Fitness®.

“Inches-A-Weigh is very unique from anything else that’s on the market because it combines personalized meal planning, on-site toning and firming, and customized weight loss assistance all under one roof,” Chuck explains.

This three-tiered approach to weight loss, delivered in a highly made to order fashion, is what sets Inches-A-Weigh apart from similar health-related franchises.

“No two members pay the same price because one woman who wants to lose 100 pounds is going to pay more than one who needs to lose 20 pounds,” he says.

Both Chuck and his wife continue to work full-time in other careers and purchased the Inches-A-Weigh franchise as a smart investment in their future. They were comfortable with investing their accumulated 401K savings to work and invest in themselves.

“I was looking to invest my money in this business in hopes of making my retirement that much better. That’s why Chuck chose Guidant Financial. Knowing Guidant was the recognized leader in such small business transactions, he asked them help him invest his 401K to responsibly acquire their new franchise.

“By doing it this way, I’m [investing] my own money and paying [the retirement plan] back rather than paying a bank,” he states proudly.

After starting his career in publishing right after high school, Chuck learned the business from the ground up, working at one time for TV Guide and Rupert Murdoch-owned magazines. He later worked for Rodale Press, which publishes popular health and fitness-related books and magazines.

Ultimately, Chuck went on to launch his own company about six years ago, specializing in publishing home plan/blueprint books, widely available in Barnes and Noble and Home Depot stores. At one time, his company was the largest publisher of these types of books and catalogues and business was booming. With the real estate market implosion however, came the subsequent free fall of the home plan publishing business, so his decision to venture into women’s weight loss was prophetic, to say the least.

“Two and a half years ago, the economy was rolling along, housing was extremely strong, and we just were both at a point in our lives that we felt like we were ready to take on something in addition to what we were doing. So we decided to go for it -- entrepreneurship. Just about that time is when the housing industry started bottoming out. So I guess it was a good thing because it’s allowed me to have something else in addition to the home plan publishing, since that has hemorrhaged so badly in the last year and a half,” he adds.

Giving back to their community was the other reason they chose the fitness-related franchise. They were inspired by a sister and sister-in-law -- women they knew and loved who had recently endured drastic and invasive surgeries like gastric bypass and Lap Band® to fight obesity.

“There are a lot of women dealing with health issues … going to these extremes to get rid of excess weight. My wife and I just decided we wanted to get involved in something that could give back. That’s how we ran into Inches-A-Weigh  and the more we dug into it the more we liked the business model. We both continue to do our other jobs, this is something we got into really as way of giving women a better option to get healthy,” Chuck says.

Since opening the center in February 2008, Inches-A-Weigh  has been doing extremely well, despite the tough economy. “I guess the extra stress causes people to want to lose weight and get in shape. This past June was our best month ever since we opened,” he reports. Currently, the club boasts approximately 250 members and is starting to see increased revenue streams and positive monthly cash flow.

Chuck relies heavily on direct mail as the primary source of advertising for two reasons. First, their target demographic is very specific. Secondly, since location and convenience are major drivers in customers’ decision-making, it only makes sense to target households in certain zip codes.

“I hit them hard and hit them often (with direct mail),” Chuck says emphatically.

Physician referrals are also a growing source of business, so they’ve started hosting lunches and breakfasts in doctor’s offices in the immediate area.

Chuck advises anyone thinking of buying a franchise to be meticulous in their research, looking carefully at the franchise’s background and history and talking to other franchise owners. “It’s their goal to get you on board so they’re going to sugar coat things as much as they can so you’ve got to be diligent in your research” he cautions.

“Don’t expect too much from the corporate office of any franchisee that you might be looking to open. But in the same sense don’t ignore the resources and information that they have,” he adds.

“I’ve sat back and watched a lot of other franchises that are not following the corporate model and they are struggling. They’re scratching their head as to why is this not working. It’s because they’re not working the plan the way it’s been designed.”

“Follow the system and learn from the mistakes that they’ve already made. They’ll expose their mistakes to you because they don’t want you to repeat them. But go in with your eyes wide open. Don’t be afraid to ask the hard questions. If you don’t like the answer then that’s telling you something,” he advises.

Now that he’s back on his feet, Chuck is looking forward to a healthy financial future thanks to Inches-A-Weigh  and the experts at Guidant Financial.

How many people enjoy paying bills and taking care of the myriad details of personal finance? Not many... but Alison Salisbury does, so the entrepreneur turned a personal skill into a thriving small business.

“I’m known as a daily money manager,” Alison says. “It’s a fairly new industry on the West Coast, but it’s much more common in the east. Daily money managers are like personal financial assistants: We help people pay bills, open and sort mail, reconcile check books, organize tax records... all the paperwork of running a household.”

Think of her small business as household financial administration; she does not offer financial planning or investment advice.

So where did the idea for starting her small business come from? “I’ve actually done it all my life,” Alison laughs. “In my former career I worked in financial administration, and my former husband was a professor and owned a business – so I know all about being in a two-income family with kids and a nanny. But then I was a stay-at-home mother for eleven years, and it was hard for me to get back into the regular workforce; every time I applied for a job I was told I had too much experience... which I think is secret code for ‘we would have to pay you too much.’”

A conversation with her ex-husband turned on the entrepreneurship light bulb. “His taxes hadn’t been paid, his bills weren’t getting paid... he said it was a mess. He had hired two professional organizers to come in and straighten things out, and according to him all they did was put papers in different piles, tell him what to do... and leave. I realized someone needed to actually work the piles – and if I did, people would be happy to pay for the service.”

Instead of seeking to purchase a franchise or an existing small business, the entrepreneur set up her own company – even though it was her first foray into entrepreneurship and small business ownership. After graduating with an Art degree, she helped artists write grant proposals. Later she spent a number of years at MIT as a grants administrator for the Arts Council and then as the administrative officer for the anthropology and political science departments.

“The funny thing is I majored in Art because I didn’t think I was good at math,” Alison laughs. “But once I started working it was all budgets and proposals and numbers... I guess I was destined to work with numbers.”

But when she returned to the workforce she became a teacher, putting herself through graduate school and earning her teaching credentials. She taught fourth grade for two years and transitioned into a curriculum development role, developing tools to help high school and college-bound kids learn the fine art of personal financial management.

Still the entrepreneurship fire burned. “I bounced my small business idea off a lot of people and not one person said, ‘What, are you nuts?’” she Alison explains. “I’ve started to make money and I love working with people at an intimate level – the amount of trust they put in me is inspiring.”

She did have sleepless nights early on, though. With the help of Guidant Financial Group, Alison bypassed traditional small business financing by using her retirement funds to invest in her business. “I can see that if I just keep doing what I’m doing I’ll not only pay that investment back but will also grow my retirement savings at a faster rate.”

So who is a typical client for Fiscally Fit? Alison targets the upper middle class demographic. While many of the Silicon Valley entrepreneur’s clients are local, using online tools she can work with clients across the country. “I have a client in the process of moving to South Carolina,” she says, “and since I maintain their household finance online, they are ‘bringing me with them.’”

Since household financial administration is a relatively new concept in her area, spreading the word about her small business is critical. She belongs to the local Chamber of Commerce, goes to Senior Roundtable networking events, and maintains a website. But much of her business is based on referrals from satisfied clients and professional organizers. “Professional organizers tend to focus on handling garages, closets – physical spaces – and they don’t want to deal with paperwork. So I’ll step in.”

“It’s funny. More often than not, I’ll get people organized and they’ll say, ‘This is great – I can handle it myself from here!’ Then a month or two later they’ll call me back to clean up the new mess they made and have me just take over.”

Having the small business owner “take over” pays huge dividends for some clients. Alison explains, “I just went through and categorised all of a client’s expenses for the last seven months. She had plenty of money but wasn’t watching her cash flow. She was bouncing checks and incurring charges and believe it or not she had paid $4,350 in bank charges in just seven months. Not only do I make her life easier – she was amazed by how much money I could save her.”

Her family and friends were also amazed when she decided to start a small business. “They thought it was a great idea but they were still surprised I took it on,” she explains. “My ex-husband calls me the ‘best personal financial assistant I ever had.’ Because organization and financial administration comes easily to me, I never imagined it didn’t come naturally to other people.”

While the economic downturn has hurt some small businesses, it has created an opportunity for Alison. A number of clients turn to her because their income and investments have declined and they want to reign in discretionary spending and develop a workable household budget. “A lot of my clients,” she says, “realize that not only do they need to get their own spending in line, but they need to pass that skill on to their children. That, of course, dovetails perfectly with the curriculum I’m developing.”

And her five-year vision for the small business? Alison hopes to grow her client base and build a staff to service a growing market. “I’d like to have a nice little business where we take care of people but we’re still small enough to know people really well.”

“Sometimes I wish I had a normal job,” she continues, “but then I think about working for someone else and doing what they want me to do on their time... and I realize I love the freedom I have – I really love it.”

Find small business financing, and jumping on the opportunity to buy a franchise, is a lot easier when a bank is on your side – especially when an entrepreneur brings something to the table, too.

Richard Koch is living proof.

After working for Bricker International Utilities for eighteen years, the managing partner wanted to take the next step in small business ownership. As a partner in a Chili’s restaurant in Wichita Falls, he had significant restaurant operations experience – but limited profit participation. “As a managing partner with Chili’s it’s a little different than owning a franchise,” Richard says, “because you in effect work under Chili’s. You don’t have to set up a corporation; you take a portion of the bottom line. I enjoyed it, but I wanted to start my own company, buy my own franchises, and work my way up from there.”

Realizing the entrepreneur’s dream of franchise ownership started when Richard spoke with a friend. “My wife was volunteering in the school cafeteria,” he explains, “and a friend said, ‘Hey, if you know anyone that wants to buy our Quiznos franchises, we’re probably going to be selling them.’ She told me... and in the middle of the night I tapped her on the shoulder and said, ‘Hey, why don’t we just buy those two franchises’... and that’s what we did.”

For financing, Richard turned to a local bank that had extended financing to the previous owner. But he also came prepared. With help from Guidant Financial Group, he invested his retirement fund for a significant portion of the money needed to purchase the franchise. “So I walked in,” Richard says, “and the first thing they said was they made the loan to the previous owner, so they were very familiar with the business. And they loved the idea of me investing my retirement funds – they knew I’d have a large stake in the business.

“They said, ‘We loved doing these kinds of deals. We’ll do them any day of the week.’”

After a quick meeting, Richard provided a copy of his business plan, shook hands, and left. “They called me an hour later and said, ‘Congratulations – you’ve got your loan.’

Keep in mind most banks will not approve small business loans that quickly. As Richard explained, the bank looks for solid deals – and for entrepreneurs who bring a portion of the funds required to the table. “In effect they said, ‘If you’re putting down 35 to 40% of your own money, we’ll be glad to put up the remaining 60%.”

Richard also chose to stay local when he purchased his franchises. He looked at other opportunities, but realized that most would require a move to another city. Buying the Quiznos franchises was a natural fit for his family, since both restaurants are located in Wichita Falls where he lives.

And so far franchise ownership has met all his expectations, both financially and personally. “My goal was to stay in town, give myself a decent salary, and be active in the community. I want the kids to have a good time, stay in private school... that’s what I wanted and that’s what I’ve gotten.”

But franchise ownership has not been without challenges. “The hardest thing,” Richard explains, “was when I walked in the first day and and saw a bunch of employees eating. I asked and they said, ‘Oh, we don’t pay for our food, man.’ And I said, ‘Well, you don’t work here.’ I went from eleven employees to one employee in one afternoon. But I looked at it as a positive thing – it was time for a change and for a new culture.”

In Richard’s opinion, the key to managing employees, especially part-time employees, is patience. But that patience will then be extended to the customers. “I love working with employees and with customers,” Richard says, “and I just thrive on the restaurant experience. I love spending time with customers. I just love it.”

He also loves the additional time he can spend with his family after purchasing the two franchises. “It was tough because I was working from seven in the morning until ten or eleven o’clock at night. My kids and my family are more important than a huge pay check. So my wife was excited about the opportunity, and my wife was my biggest supporter when I said I wanted to do my own thing.”

So what does Richard feel is the best part about owning his own small business? “The flexibility you have with what kind of hours you want to work,” he says. “I’m very fortunate. I have good managers at each of my locations; it took a lot of hours to get them trained the way I wanted them trained, but once they’re trained, good quality people allow me to have the flexibility to come and go: Coach my kids’ soccer team, basketball team... do things in the community like serve on the Board of a senior citizens center... owning a small business gives me the flexibility to do things I wasn’t able to do previously.”

“Investing in yourself is one of the safest investments you can make,” Richard says, “as long as you are confident in your abilities. Using my retirement funds to help finance the business helps me diversify my investments. I now have my own business and I still have some money in retirement accounts... I can watch my business grow and my investments grow. Diversification is the key.”

What is Richard’s advice for entrepreneurs who want to buy a small business or buy an existing franchise? “Do your research on the company you’re looking at buying into. It has to be a good fit. I had been in the restaurant business for eighteen years and I knew quite a bit about Quiznos: I knew what their good points were, I knew some of the faults... there are plenty of ways to research companies. Do your homework, make sure it’s a good fit, and be prepared to work hard and stick with it. I’ve always been an entrepreneur – I sold dog and cat supplies door to door when I was in sixth grade. I’m confident in my abilities; be confident in yours.”

Many entrepreneurs say their dream of owning a small business began at an early age. John Graham, owner and President of a Bright Star franchise in Birmingham, Alabama, didn’t really start thinking about owning a small business until after he enjoyed a long and successful career in the pharmaceutical industry.

“I never really thought about being an entrepreneur or going into business for myself,” John explains, “until my view of the pharmaceutical industry changed drastically. I went from needing an entrepreneurial ability to run my district and take responsibility for growing sales... to becoming a sales manager. My role became less strategic and more tactical, in spite of the fact I could run my team my way. So I interviewed with several other pharmaceutical companies and realized they all operated the same way. I had to seriously consider whether I was willing to leave a great-paying job and try something new... so I decided to look seriously at taking the plunge.”

Keep in mind John was in no way a “job hopper.” After serving in the U.S. Army, he worked in the hotel business for six years and then shifted to a career in the pharmaceutical industry for seventeen years. His entrepreneurial fire kindled, after an extensive search he settled on wanting to own a Bright Star franchise. The president of Bright Star referred him to Guidant Financial Group, who helped him invest his 401(k) funds into his franchise without having to obtain more traditional small business financing solutions. By investing his existing retirement funds, he was able to purchase the franchise without debt, taking a distribution or paying taxes.

“I realized I could go into business for myself,” John explains, “when I saw the combination of medical experience, medical sales experience, and having the ability to invest retirement savings all came together to make owning a Bright Star franchise possible.”

Bright Star is a national company headquartered in Chicago; franchises provide medical and non-medical, private duty, in-home care. Services range from caregiver companionship services like spending time with seniors or helping with meals and light housekeeping to providing complex medical care for patients who have colostomies, chemotherapy, or multiple medical conditions. Bright Star now has over 150 franchises in nearly thirty states, with plans for further expansion due to a rapidly expanding franchise and customer base.

The customer base grows primarily through the direct efforts of franchise owners. “The model itself makes the owner the primary salesperson,” John explains. “On a daily basis I hold myself accountable for sales. Our sales team is responsible for making daily sales calls on traditional and non-traditional referral sources. Think of it this way: Every church has somebody that knows someone in the hospital and who’s sick and what all their needs are. We also call on physicians, surgeons, plastic surgeons, we call on senior centres. There are lots of different opportunities to make individual sales calls, and the goal is to make twenty-five of those calls every day, five days a week. People need our help – our goal is to find those people and make the care they need available.”

John’s focus on sales and customer service has fuelled incredible growth. In just eighteen months his small business has grown to over 140 employees; in his first year alone the franchise owner billed $1.1 billion.

One of those employees is his wife. “She’s always been really supportive,” John says, “and when we started hitting big numbers I said, ‘Honey, I need you; I need you to help me because I can’t do this on my own.’ I had to upgrade our payroll and billing skills, and my wife was the perfect person to step in and take those functions over.”

What has the transition from corporate employee to small business owner and entrepreneur taught John? “When you start a small business or buy a franchise, make sure it’s something you have a passion for. I can’t imagine wanting to get up and come in every day without it being something I feel passion for. There are lots of small businesses you can own to make a living. The small business you choose should match your skill set; find a company or opportunity that best matches you. That’s one reason I’m having success; we’ve been in the top three to five nationally for twenty-five weeks because I’m out there selling and showing my passion for the business.

“Keep in mind I was a sole income earner my entire life,” John continues. “There have been lots of times when I wanted to throw in the towel... and then I think back to my military training or playing sports and remember that true character is how you react when things get really hard.”

And while revenues are high, cash flow remains an ongoing challenge for John. “To this day haven’t borrowed any money; I’ve been able to make it on my initial investment and my retirement funds, but it’s been really close some weeks. Some weeks we have $160,000 to $180,000 in receivables, and I do payroll on a weekly basis.”

Tough times aren’t new to John, and he’s confident he can work through any obstacles. As an army officer he flew airplanes, and he has put his military experience to good use as a small business owner.

“As an officer your primary role is to lead people through difficult times,” John explains. “I remember every day that the attitude I have when I walk through the door will affect every employee... and the way they react to our customers. The biggest goal a small business owner has is to lead people through difficult times and get them on board. You can get people a lot further if you pull them instead of push them. I get my people involved in everything. I don’t mind sharing results and performance metrics because I think it’s important to show we’re in this together.

“It’s funny,” he continues, “because I’m a business owner... but if you walk in our office right now and start talking to our nurse manager or our director of clinical services or our administrative assistant, you won’t hear the word “I.”

“You’ll hear the word “we.”