Small Business and Franchise Success Stories

There is much to consider when deciding whether to start a small business or franchise or buy an existing small business or franchise, and beyond the initial capital investment, the continued investment of time should certainly be a factor. All small business and franchise owners must be willing to invest a good portion of time into their enterprise, but those who do proper research might be able to buy a relatively cheap small business that can be improved, thereby saving time and money.

Paul Malstrom followed this business strategy when he purchased a small storage facility in Vale, CO in 2005. Malstrom retired earlier that year after three decades with the Oregon Agricultural Department, and knew that he wanted to do something different. He also knew that he wanted a little more control of his retirement funds.

“I wanted to do something else with [my retirement funds], and so I drew out all of my retirement funds from the state of Oregon, rolled it into the IRA and then over to the 401K. It was a big jump for me, because I hadn’t done a lot of business just to make a living.”

Malstrom wanted whatever investment he made with his funds to allow him a working retirement, which would allow him to find a better return on his retirement funds until his wife retires from teaching school in 2011, at which point he plans to sell the business. This gave Malstrom a relatively small window before his established exit strategy, and so commercial real estate seemed to be one of his best options.

“Four years ago, the residential real estate market was really up and it was kind of scary. I thought I would try commercial real estate. Working with a realtor, I came across this business and it looked like it was something that I could grow. I bought the one unit here in Vale, then we picked up a second one later when we were in Ontario.”

The first storage unit that Malstrom purchased had a companion business as part of it that seemed slightly unconventional to him at the time: It also sold cell phones and cell phone plans for a cellular startup company, US Cellular. He and his wife were initially dubious of whether this additional business would be a match for them, but it exceeded their expectations that when they acquired their second storage facility they immediately began dealing US Cellular there, too. Both sides of the business have grown: They have at times had 100 percent occupancy and the phone business now almost makes as much as the mini-storage. The latter side of the business is a little more high maintenance than the former, though, and this has created jobs for others within Malstrom’s working retirement.

“It’s quite a bit to keep up with for somebody. Models are changing all the time; the promotions are changing with the carrier; it’s a lot to keep up with, so I have a couple [people] that work for me. They’re really sharp with cell phones and they do a great job,....”

Malstrom admits that he was surprised most by the cost of running a small business, and like every business owner he recognizes certain things that he could have done better.

He emphasizes the importance of understanding the books as well as you can before you purchase a small business or franchise because it can help you negotiate a fair deal and is something you will eventually need to learn anyways as the owner.

“A basic understanding of QuickBooks is useful. Just about everybody in small business uses QuickBooks and bookkeepers and accountants want things in that format. Reading the accounting statements closely before buying a business can help you know whether the business is making money or not, whether it has room to grow, and so whether you are doing the right things in buying the business.”

This is especially true for those who are using retirement funds to buy a small business or franchise. All investments carry a certain level of risk, and small business ownership carries additional responsibilities. Careful due diligence and planning are essential to protect one’s assets and one’s family and to ensure that the investment provides more opportunity than burden.

Despite the heavy costs and the added responsibility, Malstrom is pleased with his investment and remains confident that it will pay off well in the long-run.

“I missed the fall on the stock market; I missed the fall in the real estate. The return has been good.”

There are many lessons to be gleaned from Malstrom’s story.
  • One can sometimes combine two very different small businesses to maximize one’s profits within the same space.
  • A strong understanding of the cash flow and value of a business is absolutely essential, and familiarizing yourself with accounting and the common platforms used to conduct it is an excellent way to start.
  • Using retirement funds to buy a small business or franchise can be a big leap, but could provide a great return on investment.

Finding capital to buy a small business or franchise is often the most challenging part of the process. Even when one can find a franchise related to one’s field of expertise and in one’s area, the starting costs are often far too much for would-be franchisees to pay out of pocket, and banks are more hesitant than ever to provide funding for new businesses. That’s why Allyn Nock and his wife Michelle decided to invest in their franchise using their existing retirement funds through Guidant Financial Group - a decision they are very happy with.

Both Allyn and Michelle have medical backgrounds. Allyn was an Army Corps nurse and Michelle has a Master’s in Nursing Education and worked 9 years in a Medicare home care agency. Allyn long wanted to own a business and both of them wanted to continue helping others using their skills, so when they discovered Bright Star, a home health care provider that serves all ages but primarily the elderly. Clients can received top-notch care from qualified nurses and care providers within their own homes, which is an appealing alternative to nursing homes. Its appeal has been manifestly proven by the speed at which their business has grown. It’s no wonder that Allyn was quite enthusiastic when we spoke with him.

“We broke even a long time ago and we’re just a little over a year old. We’ve grown exponentially through the recession... We have a very strong foundation and we have a lot of growth, a lot of good quality growth.”

Allyn originally wanted to own an assisted living facility, but couldn’t find capital and appropriate real estate. He also didn’t originally plan on working with his wife, who was an executive nurse with 25 years of experience. When they both read a book on financing, introduced the idea of the two them doing business together. During the process of looking for financing options for a franchise or small business, Allyn twice encountered Bright Star and was impressed by the company’s reputation and the services that it provides. It was clear to him that buying a franchise from Bright Star was one of his best options. He had several financing options available, but he chose to pay the franchise fees using retirement funds through Guidant Financial Group, thus getting the money he needed faster than he could have through other means and without penalties and taxes from a direct 401(k) cash-out.

“I had a couple houses that I could have sold, some other investments...Luckily we used Guidant."

Allyn and Michelle were able to start their Bright Star franchise without delay and without debt by investing their retirement funds in the business. The returns have been enormous, and the business continues to grow. One might wonder how Allyn has managed to maintain this growth. He says that the answer is quite simple.

“All we had to was just follow the Bright Star model that they have in place. They have it all very fine-tuned: the exact dollar, exact sale. ‘You will be helping this many people. You will be changing this many lives.’ And it’s all true. That’s kind of fluffy, but it isn’t just that. We do about seven more days of training for owners and branch managers than any other franchise like this. There are 160 locations now nationwide and we are number 32 in the nation in July 2008. I know about 60 other owners throughout the country, and I talk to them all the time about how they grow their businesses, what works for them.”

In addition to outside support, Allyn has a strong team of 115 employees. Learning how to manage what he knows best and leave other matters to people trained for them has helped him be more productive and lead the company into continued success. After all, the job has a complex emotional aspect which takes time and attention, and Allyn is most valuable working in the community and building bonds that will bring referrals and keep the business growing, especially when many clients are nearing the end of their lives.

“This kind of franchise is not for the faint of heart. It takes a lot of sincere compassion and relationship building to create trust and develop a reputation. We have lost 27 people so far in a little over a year. When you own a business like this, you get to know these people personally, so if somebody is considering a franchise like this just because they are thinking, ‘Woohoo! Let’s make some money’ then it isn’t going to work.”

It’s clear from the growth of their franchise that Allyn and Michelle are doing a lot of things right, but the rewards don’t stop there. The praise and positive feedback that they receive from families and clients is what keeps Allyn most motivated and excited about his work.

“Whether it’s someone who has had an injury like a hip fracture or a family dealing with someone with severe dementia, clients are giving us feedback of how much they appreciate our help. We receive all kinds of accolades and letters and nice things. The other big compliment is that we’re getting a lot of staff who want to commit to us to be 100 percent ours, commit 40 hours a week to us. In this business care workers usually work for two or three or four agencies, because it’s rare for them to find one with a reputation and culture to grow solidly in the community, one that can provide full-time hours and benefit. In other words, there’s a lot to get me up in the morning: the belief that I can truly say that my clients and my staff think we’re the premier health care agency in Southern Arizona.”

Allyn admits that it was an unusual decision for two career nurses with stable jobs to break off and work for themselves, but they knew that Bright Star was a perfect match and all they needed was the money to get it started. It was certainly a risk, and using his 401(k) to fund his new business may have made him uneasy at times.

“But what an investment it’s been,” he says, happily.

Others who are looking to buy a small business or franchise could take a few lessons from Allyn. For those who have valuable skills, finding an existing business or franchise to buy that matches those skills may not be difficult and could improve one’s success. Still, initial funding is always the next barrier, and even if multiple funding options exist, delay and debt are often incurred. This is why Allyn chose to go through Guidant Financial Group to use his retirement funds and why others might consider the same plan. It might be one of the best investments that they ever make.

Starting a small business can have many rewards, but many would-be small business owners are afraid to take the risk. Sometimes it takes more than just the allure of being one’s own boss to inspire one to start a business; it takes finding a business or franchise that truly matches one’s passions. For people with years of business experience who want to take a new path, starting a business coaching franchise might be an excellent option.

Dulcee Loehn was itching to have her own business for over two years before she started a coaching franchise through Focal Point Business Performance. Loehn could not have guessed where her experiences would take her. Her academic background was in Biology, and after college she worked at a small laboratory supply company which was owned by a married couple. The husband handled outside sales; the wife handled most everything inside, but her passion was tennis, and Loehn was soon assuming most of the responsibilities in the office.

She recalls, “I learned during the years that I was with them every aspect of how to run a small business. I learned every piece of the business, from inside sales to accounts receivable, to accounts payable, to customer service, to shipping.” This was extremely useful experience and a good venue for her skills, but her passions lay elsewhere.

Loehn then spent over ten years in the corporate world, working in middle management and up, and eventually coaching other managers. For nine years, she worked at Johnson Controls, a building controls and HVAC service provider, where she tracked performance indicators for the state of Florida and Puerto Rico, but her role did not stop at analysis. Loehn explains, “I worked with the managers who had the PNL responsibility for their piece of the business. I would help them maximize their key performance indicators and reach or exceed their goals. I really was a coach, although I didn’t call it that at the time. We’d look at every aspect of their business, and how to grow their business, become more effective and efficient and decrease their costs.”

Over time, Loehn began to recognize that she loved looking at a business—in her words—as if it were “a machine, and getting that machine running at an optimum level.” This prompted her to pursue an advanced degree, but rather than seeking an MBA, which she felt would teach her little that she did not already know from life experience, she began a program at the University of South Florida for a Masters Degree in Management Leadership and Organizational Effectiveness, and completed it in 2006.

After her time at Johnson Controls, Loehn worked as a coach for a smaller HVAC company, where she continued to apply her coaching skills, but after a year and a half she still wasn’t feeling fulfilled. That is when she stumbled upon the idea of business coaching as a career, which combined the two things that she most enjoys: optimizing business and helping people.

“Those are the two things I really enjoy. I wasn’t a big fan of the politics in the corporate world. I really didn’t want to go back to that,” she says.

Of course, Loehn first needed certification and to find a coaching franchise that suited her. There were several options, but Focal Point quickly made a distinct impression on Loehn. She says, “I realized after talking to the Focal Point people that they were the type of people that made me want to be better and do better. They were highly qualified and had a high value system that matched my own, so I felt very comfortable.”

Furthermore, Focal Point’s stringent due diligence process convinced Loehn that they were as interested in finding quality business coaches as she was in finding a quality franchise. Focal Point’s due diligence begins with two to three months of frequent interviews and conversations to determine if the prospective coach is a good fit for the Focal Point franchise. During that time, Focal Point checks the individual’s business experience to determine if the individual has adequate experience to produce results for clients. After the due diligence process, the coach goes through eight days of intensive training in a range of topics, including how to be an effective coach, how to produce results for others, and how to market one’s own business and grow a coaching practice.

The man behind Focal Point is Brian Tracy, a well-recognized expert in personal and professional development. Loehn says, “He wanted to get this methodology that he’s been using with the largest companies of the world...into the hands of small- to medium-sized business owners. So in 2004 Focal Point was born and that’s why there is that due diligence in that certification process, because if you’re familiar with Brian, then you know that it has to be sound and these people need to be qualified in order to sit with a client and help them get results.”

The coaches take their own business experience and fuse it with Tracy’s methodology, which she has put into coaching modules. According to Loehn, through their own unique business experience and the training that they receive, Focal Point coaches can “partner with business owners to help them identify their goals, and—more importantly—help them to lay out the implementation plans to achieving goals. We help them increase revenue, decrease cost, and therefore increase their margins. We build strong accountable teams within clients’ companies, increase efficiency, and help them become better leaders.”

Sometimes the results of Loehn’s coaching are more than material. Clients also achieve personal triumphs. Loehn fondly relates one client’s success story:

“We had really just started and were in about week five of coaching. I showed up for the session and the client said to me, ‘You had something to do with this,’ and he pointed at me. I said, ‘Okay. What did I do?’ He began to tell me that he had not spoken to his young adult daughter in over five years. She didn’t say why they had stopped communicating, but that he had picked up the phone that past weekend and called her. That was a year and a half ago, and I’m still working with this client. He and she now have a great relationship, as if there was never a falling out at all. The walls between just crumbled, and they’re getting closer by the day, and it all started because he picked up the phone and called her. And that was a result of coaching.”

Of course, Loehn has big financial success stories, too. She gives one example:

“One of my clients owns a veterinary clinic. We have increased his revenue by at least $20,000 a year and it continues to grow. We have decreased his costs by about $20,000 a year and that continues to improve. We continue to find more opportunity there, despite what has happened in the economy. His new client appointments continue to rise and we’ve increased that by 3 percent. So the financial benefits to the clients are just huge. The average return on investment over time is about $5-10 for every dollar spent.”

Loehn shares in her clients’ successes and enjoys her own, though she admits that owning a small business is a lot of work. “I’ve never worked harder in my life—and I thought I worked hard before—but I’m working for myself. I don’t have anywhere near the stress level that I used to have.” Much of that is the result of simply taking charge of her own time and being recognized for her accomplishments. “I control how much money I make; I control how many hours I work; I control how much stress is in my life...I jump out of bed in the morning excited to get started, which I honestly admit was just not the case before. I like what I did, but I couldn’t say that I was 100 percent passionate about it, and I’m 100 percent passionate about this.”

Loehn decided to start her franchise using her retirement funds as a form of investment capital. She worked with Guidant Financial Group to complete the transaction using the Guidant 401(k). She chose Guidant for the same reason that she chose Focal Point: the company’s commitment to proper care and diligence.

“I felt, because the product is complex...I wanted to be sure that everything was done right. I’m a highly ethical person. I want to make sure that I’m doing everything right, and I felt very comfortable with Guidant.”

Careful due diligence and efficiency are all key factors in Loehn’s success, but she has two more bits of advice for small business owners and people who are considering starting a small business or franchise:

“Make sure that you’re passionate about it because you’re going to spend a lot of time doing it. I’ve often seen and heard about people getting into a business because they stumbled across something that just happened to be for sale and it was the right price, and they say, ‘Well, I want to control my own destiny, so I think I’ll do this,’ and they sort of go in through the backdoor, but that’s not the way to do it because the passion isn’t there. Secondly, be prepared to put all of your energy into it for awhile, because it takes time to build a business. As Brian Tracy says in Flight Plan, you have to go full force, just like you have to go full throttle with the engines to get a plane in the air. Once you are airborne, you can relax a little, but never all the way. There will be unexpected challenges and setbacks, and that’s where the passion comes in again because persistence comes from passion.”

So if you have a passion and a business or franchise to match, you might consider starting your own business. You may find more fulfillment through your work than ever before and have better control over your own success. Just be sure to thoroughly evaluate all of your options regarding franchises, certification methods and funding options, so that you can be sure that your business is supported by people as passionate and qualified as you.

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.”

Oct 13, 2009
Buy a small business or buy a franchise and the first word that comes to mind might be “new.”  Buy a thirty year-old business in a thirty year-old building... and “new” might be the last word that comes to mind.
But turning old into new was a challenge that excited Frank Czerwinski, entrepreneur and owner of two Burger King locations.

After earning a degree in finance, Frank started a career in retail banking in Delaware. “It’s ironic,” he says, “that I ended up in retail banking. Delaware is the credit card capital of the world. I thought it was exciting being fresh out of school, working with a small bank that allowed me to work directly with creditors and seasoned executives. I wasn’t making a lot but I learned so much.”

Frank’s financial education started at an early age. “Working my way through school from age fourteen on,” he explains, “meant I never went without having some source of income. Whether it was just a kid working at a car wash, which was my first job, or in the summertime waiting tables, or working at various industry jobs. Having that exposure and seeing some of the freedom and rewards and challenges that business owners face... when I jumped into the corporate world I realized quickly how constraining it is – and my learning curve really tapped out after my first banking experience.”

But he found other ways to gain knowledge... and along the way had experiences that shaped him. “I had five different positions with five different companies over twenty-two years,” he says, “and each one of those companies was acquired or merged. Each time my position was put at risk. Bad things can happen to good people... and it made me realize you could be the best at what you are but if a company acquires yours there could be somebody just as good if not better. The risk I faced was eye-opening.”

Owning two Burger King restaurants is not Frank’s only venture into small business ownership. “A few years back I jumped back into entrepreneurialism after a long hiatus, he says. “A friend and I did a few real estate jobs, taking comfortable risks and managing those risks. We were successful and had some fun, and that let me get comfortable making big financial decisions that directly impact my wallet. I learned I could assess situations, think on my feet, and make the right decisions most of the time... and I realized I was ready to go out and start looking at businesses again.”

So Frank started investigating new opportunities over six years ago. Even though he looked at a number of business sectors, including auto-related products and services, he sought a small business opportunity with an established franchise offering low ticket items that was relatively recession-proof. While that sounds like a tough combination to find...

“Interestingly enough,” Frank says, “these two Burger King locations became available literally in my backyard. I have no fast food experience, but I saw tired staff, tired owner and managers, tired buildings... so I jumped on the opportunity.”

Franked put together franchise financing in part by investing his retirement funds into his businesses with the help of Guidant Financial Group. “I felt it was more risky being in corporate America than putting my own money at risk and controlling my own destiny. I can make a burger with the best of them, I can coach a team, I know how to clean up a tired-looking restaurant and get the staff motivated. So for me it was an easy decision to [invest] retirement funds to help [purchase] the business.”

“I really don’t see it as risk at all,” he continues. “I think it’s a very intelligent decision for people comfortable managing risk and confident in their abilities. As long as your abilities match the opportunity the risk is minimized.”

As a new small business owner, his first order of business was changing the attitudes and mindset of existing employees. “I could not afford – nor would I have been smart – to fire everyone and start fresh, even though it might have sounded easy to just hire new people who agree with your approach.

"What I did was lead employees by examples; not being too firm but coaching, redirecting, and explaining. I told them we controlled our own destiny, and once we were approved by Burger King for expansion, they could take part in my vision of growth and profit from it, too. While I have had to fire employees it was as a last resort... because I want to show people that we can coach people into success.

“I just try to show we can accept limitations or challenges... or we can move forward and be what we want to be: A great fast food restaurant and the best Burger King we can be.”

What is Frank’s advice for other entrepreneurs who want to move forward and succeed? “Don’t be afraid to fail,” he says. “Study everything you can. Start small, take small risks, but definitely take risks, and be prepared to feel uncomfortable to be uncertain, and to lose some sleep at night... because you’re really expanding your comfort zone. Be prepared to be uncomfortable, be prepared to take risks, and do your research.”

And how does he feel about using retirement funds to buy a small business? “The best part is as I pay down my debt the equity of the company of course grows. So my business is growing just by existing; if I grow my top line then it’s exponentially growing my investments. I’d say that’s a good deal.”

Entrepreneurs must be bold – extremely confident and borderline arrogant. Entrepreneurs who buy a franchise that are in the process of being “demolished” must have incredible self confidence and self belief.

Gary Friedman, President of Cost Containment Specialists and a serial entrepreneur, has confidence in spades.

Cost Containment Specialists is an expense reduction consulting firm that helps mid-market companies reduce their indirect expenses through two primary approaches. As part of a larger affiliate group, his small business helps $10 to $300 million companies get better pricing by combining their volume with that of other small businesses in the network; in effect mid-market companies enjoy Fortune 500 pricing. At the same time Cost Containment audits invoices to help clients avoid “price creep” and ensure they receive the savings and service promised by vendors and suppliers.

The result: Lower prices, better service, and a partnership with a company specializing in helping small businesses get optimum prices.

Cost Containment Specialists services are provided are on a contingency basis If they can’t save a company money…they don’t get paid. “I tell people it is kind of Las Vegas every day for us,” says Gary, “because we assume a lot of risk. But we also do our homework. We do a preliminary analysis, pull invoices, release requests for proposals to vendors, and make sure vendors bid apples to apples. We compare and benchmark pricing, conduct post-audits, and get credits when necessary. In effect we’re a third-party operational expenses purchasing group. And 95% of the time we achieve savings in one way or another.”

In order to be successful, Gary works directly with a company’s high-level executives. “Some of our best clients are companies where we can deal directly with the President or CFO,” Gary explains, “which creates high-level support for cost containment initiatives. We’ve also found that mid-market businesses think they’re getting good pricing – but in reality they’re not. Plus we make darned sure they get the prices they’re promised. Very few companies have the resources to go through every invoice and make sure the price is appropriate against the contract. We do.”

“Think of it this way,” Gary continues. “Say you get 30% off on office supplies. You think you’re doing great… but it turns out everybody gets 30% off. We benchmark against national pricing agreements, and since our affiliate group creates so much volume we’re able to negotiate better agreements by aggregating spending. A small business does best they can negotiating rates with, say, a telecom company, but we bring $40 million in spending with AT&T and $50 million with Verizon to the table… so we can apply massive leverage, deal with senior people, and get significant discounts for our customers.”

Cost Containment Specialists is not Gary’s first foray into entrepreneurship and small business. “I always have been an entrepreneur,” says Gary, “even when I worked in corporate operational management I was always an entrepreneur at heart. When I left that position I knew I didn’t want to go out and work for somebody. In fact, my wife kids me. She says I never find a job. Instead, she says, ‘He always has to buy a small business so he can find work.’”

A graduate of the University of New Mexico, Gary worked with start-up companies in operations and sales management. “I’ve always liked start-ups,” he says. “I’ve always liked small, fast-moving environments… to be honest, when the companies got bigger, I got bored and left. As a result I’ve been involved in a couple of exhilarating experiences with pre-IPO small businesses – I never could have experienced that excitement working for a big company.”

After selling a company and working as a consultant for several years, Gary worked for a friend who, along with a partner, provided cost containment services. Three years ago, the owners partnership soured and Gary stepped in to buy the franchise and begin the rebuilding process.

“I actually had started looking at other small business to buy,” Gary says. “I was working with a business broker looking at some brick and mortar businesses when this franchise opportunity came along.” It was at that point that he began investigating all sorts of franchise financing options. After researching small business and SBA loans, Gary turned to Guidant Financial Group for help using his existing retirement funds to make the franchise investment. Instead of taking a distribution, Guidant showed him how he could invest his retirement funds into a small business or franchise. “It was an intriguing concept,” Gary says, “so I went to my lawyer and accountant and found it was a viable [investment] alternative to conventional [small business] financing. Then I turned to my wife and said, “I want to do this….”

“And she said, ‘Let’s do it.’”

“Yes, I’m a lucky man,” Gary continues. “My wife knew from the get-go I was an entrepreneur. I’ve made lots of money and lost lots of money and she has been behind me all the way. In fact, the couple times I took corporate jobs – making big money but feeling miserable – she was the first to say, ‘Get out of there.’”

Even with incredible support, every entrepreneur and small business owner has sleepless nights. Gary is no exception.

“What keeps me up at night is what every small business owner contends with,” Gary says. “But what I tell every would-be entrepreneur is those challenges need to energize you. Challenges need to motivate you instead of putting you in a negative frame of mind.”

“More than that, though,” Gary continues, “what keeps me up at night is the excitement of getting up the next day and doing the right things for clients and winning more business. That’s what I live for.”

The economic downturn has been great for Gary’s small business – after all, when times are tough, companies look for cost savings wherever possible – but has also created challenges of its own. Two clients have gone bankrupt, two others are in receivership, and volume is down. Gary says, “as an entrepreneur and small business owner you have to re-adjust and be excited about re-adjusting. That’s the nature of business.”

Gary deals with challenges by simplifying and focusing. “A mentor of mine used to say, ‘If you can’t do your business plan on six pages, it’s not a good business.’ In fact, if you can’t keep a report to one page, the project isn’t worth doing. Crystallize your thinking, stay focused, and keep your eye on the ball. The key to success in small business is focus.”

And passion. “As an entrepreneur,” Gary says, “you will experience phenomenal highs and phenomenal lows, so the name of the entrepreneurial game is passion. If you work really hard and the business isn’t a success, pick up your boots and get on with something else.”

Cost Containment Specialists has worked with large and small businesses in a wide range of industries: Insurance agencies, law firms, non-profits, private and public schools – the methodologies apply to almost any business. Yet when asked what he considers his small business’s greatest successes, Gary says, “We’re still standing. That’s one. I’m motivated by the substance of having a small business that’s sustainable and that’s working.”

“But our greatest success is our client list,” he continues. “Being able to build a business from referrals; when you have an undeniable, fabulous reference from a client with a megaphone saying, ‘You have to work with these people,’ is a huge success. That’s what makes any business sustainable. I appreciate how important maintaining and keeping clients fabulously happy with your work is the mark of success and of a solid, sustainable business.”

Small business financing options can often be challenging to evaluate – much less to find. For some those decisions are easier to make, especially if you are in the rare position to understand business financing from both sides of the table. Debbie Caterson exemplifies a rare breed with lending experience, entrepreneurial vision, and small business experience.

But not at first; after earning a Bachelor’s in Business Management and Accounting, Debbie started her banking career at what she describes as the lowest rung. “People think the teller position is entry-level,” she says, “but believe me there are positions below that – I started as a courier.” She worked her way into more responsible positions and in 1984 started work in the foreclosure department, focusing on small businesses defaulting on Small Business Administration loans.”

“In effect I learned what not to do as a lender and as a small business owner,” she says.

She later became a branch manager and commercial lender, making small business loans throughout the 1990s. In 1998 she left banking to work for non-bank lenders who provide small business financing to entrepreneurs, start-ups, and established small businesses.

Then she decided to take her own advice. “I realized the economy was struggling,” she says, “and I probably needed to do what I recommend to my customers – start my own business. But of course I needed financing for any business I decided to start.”

She also needed an idea for a great small business – and she found one close to home. “Our grandson was diagnosed with autism,” Debbie says. “We went to a specialist for autistic children, hoping for a recovery, and the first thing we had to do was take him off all gluten and casein.” Research shows 90% of autistic children cannot digest gluten – which is found in wheat, rye, barley, and oats – and casein – which is found in dairy products.

“We were inspired by the difference the diet made to our grandson’s world,” Debbie continues. “Within two weeks of changing his diet he stopped banging his head against the wall, he stopped spinning and slapping his hand in front of his face. From that point forward we worked hard to continue to clean his system out because there are so many things that contain gluten and casein: Shampoos, hand soap... even things like paints for school. We have to provide non-toxic paint because everything has gluten in it.”

Earlier this year Debbie and her husband planned to take their grandson to Hawaii on a family trip, so they went on a scouting trip, checking out health food stores to see what products were available. “We found the same stuff that is available here – which is not edible in our opinion,” Debbie says. “So I was sitting on the beach complaining about the situation to my husband... and I realized it was the perfect business: We’ll make gluten and casein-free products that also taste great!”

Idea in place, she returned to the issue of funding. Because she thoroughly understands small business financing, she knew precisely how to evaluate the options available. Debbie made a bold choice, deciding to invest her retirement funds into her new business. Working in the industry as a lender, Debbie knew who to turn to. She contacted the recognized leader in small business financing Guidant Financial Group for help.

And the concept of Inspiration Mixes was born. To move from concept to reality, the first thing Debbie did was investigate pre-made ingredients, but the cost seemed prohibitive. Then she bought ready-made mixes and was less than impressed. “I started playing with recipes that were terrible,” Debbie says, “but that people still have to eat because of their strict biomedical diet. We started experimenting with recipes and came up with products that taste just like foods that contain gluten and casein – except ours don’t. We’ve done a lot of research and development and have several customers who haven’t eaten bread in ten years who are excited because they love our bread.”

Inspiration Mixes launches later this month and its prospects are excellent. “We plan to place products in health food stores by the end of September,” Debbie says. “And we’ve had over 100 people contact us just based on word of mouth. That’s exciting, but we are hesitant to go too far too fast since we’re a small manufacturing facility and the Internet may take us to a level we can’t service. We’ll start out by placing ten or so of our mixes in health food stores and ramp up from there.”

Even though the entrepreneur plans to start small, she has a clear long-term vision. “We’ve seen statistics showing one 1 out of 133 people are diagnosed with celiac disease in the U.S.,” she says. “From what I’m reading, since grains are now genetically engineered our bowels can no longer process it in our system, and that’s why there has been such an increase in this disease.”

“So there are two things we would like to do,” Debbie continues. “Ten percent of children with autism overcome their diagnosis and are never autistic again – that tells me therapy and a biomedical diet are critical. Therapy is expensive, though, and is usually not covered by what we would like to do is become a successful business, make money, and use a portion of those funds to create a trust fund and help families who can’t afford biomedical treatment and therapy. They just want an opportunity to help their children’s lives improve – and we would love to help provide that opportunity.”

Bob Burke decided to seize the opportunity to help small businesses turn perception into reality…. while along the way improving a few of his own in the process.

Perception is reality. In difficult economic times many businesses can’t afford to lease expensive office buildings, hire administrative staff or maintain highly professional operations and workspaces – without dealing with the financial burden of significant overhead costs. Yet many businesses feel that without the perceived and tangible advantages created by professional office spaces, dedicated conference rooms, skilled receptionists, and experienced administrative specialists, they will not be taken seriously by customers, vendors, and suppliers.

Bob is hardly a newcomer to the needs of small businesses and the realities of corporate life. He worked in chemical manufacturing for seventeen years, spent twenty-one years as a national sales manager for a global corporation. Later he found a productivity improvement firm where he consulted with businesses that needed to cut costs, improve efficiency, and optimize manufacturing and production processes.

Bob was extremely successful but over the years grew tired of the heavy travel demands. He decided to find a new business opportunity that would allow him to cut back on travel, stay close to home, and work full-time with his son.

“My son had just gotten married and was building a family,” Bob says. “My wife and I have three children, three grandchildren with another on the way… I traveled a lot while our kids were growing up and I wanted to help my son build a business so he didn’t have to live the same way. Granted, starting a new venture is always risky, but improving our family life makes it worth the risk.”

Bob has also received full support from his wife. “She’s enthusiastic and sees the big picture,” says Bob. “She’s willing to accept short-term hardship if it creates a better lifestyle for our family over the long-term.”

Since family concerns are a major motivator for Bob, it’s no surprise he found the opportunity he was looking for through his family. Bob’s son was working for Intelligent Office Systems, a Colorado-based provider of shared and virtual office systems and services.

“My son had been with the company four years, helping new franchisees and start-ups get established,” Bob said. “As a result he really understood the business and what it took to get started.” After a number of discussions and a lot of research, Bob and his son decided to become partners as Intelligent Office Systems franchisees. Together, they opened for business in June, 2008, with thirteen office spaces and three conference rooms located at a high-profile Denver business address.

Their location provides fully-furnished offices, conference rooms that can be rented by the hour, remote and on-site receptionist services, and comprehensive administrative support. Shared office solutions are available on an a la carte basis, which allows small businesses to pay only for the services they need.

“Perception is reality with many companies,” says Bob. “Our clients get a professional image at a much lower cost – and they get additional services they couldn’t otherwise afford.”

Bob’s goal is to maintain a 90% occupancy rate, leaving remaining 10% open for clients to use on an occasional, spur-of-the-moment basis.

While the business hasn’t grown as quickly as he expected – June 2008 was not the best time to offer new office space since many companies were feeling the effects of a staggering economy – growth has been solid in recent months as companies begin to understand the opportunity Bob’s franchise offers. “What they don’t realize at first,” says Bob, “and it’s one of our marketing challenges to inform people, is how many services they can get for a dramatically lower cost. Companies need offices but they don’t have a lot of money to spend. Right now receiving great service at a low cost is incredibly important for businesses working hard to survive and thrive.”

What has Bob learned from opening a franchise? “Cash is king,” says Bob. “I’m not comfortable with debt, especially in today’s market.”

The business has also taken longer to mature than he anticipated. “If you think you need $100k, find $200k so you’ll have a cushion if cash flow is a problem early on,” he says. Bob received help from Guidant Financial Group to purchase his business. Through Guidant he learned how to invest his retirement funds in the business without taking a taxable distribution. This provided him an alternative to investing in the stock market and allows him to directly impact the value of his investments.

Where cash is concerned, Bob offers another thought. “If you have a business plan and the cash to support it, you’ll succeed,” he adds. “If you don’t have the cash to support the plan, you’ll fail. And if you do have cash but you don’t have a great plan, you’ll also fail.”

Yet he also readily admits that even with his experience and background he doesn’t have all the answers. Who does Bob turn to for advice? The support provided by his franchise system.

“Don’t just choose a good franchise opportunity – choose a franchise that can support you,” says Bob.

“Everyone needs help – make sure you can get the help you need to be successful.”