Small Business and Franchise Success Stories

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.”


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