Small Business and Franchise Success Stories

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.