Small Business and Franchise Success Stories

Most people don’t enjoy tax time… unless they are entrepreneurs who own a small business franchise providing tax preparation services to individuals and other small business owners. After buying a franchise from Liberty Tax, one of the largest tax preparation franchisors in the United States, Chris Fehr actively looks forward to tax time. With good reason: Last year Chris was one of the top rookie franchisees in the entire country.

Even though he exhibited a healthy entrepreneurial spirit in his youth, for a long time the idea of owning a small business took a back seat to a successful corporate career. “I have to laugh when I think about it now,” he says, “But in high school I sold exotic weapons to other students. By today’s standards I probably would have been kicked out of school. I sold throwing stars, throwing knives, and nunchuks to kids who wanted to be cool. I bought items wholesale and marked them up 200 or 300%.”

After high school he attended Illinois State University and received a degree in accounting. He worked in sales for several years and went back to school, earning a Master’s degree. During that time he also passed the CPA exam. Chris used his educational background and experience to land a job with State Farm, and over a seven-year period worked in a variety of accounting and mutual fund compliance functions. “It wasn’t huge fun,” he says, “But I did gain a lot of experience.”

He was then hired to be the compliance officer for a small futures brokerage firm, later moving to become the Vice President of Marketing for a mid-size insurance company, a job that involved not only marketing but financial planning and analysis and oversight of a number of back-office functions.

“The problem was I eventually outlived my usefulness to the company, and them to me,” he explained. “I wanted to own my own business but I was also a little hesitant. So I started looking for jobs. I had an outstanding resume, but in 2008 the economy was down and no one was hiring people with my qualifications.”

Chris then started looking at franchise opportunities. “I looked pretty seriously at two different opportunities, but in both cases decided not to pull the trigger. One opportunity required a larger capital investment than I was willing to make, and in the other instance the financials didn’t work – I wouldn’t see a return until I had six or eight stores in operation.” Then a conversation with an area developer caused him to take a serious look at buying a Liberty Tax franchise. It turned out to be an opportunity that not only suited his accounting and financial background but also came with one other significant advantage.

“One of the things I liked most about their franchise program was that it came with an incredibly well-designed, cookie-cutter, turn-key operating blueprint,” he says. “All I had to do was execute the plan Liberty Tax had already developed proven. And that’s what I did.”

Another key factor was Chris, with the help of Guidant Financial Group, was able to fund 100% of the franchise start-up costs using his retirement savings. “I figured rolling over my 401(k) was a great option. I trust my abilities. The thought of investing in myself makes a heck of a lot more sense than investing in someone else.”

First-year success behind him, Chris has aggressive plans for growth. In fact, when he bought a franchise he did so with an eye to expansion. Even though he currently operates one location, he purchased three distinct territories under his original franchise agreement. Territories already in place, he has plans to open a second location this year and two or three the following year. In five years his plan is to operate ten locations.

Small business success aside, entrepreneurship has also made a significant improvement in his family and personal life. Due to the seasonal nature of the tax preparation business, Chris can spend summers with his daughters instead of behind a desk. And he is able to devote significant chunks of time to another passion, day trading.

“I wish I had made the decision to own my own business a long time ago,” he says. “While I was without a doubt successful, I really did not fit in to corporate America. I didn’t like the slow pace and I didn’t like the fact we weren’t growing. Making good money is fine, but I don’t want to have to check my soul at the door and not be true to who I am. Treading water in corporate America is a dead end game for me. “I’m glad I am finally in a position to succeed on my own merits.”

Many entrepreneurs know exactly what small business they want to run. Others seek to buy a small business that meets specific criteria. Mike Royw’s, owner of, spent three years looking for the right opportunity.

“I was a corporate guy,” Mike explains. “I worked at ACI Worldwide, a technology-based company, for 25 years. I made my way through operations, management, sales, marketing, business development, and ultimately corporate acquisitions. So I had a few parameters in mind.”

Mike’s family wanted to stay put. As a senior executive Mike was well compensated and wanted to remain that way, so the business had to be of a certain size. And he didn’t want to own a restaurant, a retail operation, or anything requiring heavy assets. “In short,” he says, “I wanted something light on assets with a focus on cash flow and a lot of variable margin.”

Mike found eSupply Store through a small business broker. One problem, though: The business was located over 500 miles away in South Bend, Indiana. So what did he do? He moved operations. “We had the business moved inside of eight weeks,” he says. “In fact the office administrative functions, the computer functions, telephone systems, office management… all were moved within the first week. The rest was just shipping as much inventory from South Bend as we could while we stocked up the Omaha location – we didn’t want the expense of trucking inventory from one site to the other.”

As a small business owner Mike services other small business owners, providing shipping and packaging supplies. “We serve the segment of the small businesses that need shipping supplies and packaging materials that do too much volume to pay the markup at a major retailer like Staples or Office Depot… but they don’t have a local distributor to turn to. We fill a major void in the marketplace.”

“Our unique differentiator,” he continues, “Is that we’re able to sell various lines of bubble products and deliver them to our customers’ doors for a good price. Bubble wrap, bags, and mailers are our leading product – in the future we’ll expand our product line to become a single-source provider for the packaging needs of small businesses.”

What challenges has Mike faced in buying a small business? One risk entrepreneurs face when they buy a small business is that major customers may disappear during the transition the old owner to the new. As an internet-based ecommerce business, customers had never met the previous owner face to face, and since no customer made up more than 1% of total sales, the transition was relatively low risk.

Another challenge was going from a major corporation to being the head of a small business. Yet oddly Mike feels his stress levels are now lower, not higher, since leaving corporate America. With an MBA and a B.S. in computer science and nearly thirty years in technology positions, Mike handles all computer and web efforts on his own. He functions as his own webmaster and also manages internal systems, product procurement, accounting… which according to Mike may sound like a lot but on a day-to-day basis is easy to handle since he purposely avoided custom systems and uses proven third-party applications whenever possible.

“I also feel my stress has gone down by owning my own business,” Mike says. “At my previous job I was on my fourth CEO in five years. I like to be able to make decisions. In corporate America more people were involved, more presentations, more data, more communications, more differences of opinions, and more politics. When you own your own business you gather the information you think you need and you decide and in 60 seconds it’s over.”

One decision Mike made fairly quickly was to avoid traditional small business financing methods and enlist the help of Guidant Financial Group to use retirement funds to help purchase of the business. “I was an analyst,” he explains, “And I analyzed company acquisitions and returns on investment based on multiple-year timelines under a variety of assumptions. I looked at what I was able to contribute to my 401(k) and my historical return and realized if I could make 20% on my money over the long haul by owning my own business, why would I not do that? In my mind I’m not spending my 401(k). I’m simply investing it differently. And I’m investing in my knowledge, my work ethic, and my own success or failure.”

Now that Mike has completed the transition phase he looks forward to growth. His first step is to diversify eSupply Store’s product base. When he bought the company it sold approximately 1,000 SKUs; currently they sell 2,500 products and are hoping to hit 10,000 in the near future. The goal is to penetrate the existing customer base while gaining new customers through a wider variety of product offerings. “Our goal is grow our business by helping our customers grow,” he says. “A number of our customers are home-based, and as their businesses expand they’ll need alternative business models to support that growth.”

What thoughts does he offer to potential small business owners? “My main advice is to never pay for growth when you buy a small business or purchase a franchise,” he says. “People selling businesses have a business that is worth ‘X’ dollars and they want you to pay ‘X’ plus ‘Y’ because the business may grow. Don’t pay extra for growth potential; getting to ‘Y’ is your job.”

Starting a small business can be incredibly stressful… unless your small business develops products that actually reduce stress.

Along with his partners Sonja and Jasminka, Kenneth O’Connor had worked in the food industry for about twenty years. “The problem was as executives for many corporations we created formulations, built manufacturing plants… but we were always small cogs in a big wheel. Two of us went to work for one company and created a number of formulations and made them a lot of money – and then when they were finished with us they let us go. So we decided not to put up with that again and went out on our own.”

Together they founded Emerald Star International ( to develop and manufacturing fine foods and supplements. Their first compound was Accord, a beverage designed to work with brain chemistry to reduce stress, and improve clarity, focus, and memory. They tested the product, launched into the retail market, developed distributor relationships – and just last week launched nationwide.

How did they find success so quickly? “We have done this for other companies,” Kenneth says. “And we made them into very large companies. By education we’re not only food scientists; for example, Sonja is a machine engineer and a pharmacist. We have a lot of skills in doing a lot of different things. I don’t recommend people starting a business in something that they don’t know, if you’ve never made donuts don’t open a donut shop. If you’ve never groomed dogs before or don’t like animals don’t open a dog grooming place. What we know is the food industry and especially about food supplements.”

Their goal was to find a new product in a developing category. They also wanted to own their own business without outside investment or interference. After investigating a number of possibilities, Kenneth turned to Guidant Financial Group for small business financing advice. “I talked to a few companies and I just wasn’t happy with what they offered. I loved the thought I could actually take a 401(k) and use it to invest in the business. After all, my 401(k) hadn’t done well for many years. So we all pulled our money out of our 401(k)s and as a result we own the business ourselves. Just make sure you get professional guidance,” Kenneth continues.

In the early stages Emerald Star focused on developing a product with a broad appeal. Instead of competing in the energy drink market, they took the opposite approach. “We decided most people could use stress reduction and a way to eliminate some anxiety. We know a lot about herbs and supplements and we combined that knowledge with scientific results. Then we started testing, and 87% of the people who tried the product said they could feel the effects. We even tested our product with paratroopers – who feels more stress than someone jumping out of an airplane?”

Along the way they noticed an interesting phenomenon. 20% of the people that took their products felt a “runner’s high” after about ten minutes. After some research he determined that some of the product was absorbed through the tongue, bypassing the normal digestive process and entering the bloodstream quickly.

Early results were encouraging, but they didn’t stop there. Over time they tested their products with army rangers, teachers, firemen, policemen, salespersons, and students. In fact, the company actively evaluated their product using high-stress, high-risk professions to ensure they were on the right track.

In each case they experienced great results. And since the people who tried the Accord tended to love it, Kenneth and his partners realized that demonstrations and samplings were a great marketing tool. They started servicing smaller independent stores, built up a solid base of sales and experience, and eventually moved into large chains like Whole Foods and Henrys.

“Now our problem is being able to service all the stores we’ve landed,” Kenneth says. “I just got word we’re going into 15 new stores in New York. Once again we need to organize demo people and ramp up quickly.”

Kenneth feels part of Emerald Star International’s success is due to his having a marketing and advertising background; his first job out of college was in sales and marketing. When they started the business, he and his partners developed a strong business plan and extensive marketing model. “A business plan is not something you write and put away, it’s something you follow,” he says. “Evaluate what is working and what is not working. Measure everything, especially marketing. I look at marketing as a profit center. Every piece of literature I put out I expect a return on.”

But while he keeps a close eye on how the business operates, and is conservative in how he allocates funds to different projects, Kenneth is not conservative is when it comes to projecting growth. “In five years we are going to out-perform products like 5-Hour Energy and be a serious contender in a new category of foods. I think we will hit $150 million in sales.”

And due to the nature of his product, he and his partners will probably experience a lot less stress along the way.

Buying a franchise is not quite like buying a small business. When you buy a franchise the system behind it has been tested time and again and deviating is most often not a recipe for success. This is not to say that franchisees can’t take any creative control, but for Chris Zook, a franchisee of Crestcom Training, sometimes the best model truly is the one that others have established—especially when you are just beginning.

Zook had a background in education first as a coach and teacher. When he entered the business world, he excelled in sales which allowed him to move through the management ranks. Eventually, he was combining his business expertise with his educational background as a trainer and business developer internationally.

“I worked in London on three different occasions and in the far east and continental Europe. My role was often times to establish an office in a particular country or city, build the infrastructure, get the people in place, and then move on to another territory and do the same thing in a two or three year period. In essence, what I was really doing was developing people, developing my succession plan, and getting the right people in the right seats, giving them skills to be successful.”

Being mobile, encountering new people and new cultures, and sometimes being caught up in the turmoil of mergers and acquisitions made Zook very adaptable, but he eventually began to consider going into business for himself.

“I realized as I was entering my fifties that jumping around from job to job isn’t fun, especially in a tough economy. I felt like I didn’t have control of my future... I looked around at different businesses. I toyed with consulting and I realized that I wasn’t the explorer; I was more of a farmer. And I wasn’t someone who was going to come up with some new widget or new method or new technology. The idea of getting involved in a business that already existed, that already had the process in place, made sense.”

Zook began looking at options with a franchise broker. Through the broker’s coaching, he was able to eliminate many paths that didn’t really match his skills, such as retail. Management and leadership had been Zook’s strongest points for years, and this led him to Denver-based Crest Com, which provides leadership development and management training worldwide through franchisees.

“Looking at my background, what I had done and enjoyed was developing people. It kind of went back to my roots as a teacher and a coach when I was developing kids, whether it was in the classroom or out on the athletic field or on a wrestling mat. This is the same thing except I’m not developing kids anymore I’m developing adults to help them become better managers and leaders.”

Zook started Zeta Management Training in June 2006 as a Washington state franchise of Crest Com International. Zeta Management offers a 12-month training program that helps managers at every level with essential skills for successful business, including big issues for upper management—from communication, to negotiation, to delegation, to strategic planning—and subtler matters that people at every level might find problematic—better communication through voice mail and over the phone, presentation, stress-management, dealing with difficult customers and different personalities—and more. Participants come in for one four-hour session a month that focuses on two different essential skills. The experiences of the participants vary widely, but all can benefit from the program, based on Zook’s experience. This diversity has in turn proved rewarding for Zook, who has a very diverse background himself.

“People participating in our program might be managers who moved through the ranks self-taught and haven’t received any formal training, or people who were trained so long ago that they have forgotten it and haven’t been applying it...I meet with people on a regular basis from different companies, different backgrounds, different experiences, so I’m constantly learning from people I meet with on an initial basis, but I also lean an awful lot from my participants because these are managers that are young and old and in between who have been all over the place: different companies, different cultures, different background, different experiences. So it’s a two-way street: They learn from me and I also learn from them.”

An advantage of buying a franchise instead of a small business is the network of franchisees that comes with the package in addition to the proven model. This network, too, has provided Zook with diverse input and experience which he has used to improve his business.

“Once or twice a month, I talk to three other [Crest Com franchisees] about our monthly sessions—what the topics are, what new and better exercises and activities we can do that would benefit our participants. That keeps me sharp because these people are all over. One person is from Texas; one person is from Atlanta; the other person is from California. And there are other people I’ve met through Crest Com that are all over the world. They’re in China and in Vancouver, and we are constantly comparing notes.”

With all this diversity and innovation and with Zook’s background in developing businesses in new areas and markets, it seems to easy to arrive at the idea of deviating from the franchise’s business plan, but, according to Zook and the lessons he has learned with other franchisees, trying to force a new approach can be a big mistake for new franchise owners.

“Before I bought the franchise, I contacted existing franchisees, and one of the first questions I asked was, ‘What were the mistakes you made and what would you have done differently?’ The majority of the people said the biggest mistake they made was I not following the script. They said to themselves, ‘I am a good enough sales person, so I’ll try my way versus the Crest Com way!’ and after six months not making any sales and not being very successful, they would go back to the Crest Com style. When I heard this from enough people, I realized that there must be some validity to it.”

Zook stuck to the Crest Com plan, and sure enough, his business was up and running in the time that he and others had estimated. No one anticipated the dive in the economy, but he and others are working through this tough time, too, adapting the plan and expanding on their program as needed.

“Crest Com has a proven model that works. They cover everything from initial contact and marketing, and they’ve done a very good job of tuning that model globally...Unfortunately, the economy took a dive that has hurt my business as it has hurt many companies and franchisees. Perhaps it hasn’t affected people internationally as much, but it has hurt, and it has changed things. We just have to plug along and do things a little bit different, such as looking at different markets that maybe have not been affected by the economy, that have the money and are willing to spend on developing their people.”

In a struggling economy, where businesses need to operate as efficiently and cohesively as possible to succeed, the training at Zeta can prove vital, and one of the biggest rewards for Zook—a man who has been developing people of all ages and backgrounds for his entire career—is seeing his participants flourish personally and professionally. Every day is a new challenge, though, and the combination of challenge and personal and professional reward keeps Zook going even in the down times. It has given him more control over his own future while helping others reach their full potential...a dream prospect for many potential franchisees.

Zook was qualified in every way by his experiences, but like many potential franchisees, the biggest obstacle was financing. Zook overcame this by using retirement funds through Guidant’s 401(k) small business financing plan.

“Without the tools from Guidant I would not be where I am now. I’m very appreciative that Guidant is constantly reminding me of when things are due because it hasn’t been engrained in my mind as much as when your tax is due in April. It’s a very complex plan—reinvesting the money and, how much you have to reinvest, the different things you need to be doing—but Guidant has provided the guidelines and the help and support to make process much easier.”

When you buy a franchise, remember that you are buying more than a business: You are accessing a network of franchisees and acquiring an established plan for success. It can be extremely helpful to be in contact with other franchisees, to compare notes and learn to adapt as the business environment changes. At the beginning, however, no matter how diverse and expansive your experience may be, if you deviate from the franchise’s business plan, you are tossing aside one of the larger reasons to buy a franchise in the first place. If you are the sort of person who wants only to forge your own path, buying or starting a small business may be a better option than buying a franchise. Either way, finding a model that matches your skills and then being persistent is absolutely essential. Of course, funding the purchase is another big step, and Guidant’s 401(k) small business financing plan is one solution. There is much to consider, so allowing an expert such as Guidant Financial to lead you through the process just as a franchise establishes your business model may be your best guides to personal, independent success.