journal economics of education review
Whatever you call it, cash, money, big pockets or something else, makes no difference. Way back in my earliest franchising experience, we had a board member who was one super guy. His Dad had the big pockets from another business but our board member had lots of wealthy friends too. It was not a big problem for him to add new money within a couple of hours when we needed it.
We'll call him Bill, for short, a young man with lots of connections. He'd come into the office every morning about 10 AM with the Wall Street Journal. Get a cup of coffee and head for the back office. He'd had polio as a teenager and walked with one crutch for balance. Bill was one of the nicest guys you'd ever want to meet or have on your board. Smart, college educated, and filled with great ideas.
Our franchisor was new to the franchising business. We were new to the staffing business as proud new franchise owners. None of us had been in or even near a personnel agency or temporary help service. I had a friend who owned the Manpower franchise but nothing more. It didn't seem like he was very interested in my new franchise or helping us to successfully compete with him in the marketplace.
Remember, Bill? He helped us get into this situation by buying the franchise. Several of us had a few dollars invested so the wealth was spread among us. No one took the full load but somebody had to get moving or we'd be broke before we began. Not a good idea for any of us. Unfortunately, our timing was not summa cum laude either. Economics of the marketplace was not treating us with kindness as prospective clientele began to tank and cut staff at the same time.
Gas prices can be bad but no gas is worse. Lines were forming at the stations for 10 gallon, maybe less. For some gas hogs it was awful. People quit going out to eat, cooked at home. Restaurants were going out of business like flies on a porterhouse. Nothing good seemed to be happening in our industry and a newbie like us, got turned down at the door by the gate-keepers. The employees were living in fear of losing their own job and weren't interested in our recruiting or temporary help services.
You see the problem, right? Our timing was not good for buying a franchise. One person on our staff had a few years in the personnel business so all was not lost. We learned quickly, worked very hard to make it happen. Two weeks training at the home office was the franchise industry norm. You return home with all the answers written down in one or two 3 ring binders. Got a problem? Look in the Operations Manual, right? Franchising has come a long way since our day.
Money bags Bill, our guy with the WSJ in hand, was paid a big salary for being or because. For over a year his daily activity was propping his feet on the back office desk and reading the WSJ. Is there a huge message here? Very simple: know your business partners and stockholders. Write out a business plan in detail with everyone accounted for in full disclosure. Survival is your goal without detractors, people who refuse to carry out their part of the business franchise agreement. You must have good accounting guidance and the best legal counsel in managing your due diligence.
Don Monteith spent 32 years as co-owner of a staffing/personnel business plus several franchised services [personnel agency, temp services, diet centers, computer training, dictation-to-go, vending, mail-order]. Most of his business education was learned in the {SHK} "school of hard knocks" where he earned a PhD with honors. Today, Don shares his experiences, successes and failures with clients, friends, and small business owners. You can enjoy his Newsletter about business, life, joy and happiness at http://www.DonMonteith.com
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