Written by: Jeremy Bollington, Multi-Unit Franchise Owner & Area Developer, Blo Blow Dry Bar
A Google search for articles on transition from a long corporate career to entrepreneurship produces lots of results, but I question what help many of these provide to corporate execs in transition. Most of these articles focus upon start-up business ventures – someone taking an idea and going for it – how relevant is this really for the typical 20 year+ corporate executive in transition, who is trying to decide whether to jump back on to the treadmill, or do something very different.
I found myself in such a transition going into 2016. I was a banker, who had spent over 25 years building a successful career, working in London, Hong Kong and New York, running large teams/business at a couple of firms, but then suddenly I found myself “restructured”, as the outplacement folks say, out of a senior leadership position. To cut a long story short, I made the transition from corporate executive to small business owner, and wanted to share the story, because as I went through the transition, the most helpful conversations were with individuals who had made a similar journey. To anyone in such a position, or contemplating making this change, I hope that this will be helpful.
Restructured Out!
It was late Sept 2015 and I was Co-Head of Wholesale Banking, Americas for Standard Chartered Bank based in NY. I had just turned 49 and was saying my goodbye’s to the team I had led for four years. As I walked off the banking floor for the last time, I received a standing ovation – pretty cool, very emotional and something I will never forget, but as I rode the train home it sunk in that for the first time in my life I was unemployed. I decided to take a few months off – some golf, and some travel with my wife, but I am not sure I ever fully relaxed – I needed to solve the “what next” question.
As we came towards the end of the year it was time to think seriously about answering that question. I signed up for the Lee Hecht Harrison outplacement services, worked on my resume, joined one of their “work search” groups and set about answering that “what next” question. I will say LHH’s process was tremendously helpful – two elements stand out for me as I look back on that time – firstly their process of forcing you to really step back and think about your skillset; secondly, their work search group – a weekly accountability group that became a great sounding board for ideas and connections.
The obvious answer was of course to go back to banking –I had good reputation for building/running teams and could bring value to a number of institutions. My initial networking bore this out, but also confirmed my thinking that there were very few inspiring opportunities. As I felt increasingly uncertain about my desire to jump back on to the banking treadmill, I was starting to think seriously about doing something different. My wife and I were now empty nesters, as our youngest child had left for college in Aug 2015 and we had been building what was intended to be a second home in Charleston, SC. Heck…should we just migrate south?
Entrepreneurial Thoughts
As we thought about a move south, I started to look at three basic options – do I buy a business; do I start a business; or do I opt for the middle ground (i.e. franchises).
From discussions with business brokers, there were very few businesses for sale in Charleston. I didn’t think I had the time – I wasn’t getting any younger! – nor any good ideas to start my own business; so I opted to explore the middle ground. But where to start – there are thousands of concepts, in every conceivable business. I stumbled across the world of franchise consultants – a former banker who had started his own business put me in touch with a consultant organization. I was a little skeptical – they do after all get paid by franchisors if you sign on with a concept they introduce you to. Early on, I determined to use the consultants as a sounding board and for ideas. Ultimately, I think this served me well as I went through assessment processes with a couple of different firms and ultimately worked closely with FranNet’s consultant in Charleston, who subsequently has become a great source of contacts/introductions to the local business community.
I spent 3-4 months looking at multiple concepts. I ruled out food straight away – too many brands (how do you pick a winner); generally too big an upfront investment; too many moving parts (in addition to staffing; commodity prices; changing preferences for food brands etc).
I did look seriously at coaching franchises – I felt that one of my core skills was leading / coaching teams. I looked at various peer organizations and also business coaching. Ultimately, I am pleased that I didn’t go this route as it’s a crowded field – I am finding I meet a lot of coaches pitching me on their services! Ironically, as you will see below, my chosen path will actually give me the opportunity to coach business owners via another route.
Strategic Plan
As I was looking at concepts, I was also firming up broader goals – my 3-4 months off at the end of 2015 convinced me that I wasn’t ready to retire. I was looking for something that would effectively become a 2nd work/business chapter, and that I could pursue with vigor for 8-10 years. This led me to look for concepts that were scalable – either geographically (ie opening multi-units) or where it would be possible to invest in adjacent concepts. This also led me towards concepts that were developing, vs well developed, as the latter often had territory constraints.
With the above goals in mind, I quickly ruled out territory based sales businesses (eg either B2B or B2C sales business of which there are a myriad – printing, signs, cleaning, pest control etc etc). I just wasn’t sure these were scalable. Many of these also felt like “buying a job” – by this I mean that the franchisors expected the owner to be the salesman in chief.
This led me to non-food bricks & mortar, and in particular personal services, given the trend towards niche/specialist service providers. I looked at multiple concepts (massage, waxing, haircutting, blow dry etc). The success/rapid growth of concepts such as Massage Envy and European Wax demonstrated the potential, but such established brands had limited available territories. I also looked at some start up concepts, particularly in the blow dry space, but I saw little benefit to partnering with a concept that was in start up mode (ie only a handful of franchisees), as my costs and upside potential were the same; and yet I would be taking the risk that the Franchisor failed (literally or in terms of scaling their support systems).
Ultimately, I decided to focus on two areas – blow dry and waxing, and after much due diligence (multiple franchisor conversations, talking to/meeting with multiple franchisees, looking at all of the concepts in the segment), I partnered with two concepts – Blo Blow Dry and Waxing the City. Both were of a similar size – c. 50 locations at the time; both were intent on rapid growth, and both had good territory availability in the South East. Start-up costs were reasonable and diligence indicated potential for good returns. It also felt like there would be great synergy between the two concepts in terms of client base (allowing for cross marketing etc). Lastly, I was comfortable with the Franchisor teams and felt that I could work with them. This most definitely wasn’t the case with all franchisors I looked at !
In addition to acquiring franchise territories for both concepts, I also partnered with Blo as an Area Representative for the South East – essentially working with them to seek/develop/support franchisees across the region. Going back to one of my early goals – this arrangement ultimately will give me the chance to coach franchisees as they come on board.
The Rubber Hits the Road:
The above process, from the initial work at the outplacement agency, to signing on with Blo and Waxing the City took 6-7 months. For me it was a full time process/project, particularly once I got into due diligence mode… I guess that was the banker in me !.
That was six months ago, so far no regrets – we are busy getting ready for the opening of our first locations for each business – back to my point on synergy – we are opening locations that will be next door to each other. We are in the midst of build out, hiring our staff, setting up systems etc.
So what have I learned from all of this, and what advice would I give to anyone facing a similar transition, or thinking about pro-actively making such a move? I think some key elements are:
- Really take the time to examine what your skills are; what you enjoy doing; and what your objectives are;
- Talk to as many people as you can. Even before I started talking to individual franchisees at the concepts I was seriously looking at, I sought out and spoke with many people who had made the transition from corporate life into franchise ownership.
- Get ready for the sales pitches – Franchisors are after all in the business of selling franchises…some are highly selective on who they will sign up as franchisees…some are not. Most have a well honed sales pitch !
- As you do your due diligence, really ask yourself “can I see myself working with this team?” By team I mean the franchisor team and also the existing franchisees.
- Everything will take longer than you think (setting up the business, negotiating leases, permitting etc). Ensure your financial planning factors this in.
- Be prepared to roll-up your sleeves – initially you will be Sales, Marketing, HR, IT, Legal, Finance and any other function you perhaps took for granted in your corporate life !. Sure you can and should outsource some of the work, and you will begin to hire a team, but I have spent time over the last few months doing things I didn’t really contemplate having to do.
- Ensure you have some form of advisory group – even if very informal. While corporate leadership positions can be lonely, I always nurtured strong relationships, whether those were with my direct reports or peers across an organization, which allowed me to brainstorm issues/challenges. In starting your own organization, its critical to have an informal group of advisors to whom you can turn.
With what I know now, would I make the same decision today? Hell yeah!. While this question should really be asked in 12-18 months time, my early view is a very positive one. I have been re-energized by diving into something new and very different. I don’t miss the endless meetings and corporate politics that are tough to avoid in the corporate world, no matter how hard you try. On the truly positive side of the ledger, I have discovered a whole band of small business professionals that I really didn’t know existed, and that really are the heartbeat of the local community, and also joined teams of franchisees who bring a wealth of different backgrounds and experience and who have generally been tremendously supportive.
I truly hope that sharing my experience is helpful to anyone contemplating such a move. If you are – do so with your eyes wide open…but don’t be afraid to take the leap!