The Accidental Entrepreneur

by Allis, Janine;

  Know when to let go and allow people the opportunity to thrive.

  A business's success is all about the people — get the people wrong and it will be detrimental. For example, getting your accounts wrong can cause numerous problems. It's impossible for investors to come into the business if the figures are in question. Making the right decisions within your business is also difficult if you do not accurately know what the business is doing. One of the most important people in any business is the bean counter (okay, the accountant).

  No one person can do it all. The reason that Boost is Boost, and not one of the other juice bars that no longer exists, is the people who I choose to have around me. I think of them as my personal board members. When you get your people right, it makes everything flow. When you get it wrong — get it right quickly!

  It's vital for people who are successful in business to pass on their knowledge to those who can benefit from it. Both Rod Young (our franchising expert) and Geoff Harris did this for me and, in a nutshell, it's why I've written this book.

  6

  STRUCTURE FOR GROWTH

  The most important gift you can give to your business in the early stages is to get great systems in place to manage all the mission critical aspects of your operations. The number of people who tell me they have everything in their head is frightening. You cannot grow unless you create a solid foundation. Very early in the Boost journey, we discovered the value of systems — particularly when we decided to move to a franchise model. Strong systems will save you when the going gets tough because — like military training — they give you something to fall back on when your brain is in a fog and you have a thousand urgent things screaming for your attention at once. I was fortunate that my brain works in systems, and every day I was either tweaking or creating a system so the business could grow. Of course, no system will work unless you have an A-team in place to ensure that, as the business grows, it develops into a relatively sleek and streamlined operation. Without good systems and a winning team, you risk creating a scary ‘Frankenmonster' of a business that will need a lot of pruning and restructuring down the track to get it back into shape.

  It's also important to consider what the future shape of your business will be and make sure the important decisions you make in the early days take you closer to that goal and not further away from it. In the case of Boost, franchising was on the cards from the outset but franchising isn't right for every business so consider carefully what the best model will be for you. Another thing that set Boost apart was our marketing, which I talk more about in this chapter.

  So spend some time in the beginning to think through what your business will need and set yourself up for success early. Remember — you cannot build a house on cracked foundations; you need to make these foundations as robust as possible. The hours you spend early on will save you weeks, months or even years of pain — and potentially substantial sums of money — in the long run.

  To franchise or not to franchise …

  What to franchise? When to franchise? It seems that everyone with an idea is trying to franchise it these days. So how do you know if your idea is a good bet? When should you franchise? At Boost, we were very quick to franchise and, for us, it was definitely the right move. The speed of our growth was so rapid in the early days that franchising was the only viable option to maintain this growth momentum, and it worked well for our business model. But franchising isn't for everyone. Before you take that plunge, you should consider whether your business model is appropriate to your business.

  The first thing I'd say is if you have a business that is only slightly profitable after royalties, do not franchise, because it will be a world of pain! Franchising only works if you have a proven profitable model that is transferable and has growth potential.

  You need at least a year's worth of figures that are profitable. You also need to make sure that you're in possession of a full operations kit (a ‘how-to' guide with tools, forms and information) so that everyone knows exactly what they're doing. And you need to be certain that your intellectual property rights and trademarks are set up and protected. And I'd recommend you hire a solid accountant and lawyer to ensure you get it right — once you know the rules, the process is not difficult.

  Next, you need to be sure your business is a good franchise option. Work out if your concept is a profitable model that can be transferred to another location. I have a friend who's a naturopath, and she is so successful that she was considering franchising. Unfortunately, in her situation it's not possible — she is her business. If she could find 100 clones of herself to run the franchises, yes, it would work, but that's not going to happen! In my friend's case, she's now considering creating a product line instead. Remember — franchising may not be for you, but there are always other ways to expand your business.

  Assuming your business is making money and is transferable, what are the benefits of franchising? For me, franchising has five enormous benefits:

  Market ownership: If you have a good concept that's busting to grow, you need to claim your market — if you do not grow your concept, someone else will! Don't let anyone steal your hard work right out from under you. Franchising allows you to expand your concept into new territories without having to physically be there yourself, because you get like-minded people involved in your business who also have ownership, and you know that they have the care factor to make the business work. You need to be first in the minds of your consumers. Without this advantage, growing a brand is difficult.

  People: When you franchise, you expand your operation with passionate, like-minded owners who will work as hard as you do to build their own businesses as part of your network. The good franchises really tap into this great resource to grow their business.

  Capital: Franchising allows you to grow your business with limited capital outlay.

  Marketing: Franchises pool their resources so that they can market effectively as a group. Franchising is also a great way to get market penetration by opening lots of stores, which in itself is a great marketing tool.

  Buying power: With mass orders come great savings. Many businesses need to get to a certain size before they are big enough to make decent money. With a franchise, even though you have one store, you leverage the group and you immediately have better buying power.

  So if your business is straining to grow, do the sums. Franchising just might be the perfect solution for you. However, while franchising is often viewed as a golden ticket to retirement, it can be a nightmare.

  Franchising comes with four major stings in the tail. These are:

  Set-up costs: Legal costs and aspects such as preparing your training manuals and documenting your systems so you set your business up to franchise can cost in excess of $200 000. Of course, if you do it right, it is well worth the investment.

  High risk of litigation: Whenever you are dealing with people and large amounts of money, even if you do everything right, you are still at risk of being sued. When all good intentions go wrong, for example, sometimes a franchisee can look for someone to blame. When I first started out, my lawyer said to me that the one thing that was guaranteed was that, sometime down the track, someone would sue me. If you ever go through this process, you will know there are no winners (other than the lawyers) and it is a world of pain.

  Systems pressure: If you thought that running a business required you to have good systems and processes in place, well, multiply that pressure by ten to get closer to the requirements once you franchise. The Franchise Code of Conduct needs to be followed, and you need systems for tracking sales, communication, marketing, HR (etcetera, etcetera). So your business needs to be in great shape before you franchise. You will need to continually invest in digital systems to keep your business robust.

  People: While getting great people to deal with and share great ideas is a great positive (because nothing is better than being surrounded by dynamic, innovative people), the negative is that, because we are all human, y
ou'll also likely have to deal with negative people who love the blame game. It is also very hard when, for whatever reason, the business does not work for them or perhaps they have a change in life, such as a divorce. You need to ride that path with them, understanding it can be very hard emotionally to run a franchise business.

  So before you make the leap, consider carefully what kind of model your business is best suited to.

  The Boost franchising method

  I never even considered having just one juice bar. I always knew that Boost was going to be big (which shows just how naive I was, and lacking in any true knowledge of what was involved to make this prediction a reality).

  In the very early days, I hadn't considered how exactly I was going to create all these stores. I simply thought I'd have another and another and another … Unfortunately, as the brand expanded, I simply couldn't hire the high-quality people I needed as well as expand. I realised early that if we wanted to grow quickly, people in the company needed to have ownership — and there's nothing like having everything on the line to make a business work well. Enter franchising.

  I'd never had anything to do with franchising, and didn't really understand how it worked. We met Rod Young, a franchise industry consultant, through a friend of a friend, and approached him to advise us in setting up the Boost Juice franchise. I always think that if you're going to do something, you should do it right, and getting Rod on board to help us avoid some of the basic mistakes in franchising was a good thing for us in the early days — at the time, he was the best in the business.

  Another important factor was getting the right franchise manager. I've always seen our franchise manager as the gatekeeper of the Boost Juice name. I imagine her standing in a knight outfit (with a very sharp sword) on a plank outside the Boost castle, and I know that she will not let the wrong people into my business (or our business, as she would say). We do not tolerate mediocrity. Believe it or not, the best decisions we have made involve the people who are not with us!

  For Boost Juice, franchising has been a wonderful way to get amazing people into our business and to create ownership in individual Boost stores. We call our franchisees ‘Boost partners' and in a sense that's what they are. Franchisees pay Boost an ongoing royalty — a percentage of turnover — for the right to use our brand on a single store. They are buying into the brand and the support we give them. The statistics are very straightforward and, overall, you're more likely to run a successful business if it is a franchise business; however, buying a franchise business is not a blanket guarantee.

  As the franchisor, we get two major benefits from the relationship. The first is growth of the brand. (We were listed in BRW in early 2005 as Australia's fastest growing franchise network.) The second is the quality of the people you bring into your business to run the individual stores. Both the franchisor and franchisee have the same motivation to be successful, and both parties have everything on the line to make it work; this is a great motivator.

  It's not easy to become a Boost franchisee. We are known within the franchising world as being incredibly selective — and we're proud of that. Our existing partners, in particular, love this reputation because they know that any new partner has undergone rigorous assessment. Our selection process for new partners (new franchisees) is one of the most robust and rigorous within our industry. Our dedicated franchising team receives over 400 enquiries a month; of these, one partner is likely to receive keys to their own store. We are fortunate to have an incredibly engaged partner group who have an appetite for further expansion and often snap up new Boost opportunities before they are available to the public.

  When selecting a new partner, we are not prepared to settle for mediocrity; our process helps us to get the right people in our business, and ensure our partners are aligned to our values. Our brand is our greatest strength, so we do everything we can to protect it.

  Shortly after a new partner has been approved to join our network, they will undertake a three-week intensive training program. This in-depth training program encompasses subjects relating to business management, operational excellence and the customer experience.

  Consistency can be a challenge when working with over 200 partners on a global scale, so we have installed strong quality checks (including mystery shoppers and quality assurance audits) to ensure our brand and product is presented consistently.

  This means a Mango Magic will taste the same in Melbourne as it will in Noosa (in Queensland). This may seem like a challenge but to us this is second nature.

  We select franchisees based on the philosophy, ‘It's not necessarily about where they've been, but where they want to go'. We have some partners whose previous retail experience has made their transition into our stores quite smooth, and also many others with no previous experience who have taken it all in their stride and ended up operating very successful stores. The only common stream among the partners is passion for the brand, following the system and understanding the concept.

  I have heard a lot of stories about partners who have cried tears of joy at the news they've been approved as a Boost franchisee and, on the other hand, stories of unsuccessful applicants who have phoned to rant and rave (including one person who sent Boost a doctor's invoice because his wife had to be sedated after hearing the news of their fate).

  Boost's recruitment process is transparent. On the Retail Zoo website, we've posted answers to about 90 per cent of the questions we're most frequently asked, including how much it costs to become a franchisee. (You can find these and other resources at www.retailzoo.com.au/franchising-information/.) The application is quite an intense process. After filling out a ‘Quick Expression of Interest' online, applicants have to fill out an eighteen-page questionnaire and send it to us with an application fee. We then call them for a chat. That's the start of the process. There are then more stages to pass before approval is granted.

  As mentioned, once franchisees are in the system, they take part in a three-week training program. They work in their store with one of our experienced people for support. They have full access to our team and we do our best to ensure they succeed.

  Mixing up your marketing

  It is no accident that Boost Juice achieved 94 per cent brand awareness in juice and smoothie drinkers in Australia in just five years. After all, having a terrific product is pointless if nobody has ever heard of it!

  Much has been made of Boost's marketing and, the truth is, it should be. We weren't the first juice bar, but we were the first in most people's minds. At one point, there were 47 different juice bar brands vying to be in the top two to survive. Boost was the brand that made it through.

  It may be old school but the philosophies of Ries and Trout, covered in their book The 22 Immutable Laws of Marketing, were followed to a T. This is marketing defined simply as ‘find out what customers want and give it to them' — but it's only half the story. The other half of the story for Boost was finding things that customers could talk about and giving them to them. So consumer desire and innovation became our mantra.

  Early on, so that we had a flag for our team to point to, we came up with the ‘Boost JAM Factor', which still stands today. JAM stands for Juxtapose, Assimilate and Make your mark, as follows:

  Juxtapose: If the other guys do it, we don't! What can we do because we are small and don't answer to a marketing committee? Things like the ‘What's ya name?' game (where customers receive a free smoothie if we call their name), or ‘Boost Vibe Challenges' (where customers do crazy stuff for free smoothies). Another promotion that was a huge success for us was the ‘Give away a Boost store' promotion. We ran this in conjunction with a major radio station, and it formed the station's major rating promotion for the year. The concept was a bit like MasterChef — we short-listed 100 people and then worked with these contestants and, eventually, through a series of workshops and interviews, reduced the list to ten people. We then reduced the list even further, until we got to a final three, all of whom were give
n a key — and the person with the key that opened the door to the store owned it. (We were worried that the winner may end up not being satisfied with the win — after all, not everyone is suited to being a business owner; it's hard work and not everyone understands the reality of running your own business. So we had a fallback — in six months, the person could choose to keep the store or take $50 000.) The exposure from the promotion was incredible — sales in the state in which the promotion was held went up 20 per cent and we received over $1 million in free advertising. These are all things that the big guns of the world couldn't do, and they're innovative and new food retail ideas.

  Assimilate: Find ideas everywhere and from anyone at any time. Tweak these ideas, twist them and blend them into another ‘by Boost' idea. Never stop searching and assimilating ideas from the Boosties (staff who work in the stores).

  Make your mark: If you do something, do it big! Don't be included in the ‘and thanks to …' list with eight other sponsors. Do one big thing great, for maximum cut through.

  Using this basic formula, we smashed into the minds of Australian youth, and they loved it. These Australians are now in their thirties and still drinking Boost.

  Why our marketing strategy worked

  Here are some of the reasons our marketing strategy worked (in no particular order):

  Vision: ‘Love Life' was our soul. If something could make people smile, we had licence to do it.

  Loyalty: Our Boosties believed in us and were proud to work in our stores. Because of this loyalty, ideas were well executed in store.

  Saying yes: We told staff to not think too much about an idea, just have a crack, and say yes! Some of our ideas may not have become a reality if we had put them to a vote.