Why Your Fast Start Is Our Priority I The Real Franchise Episode 31

Rhiannon Hello and welcome back to another episode of The Real Franchise, a video series designed to deliver real information, real answers and real insights into franchising. The series is brought to you by James Home Services Australia. I’m the CEO and Justin is one of our owners and our head of new businesses. Together in this series, we tackle all of the big topics unscripted, unplanned and unfiltered.

We go where others will. Absolutely not. No sales and no fluff. We just give information straight up. Today’s topic is all about one of the biggest lessons that we’ve learned in the last 12 to 18 months of being a franchise network and supporting everyday Australians to start small businesses. And that lesson is all about how critical a fast start in your business is.

Now for some listening that might seem really basic. Oh my goodness. Yes of course, if you starting a business you want to start really fast. But there’s also a common belief out there that a slow, steady start sets you up for success as well. Well, in our network, our data is very much pointing to the format these days that a fast start is our best indicator of future performance and success.

So Justin, at a really high level, so that we can then dissect this and dive into the detail later through this video. What does a fast start in our network look like?

Justin First up, to me, I guess for most people that I talk to every day, that looking at, you know, sacking the boss and having their own business. For most people, that fast start is recovering their income or better, as quickly as possible. And and I guess you would have seen the same stat, right, in that, in a lot of, you know, in a traditional business, when you look at buying a business, they say you know, it’s most businesses you need to understand it’ll be three years at least until you return a profit or make an income.

Well, in our sort of business, that’s totally unrealistic because, you know, we’re every day families that, you know, your income needs to be replaced instantly, say, or as instantly as possible so that you can maintain your level of income and get that work life balance back that so many of our business owners want to. And that’s what attracted to this business so fast start.

Yeah, in short, is just getting their income and a bit more back in my opinion. Yeah. For yourself would you say that’s what you’re thinking?

Rhiannon I think that’s a really great summary of it, particularly if you’re, looking at a fast start from the perspective of what it means for a new business owner. There’s so many nerves, you can feel like you’re jumping off a cliff, right? Particularly if you’ve been a long term employer or as most people come to us, they’ve been a lifelong employee, which means that this is the first time they’re ever having to provide their own income.

You know, this is the first time that they’re ever, you know, not quite sure where the next deposit into their bank account is coming from because as an employee, it happens every week or every fortnight. There’s regularity to it. You know what the numbers are going to be. You know what your hourly rate is. You know, there’s security to that.

There’s familiarity in that. And there’s a, you know, a warm, fuzzy feeling that everything’s okay as long as I can budget within my means. When you start a business, that rug gets taken out from underneath you, and you are the one responsible for replacing it. And it can be very daunting. And indeed, we do find actually that, for so many people who inquire with us, one of the big ticket items is can I replace my income with a business and how quickly can I do that?

And the answer is that it it depends so much on the effort that you put in, and that it is different for everyone based on the effort you put in. But we have in the last 12 months, really started to get some great solid data around what is happening in our network from a starting perspective. And I wouldn’t mind sharing just a couple of things at that high level with you.

What what I found is that, every business that we’ve started in this current financial year, except for one, and I’ll talk about them specifically a little later on because we want to be completely open and transparent. So everyone we’ve started, except for one, is in the category of our high performance. And we’ve got two categories.

The the data separates itself out really quite neatly into two categories high performance and what we kind of just call our coasters. So high performance, people who within 3 to 4 weeks of starting their business, they’re earning very close to or above $1,000 a week. What we say after they get to that mark is that they kind of teeter up and down around that mark between the kind of thousand, that $800 a week for the next few weeks.

And then what we say after that is, is a very genuine uplift to where they then end up in their resting zone or, or a lot continue to grow. We kind of look at the data over the first 12 weeks, particularly for this, this kind of stuff. So those guys, historically in our network, business owners that have reached that thousand dollars a week mark within the first 3 to 4 weeks have a much, much, much like significantly higher chance of success long term as a business owner in our network.

Then we’ve got our other half of the data, which is our coasters and these, these business owners, they don’t really reach $1,000 awakened to wait 12 if ever. Now, are you listening to this thinking, oh my God, why would I start? Something like that is a very good reason. They never get off the ground. Because I’ll go back to what I said before, is that if you want outcomes in any business, whether it’s a franchised network or not, you have to put in the effort and I can categorically say that every single person who is in that coast group for us.

Yeah, I did not put the effort in. They did not follow systems, they did not follow guidance. They did not engage with their business coach. They did not utilize our marketing strategies. And I did not put in the hours required. And by the way, we don’t require 60 hour weeks. We require you simply to work the equivalent of a full time position to get your business started.

So our requirements aren’t onerous. And what we’ve seen is that the people that simply implement our system sit in that high performance group, and the ones that don’t or don’t commit the time to it, they sit in the group of coasters, and that group is far more likely to struggle in their business, far less likely to turn the business around and into something profitable long term and far more likely ultimately to fail and exit the network.

We’re all about honesty and transparency, so there it is. You can’t get much more honest and transparent. So back to the original data is that this financial year, every single business we’ve started except for one is in a high performance group. So that’s a really big lesson for us. When we looked at that, data was the faster we can help someone to start their business, i.e. within that first 3 to 4 weeks, the more chance they have of success long term.

So Justin, I want to go back to the one, the one in this current financial year that is in sort of our coast category. Do you want to talk a little bit or you want to jump in with the question?

Justin I was going to jump in with a question, but sure, you hit such a good point. Like, I know one of the previous episodes, we talked about our income guarantee and and we very, very rarely have to pay out on it. We have no issue with paying it on the guarantee. It’s there to support people if they need it.

But the key condition that we’ve made is you’ve got to put in 40 hours of effort. And it’s it’s designed to be this carrot to get encourage people to put in the effort. Because if you put in that effort and it’s not just one, not everybody has. If it’s a couple of 40 hours, you should be doing 40 hours each if you are both doing the business.

So it’s not an onerous thing. Like you said, that’s a full time job, but if you put that in, you get the outcomes. So we hardly ever have to pay out under the income guarantee. And what we’ve seen, yes, we’ll come to this one example because it just stands out so clearly compared to the results of what we’ve started, a lot of businesses this financial year and it’s chalk and cheese.

And, and I guess the data is chalk and cheese. When you look at previous financial years. So we’ve got nearly 100% success rate this year as opposed to other years. Our success rates were high. But we’ve we have noticed an incredible improvement in the success rate to the point where it’s nearly 100% this year. And now you look after your marketing, oversee the marketing.

You also mentor our business coaches. So what is it? Because I know we still operate the same system. We still say the same stuff. We still do the same stuff. So you are overseeing both of those key roles that work with that new status. What is it that’s causing this dramatic, improvement in success? Yeah. And then why do we have the one?

Yeah, that’s not so successful.

Rhiannon It only really comes down to two small things. Now, you said it yourself before. Our system hasn’t changed. Our training hasn’t changed, our marketing hasn’t changed, our coaching hasn’t changed. The guidance that we give you on how to how to start your business hasn’t changed. The strategies that we tell you to use from a marketing perspective hasn’t changed how we help you deal with objections, but quite none of it’s changed.

There are two small things, however, that we now do, that are slightly different within exactly the same system. First thing is, we’ve brought all of our onboarding activities forward. So we used to, you know, you’ve signed your franchise agreement. You’ve got to wait a couple of weeks until you can start your training. You’ve got two weeks that your training is spread across, and then you start trading in your business.

We use to not actually really start working with you in a consolidated fashion on strategies to grow your business and acquire customers until you would try adding. So now what we do is we throw caution to the wind and legal advice to the wind. And what we do now is we start teaching you how to go and get customers.

From the moment you’ve signed your franchise agreement. Now, technically, by law, you’ve still got another two weeks of cooling off. You still got to do your training with us to be able to start, and then you can start. Right. But our data was so clear and so loud in its message. The quicker we can get momentum in these businesses, the more likely there is to be long term success.

So if we’re really actually looking at this and acting in the best interests of our business owners coming on board, then the best thing to do is to get started as early as feasibly possible. So that’s one thing we do. We start earlier. The second thing we do. So by the way, same system we’ve just brought the whole thing forward for 4 to 6 weeks, right.

The second thing we do is it’s an internal thing that our business coaches are now really, really nailing, and that is holding our new business owners accountable. So it’s very easy as a new business owner to go, whoopee, I have no boss. I can wake up at 9 a.m. and have brunch with a girlfriend. And you know what?

Yeah, what? I’ll just do some marketing kind of around lunchtime and then, you know what? I might take an early mark and go have a cocktail with another girlfriend. Because I don’t have a boss anymore. This is fantastic. And instead of, oh, we used to, we used to be far more kind of, here’s the system. It’s totally up to you what you do with this.

You know, it’s totally up to you how much you choose to apply it. By the way, the more that you follow it, the more you apply it, the more you’re likely to be successful. But when we had a little bit more of a, we had a softer approach, which was, yes, kind of here it is. And we’re right here.

We’re working alongside you. You can get as much guidance from us as you want. But this is your business. So where you go? What we found was that people, people used it as an opportunity to to take a bit of a break. You know, they’ve been working for 15, ten, 20 years. And they used starting a business is a little bit of a mental and physical break for those first couple of months.

And that we were finding was leading to that coasting group. So now what our business coaches do is we are a lot more upfront and honest with our business owners about how much work this takes and that, you know, working it off is going to get you results. And that’s what’s in your best interests. It’s not that you’re pulling 40 hour weeks and answering calls at all hours, and marketing 30 of those 40 hours for the rest of your life.

You’re doing it now for the purpose of building your business, because the reality is you’re building it from scratch. So there’s just those two things. Same system, same marketing, same business coaches, just those two small changes. We’ve brought everything in our onboarding process forward. So that you’re starting earlier, and we will now be your accountability buddy. Like we weren’t quite paying before we were, but we were softer.

Justin And that’s what I’ve seen. Like, I know you’re working closely with the coaches, but just observing from my role, we were sort of almost like the arm around the shoulder and, you know, okay, you only did 25 or 30 hours this week. That’s cool show business. You know, we’re here. But when people coast, the money is still going out at the same rate or not.

So, you know, we’re still paying rent. We’re still paying. You know, we still have all the same living costs, but the income’s not there. And so what I observed happening, you know, two years ago, three years ago, when we released a subscription model, we had so many people sort of joined the network is the money’s running out. They’re in cruise mode.

And there comes a crunch time where it’s this mad panic. And at that point, mentally, it’s so hard to pick people up and turn them around. And it’s almost like this belief has gone out the window that I can actually make this thing work. And it’s such a whereas what we do now is radio. You’re in week one of trading in your business.

You know, we’ve already done all this setup stuff. So the ball started to roll and it’s like, right, week one, this is what you have to be doing. How are you going with that through the week? The coach catching up and saying, you know, we’re not your boss, but we know that if you get this stuff done in week one, right now, we’re in week two.

You’ve got to, you know, and you have this 12 week plan. Yeah. And they get and I had a call last night with Dean who’s at Newcastle started with us. He’s in his 13th week. So he’s just come out of this period we’re talking about. Yeah. And you know we we start the onboarding stuff. But as you said within the cooling off period right.

And we had a guy sign up yesterday on his contract. So he’s going so I can sign this and still cancel. And I’m going, well I’d rather you not sign it if you’re still unsure. You know, you need to be sure because the moment you sign it, we’re going to go spend a fortune, a car, ordering everything and all this stuff.

We’re going to have to bin if you you have every legal right to pull out. But we’re setting you up now so that you can start getting the ball rolling. So when you come back from your training, as Dean did, he came back first day, he had four quotes to do on his first day back from training. And he won all four of them.

And he was saying last night to to some people looking at joining us. Yeah, his income just he replaced it within the first couple of weeks what it was owning in the moment. He thought he was on a good wicket out there and he’s replaced it and he’s at home with his family. And yes, he had to put a lot of marketing hours in in those first few weeks.

Like you’re saying. But he said now he said the ball. I just he said, I’m just getting so many people just contacting me because I’ve seen made it, you know, and it’s just like this snowball has taken off.

Rhiannon Yeah.

Justin And it’s it’s just been amazing to observe that, like you said, just two small changes, one, just bringing our processes forward. So I guess we’re taking even more of a risk in that because, you know, we’re doing so much stuff within the cooling off period where people can change their minds, but it’s in their best interest. And the second thing we’re doing is holding people accountable.

We’ve got this plan where it’s we’re not just got the arm around the shoulder. It’s no, no, no, you have to do this stuff or, you know, you need to understand this is what the stats show.

Rhiannon Yeah. And having that data has been really transformative for, our ability at head office to be transparent with people about the likelihood of success based on their own trajectory, because, yeah, having that data, we’ve literally got a graph of all of our new business owners over the last few years and how they tracked. And then there are some really, you know, there’s those two key trend lines that sit in the middle.

There are two very separate sets of data. Those those guys that got started quickly and took off, and the guys that kind of coasted. And having that data is so powerful because when we are having to sit down with a new business owner, sometimes as early as week two and week three, because now we know if we’re not seeing this week, we’re not seeing this.

If we don’t have quotes booked in week one and week two, if we don’t have jobs in at the end of week one and in week two, we already know that they’re behind the eight ball and we can step in and help as early as wait to in week three in in just making sure they fully understand the importance of that first start.

And having the data means that we’re not sitting there going, you have to be doing this and you should be doing this. It means instead we’re going, all right, look, I’m a little bit concerned about the pace of your start at this stage, purely based on what the data tells us about those businesses that have been successful in our network.

If you want to be in that success category, these are the things that those business owners were doing at this point in their business. So you’ve got a choice. It’s your business. But here’s what our data is telling us. You choose what option you want. So so data is really important because it becomes it’s evidence based. It’s not just our gaps.

It’s not subjective. It’s not us picking or choosing favorites or being main. It’s it’s us being really honest with you about how your business is tracking against others in our network and based on where it is likelihood of success. So I want to go back and make sure we talk about the one, because it would be it would be misleading of us to talk to sort of put this video out without actually addressing that.

We do have one business in the network that we have started this financial year, and they are there a couple of months in and they are tracking in the coasting group at the moment. Justin, why is that? Because same system, same marketing. We’ve brought onboarding process forward. We’re holding people to more account. So why are we still getting that business that’s not tracking ideally where we would like it to be tracking.

Justin It you sort of, quite simply, you get out what you put into it. You said earlier, you know, it’s based on the effort. And, you know, we only approve people to join us who are lovely people. Right? So we have great people in the network. So the reason they’re not doing well isn’t that they’re they’re not hard workers or not nice people or don’t realize that they are incredible people.

But what can often happen is personal. You know, I’ve got something going on with my kid or, you know, we’ve got some personal stuff going on and which is all life, right? And the challenge of life is you’ve got to try and balance this. And. And if you have all this other stuff going on that’s keeping you busy, and it’s great.

They’re my own boss, so, I just don’t have the time to put in, you know? Yes. We’ve only been able to put in half a dozen hours each this week. And then next week. Yeah, we’re still working through this situation, and we’ve only done half a dozen hours. Well, guess what? You know, that’s like less than a quarter of what we know needs to be put in to get the results.

So I guess what, the rate of start is less than a quarter of what we would expect at the same period of time. And what I love, because I had feedback from yourself and from the business coach that’s working with them, is they had a heart to heart with talking through the data and just said, look, this is what the statistics, what we know if we continue down this path is the outcome.

So last week they changed what they were doing and went, okay, we’re just going to have to do this. And I think your words were instantaneously, well, instantly.

Rhiannon Yeah. I was chatting to their business coach yesterday and she said that their words were we are getting a flurry of new customer inquiries on the back of what we’re now doing. And so in the last seven days. So it’s it’s pretty much as instant as you can get when you’re trying to attract new customers to a new business.

Right. But a seven day turnaround is really demonstrative of the fact that putting those efforts in does get outcomes, and you don’t have to wait months to see them. So there was some of the marketing activities that they weren’t giving a lot of time to. Within their week, and their business coach helped to identify those activities that weren’t getting enough focus and really help them with strategies to be able to go out and do those confidently.

And so and also, the business coach worked with them, and showed them the data and sat them down and said, hey, look, I’m, I’m really concerned because, by the way, when we have these conversations, it’s not comfortable for us. We don’t want to be telling you that, hey, this is not looking very good. And the reason that we do it is because we are genuinely concerned.

We know if we can’t help you to fix it, then the likelihood of achieving success is diminishing very rapidly for you. And we don’t want those stories in our network. We want you to be building great businesses in our network. So it comes from a place very genuinely of concern. The business coach and I have been watching this business for the last while.

I mean, we’ve been watching them from Taiwan. I’ve been watching them from day one every week going, oh my goodness, they’re not on track, they’re not on track, they’re not on track. And you know, each week we’ve been working, in a consolidated way to help identify exactly where in the system it’s falling down. And once we were able to determine that, it was effort of of marketing input, you know, and able to actually talk to them about, hey, we we’re really concerned at how you’re tracking and, you know, we need to see this turnaround.

So they, you know, they took that seriously. And to absolutely to their credit they went away and they put the work in last week. And I saw I actually saw a flurry of new jobs be logged for them in our system last night, which totally backs up what they’ve told their business coaching that those inquiries are now coming in.

So the data is validated. I’m saying it, they’re saying it. So, I’m really hopeful that in another few weeks time we have actually seen a turnaround. And, you know, they’re tracking higher than the low cost is they’re kind of tracking mid to high cost range, which means that it’s not actually going to take an awful amount of work to turn them around and get them into that high performance category.

So I’m really hopeful that in the in a matter of a few weeks, we actually are saying that trajectory very, dramatically changing for them, because I will say that throughout their training, they were A+ students, you know, their level of comprehension for our system was outstanding. The level of, you know, application and diligence and the integrity with which they went about their training.

I was really excited to see them start. And I just think that, you know, sometimes it’s also it also feels very overwhelming to start a new business from scratch. And you can you can just and I completely understand how you can just also start to feel a little bit lost in all of the to do’s, in all of the catch ups with the coach, in all of the, you know, elements of the system.

But it is all there for a reason. It’s because when you put it all together, it works. And that’s why having your business coach and working with them closely is so darn important. And something we really focus on in the network is because your business coach is your lifeline. When you starting to feel a little bit overwhelmed, or when you just start to get a little bit lost in the fog of all of the things that you’ve got to remember and do, we’re right here and we’ve got that support available for you to help you find your way through.

So the upshot of that is I’m, I’m really I’m I’m feeling very optimistic that in a couple of weeks time, we are saying that all of the business owners that we started this year doing really well. So maybe in a few weeks time we can check back in in another episode and talk about maybe actually, maybe we should talk about how you turn it around if it’s not going really well turned around, because it has a lot of application for people who aren’t in our network, who have started the business to.

Justin Yeah, sounds good. It’s a good place to wrap up this episode.

Rhiannon Let’s do that. All right. Thank you so much, everybody, for listening along. And if you enjoyed our video got some value out of it, please leave a comment or a like so that we know that we’re hitting the mark and talking about things that are relevant. Until next time, take care.