Slightly Familiar Friends deal with common business challenges
Our Should I Own A Business Podcast, likes to look at things a little differently. We will introduce you to our Slightly Familiar Friends, who you will hear about during our episodes.
Who are these Slightly Familiar Friends?
Our Slightly Familiar Friends are fictitious characters based upon real people or businesses that we have observed.
Our Slightly Familiar Friends encounter all manner of situations that they have to, hopefully, get through successfully. No doubt, some will fare better than others on their journeys.
As in real life, some are resourceful and resilient, and others less so.
We will explain their challenges and possible solutions for them.
Novel and authentic
The experiences they encounter are authentic and quite common.
Our Slightly Familiar Friends give you a novel way of building your knowledge and confidence to handle similar situations should or when they occur.
Why are they called Slightly Familiar Friends?
We’ve called them “slightly familiar” as who knows, you might get a glimpse of someone you recognize in them-perhaps even yourself!
Meet Josh and Jacinta:
Josh and his partner Jacinta decided that they would transition into owning a business to make more money. Their goal is to pay off a mortgage using the profit from a business. They had seen some of their friends achieve this.
Josh was a well organized and competent manager with ten years’ experience as a logistics manager in a sizeable company.
Jacinta worked in a small business as an administration officer, and she had some knowledge of bookkeeping. Jacinta was confident that she could look after the new business bookkeeping and admin needs. Owning a business would also mean that Jacinta could work in their business as she was sick of her job.
Non-food franchise business opportunity
An opportunity came up in their town to buy a well-known franchise, in non-food retailing.
The franchise is a very well-known brand name, and it has first-class products. There was limited competition in the town, so it looked like an excellent business opportunity. The existing store had been there for several years and it had a good history and reputation.
Josh and Jacinta started to prepare a business plan and did some market research, including visiting the store as “secret shoppers” to check it out.
The next step was to approach the owner, sign a confidentiality agreement, and get the seller’s information pack.
Josh and Jacinta continued with their due diligence, which including getting legal and financial advice. The conditions of the franchise agreement seemed reasonable to them, as did the Franchise Manager from the Franchise Head Office they had met.
Their business plan looked good, but Josh and Jacinta also got their accountant to check their logic. To buy the business involved a few hundred thousand dollars of investment. All looked good.
Money from their savings and a loan was needed to buy out the existing owner, purchase the franchise rights, buy stock, and legal and other fees.
After several weeks Josh and Jacinta were excited to complete the purchase of the business.
They had entered the franchise agreement, purchased stock, and took over the lease. The start of a whole new adventure began.
Reality sets in
Reality quickly set in as neither Josh nor Jacinta had any experience in retail.
The biggest issue was that Josh realized he struggled to deal with the general public. He couldn’t tolerate their whinging and haggling on price -people never seemed happy, even when they were happy.
Customers always wanted something bigger or smaller or in a different color than his stock. Nearly everyone was after a discount and often kicked up about any delivery charges.
Josh’s blood pressure would rise with some customers, and he knew he was not good at customer service. He was a “larger than life type” with an outgoing character but had zero experience in retailing.
Jacinta was much better at the customer interface, but she had plenty of other things to look after in the business. She still had to keep on top their bookkeeping and admin, as well as interacting with customers.
They both became miserable over the next six months as they felt increasingly trapped.
They couldn’t reach the sales figures they had put in their business plan, nor could they match the sales the previous owner had reported. Both were at a loss to explain why. The Franchise Manager said they had put together their sales figures based upon the prior owner’s history, so the Franchisor could not explain why either. The downside of the lower sales was the business could not afford another staff member to deal with customers.
Dream becomes dread
Josh and Jacinta lasted a couple of years and began to hate every minute of it.
Eventually, they sold the business and lost a considerable amount in doing so, which set their family back financially.
Looking back at his character, personality, and experience, Josh was taking on a risk by buying a retailing business.
Josh and Jacinta are a textbook example of competent and intelligent people buying a business based upon logic, that was entirely at odds with their experience and Josh’s character.
Josh and Jacinta learned a costly lesson, and both went back into employment.
How to avoid this trap
Episode 2 You-360 “what do I really want” and Episode 3 Understanding Your Motivation help you to discover what is important to you when considering owing a business.
More of our Slightly Familiar Friends
Meet more of our Slightly Familiar Friends and hear their successes and failures in our Episodes and blogs.
Listen Before You Leap!