Franchising From the bailiff visiting to £1,000,000 turnover with nice profits Part 3

I ended part 2 of my 30 years in franchising journey with the following paragraph. 

I went back to the hotel that night and for the first time cried I thought I had lost it all. I said sorry to my late father in law for losing his money. How was I going to tell my wife we have moved to a new town she knows no one but now also has no money and a useless husband who is bankrupt. That was a low point so many other franchisees I have known have gone through and many did not recover worse of all the pressure can end up in ruining a family as well as divorce even suicide. Having been that low I can see how these things can happen.

I hold no one to blame for the mess I was in just my inexperience. I had zero knowledge of how to run a business and with a new franchise brand that was all out for sales there was not much help in understanding figures etc. Highway was a true example of getting the work then learn how to do it. I myself wanted everything to be run well I always thought I would hate to say I own this company and then dread what the person had to say my insecurities I suppose. I'm sure now though that a bit of both is needed. 

Anyway, the MD of Highway Philip Milburn went through my business with me producing a plan and even came and visited my bank manager to show how together we will get out of this situation. The bank manager promised not to cut my overdraft down for 6 months which helped. 

The first thing I did was to control the salesperson having a meeting each day about what he was going to do and how the previous day's tasks went. He put his notice in pretty quickly once he realised he actually had to work. He had bought in a couple of accounts and without his commission payments, they were more profitable. I was far too soft with everyone. I also stopped paying full pay for sickness. We never had a Monday without at least someone going sick funny enough once I stopped full pay my staff seemed to be a lot healthier.

Behind the scenes a lot was going on the franchise was approached by Ronnie Lamb who started Autoglass and introduced them into the insurance market. His plan was to do the same with Highway Glass. Ronnie knew the industry and the fact that there were no real price agreements for glazing and the insurance industry was being ripped off. As evident in my previous blog when we installed a shop front and I priced it up the added another £100 as my wife was going shopping. Seemed like no matter what you charged the insurance companies just paid out. 

With Ronnie Lamb came the backing of a Venture Capital Trust company. Between them Ronnie Lamb and Philip Milburn took a windscreen company that did very little glazing to a national glazing company. What a journey we undertook on top of this Philip started another company Highway Glass Contracts they passed work to Highway franchisees or subcontractors if there was not a franchisee in the area. The model was to handle the glazing needs of national companies he seemed to be winning national contracts and new insurance companies daily. Highway had developed the first job booking control system I had seen. They are common now but 25 years ago it was a far in advance of what other glazing companies had. Things moved fast it was a very exciting time if somewhat stressful time. I loved working with someone like Philip I remember calling him one Saturday afternoon as there was a problem with too many customers calling the insurance companies chasing the glazier where are their new windows etc. I said to Philip if we produced a handout to give customers explaining who we were with our contact details the customers will call us direct. Within a week that was designed printed and around the network. There were problems of course but they were sorted we learnt and moved on. From Ronnie Lamb joining with Highway Glass and me selling was under a year a time in which we took turnover from 13k to 100k a month. For someone who had never run a management business that was hard. As the franchise themselves had never worked at those levels they could not help much either. 

Anyone who understands business would be saying that would have hit your cash flow even worse how did you survive. Well the County Council helped on that score. With the help of head office we completed a tender to put safety film the back of all glass in their buildings to meet new glazing regs. As a franchisee, I was not big enough or had the experience to go for the tender myself so head office went for it and won. I remember the pre-tender talk well,  the man from the council said to me over the last couple of years someone had been going around testing all windows to see if they met the new safety regulations which must be a very boring job As all the buddings were old Victorian style, it is easy to get confused and miss a whole wing out. If we found that had happened he wanted us to put the film on the windows because in the next building they might have had an upgrade since the testing was carried out and we would not need to do anything. It will all even itself out I said sounds OK to me saves bothering to tell you about every little window that has been missed. Now we had never actually carried out any safety filming but I found a good local contractor and agreed on a price and got started. First building they went too all windows had been replaced and everything was up to standard. Not wanting to fiddle the council I told my contact he said don't worry just invoice as if you did all the work remember what I said. The next building was even worse it had been sold and was now occupied by another company. My contact seemed shocked and said just invoice it do the work for them but invoice us. The company would not let us do that so we just invoiced the council and did not do any work. We actually did some work at the next couple of buildings not as much as quoted but we had to invoice as quoted. Then we came across the biggest building which we had quoted over £10k to put this safety film on and it also had undergone a recent upgrade and needed no work at all. Due to the size, I called the council this time he went mad at me telling me I do not understand how this all works you have won the contract now we need invoices as / tender. From then on I just paid the company an aborted fee or for the work they did and invoiced the full amount. Best of it was they had to pay by a certain date and we were paid before we did the work. It did not stop there as all the patterned glass could not be filmed so the council asked me a price to reglaze. Majority of windows were very small and we went in at £50 a window they paid upfront as we did not have enough time to do the work before the next budget year. One of the lines on my quote read glaze 4 windows @ £50 total £2000 as it was accepted and the paperwork raised I was not going to risk being told off again I just invoiced it with the rest. 
I still don't feel comfortable with this now 25 years on. 

Soon after Ronnie came in and things started to improve The Venture Capital Trust gave Ronnie Lamb enough money to buy all franchisees out and this was made known to the network. I remember the franchisee from Leicester took £8k he wanted out then I started hearing offers of over £100k being accepted. They came to me with an offer of £175k I said no as this journey has only just started and it was summer. Most of our work came from break-ins in the summer windows are open it's light at night and there are far fewer break-ins. I carried on building my team with a depot manager at this stage we were not only replacing shopfronts but domestic glazing front doors windows etc. On top of all these trades overnight we became Locksmiths. This happened when Philip Milburn visited Green Flag's head office at the time they handled claims for a lot of insurance companies while there a claim came in for lock damage to a patio which was passed to a locksmith. Philip queried why we did not come up as an option they said this was lock damage you are gazing. Philip assured them that as we installed patios doors windows we can handle locks as well. He said to me he had his fingers crossed behind his back hoping we could actually do what he had promised. I must admit I thought he had taken a risk too far anyway we had a days training with a locksmith. We also contacted a local locksmith to help if we got stuck after a week jobs started coming in we coped I had to call a locksmith once. The amount of patios doors and windows we replaced though went up. Then Philip found a heat gun that when you aimed it at a dent in a plastic window or door the dent just came out and it was like new. We charged £250.00 for that. When the insurance industry queried the price Philip said I dare say we could do it for far less but what would happen is the person on site will say put the heat gun on and earn £50 or replace the frame and earn a few hundred. At £250 we are saving you a fortune in frame replacements. 

 I had taken on carpenters double glazing installers and was shocked at the poor standard of most of them. As a non-tradesman, I had no way of telling so I made sure when I took on a manager he knew the trade.  I am always open and honest with my staff and was not ashamed to tell him basically I knew nothing and his first job was improve the standard of my staff or get rid. Paul knew his stuff and the first day saw my so-called carpenter preparing a door putting in the lock. He was cutting the lock into the joint he was sacked on the spot and a replacement bought in who knew his job. We kept on learning and improving. What we needed next was someone to take charge of the growing amount of paperwork and my bookkeeping. We interviewed a few and I went out for lunch got caught up and returned Paul was interviewing a lady and said to me do you know who this is. I said no, should I?. They both laughed she was my next-door neighbour anyway we took her on and she was great our office was complete. I remember going on holiday that summer coming back and feeling a bit like a spare part in my own company. We kept improving things getting better and better but by this time Ronnie Lamb had acquired most of the network and was getting frustrated that I would not sell. He even threatened me that at the end of my contract they would not renew it. I could challenge them through the courts if I had a spare £100k to gamble but they would be using top lawyers and I would lose. The offers kept rising and finally, I gave in at a vastly improved offer.  I just hope the guy who sold early on for £8k is not reading this. In something like 8 months I had gone from crying in a hotel room because of the financial mess I was in, to having a company with over £1,000,000 turnover a management team decent profits and most important of all to me something I could be proud of.

Lessons to learn from this having worked with someone like Philip there was a whole lot to learn his attitude to getting the work then sort out how to do it is something that will scare most people. It proved to be very useful here and during other spells. Even today we have just been asked to cover 800 jobs in an area we don't normally cover and could easily have been scared and turn it down but we just say send them over we have the procedures in place to cope. They were unlike other franchise companies I have been involved in as there was no marketing department but strong sales. I will go through how marketing departments held me back in 2 other franchises both were all marketing but no sales. You need both the problem arises when franchisors take on young kids from Uni in the marketing department. These have no experience and have learnt how to market international brands and what's important for them. The franchisees though are small businesses in most cases and need a bit more what I call street fighting tactics anything within reason that will gain sales. Again to be explained with examples in future posts. 

Ronnie Lamb taught me to understand what the customer wanted. As you can imagine at first we were windscreen fitters breaking into the world of glazing carpentry locksmiths etc. Ronnie explained that the fact we were not experienced we would get over quickly as long as we give the insurance company the data they wanted we will be OK. They want to know that we contacted their customer quickly turned up on time completed the task in a timely manor etc. That's what our job deployment system did and if something was typed in outside KPIs a warning came up giving you the chance to correct the data. Same type of thing came up a few years later with Rainbow International this time though they did not understand are were not in the same league as Ronnie or Philip. Rainbow technicians were far better at doing the work but had no control on what was put into their data. This ended up in them telling the insurance company they were crap. I tried to tell them but they just did not have the drive to care. So frustrating hearing them say to franchisees you have to take more care when entering data when there was a simple answer. 

I always thought I was too soft to run a decent business but found I could make those hard decisions and change not dramatically but enough to take control. One thing I also learned is that you do not have to be able to do the work to run the business in fact I would say it could be your biggest hold back to growth. 

Bring in help if you need it if I had not taken on a manager and admin help I would have been in a right mess. I have seen too many small businesses fail to grow because the owner will not let go of total control. You could say it was the main reason behind the demise of my last franchise Mr Electric when I started they had 50 franchisees but now they have 5. 

What next though I was lost as I did not know what to do and with a wife and 5 growing children at home spending money at every turn with nothing coming in I could see even the amount I sold for would not last forever. My tax bill alone was over £125k. I must admit the money went to my head and I wasted a lot did some decent stuff as well I did not blow it all just too much. My business was my life and I missed it badly I did not want to sell.