From Wantrepreneur to Entrepreneur through Franchising Steve Miller

Steve Miller returns to provide practical advice on determining if franchise ownership is the right path for you in the world of entrepreneurship. Are you frustrated enough to make a go of it in the wild and oftentimes difficult world of small business ownership? For most home service-based franchise opportunities, Steve recommends having at least $170K in liquid form to weather the first year of getting the business off the ground. The two main reasons franchise ownership fails are a lack of demand for the product or service and a lack of liquid capital. Food businesses are the toughest to start and grow, but franchising offers you a way to research the business and the people involved before making a decision. Check out this episode for great information that will help you make a solid decision. Did you know our amazing voices can go beyond just the microphone? Yes, we have video! Subscribe to our YouTube channel here!

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GOLD NUGGETS:

(00:00) - Small Business Safari Adventure Team

(11:04) - Carer Transition and Entrepreneurship Factors

(20:45) - Small Business Funding Options Discussion

(33:13) - Franchise Success and Partner Selection

(46:28) - Reasons for Franchise Failure

(53:21) - Exploring Possibilities and Opportunities for Success

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Steve’s Links:

Website | https://myfranchisenavigator.com/ 

LinkedIn | https://www.linkedin.com/in/stevemiller7/

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Books Mentioned:

The Bible

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Previous guests on The Small Business Safari include Amy Lyle, Ben Alexander, Joseph Sission, Jonathan Ellis, Brad Dell, Chris Hanks, C.T. Emerson, Chad Brown, Tracy Moore, Wayne Sherger, David Raymond, Paul Redman, Gabby Meteor, Ryan Dement, Barbara Heil Sonneck, Bryan John, Tom Defore, Rusty Clifton, Duane Johns, Beth Miller, Jason Sleeman, Andy Suggs, Chris Michel, Jon Ostenson, Tommy Breedlove, Rocky Lalvani, Amanda Griffey, Spencer Powell, Joe Perrone, David Lupberger, Duane C. Barney, Dave Moerman, Jim Ryerson, Al Mishkoff, Scott Specker, Mike Claudio and more!

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If You Loved This Episode Try These!

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• 2 Weeks to Transform Your Contracting Business Into a 7 Figure Business With Brian Diamond

• The Concierge Decision Coach | Jodi Hume

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Have any questions or comments? Connect with me here!

Transcript

Steve Miller: 0:00

But how do you differentiate yourself from all the other competitors? You know Bo, british Air, all the others, and they said it's not one thing that we do a hundred percent different than our competition, it's a hundred things we do one percent better than the competition.

Chris Lalomia: 0:17

Oh, gold nuggets. Welcome to the Small Business Safari where I help guide you to avoid those traps, pitfalls and dangers that lurk when navigating the wild world of small business ownership. I'll share those gold nuggets of information and invite guests to help accelerate your ascent to that mountaintop of success. It's a jungle out there and I want to help you traverse through the levels of owning your own business that can get you bogged down and distract you from any of your own personal and professional goals. So strap in Adventure Team and let's take a ride through the safari and get you to the mountaintop. Yeah, grab up those engines, alan, we're going to rock and roll today. Baby, he didn't know what was coming, but I said I was going to say where is he going with?

Chris Lalomia: 1:02

that he's revened up the engines. We have a great episode, but before we get to him, alan, we have some fun stuff to talk about. Right, we do A lot of fun stuff. So what fun stuff should we talk about today before we get into the real meat of what we're going to?

Alan Wyatt: 1:16

do. Well, I actually have a present for our guests, but we need to introduce them before I give the present. All right, but I do think we need to talk about the video shorts with our guests, all right.

Chris Lalomia: 1:27

So let's do that because, as you guys know, or maybe do not know we're on the YouTube channel. Go out there and check us out. Safari podcast. It is out on the web, it is out on YouTube. Go out there, subscribe to the channel, check out our shorts. If you can't devote a whole 45 minutes to an hour with us, you can go check out these shorts because we hit off some of the little topics, little hit points that are going on.

Chris Lalomia: 1:52

We have had some great things. In fact, one of the things I do want to talk about is I got another call from somebody who said do you have a few minutes to talk about business? Because I want to set up an LLC and I've set one up and I want to help my father in his business and I'm like, absolutely, I love that when that happens. So I spent 30 minutes with him and actually I spent an hour with him on the phone because he wants to help his father, who is an immigrant. He had migrated here years ago and he does flooring work, but he does it all for himself by himself, word of mouth and he wants to help him grow his business so he can one day not have to do all the work as he's getting older and he wanted to help his dad with marketing, so we went through all the how do you do it? How do you start it? He's been listening to the podcast and that's why he called me and it was really cool.

Alan Wyatt: 2:41

I love that. Give me a first name. Give me a first name.

Chris Lalomia: 2:44

His name is Theo Theo. Theo, theo, you're awesome, theo. You are awesome because you're helping out your dad. I wish I had a son like that. Yeah, good luck, do better dad. What's he doing? Well, good news is they're going to law school, so eventually I got a feeling he might be helping me. Yeah, you know what I mean. Yeah, I know All right. All right, let's introduce our guest, shall we? Yeah, we used to talk to him once. We used to talk to him twice. We got him back on. We're flying like an eagle with Steve Miller, your franchise guru, and last time we had him on we had a lot of fun. But he texted us after and said guys, I don't feel like I gave your audience what they wanted to hear. And we went back and listened to that episode and he gave the audience everything we wanted to hear.

Alan Wyatt: 3:28

He dropped bomb after bomb after bomb in that episode without actually talking about franchising Right. It was amazing. So this episode.

Chris Lalomia: 3:36

we're going to get into it. What makes a successful franchisee in the exit from corporate America? This is the episode for you, but before we get there, Alan has a bone to pick with the YouTube world. Well, so you?

Alan Wyatt: 3:48

do you do the video shorts, which, I have to confess, chris, I listened to every one of our episodes, but I, you know, the YouTube thing is TikTok. All that stuff is kind of your bailiwick, right. So you mentioned to me that Steve's YouTube short was in our top five already. I mean, it's a couple of thousand viewers, and so I go look at it and it's great because it's it's our conversation about how Steve Sullen calculators to the Russians, brought down communism and for whatever reason that hit. And so I'm looking, you know, and of course, our our podcasts. We have a lot of fun, but we're trying to help people start their own businesses and help them scale their business, and so people are here for fun, but they're here for content.

Alan Wyatt: 4:37

So I'm looking at the YouTube shorts. The number one YouTube short is you pretending to stuff all of your company Thanksgiving meal into your face at once? That's our number one. That's number one. And yet I look down and there's one that's called the best way to hire. You would think somebody interested in business would click on zero. It had zero clicks. I was the first click and I clicked on it and I'm like, oh my God, that guy. What he said in. That was revelatory, right you?

Chris Lalomia: 5:12

know so. So, yeah, change the the. The could change the trajectory of your business, but no, everybody wants to go out there and want me in his face. By the way, it's epic. You got to go check it out. Youtube shorts If you just want to laugh for a little bit, I mean.

Alan Wyatt: 5:25

So I'm not saying anything about our podcast audience, which you know is in all 15 continents, but our YouTube people. I need to step up a little bit.

Chris Lalomia: 5:33

Right, but you know, you go out there to YouTube and sometimes you just don't want to be educated, you just want to sit there and laugh at some goofball doing something stupid. The number, the number two episode that we have out there, which has I forget how many views, is me acting like I could dunk a basketball at my age, but I had to jump off one of our drywall.

Alan Wyatt: 5:54

Did you fall down at least? I mean, was there some reason to watch it? Oh yeah, it's good.

Chris Lalomia: 5:59

It's an epic dunk fail. And that's me coming off one of our drywall steps back at the back office because we have a hoop out back so the guys can shoot baskets when they show up just to blow off some steam and commiserate a little bit, but so I do.

Alan Wyatt: 6:11

I do, you know, and I know we're going to get into the meat and potatoes of franchising, but I got a little present for Steve, all right. So I've kind of learned over the years of knowing Steve that he's just one of those guys that whatever I think I'm good at, he's just better and it just it's in everything it's in business. And then so we're talking. It turns out you know I, you know I'm a beer snot, and so we go out and get a couple of beers and I'm talking to him. You remember the the time that I talked about the brewery in Belgium in the Abbey, and it turns out Steve actually uses this app and takes notes on all the beers he's he's had, and he has been to more breweries in Belgium than I even knew existed. And he's like, well, did you go to this one? I'm like, no, did you go to this one? No, and he's got pictures and he's got notes and everything.

Alan Wyatt: 7:00

And so you know the story of a park brewery, brexitorium. It's in a 900 year old Abbey in Lubin, belgium, and and we met the brewery, gave us a tour. They don't give tours and whenever he brews something, that batch. When it's done, it's done. He never, he never, duplicates it. And I have one bottle left and it's one of those things where what are you going to do with that one bottle? You're waiting for that special occasion that just never comes along and I'm like, if anybody deserves this bottle, it's Steve Miller.

Chris Lalomia: 7:31

Oh you, the effects everybody. Oh wait a go, don don thank you. Oh, beautiful bottle. We'll put that post out there. We'll take a picture of it after we get out there. Go check this thing out, because it is not only a super cool bottle, but Steve loves it.

Steve Miller: 7:50

I'm getting emotional.

Chris Lalomia: 7:52

I love it Isn't that cool, well done, outstanding, very thoughtful.

Alan Wyatt: 7:57

Alan Thank you very much, Alan. Oh, you're welcome.

Steve Miller: 7:59

You know, it's funny.

Alan Wyatt: 8:00

I have this weird personality flaw. So I have a lemon tree, I get about 16 lemons a year and when I get down to the last couple of lemons it's like is this recipe lemon worthy? Is this guest lemon worthy? And then I never eat that last lemon. I never use it. You've just given away your last bottle but and I'm like you know what it isn't doing anybody any good sitting in my fridge there is, and there's a guy who's going to preach you.

Alan Wyatt: 8:25

Would you like to share it? We can, but you were talking, don't you do this? Was it with your son that you enjoyed? Yes, so you're. I kind of thought that you could share it, oh yeah.

Chris Lalomia: 8:35

Steve would love it.

Alan Wyatt: 8:36

Yeah, All right Well save it for that.

Chris Lalomia: 8:37

Thank you, steve. We'd rather have you do that and send us a picture of you and your son sharing it, and then we'll post it out there. I will, and we'll let everybody get to see that. But that is a very thoughtful kid. No kid. The last beer, the last one.

Alan Wyatt: 8:50

No, I'm thoughtful guy.

Chris Lalomia: 8:52

He is a thoughtful guy, he truly is. You know, not for nothing, steve, there's no way I get my last beer. I'm sorry.

Steve Miller: 8:57

There's just no way I can't do that. You have a Bud Light, you wouldn't, live?

Alan Wyatt: 9:00

You wouldn't live. No, absolutely not.

Chris Lalomia: 9:01

Yeah, no not my last beer.

Alan Wyatt: 9:03

No, you do have a couple of Bud Lights in the garage fridge. I do, yeah, those things have been sitting there for a while. They've been sitting there.

Chris Lalomia: 9:09

That's when the kids come over, you know, with my sons in college. But so when they come back, all the Buds come over here. And that was what I found from what they had brought down, hold on quote and left. They left that for you, yeah, yeah.

Steve Miller: 9:24

Yeah.

Chris Lalomia: 9:25

But of course, everything is gone. It was all my good stuff, yeah, so that's awesome. All right, you guys, you've waited patiently. You probably hit the 30, 30, 30, because I do that too, when I listen to podcasts and I'm bored. But don't get bored, let's get right. Why would they be bored? This was amazing.

Alan Wyatt: 9:40

This is amazing because he just gave you your last beer, dude.

Chris Lalomia: 9:42

The last.

Alan Wyatt: 9:43

Belgian handbrook and a 900 year old Abby. Come on, all right.

Chris Lalomia: 9:48

So Steve Miller, franchise guru, has helped so many people transition from corporate America into the world of franchising or not franchising, and so there's a litmus test that he takes them through, there's a process he takes them through, and so what I want to talk to him about is what is that blueprint for a very successful person and a very what I exactly was a very successful exit into franchising? Not very successful, as it not doing franchising what, what, what is the blueprint for? So you want to start, you want to do that over.

Alan Wyatt: 10:22

I'm trying to land that plane. Yeah, I think you just landed on the top of it, so just, michael, cut that oh by the way, he won't. So it doesn't matter guys.

Chris Lalomia: 10:30

All right. How does somebody become a successful corporate refugee in franchising? I'm done now, okay.

Steve Miller: 10:40

Thank you. And what the picture.

Chris Lalomia: 10:44

I stop, I get it to a stop.

Alan Wyatt: 10:45

I just want to let you know I've been podcasting for two years with Chris. He doesn't give you that much runway ever. He actually stopped like he had a hemorrhage. I did too.

Chris Lalomia: 10:54

I did, I think. I think the nose went down the plane, I think.

Steve Miller: 10:58

Well, I'm glad that the I'm glad to be back. Thank you for inviting me back. It's been very much appreciated.

Alan Wyatt: 11:04

The last episode was amazing for the listeners. You got to listen to it.

Steve Miller: 11:07

It was cathartic for me. It was also like I had journaled my career and from I had. I've asked my kids to listen to it, whether they feel I offered it to them. They don't hear a lot more about me than they know themselves, so your audience knows more about me than my wife.

Alan Wyatt: 11:22

Well, what I loved about it. I mean, there was so much Every step of your career and we've had guests where we just go on on, on on about their background and then what, and then what, but each one there was like a lesson that you learned.

Steve Miller: 11:32

That is valuable and that's what I loved about it and I think, coming from that, it helps me. Is he prepared me, equipped me to be a coach for people who are transitioning, because I've been there and done that.

Chris Lalomia: 11:44

That that's why I felt like we built is that your, your background, suits you so well to be able to help people making that transition, because you've been through so many Transitions your own and seeing so many things. And that's I mean you're, you're, you're the, you're on the mountaintop and people go up that mountaintop and they want to see you, to find out if I'm gonna be successful in franchising. He's like Yoda Well, I was going up the mountaintop.

Steve Miller: 12:07

Who's at?

Chris Lalomia: 12:07

the mountaintop Yoda's. He's in the swamp.

Alan Wyatt: 12:10

Well, and Obi-Wan, obi-wan's in a cave. Yeah, who's on the top of the mountain? I well, I thought it was Buddha.

Chris Lalomia: 12:17

No, that's that guy can get up to the top. I don't know if they're wrong movie I got to. I have been accused of you of mixing up analogies.

Alan Wyatt: 12:28

Yeah, you know for another done that here, so you want me to rephrase the question for Steve. Well, I thought I landed it, but I got it.

Steve Miller: 12:35

Oh, thank you Okay.

Chris Lalomia: 12:37

Oh, thank you. Oh, I should be, courtesy, give you great beer, so you should have been. But that's right, shut him up, let's get back to you. So I, I.

Steve Miller: 12:47

Would say this. I don't know if there's any one answer to that question, but I Work with a lot of clients who are what you've described corporate refugees people who are Sick and tired of working for corporations. The acronym I use for them is Fred. I think I may have said this before. Maybe I didn't you did.

Steve Miller: 13:07

You did so. They're, fred, so frustrated as a first off when you. When it comes, that's the first thing, I think, is how frustrated are they? Because the level of frustration is Going to dictate they're tolerance for risk and their motivation For wanting to do something, because there are a lot of people that I would refer to and you've probably heard this term that are entrepreneurs, but there are not many who are truly entrepreneurs, risk takers that are willing to make the investment of the time and the money to go into a business of their own. I, like, want to renewer.

Alan Wyatt: 13:44

That's a good one.

Chris Lalomia: 13:45

Oh yeah, right there with boss hole, the boss hole watch burner. I in fact we coined that one. I mean, I love that boss, but watch for no work Got it. So I'm a watch burner, but no, maybe not. So I'm frustrated. How much risk then? What well?

Steve Miller: 13:59

you have to for the, for the frustrated I think you have. I try to gauge what is their level of frustration. So if you think about when you go to the doctor's office and on the side of the file cabinet there's a pain chart, you're on the land, yeah, and on the left face and the family face is more than just like the guy's got tears coming down and I'll ask someone okay on that.

Steve Miller: 14:23

On that spectrum with one is little to know for even zero, with his, which is happy, and they're smiling, and on the far right they're just weeping, and Mine was probably a 12 and not a 10. I was really in a lot of pain. I'll ask them put so where are you on that pain chart? And If they're not a seven or higher, they're probably not going to have the true tolerance for risk and Desire to go into being their own boss.

Alan Wyatt: 15:00

That is really interesting to me.

Steve Miller: 15:02

I wouldn't have equated their frustration or their pain with their risk Tolerance it's huge because so many people coming from corporate Chris, you did, I did, I did, you did you. You get kind of comfortable and you know you have people you can big daddy was very comfortable.

Steve Miller: 15:23

I'm not lying, I was very comfortable, yeah, but you could sell, you could tell other people to do what you have a marketing, you've got an assistant, you've got we talked about the expense account, all these things. And then when you consider going out on your own, you have to rethink all of that. So the individual has to be willing to be motivated by the pain of Frustration of working for someone else, which will then they're not going to regret doing it if their pain is great enough of going into their own business, if they're like a two out of client in New York. I said what is your pain? And he said I'm a one or two. I said we're not, we're done.

Chris Lalomia: 16:02

Okay, what was that answer? What was his back to you Was it was the no, I'm ready to go. I mean, was or is it okay? Thank you very much and click.

Steve Miller: 16:10

It wasn't that, but he really appreciated me being forthright with him because he had engaged with other people than my one other Individual who was in my space and when he wouldn't he like on the first call, this other I would refer to them as a franchise broker, which I'm not. Start a shooting ideas that I want you to try. This one, do this. We look at this, look at that. No, it's just like there I have to be. I have to have two to three calls with the client before I even get to the point where I'm introducing them to options to consider and a lot of it has to do with Transferable skills is really important again tolerance for risk, their geographic preference, how much they have to invest, and the thing that that they don't necessarily have to have is experience of being self-employed or in a business that they would consider. 95% of the clients I've worked with would have never considered or discovered the business had I not introduced them to it. That's a huge stat.

Chris Lalomia: 17:09

I think everybody's got to pick up right there. He's laying out a lot, of, a lot of big things, but 95% Would have not picked this industry Given to their left of their own devices or even known about it. No, not even know, right you? Because you're walking out, because if you're really frustrated You're probably checking shit out. Right, you're out there. You're like you know what, screw this, it's lunchtime.

Chris Lalomia: 17:30

My boss said I had to have this report by one. You know what? Screw that guy, I'm gonna start looking for things, I'm gonna start surfing the net and, well, that looks cool. You know what? I'm gonna grow goldfish. You know I'm gonna have a koi pond, whatever. So you don't know. But I think what you just hit on is that it's kind of an exercise you have to go through and if you don't take the time to do that, guys, you will 1000% make it so hard on yourself and probably 100% fail if you don't go through this process. So I love what you just said, because you're right. I mean, you don't know what's going on. So frustration equals motivation, yes and so. But you laid out a couple more things. So you ask him about that. We'll get to the financial limit. Geo location Mm-hmm.

Steve Miller: 18:14

So what's that mean? Well, the location in which they want to end up. They may want to stay where they are, they may want to move, they may want to go. They might want to go from, say, buffalo, new York, where there's a little bit of snow up there, and they want to go to Florida. So it gives them the opportunity to escape At a really at a crossroads of their life, where they are, if they decided to do so. I would say the majority of clients do that, maybe 15, 10 to 15 percent do that. Again, it's a. It's a crossroads where they can make that decision to make a change in their life, not just their employment, but their career path.

Chris Lalomia: 20:07

Beautiful. All right, let's talk about the big part, and that's the financials. Yeah right, so when you're talking to them, how much you gotta have? I mean, you know this is back, what's that number? Well, we can't give you a number. You know, dude, come on, I can give you a number, I can give you a number.

Steve Miller: 20:23

So the I've placed well over a hundred clients in businesses like a hundred and ten hundred and twenty, something like that. 80% of those clients are in business today or have successfully exited by selling their businesses. So some have failed and that's. We can talk about some of the reasons for that if you want to later on. The. The funding options are three. Chris, you've got you can use good old-fashioned cash. The second is a small business administration loan. And the third is roll over for business startup, which you take apart of your retirement funds, out of the retirement fund at no cost or penalty, and you set up a C corporation that basically holds that business, and then that's how it's set up. That's my least favorite. I don't like that idea much unless it's an absolute. And the other one is like home equity again another one, that's the one I took, by the way, home equity.

Steve Miller: 21:21

I did that as well. Most of my clients are in their 50s, 60s even, but some are in their 40s. But when you're in your 50s and 60s you don't have the runway to recover from if you've got forbid. The business fails. You're taking it of hard-earned retirement savings and leveraging that to start up a business. So my preferred way is actually small business administration loan. There's about 4,000 franchises. 3,000 are pre-qualified for SBA loans. Do tell, so it's not that hard to get one. So let's say a 7A loan. It's $150,000 a loan and, by the way, the majority of clients that I've placed in businesses those 120 or so in all investment range, working capital or franchise fee, training costs, working capital, the whole enchilada to set it up is gonna be somewhere normally in the $125,000 to $200,000.

Chris Lalomia: 22:22

Stoke that in, man, if you're listening to this episode. Finally, somebody give me some real numbers, because I hate it when everybody talks about well, it depends. Oh, there's not really a number. Hey, voya, I've seen those commercials bullshit. There's a number, man, we all have a number.

Alan Wyatt: 22:35

Give me a number, I'll work around it Well and I'm gonna play devil's advocate and Steve can talk to this but there are some businesses that you can get that are gonna require some real estate, and that's a huge variable.

Chris Lalomia: 22:48

So it's north of 120, but it's not less than 120. Oh, it's way north, right? That's the point. I think a lot of times people don't realize that because and in fact, as you start your business, you start working on your pro forma, you start working on all this. If you're doing this on, if you're doing this shit on your own, he just told you right, 120,. That goes right now. Right now, out gone, goodbye. You're not even running for a year.

Steve Miller: 23:12

With an SBA loan you can get 150,000, 7a is 150,000. You have to have a 680 or higher credit score. 17,000 liquid, which includes cash and funds that are invested outside of retirement. So it could be in a brokerage account. And no recent bankruptcies. And what was the last? There's 680, that's about it. Oh, no, 17,000 cash, no recent bankruptcies. 680 or higher credit score those are the three conditions.

Chris Lalomia: 23:47

Right. So back to Alan's point. You start at 120, but you could be. I mean, alan, what do you think? What do you mean?

Alan Wyatt: 23:54

It could be. I mean, if you wanted to get a McDonald's you know you're over north of a million.

Steve Miller: 24:00

And you're not gonna probably get a McDonald's today, because they don't want individual operators for the most part, they want people who have 30 of them or a hundred of them.

Chris Lalomia: 24:08

How about that? Because I do know a McDonald's operator, in fact. In fact, that just reminds me that's a great one. So I just lost my train of thought because I just got a little lucky.

Alan Wyatt: 24:22

I do have a question. So let's say somebody listening, they're in the corporate world, they want out and they're thinking I'm gonna start my own business. And there's a difference between an entrepreneur who starts their own thing from scratch and somebody who's better for franchising. I mean, help that person think through. Should I just open Chris's you know, burger Barn Or-. The trusted toolbox, the trusted toolbox, or Alan's the more trusted toolbox. Right, you could do that.

Chris Lalomia: 24:56

So yeah, so yeah. I think it's a great question. I don't want to take away it because I really wanted to hear the answer to this. You have to it starts with.

Steve Miller: 25:03

Is it even a possibility, alan? So, ken, do you have? The main reason that? I think business is fails two-fold there's a lack of demand for the product or service and they run out of capital. I think those are, genuinely speaking, the two.

Alan Wyatt: 25:21

Not everybody's like you, Chris.

Chris Lalomia: 25:23

with endless streams of capital, oh no, I've said this and you've heard me say this. You've heard me say this no less than three times in my business career 16, or as I started my business, I probably should have shut it down. I almost didn't make it. I was maxed out in all my credit cards. In one instance my wife had no idea how bad it was. I should have gone down. I should have just called it good and I just stay with it, because when you go through that deep, dark night of the that you go through in your soul I was like I will not fail. I will not fail, and he seen me do it. I actually broke down in tears trying to tell a bunch of kids that you don't realize just how hard it can get. I mean, you look at me now six million and biz doing the things. It looks successful. In fact, nobody had no idea.

Alan Wyatt: 26:11

Probably many of the people didn't have any idea how bad it was, because you can't tell them otherwise, of course it unravels.

Chris Lalomia: 26:18

It's a lonely situation Because you can't tell anybody how much you've screwed it up, especially how stupid you are, especially your money you've lost, especially your loss. A loser, you are, what a huge loser. You are in the imposter syndrome and you said it. They fail. And I tell you, man, lack of capital. He says big daddy had a cash flow stream. No, big daddy didn't. Big daddy was almost SS without the street and you had to dig out of it, man, I mean, and I did.

Steve Miller: 26:47

I mean that's a huge deal. So there has to be to even consider. You have to have sufficient capital to fund the business during the startup and one of you said three times what you think you're gonna need. I think that's probably right, cause it's gonna take probably twice as long as you think it is. It'll be profitable if it says, particularly if it's a startup.

Chris Lalomia: 27:07

Not me though, steve. You're the exception. I was the exception, at least before I started my business. That's what I told everybody. But because what I became? Exactly what Steve just said.

Alan Wyatt: 27:16

Yeah, I remember actually saying these words. This will be like shooting fish in a bag, ha ha ha, ha, ha I didn't realize I was the fish. Oh my God.

Chris Lalomia: 27:26

That is. That's big. All right, so the 150 covers you just getting in.

Steve Miller: 27:32

Actually it can cover well, as I said, the all in 125 to two, all right so you get the 150, that covers that, and then you gotta go to work. Well, no, no, I'm saying that that 150 can allow someone to pay themselves a small salary during the startup period. That's in there.

Steve Miller: 27:49

That's baked in. So that's the all in Working capital. Franchise fee, training costs, that's the whole inch a lot. So they cannot stroke themselves a check for the full amount, according to the SPA, to repay that to themselves. But they can take a salary out in the very beginning until they ramp the business up and kind of wean themselves from that. I think it's advisable. That's why they want you to have a 17,000. So you have additional reserve capital if needed to infuse into the business. They want to have some dry powder should you need it. Nice. But there are loans that go far higher than 150. You know, probably up to a million dollars with an SBA loan. But I don't like and this is gonna cut close to the bone.

Alan Wyatt: 28:33

Yeah.

Steve Miller: 28:33

Alan, that's okay.

Chris Lalomia: 28:34

I'm sorry he's a big boy, but I've cried a lot about this.

Alan Wyatt: 28:38

Yeah, I've prepared to be in a lot of pain tonight, but go ahead.

Steve Miller: 28:44

So I'm not a big fan of retail operations. I told you that about last time with Scott. I don't. I tend to find businesses or try to identify businesses that are non-retail or they don't have to sign a retail lease, so they're not gonna be food. I think that's a horrible, risky business and if you're thinking about food out there, you need to talk. I'm a restaurant management major. Remember I said you were cut my teeth in the very beginning. Right, you gotta go back to that episode.

Chris Lalomia: 29:12

I remember you were in the restaurant but you would tell people right now, getting in a retail food business as a franchisee is a non-sir.

Steve Miller: 29:22

And people will say, well, how about Chick-fil-A? Well, yeah, go play the lottery, because with Chick-fil-A, their numbers are they award about 100 to 100, 150, maybe 200 franchises a year and it's not a true franchise. It is a franchise but it's not. So the investor, the investment in a Chick-fil-A if you look at a Chick-fil-A you're probably looking at probably million two to a million seven. To open one of those up, I would think the operator, $10,000.

Chris Lalomia: 29:52

So you said 150 to 200,. How many applicants per year?

Steve Miller: 29:56

For a Chick-fil-A one. No one say. I said 1.5, 1.2, 1.7 million Just to open, open dollars. Yes, but you said they open, oh, they open up, oh, excuse me, about 150 year, 80,000 Aplicons a year and of those applicants, of the ones who were actually awarded, 80% are already in the system. So there's a couple that I know over here at the one in nearby us. They're gonna work in that location for probably 10 years Before they get awarded a Chick-fil-A.

Chris Lalomia: 30:30

Oh my gosh, so you have to work in Chick-fil-A and then apply, but majority now 150.

Chris Lalomia: 30:38

So that's why the Chick-fil-A thing, I think that's a huge. I don't think anybody understands just the brass ring You're grabbing for there. And so we're in the southeast and here in America the Chick-fil-A thing, is it been big? But here, especially in the manna, chick-fil-a is a is a religion, because they are closed on Sunday. So they just happen to do religion on Monday through Saturday. It's pop. But you can't get there, man. I mean people say ominous, go get Chick-fil-A. Well, good luck, man, cuz 80,000 people apply and they only award 150 a year. So let's think about something else. Okay, yes, okay, all right. So not food, not retail.

Steve Miller: 31:15

So now what I like. I like the space that you're in. Actually home services is a great space. And you, how do you do during COVID? So if we did well during COVID, Chris was tongue in it, I was yeah, back up the dump truck with the cash coming into this place from you.

Chris Lalomia: 31:32

I mean, don't tell my customers, but Thank you for my new house and the mountains.

Alan Wyatt: 31:38

And my trips to Vegas and my trips to Barcelona and Mexico, tahoe, tahoe.

Steve Miller: 31:45

Those are phenomenal. Services are phenomenal businesses because you're not getting a retail location so radically reduces the overhead. Some of the characteristics I look for in businesses are that they're not adversely affected by the economy. Point number one there should be low overhead wait number two food does not offer that right. There should be Easily explained competitive advantage. Love that one. Love that I call that.

Chris Lalomia: 32:18

You're not selling proposition right competitive advantage.

Alan Wyatt: 32:21

Yeah, well, and let's touch on that for a second, because one of the and I love franchising. You know, I love franchising and it's one of the few Areas where I'm okay with government intrusion because of what you know, the way franchising started, yeah, so we can talk a little bit about that.

Chris Lalomia: 32:40

It seriously? Do you say I love government getting involved? Oh, my god, one time, okay, oh yeah, you know, you get a little runway here. Oh wait, oh wait, oh my god.

Alan Wyatt: 32:49

No, but what I do see in franchising, that drives me crazy.

Alan Wyatt: 32:53

I mean my co is Okay, you get, you get five guys. They go out there and all sudden everybody goes crazy over the burger and then within two to three years, there's 15 other Burger franchises. That are five guys, just with a different brand. And then they're you know, you know they're going through their Discovery day with. This is the size of the market and this is what makes us unique and it's not unique. And I mean, and and how many franchises in food especially have a? Oh, you get that, you know, you come, it's just it's the subway thing. You come in and you get to build your own whatever, it's a pizza, it's a sandwich, it and so they just copy it and then they continually Just gut the goose that laid the golden egg. So when you're talking about unique, it's like you almost need to have the the franchise concept. That has got some momentum. That's maybe new in its space, right?

Steve Miller: 33:51

Are you talking about food specific?

Alan Wyatt: 33:53

in general, just in general. You know, when you're talking about a unique selling proposition it's kind of hard to find that in franchising.

Steve Miller: 33:59

I I don't like things that are unique and new. This is not anything.

Alan Wyatt: 34:05

I actually like the ones that how do you feel about axe throwing? I mean, there's all these acts.

Chris Lalomia: 34:11

No, hey, hey, don't deflect, I don't like, I want to go back to this. Well, he says. He says no, alan, no, no, bad boy, bad boy. So slap your hand, do not go new and innovative, go with old and stayed.

Alan Wyatt: 34:23

That needs to, because if you, Know what the old and stayed and still have a unique selling problem.

Steve Miller: 34:28

Is it better?

Chris Lalomia: 34:29

You just do it better, exactly right. Oh, welcome to my handyman company. All the trusted tool bar or the bet and more trusted toolbox, but I'm better than everybody else out there. I just got to tell on my team the same thing. We are different than every other handyman out there. I don't care how many handyman are out there, we're different.

Steve Miller: 34:46

Because you show up one more than likely, you're bonded and insured to no.

Steve Miller: 34:51

We're not chucking a truck. So you know who you're getting. You have a warrant. I'm not picking on Chuck. The warranty, the warranty is not as good as a license plate on the truck that's driving off, because you probably warranty and that's damn behind. You do for your, your professionals, it's a different thing, yeah, and so I think that's really, really important. I, I'm with you, chris, I I'm, I like the, the, the ones that are here's one thing I'll say to Alan we just Just got a start the turtle on a island, all right.

Steve Miller: 35:25

If there's no demand for the product or service, there's probably no competitors in the market and you have to create that market. So I want competition because I can do it better than my competitors can do it.

Alan Wyatt: 35:38

So, and so you're saying the uniqueness of the business can be just slight and that there was.

Steve Miller: 35:47

I remember this from many, many years ago. There was an airline in Scandinavia still there's called SAS and there was a. The CEO of SAS once said how do you know? There's hundred, hundreds of flights a week flying across the Atlantic, the Scandinavian overseas airways and they were stellar not, I don't think they're well known for today, but how do you differentiate yourself from all the other competitors? You know Bo, but British Air, all the others, and they said it's not one thing that we do a hundred percent different than our competition, it's a hundred things we do one percent better than competition.

Steve Miller: 36:29

Gold nugget, you in the trays that the people were serving the being served, the food. Make sure the restrooms are supplied, make sure the flight attendants are smiling and happy. It's just all those little things I can tell you from experience. We've been to Europe multiple times in the past three or four years because my son's been over there in the Air Force. We've flown Delta, british Air, your Air Europa, which is the worst of ever flown American. I mean. We've flown probably a sixth carrier carriers over there. Delta is who would have thought the top carrier. Steve just killed our Air Europa.

Chris Lalomia: 37:11

Sponsorship but we got Elsa.

Steve Miller: 37:13

And.

Chris Lalomia: 37:13

I got an end to add the CEO, by the way, so Delta is they have they have. I'm on this because he's not exactly an entrepreneur, he's just a really good CEO.

Steve Miller: 37:22

Yeah he is.

Chris Lalomia: 37:23

That's a whole other skill set and he's not even from the southeast. How about that, huh, new Jersey guy? That ain't really. I know that. But yeah, no, it's. He's an amazing guy. Lucky that I got a chance to just even see him speak. Amazing. But you hit on it. You don't have to just do one thing better, you got to do a hundred things better. And that's back to. There's a demand and especially in the fragmented industry, there's plenty to go around and if you just do it one percent better and a hundred things, you beat everybody. And I love that line because that's really hard to do, because it's not hard to do, but it's really hard to do because you have to be disciplined, you have to be focused, you got to want it, because it takes a lot of hard work to be good at all those and better.

Alan Wyatt: 38:09

Well, and that goes back to you, you're looking at more established franchise brands that have the ability to make sure that their Customer experience is the same Regardless of which franchisee they're working with, right?

Chris Lalomia: 38:23

correct. All right, let's get into that one, because we're into the middle of this. And so what's the blueprint to get me to a success? And you hit on it. So stay away from the high retail, you tell us, but franchise ores, I mean, when you get into it, you got to find a good partner, right, it's it. So it's about me first, and then it's about picking the right partner, right.

Alan Wyatt: 38:46

How do I pick the right partner? It's a great question, chris. I'm giving you that one, thanks.

Steve Miller: 38:51

That is a really good question, because people don't always consider that, because you it's you want to bask in the glow?

Alan Wyatt: 38:56

that question. Can I have that beer?

Steve Miller: 38:59

He's gonna fail over his head. It's just a little glow.

Chris Lalomia: 39:04

But it's a big question, it's a huge question because there are.

Steve Miller: 39:08

I'm not gonna name the name of the company, but there's one that I know of that I I represent 600 brands and and so there's one that has probably eight friends. I and they do a really good job of selling franchises. They don't do a great job of opening them, which is also a major consideration, but they do an even worse job supporting them. They're in the franchise development business, which is just open them up and then see what's next.

Steve Miller: 39:39

They're on their own and that is just such a short-sighted, silly way to do business. Because you mentioned this earlier, Alan, the Federal Trade Commission regulates the sale of franchises and I think it's great Because if someone goes through the process of the document that the franchise or has to submit annually annually called a franchise disclosure document. There's 23 items and if someone wants to, just let me know and I'll send it to them. The 23 items include things such as the background information on the franchise or their most recently audited financial statements that would disclose any litigation they've been involved in the previous two or three years. It lists the franchise owners with their names, addresses and phone numbers, audited financial statements. There's just tons of information and, as the former franchise owners, as well it does.

Steve Miller: 40:25

It does, and I advise my clients to talk to the ones that the person who's trying to sell them the franchise, the franchise development representative, will naturally refer them to the ones who are doing well, which I want them to talk to because I want them to learn whether they can emulate or replicate that type of success. But talk to some others randomly, of nothing else, and find out. Here's two great questions to ask. One knowing what you know now, what would you do differently?

Alan Wyatt: 40:56

Excellent question. Love that one. He gets a point he does, and he's not even in the race. He might win by the time this is over.

Chris Lalomia: 41:03

Damn it.

Steve Miller: 41:04

And the second is do you feel like you're getting your money's worth for the royalties and fees you're paying Because the franchise or Chris?

Steve Miller: 41:14

It's equally as important for the franchise or to not sell but to award the franchise to the person that they want to partner with, Because, honestly, franchises can be a real pain. If they don't feel like they're getting their money's worth for what they're paying in royalties and fees, they get ugly and they don't want that anymore than the franchisee wants that. The other reason they have to be careful who the award to is because in the federal, in the FDD, as I mentioned, they list the names of the companies who are the franchises who have failed. If you've got, let's say, they've opened 50 that year and they've closed 25, well, that's a huge red flag and the franchisee, the prospective franchisee, is going to be able to determine that and look at that and say, OK, what's going on here? So they can't afford. If they want to continue to sell franchises, they can't afford a bunch of failures. So there's checks and balances, and all this because of transparency and the information provided in the FDD.

Chris Lalomia: 42:17

So after you've placed somebody and you've been doing this for how many years now, 14. 14. So 14 years into it, how often do you check back in with the guys you placed in the first year and check in how it's doing and kind of reiterate and figure out hey, I think I know what I'm talking about now. It worked.

Steve Miller: 42:36

I would say I have a relationship and a knowledge with about 25% of my clients, and it's just because oftentimes they become friends and I just want to stay in touch with them Well.

Chris Lalomia: 42:50

I can attest because we all know one and that Scott Specker. He's been on our show early on, way back when, and he just hooked us up and he says without Steve he said I would have blown it, I would have made a horrible mistake, and he helped me see differently about where I wanted to go, not knowing what I was doing, and he's a very assured guy, like we all are, coming out of corporate America. I mean many times sometimes I mean we've been told, hey, we're really good at what we did. We got to a station in life and maybe we got to let go or maybe we chose to leave, whatever, we're still pretty sure of ourselves. So as you go back and check yourself and reiterate and go through this thing, what if you've found has been the most? You've talked about the characteristics, but maybe a surprise failure.

Steve Miller: 43:40

I would say there's the one that was a surprise. Failure to me was there's another individual who went into the same business as Scott. At the same time he acquired a different territory adjacent to Scott you would arguably say it's a better territory and within a year Scott bought him out. So in that year that territory was probably doing, scott was probably doing. He was really driven to be rookie of the year and then he really blew it out the first year. So he was probably doing close to a million dollars in his first year, maybe not quite that much 750. The other gentleman was doing I think his whole year was $40,000 in a better territory.

Chris Lalomia: 44:30

Yeah. So those who don't know Atlanta and actually I know a little bit behind the scenes on this and Steve probably doesn't know this, but in Atlanta you think about any market you're in you wanna go after. If you figure out a target market in the business you figured out, this guy had way more, in a way, dense population that absolutely needed this service, a lot more than where Scott bought, and he did 40,000 and in that same year Scott did a million.

Steve Miller: 44:56

So what's the difference? We have work ethic. Work ethic I can't. I can't determine someone's work ethic. The other gentleman just would not get out of the house. He was incapable of interacting with others and he was paranoid of risk. I'm afraid if I do this I'll get sued. Well, what do you have to be afraid of? You have insurance, and I've spoke with him on multiple occasions, met with him. He just couldn't get out of his own way. So that was one that was surprisingly really quickly flamed out and he was highly motivated, just incapable. And then Scott bought his business and he's doing probably a million dollars in that area now, if not more, at least more than that. Yeah, that guy's lucky that there was somebody that would buy it.

Steve Miller: 45:48

Right, he got out, he came out whole. Wow, how about that?

Chris Lalomia: 45:52

Being completely inept at what you did and you get out whole he did and now he's delivering.

Alan Wyatt: 45:57

I'm gonna shoot myself again I know he's delivering mail today.

Steve Miller: 46:01

Last time he was delivering mail, which is where he needs to be. Again, a completely risk intolerant position of delivering mail.

Chris Lalomia: 46:08

So you got to have a high risk tolerance, guys. I mean again starting your own business.

Alan Wyatt: 46:12

It's not all fun and glory, but I mean the stats on franchising versus starting your own thing, like you did, chris, which is way better. I mean you really looked into the belly of the beast when you started it from scratch.

Chris Lalomia: 46:24

So franchising obviously gives you a leg up, and that's what we're talking about. We're gonna start rapping this sucker up.

Alan Wyatt: 46:29

Well, but I want to ask. So you know and I don't want to dwell on the failures, because I mean, Steve is very successful and obviously most of the people are wildly successful but I think you learn. You know, Chris and I have a history of learning from our mistakes, so let's try to learn from other people's mistakes. So, the people who have failed in general, is it just a simple two-stubborn to follow the model, or they, you know, misrepresented themselves in a certain way, or what would you say?

Steve Miller: 46:57

Steve, I think once they got into the business they realized this isn't for me. Once they actually started to do it. It might be the managing of the employees, it might be the dealing with the customers. But typically, if they can, if the individual can hold on for even if they don't like what, once they get into it and they, what I encourage clients to do is do a ride-along, I mean, go spend two or three days or longer with a franchisee and get a really a feel for what it's like to run one of those businesses. I think another reason, alan, is because they get cold feet or they get an offer like I had a client who purchased the franchise.

Steve Miller: 47:47

He received this sweetheart offer from a company who hired him for a large salary. He was recruited and he turned the business over to his wife who wanted nothing to do with it and expected her to run it, because he took this position and it flamed out after a couple years and it could have cost him their marriage. Thankfully it didn't, to my knowledge. Life happens and people, when they get into something, realize it's not for me. But if they can hold on for a couple years and build the business up where they can sell it and say three years, they're probably going to be able to recover their investment in it, maybe not the lost opportunity of their time, the value of their time, but at least the investment in the business. They can recover it. But the ones that drive me crazy had one who did this. He was only literally 60 days into it. He threw in the towel 60 days, 60 to 90 days.

Chris Lalomia: 48:45

All right, this is a big one and I feel like I got a chime in, because in corporate America and we're coming to the end of this in corporate America you never asked what's a day in the life of you, what's the week in the life of you, what's a month in the life of you, and I ask that all the time. Actually, I tell people, especially my sales guys, my project managers, day in the life, week in life, month in life. You've got to understand what the day in the life looks like, because you're going to live that day in the life, especially as a new business owner. You're going to live that for at least three to six months, hopefully three to six months because and hopefully you're way smarter than me, because it turned out to be again twice as long but you got to understand that day because when you said 60 days in, he was oh, my god, I have to hire painters or I got to hire handymen in my case.

Alan Wyatt: 49:35

When you think about the whole process of searching for and buying a franchise, the due diligence that you do, the discovery day and everything I mean, the fact that you would pull the plug after 30 to 60 days is just it tells me you did no homework, bro.

Chris Lalomia: 49:51

You know what I mean. You did, oh this kills me.

Steve Miller: 49:54

He even did a ride, man. He even did a ride long, Because I remember going.

Chris Lalomia: 49:58

I remember going sitting before I left my own business, I said you know what? I think I had to do this on mail. So my friend had a tire recapping business One of the dirtiest businesses you could ever be in If you've never seen tire recap. What they have to do is, first thing, they have to ground down, grind on the tires right, then they have to put a cap on. Then they got to mold it back in with a certain process. It is dirty, it is tough and it is 24 seven because you have truckers that are always going down.

Chris Lalomia: 50:26

And I went in with them and I met him at 8am. He'd already been there for four hours and I sat there with my business attire on because I was a banker and I had my, I had my suit on the whole thing. I felt like I was dirty when I left and he was. I mean he was talking to guys like I had never talked to anybody in my life. I mean you thought you thought longshoremen were bad. This guy was blessing everybody anytime anywhere and I was like, dude, you can't talk to people like that when you're into my business. I talked exactly like him because you have to talk to their language.

Chris Lalomia: 51:00

But I saw it and I went you know what I can deal with that because I can be like that guy, because you're being authentic, I mean you're being, you're the traffic cop. You got to do what you got and I saw it. But I felt like what the day in the life was going to look like is that in his case he woke up at 4am, my case 6am, but I'm doing home services. He happened to do tire recapping and I was like, can I handle that, that rigor and that that that role? And I was like, yeah, I can do it and I and I could. I mean, at the end of the day, I felt like it could.

Steve Miller: 51:29

But you didn't have the advantage of being able to spend the day in the life with somebody for a couple of days. You kind of like I did. I started up a distribution company, a rep group. I didn't. I never really spent any time with anybody. I didn't have the opportunity to do that. That's one of the advantages of a franchise organization is the network of other owners can be invaluable the ones who have been in it for, like Scott, for example, someone wanted to.

Steve Miller: 51:52

My son owned a five star franchise out in Colorado. He rented for three and a half years and sold it and after after three and a half years and moved back here and thank goodness they have our grandbaby now and another way. So guess who? His mentor was Scott Specker. Scott, what are you doing in a situation like this? How about? Where do you? Where's the best investment of your advertising dollars? Where do you get the services? Where do you get this kind of service for my employees, like benefits or whatever? I mean? It's invaluable that someone like Scott has done it before and Alex didn't have to try to figure it out.

Chris Lalomia: 52:24

Gold nugget right. If you, if you buy into the franchise, utilize the network, no doubt Use it because they are your coaches.

Alan Wyatt: 52:30

That goes to the the old saying of you're in business for yourself, but not by yourself, and it's not just the franchise or it's the other franchisees that bring that together.

Steve Miller: 52:42

I think it's. I think there's the training from the franchise or is invaluable in the beginning, but I think there's more benefit in the long run by having a peer group of franchisees that meet. In his case he had a. They called him a flight, they would meet every two weeks and they would talk about issues they're facing. It's almost like it's a peer group Nice. It's invaluable, it's priceless Guys.

Chris Lalomia: 53:05

If you haven't learned something, that's on you again. Yeah, this has been dynamite. We're not going to do the final four questions. They're YouTube listeners. You know what? No, these guys are. It's soaking it all in. Is there one thing that you think that we've missed that everybody needs to hear.

Steve Miller: 53:22

Don't pose your mind to the possibilities that are available to you. If you really feel like you're stuck, you may be actually stuck, but there may be hope, and just be open-minded to the possibilities, because what your perception is may not be all reality.

Alan Wyatt: 53:41

You don't have.

Steve Miller: 53:42

Just think about how much time you spend at work, driving to and from work. And, like Scott, when he got home from driving for an hour and a half from downtown Atlanta to coming, and he came home to Sharon and he was a, she said he was a grumpy bear. Life is too short. At least investigate your opportunities and possibilities to have a life that you'll thrive in and not be miserable in.

Alan Wyatt: 54:08

You're not as stuck as you think.

Chris Lalomia: 54:10

You know what? I love that phrase because I've. So here's my crossway. When somebody puts a gun to your head, blow the wall behind you, let's go. Big boy, we got a roll, we got to get out of here. If you do learn something, that's again on you, man, let's keep going up that mountain top to success. If you want to get in franchising, you got to check out Steve Miller. Check out the details, man, because he'll help you. He'll help anybody anywhere, anytime, because we just said he could and he will. And you've got to talk this guy because he is going up the mountain. He is Yoda in the woods. You want to find this dude. By the way, he is not going to give you his last beer because that was the best gift ever.

Chris Lalomia: 54:48

You did the best. We're out of here.

Alan Wyatt: 54:49

We got to go, Cheers, Cheers everybody. Thanks Steve, Thank you guys.