Unfiltered Founders
Unfiltered Founders is a raw, real, and refreshing podcast for anyone ready to break free from the corporate grind and embrace the unpredictable world of entrepreneurship. Hosted by Darren Penquite and Andy Baker—two former corporate professionals turned business owners—this show dives deep into the highs, lows, and everything in between of starting and scaling a business.
Each episode features candid conversations about the unfiltered realities of entrepreneurship: the wins, the losses, the sleepless nights, and the lessons learned along the way. Whether you're just considering taking the leap or you're a seasoned business owner looking for perspective, encouragement, or the next big idea, Unfiltered Founders delivers honest insights and practical advice—with a dash of humor and a whole lot of heart.
Tune in for stories that inspire, advice you can actually use, and the kind of support every founder needs but rarely finds.
Unfiltered Founders
Beyond the Hustle: What Nobody Tells You About Starting Your Own Business
Ever wondered if you've got what it takes to be your own boss? The truth about entrepreneurship is far more nuanced than Instagram highlights suggest.
In this reflective episode, Darren and Andy strip away the myths surrounding business ownership and serve up some startling realities. Did you know 80% of small businesses survive their first year? That might actually be better odds than keeping your corporate job long-term. However, the five-year survival rate drops to 50%—and the reasons why reveal what truly separates successful entrepreneurs from the rest.
The hosts dive deep into what can't be bought with startup capital: grit. While funding matters, the entrepreneurial mindset is what carries business owners through inevitable challenges. They explore why pursuing business ownership purely for financial gain is a recipe for burnout, and why passion must fuel your venture.
From practical funding strategies (including tapping your retirement funds without penalties) to the realities of franchising, Darren and Andy provide actionable insights for those considering the leap. They share personal experiences about their first business moves—from forming LLCs to creating "absolute piece of crap" starter websites—proving that perfect beginnings aren't necessary for ultimate success.
What makes this conversation particularly valuable is its honesty about entrepreneurial psychology. The hosts explore how successful business owners approach problems differently, viewing challenges as opportunities rather than obstacles. They also emphasize the importance of surrounding yourself with trusted advisors who will "poke holes" in your ideas before you invest everything into them.
Ready to explore whether entrepreneurship might be your path? This episode offers both encouragement and a reality check that could save you years of misdirected effort. Connect with us through your podcast platform or the contact form in our show notes—we'd love to hear where you are in your entrepreneurial journey.
Welcome to another episode of the. Unfiltered Founders. I am Darren.
Speaker 2:I'm Andy. How's your week, man? It's going to. The weather's changed on. Oh my gosh.
Speaker 1:Fall has officially arrived, no joke.
Speaker 2:Until next week. Yeah, I still wear shorts in protest, I know? Yeah, no, I'm going to, I'm going to be short.
Speaker 1:And I wear shorts throughout the winter.
Speaker 2:Yeah, I know.
Speaker 1:Yeah.
Speaker 2:Some people. No, dude, it's. It's good we're ge gearing up. This is our last week. Um, I'm flying out in a couple days out to nashville. I'll be there for the week and we're putting on one of our uh health care events that we host and uh, looking forward to launching some new services off of this and having just a ton of fun with some good people out there and um, so, yeah, just dot and i's cross and t's and then you know, keeping other business flowing. So it's good stuff.
Speaker 1:Any other recent conversations about entrepreneurs wanting to get into the self-employment world, franchise world? Oh, man, I talk to people all the time. What's hot right now?
Speaker 2:Yeah, what's hot in franchising Gosh? You know that's a great question and I can never really answer it because it depends so much on the person. You know, like we talked last week with Ruben right? I mean Ruben wouldn't be right for probably some sort of a restaurant franchise. His expertise was in business to business services.
Speaker 1:I don't know, Ruben. If he wants to do something, he just bucks down and just makes it happen. But you've got to. I don't think he'd like it.
Speaker 2:You know 100 percent just makes it happen. But but you got it. I don't think you'd like it. You know 100 what you do. You have to leverage your strengths, you have to leverage your network, you have to leverage things that you have available to you now just to ensure your, your success and you have to do what you enjoy doing exactly because you don't have a boss, you know, harping at you to get up and go to work every day.
Speaker 1:You got to motivate yourself to do it and the only way do that long-term is enjoy what you're doing is enjoy what you're doing.
Speaker 2:It's funny. I tell people that all the time and they're like oh, but there's so much money in roofing Exactly who wants to do roofing.
Speaker 1:Is that what?
Speaker 2:you want to do, then yeah.
Speaker 1:If you're passionate about roofing, then then I've got there's a guy get the golf garage sometimes who owns a roofing company okay and he's like you know. He said I did it for a long time, but he said I had an angle in sight that kept me going and that was to own the company and not climb on a roof again. That's right. Hire people to do it yeah, and that's.
Speaker 2:That's kind of why we're talking today. We're kind of summarizing a little bit about what we've talked about with all of our guests. We're you know, this is our what? 11th episode.
Speaker 2:We've got 10 behind us and you know we. So this is kind of that. Hey, let's reminisce a little bit, let's talk about what we've learned, let's share a little bit more about what we know and have experienced, but that's exactly it. I remember talking to Noah, right, noah was always talking about you know, I have a goal, I have a things for him is vision and community. You pursue your vision with your community around you, and that that ensures your success. I mean, it doesn't guarantee success, but it certainly sets you up for success and other people they have an entrepreneurial spirit, but they want systems given to them.
Speaker 2:Well, and you have to also define they want to buy into.
Speaker 1:Yeah you know, a turnkey business.
Speaker 2:Right, but entrepreneurial spirit. I think people also have to do this check on themselves of like why, why do you have that draw? Is it just because you feel like you're supposed to? Is it just because that's the quote unquote American dream, or do you really genuinely feel like this is where you're supposed to be? And if it is, then you got to take a look around and see what in your life is is helping you do that. Now. Um, you know, I I talked to a lot of people that want that they don't have the funds and that's fine, you can figure out the funding part. But they don't have the experience and that's okay. Like in franchising, you can you know, you have the support, you have, have all that stuff, you have the experience there that you're buying.
Speaker 1:Right, right, um, but it's, but you can't buy grit.
Speaker 2:You can't, you absolutely can't. It's the work ethic, it's the grit. You're right 100 I mean you, because business ownership isn't instagram worthy all the time I mean sometimes, yeah, we get to golf on a on a freaking like thursday afternoon and that's great. Uh, I got to be in a golf tournament on friday, that was great.
Speaker 1:But that's not my every day. How did you play?
Speaker 2:well, we don't need to talk about that now do we?
Speaker 1:well, it's a scramble.
Speaker 2:So uh, we won it actually, so I'm pretty happy, you know they say business is a lot like golf.
Speaker 1:But is that I mean? Sure, I guess I can see some similarities, but if it were true, I'd be filing for bankruptcy right.
Speaker 2:Well, it's to your point, right. It's great, it's sticking with it, you know and it's and it's. You know, even when you feel like you're grinding your gears, you're just not making forward momentum.
Speaker 1:It's like you gotta have something else ahead that you're going for yeah, I'm thankful my business is more successful than my golf game, though For sure Me too, man, I don't know what I'd be doing. So people's why to get into business are some of it is I'm sick of somebody. I'm sick of working to make somebody else, money I want to make money for myself. So some of it's financially driven. So some of it's financially driven. Some of it's freedom driven. A lot of the ones that fail are ego driven.
Speaker 2:Or funding driven or funding.
Speaker 1:Yeah, funding driven, yeah. What are some of the reasons people should or should not get into business for themselves?
Speaker 2:Strictly money.
Speaker 1:Yeah.
Speaker 2:Yeah, I mean because it's not a guarantee. Get into a passion, get into it. Get into a passion, get into something you enjoy doing, get into something that you want to explore, that you're curious about. But don't do it just for the money. And I talk to people all the time They'll, you know, we'll look over franchises, like, yeah, that one doesn't make enough, like, why not Like so? So look at that as the step one. What's your step 25? And does this get you closer to step 25? And just because it's one franchise and maybe it only, you know, has an average revenue of 500 grand, what happens if you buy two, three, four, 20 territories? Then you're talking right. It's like scale, have a plan, have something in place.
Speaker 1:Some people ask how much money do you make Well, net or gross gross revenue? How much money do I bill? How much money do I pay myself? How much money do I tell my accountant, or do I tell my accountant to tell the IRS? I mean there's 50 different metrics you can use 100%, yeah, no doubt about it.
Speaker 2:And I think you also have to have your process and your goals in line to be successful. And you have to have reasonable goals. Right, it's the smart goals. You know specific, measurable action, you know all that. But it's also reasonable, and that's a big part of it, because if you have goals that are just these big, huge goals that are probably unattainable, you're going to burn yourself out quick and you're going to be discouraged and just the general challenges of entrepreneurship are going to beat you up, right, and you're not going to be able to win. You have to get yourself wins. You have to have reasonable goals. But it's not like hey, I want to have 20,000 in sales this month. It's like, in order to get 20,000 sales in a month, I have to land 20 new clients, I have to have 80 new meetings and I have to reach out to 160 people Like you. Have to have that math figured out Right.
Speaker 2:And and that's where I think a lot of people tend to forget of okay, well, if I and this is the world I live in, which is, oh, if we buy a franchise, how much of the business is run for us? Now, they say it in different ways. Franchise how much of the business is run for us? Now they say it in different ways and that is well. Do I have to sell?
Speaker 1:It's like of course you have to sell.
Speaker 2:You're the main person.
Speaker 1:Well, you know a lot of these franchises. You pay them fees and they will do national ad campaigns and whatever, and cover that that you are contributing financially to these ad campaigns, correct. But when, when push comes to shove, you're the one who has to close the deal. I mean they might help get your phone ringing.
Speaker 2:Yeah.
Speaker 1:But what do you do when you ask? One, are you answering the phone? Two, if you're not, are you returning that call immediately? And three, do you have the people skills to convert it from a prospect?
Speaker 2:to a client yes, 100%, 100%. And that's. You think about it too, and I use the analogy sometimes that this is like having a baby. You don't just have a baby and hand it off to somebody else and say, okay, let me know when. This is semi-passive and therefore they're 18 and I'm doing it.
Speaker 1:It's like you cuddle it, you burp it, you feed it, you change it, you cuddle it, you burp it, you feed it, you change it you snap it.
Speaker 2:Yeah, because how do you expect to run a good enterprise if you don't know every single thing about it? And that's how you start it. You start it and you know everything about it, and then you can start to fill the holes with other talent and say this is where I need this help, this is where I need this person. But you can't manage people if you don't know the job already, especially in a small business.
Speaker 1:So I hope that this podcast has inspired people to take the leap or at least got the gears turning in their head a little bit about hey, maybe, um, maybe this is something for me. We want to think through it a little bit. Um, I also want to make sure that we're a resource to people to be able to reach out to and maybe come on the podcast and on or off the podcast and talk to us and we can help you know, not your confidence and or make you kind of, uh, do some shifting and changing directions in a way that could potentially make you more successful.
Speaker 2:Yeah, have a community and and we're happy to be that for you, you know, give us a shout, reach out to us and you know we'll be an ear and happy to do what we can to to you know, to share our experience. So.
Speaker 1:I was just looking. I mean, take this source for what it's worth. I just asked ChatGPT. If you're an entrepreneur, chatgpt is one of your best friends.
Speaker 2:That's right, you know.
Speaker 1:Oh man, I said, give me some interesting stats on starting a business for the first time. And here they are. Roughly 20% of small businesses fail in the first year. And in my mind I kind of read that wrong. For the first time I thought, oh, only 20% make it in the first year. No, 20% fail in the first year, that means 80% make it. What are your odds over the next 10 years of your employer keeping you Right? Okay, right. So you have to kind of weigh that risk. Is there risk in going into business for yourself? Of course there is. But if 80% succeed after the first year, then there's one.
Speaker 2:Check that list.
Speaker 1:I think that those odds are as good, if not better, than continuing working for your employer.
Speaker 2:Yep.
Speaker 1:This is where it gets a little bit more bleak. 50% fail within five years. Why do you think that?
Speaker 2:is. I mean, I can think of a few reasons. I can think of a few too, I would say, unrealistic expectations. You know entrepreneurs as well. We tend to get distracted easily, so we, you know. There's this Chinese proverb, by the way. It says he who chases many rabbits catches none. Yes, but there's also the saying that talks about what's the master of few, or whatever.
Speaker 1:Yeah yeah, yeah.
Speaker 2:It continues and I'll remember it in a minute We'll come back to that but it's a jack of all trades but a master of none. Yes, but it continues and it says it's still better than a master of one. So there's a balance there. I think of having multiple things going and I've got more on that topic. But go ahead, I know you've got.
Speaker 1:Let's see. I think a lot of it too is is just work ethic I'll agree 100 you know you go okay, my business is succeeding and it's the margins are where I want them to be. I'm going to take a deep breath and, uh, sit back, and then it kind of it's a slow fade till it gets to the point to where you can't just put your foot back on the gas and have it pick back up.
Speaker 2:Yeah.
Speaker 1:Yeah, yeah, I think it takes a special person to keep that drive going year over year and the willingness to adapt. I mean we were just talking before we started recording here. You asked me what I've been doing this week here. You asked me what I've been doing this week In addition to doing my regular jobs for my clients. I've been grinding out, creating literally hundreds and hundreds of specific items with specific parameters to do a very modest increase in the rates of services that I provide.
Speaker 1:Because that has to be done. If you don't do that, everything else is going to get away from you. Everything else, all of your expenses are going up marginally every year and it's going to start chipping away at your margin in four or five years. Down the road You're like whoa, whoa, whoa, whoa. Wait a second. How did I go from a 70% margin to a 30% margin? I'm not doing anything different.
Speaker 2:It's not like you can raise your prices 40% at that point, not at that point, no it's better to do it.
Speaker 1:You know, small, small increases every six to 12 months, yep, yep Makes sense. So that's what I've been working on and I like to do that, and I have never had a client balk at me for you know a 5% or 6% increase in price.
Speaker 2:Because your value aligns with what you're doing.
Speaker 1:Absolutely, and along with that, I always offer something new that I'm going to be launching this year. Oh, exciting as well so yeah, so yeah, the most common reason for failure is lack of cash flow, weak market demand and poor management. Oh, and pricing mistakes. We just talked about pricing Perfect, yeah, so I don't like to hear. I work heavily in the real estate industry. I'm not a real estate agent, I'm not a broker, I don't do that. I don not a real estate agent.
Speaker 2:I'm not a broker.
Speaker 1:I don't do that, I don't want to do that Right, but I work heavily within the industry for what I do and the unsuccessful agents are always going oh, the market's slow, it's the market's fault, it's this. The successful agents are like the market's fantastic why? Because they hustle, they build their business, they build their portfolio, they build their clients and they are not subject to the market. Yeah, getting into an industry like I guess some retail environments suffer a little bit in a down economy that sell luxury items but not necessities Well, not alcohol not tobacco, not groceries.
Speaker 2:So it's, it's. That reminds me of one of our past guests that we've had on Colin Henderson, if you remember, colin. Yes, mental performance yes, and how much mental performance has to do with entrepreneurship is is uncanny. I mean it's. I don't know that it's really that line has been drawn yet. But you know, like you said, you know we challenged the glorified hustle culture and that makes entrepreneurs get burned out and unfulfilled. And there's a way around that and it's a way to process that from a healthy way of. You know, he called it grooving rather than grinding right.
Speaker 2:I mean it's and it's a fine line to walk. It is, and it takes a bit to find, and it's where we have to have the patience to be able to get there Right. You know? I read something recently that the average age of a founder for the fastest growing startups guess what? It was 28. 45.
Speaker 1:Now this book is, and I just turned, 44. I'm knocking on the door of 45.
Speaker 2:Happy birthday.
Speaker 1:And you just had a birthday too.
Speaker 2:I did, yeah, yeah day, um, and you just had a birthday. I did yeah, yeah and uh it. This one is it's the book's called range and actually talks about in a world of specialization, people need range and that's why because people are starting more successful businesses later on in life, at 45. Well, not later on, we're still young. But you're collecting all this experience that you can use later as opposed to you know this jack of all trades, master of of none is still better than a master of one, right?
Speaker 2:Because if you master one and this book plays exactly into that and backs up everything with studies of you specialize in something, you're one trick pony. But if you're using your experience and this is great for the audience to hear if you are using your experience right now to build something for later, look at it that way. If you have that vision, then look at what you're doing right now as building your skill sets, building your connections, building your knowledge base to go out there and do this. You know this book. The author, also writes another one about sports, and he's talked about how those um who are successful in soccer because soccer tends to be a very specialized sport Kids specialize very early on. Um, those who were successful started specializing in soccer around the age of 22 or later Really 22 or later. So if you have your fifth grader, if you're a five-year-old running soccer constantly, all day, every day, you're doing it wrong.
Speaker 2:You're just doing it wrong. That's what psychologists say. That's what sports performance folks say. It's do more than one thing and make yourself valuable, because, at the end of the day, that's what we do as entrepreneurs. We have to deliver value, otherwise we don't eat. So if you can deliver value, you have something you can get money for. Therefore, that's your business. Read the $100 startup same thing. People start out one way or another with a simple idea and they work that idea and they turn that into some value that they can deliver to people, whether that's manuals, training, coaching, whatever it is that you do. Maybe you're a marketing person and you want to be in business for yourself.
Speaker 1:What is the demand for that idea and what do you think the general public is willing to stomach paying for it?
Speaker 2:Exactly.
Speaker 1:And you have to look at your own life and go. Well, you know I, it would take me an hour to do this. The general public's probably willing to pay about 30 bucks for that. You know it's 30 bucks an hour before overhead. You know going to pay me a living that I am going to be satisfied with. The answer should be hell, no.
Speaker 2:Right, right, right, yeah, a hundred percent. Um, so it's. I think it's important to to do the research, but also trust yourself to go and do it. You know, analysis to paralysis is something I think is really real in our society because we're so dependent upon data. Go out there and have some conversations. Go talk to people. Go ask current customers for advice. Go ask future customers for advice. Don't go out and say hey, I'm going to do this, what do you think? Go and say hey, what, if Right, and what do you think of something like this, like where are your pain points? What are you frustrated by? And use that information to turn into a business plan for yourself.
Speaker 1:And your own business can even offer you, as the owner, a different career path.
Speaker 1:Yeah, like this guy who owns a roofing company that I talked about. He just went into it with a hustle. He's like who wants to work on roofs their whole lives, but he saw the end game. He saw getting off of the roof and owning business and running it. Well, Do you like? What do you like doing? Do you like interacting with people? Do you like building customers? Do you want to take on the sales role of your business or do you like doing? Do you like interacting with people? Do you like building customers? Do you want to take on the sales role of your business or do you hate people and do you want to take on the accounting role?
Speaker 2:of your business. Not all accountants hate people.
Speaker 1:Or do you want to take on the HR role of your business? I? Mean there's lots of different career paths within your own company.
Speaker 2:Yeah, I mean, I have every intent of you know in my master plan for what I'm trying to accomplish. I have every intent of not having the CEO type of role but more of the chief visionary role of I can come up with ideas and monetize those and get those out to other people and find people that and help fund the people that want to take their idea to the next level.
Speaker 1:So you know there's. You have to have that long-term vision. Speaking of finances, nearly 78% of small business owners rely on personal savings as their primary source of startup capital. Good idea or bad idea 78%.
Speaker 2:Here's the thing Like 78.
Speaker 1:I mean, if 78% of people are relying on personal savings as their primary source of startup capital, there are not near enough people out there starting businesses, because there's a lot of people out there who are hungry, who want to work hard, who have the intelligence, who have the mindset and the drive to get out there and are hungry, who want to work hard, who have the intelligence, who have the mindset and the drive to get out there and do it and be successful, who simply don't have any capital Right.
Speaker 2:Well, and so here's the thing like, if you're, I'm one of those guys that I try to stay out of debt as best I can, and so I've. I've started every business I have out of cash, out of my own pocket, or sometimes ready to back it up out of my own pocket if I don't, if my sales goals don't hit right. So I've done everything without having to take on any kind of debt. And so, unless real estate, which is a different story, right, but that's how I've done it. But there are other ways to do it and to fund your business, and I think a lot of people, especially within the corporate world, every day hopefully, your company has some sort of retirement plan.
Speaker 2:Every day you're building a nest egg to start a business because you can actually dip into your retirement account through a program called ROBS R-O-B-S Rollover for Business Startups is what it's called and what happens is they'll set up a corporation for you and that corporation has a retirement plan. But what happens is they take that money, put it into the other corporation and that corporation is what owns your business, and you reimburse out of your profits into that business, back into your retirement account. So you're taking a loan from yourself. And here's the great part about it, you don't pay any penalties and you pay no interest on it self. And here's the great part about it, you don't pay any penalties and you pay no interest on it.
Speaker 2:You can, I think, you get really down, down and dirty to the to the details, but we don't need to go into the details on this one yet. Uh, but we can find somebody. If, if anybody wants us to to bring somebody on to interview about this, we're happy to do that. Um, but that's the easiest way to fund your business and it costs a little bit to get it set up from the bank. There's banks that specialize in doing this, and so you're looking at, let's say, you have a franchise and you can get a franchise for under 100 grand right.
Speaker 1:The average business startup is like 33 grand.
Speaker 2:Yeah, okay, but in a franchise, what people need to understand is that includes your franchise fee, that includes your working capital for three months, that includes all your setup and startup and everything. Now, there's some that are definitely well under a hundred, but let's just go with a hundred. And if you have a hundred thousand dollars sitting in your account, in your retirement account, then why wouldn't you? And I and more people. When I talk to folks about wanting to start a franchise, most of them say I don't want to touch my retirement. And if you're in that boat, think about how you're thinking, because it's not thinking like an entrepreneur.
Speaker 1:If you're not willing to bet on yourself, if you're not willing to bet on your idea Right, then it's not worth it.
Speaker 2:It's probably not worth doing it and if you're not willing to bet on yourself, it's not worth doing. But you know you also look at um, you know the the other opportunities that you can pursue with traditional funding, and I think we we have the society of saying, well, if you come up with a really good idea and you go sell a bunch of venture capitalists on it, then you're going to get really, really rich.
Speaker 1:For less than 1% of businesses are able to obtain venture capital.
Speaker 2:Well, and that's the thing. You sell so much of your value, of your own business, of your own idea. Why give it away if you don't have to?
Speaker 1:So it is easy to get out there and get a $35,000, $40,000 car loan. Anybody, regardless of how much money you make, regardless of your credit, people go out there and they take out $35,000, $40,000 loans for cars like it's handing out candy on Halloween. How is it that easy to obtain business capital? Yeah.
Speaker 2:I mean, you know, I mean is it is.
Speaker 1:Is the money? Is the money from banks, small business association, whatever? Is it accessible? And what does that process look like? Have you been through it? I haven't.
Speaker 2:I haven't personally, but I've helped a lot of people get through it. And so what what it?
Speaker 2:you know the SBA doesn't directly loan any funds, and I think everybody knows that but you know they'll guarantee I think it's 70 to 80% of the loan to value to the actual bank. So that's where the bank's going to want, you know, 20, 30% from you right To make up to cover up for their, their potential loss. Um, but there's things like the SBA express loan, that $150,000, no collateral. You just have to have a 675 credit score and you have to have some income. So don't make this mistake. If you're looking to start a business and get a business loan, don't leave your job yet.
Speaker 2:Get the funding with your actual paycheck and show that you have the ability to pay and then go. I've had people that are like, yeah, I want to start a franchise, yeah, I'm going to do it. Yeah, okay, we're down the path, and I quit my job and I said I have no idea what we're going to do now. You should. You need to talk to me about this kind of stuff, because now you can't get a loan Right, and it's. That's not thinking to the next step, that's just being. You've got to be able to think like a business owner right away, and sometimes that business owner thinking is like chess you have to make a move and you have to wait to see what the other move is going to be before you make your move.
Speaker 1:But you're also anticipating moves and once you've had a business for a couple of years that's profitable. You I don't know where they come from. They come out of the woodworks, but you get inundated with business funding offers. Oh yeah, it is nonstop. I get three calls a day, text messages, emails. How much cash does? Could your business use tomorrow?
Speaker 2:I don't know how much you want to give me, tell us a number and it'll be in your bank account. Yeah, yeah, which is funny, sometimes I'll take those. Those don't fall for it. Oh yeah, no, sometimes I take them for the fun of it. I'm like, yeah, here's how much I need. Oh, yeah, yeah, he will just tell us what to it, just they go. If they're basically a bank folks, it's no different, it's just a different. You know it's, it's a at that yeah.
Speaker 2:It's a pig with lipstick on right. But you know, you think back to one of our guests, ryan, when he had to leave his corporate job. I mean, he left that comfort zone but he went and didn't look back. But it wasn't as if he just took a blind leap, like he. He was preparing, he was making step by step, but also knowing that my goal isn't to be in the corporate world for the rest of my life this isn't what I want and he was able to take that leap. Um and same thing with Ruben even. I mean, ruben left the corporate world and went out on his own. And you know, it's one of those things where it's like you just got to go, and that's where you have to understand there's going to be a change of pace.
Speaker 1:He literally gave himself and his employer what did he say? Three months, something like that, yeah, yeah. And so in that three months they had to figure out him being replaced and not being there anymore. And he had to figure out how am I going to be making enough money in three months when this job dries up.
Speaker 2:Yeah, yeah, exactly. And so there's there's ways to do it. There's ways to plan an exit, get the funding and move those chess pieces in a way to where you're putting yourself in the best position to be successful and understand. It's not a guarantee but, at the end of the day, the guarantee. You don't have a guarantee you'll have a job tomorrow. A hundred percent. There's companies that I mean shoot. I've been laid off Right and it had nothing to do with decisions I was making. It has to do with decisions far separated from me.
Speaker 1:And the guarantee of having a job you could walk in and gone. Tomorrow it gets back to 80% of startup businesses succeed in the first year. I don't think your odds of making it long-term with a corporation are any better than that, right.
Speaker 2:Well, and a lot of statistics will even say that your chances of success are better in a franchise.
Speaker 1:Tried true and tested.
Speaker 2:Yeah, and I don't know if that statistic is, I think, is a little overused, to be honest with you, because yes, you have a franchise and yes, there's a process and there's a lot of the foundation work done for you. I mean, the foundation work is done for you, but it's still dependent upon you. So you could have a great idea and it could tank in a market. I mean, we could probably all think of franchises that we're excited to see be in our local market, and they were gone. We had a massage envy here, did we? It was huge, it was a massive build-out and an expensive build-out.
Speaker 2:It's where the Carhartt store is now over by Dick's Sporting Goods and all that and it didn't last and I even went in there, because you know they help the franchises with the marketing. And so we got marketing like hey, come in for like a half-off massage. My wife was like sure, we'll go. You know, go have dinner across the street, patronize their business.
Speaker 2:Yeah, we'll go check it out and it wasn't strong. It wasn't a strong experience. And it wasn't strong, it wasn't a strong experience. Where do you think it failed Management? You know, honestly, I think that was probably more of a funding thing, because the build-out that building was so big I mean, I don't even want to know what the lease was on it, it was expensive.
Speaker 1:Brand-new construction.
Speaker 2:Brand-new construction.
Speaker 1:Commercial center.
Speaker 2:So customized that it just where else. What else are you going to do with that space? It's not like you can be like, well, shoot, this isn't working and pivot to something else.
Speaker 1:You have a lease, so now you got to get out of it's it's like I I mean, I don't I don't bring this up to be disparaging in any way whatsoever um, I don't know the family personally, but I know people who know them and they're, just from what I understand, absolutely wonderful people. But you know people who know them and they're, just from what I understand, absolutely wonderful people. But you look at Chick-fil-A. They came into Medford. They're booming. The North Medford location has, at any given time, 50 cars in the drive-thru at lunchtime. The South Medford location has none and I've heard through the grapevine that they are hurting really bad and it's the North Medford location that's paying their bills because they're not cutting it. It's Chick-fil-A, for crying out loud. It's the same ownership, the same franchisee. The customer service is outstanding. The only thing that can possibly go through my mind is location.
Speaker 2:That's my thought too.
Speaker 1:I don't know I mean. There's nothing that shares the parking lot with them.
Speaker 2:Well, and the funny thing about Chick-fil-A is it's not technically a franchise, it's like a joint venture.
Speaker 1:Okay.
Speaker 2:So you get very, very intensely interviewed to become a Chick-fil-A franchisee, okay, but you don't own all of that Like a franchise. You own all of it.
Speaker 1:I think we talked about this a few weeks ago.
Speaker 2:yeah, but Chick-fil-A it's a very small amount of money to get into, which is why a lot of people want to do it. And there's a lot of positive upside, but it's a joint venture partnership. You're essentially the managing A profit-sharing GM.
Speaker 2:Yep, you are a profit-sharing GM. That's what you basically are. Now you can build equity. I believe you can sell out of that. I don't know the details of the of the what's next, Um, so don't quote me on that, but it is not a true, typical franchise model as we know. Those at the franchise model to be what is the benefit of that model?
Speaker 2:Uh, risk, risk diversification for yourself for one Um and two is is less money. I mean, you're putting out less money, which falls into that risk diversification. Uh, to begin with Right, but you're sharing risk with the, the franchisor, essentially which is fine but they're going to.
Speaker 2:Don't think for a second that they don't have more leverage now than a franchise that you own outright, a hundred percent, right, like, if you buy a franchise, uh, oh gosh, what's? What's one off the top of my head I want? One of my favorite ones is is end zone sports, because I I'm a sports guy and it's it's for youth sports specifically. I just love their model. But, um, you know, let's say that you use it. You go to an end zone sports, you buy end zone sports as a franchise. You operate that, you can decide to sell it. All you have to pay. A franchise is a transfer fee, but you're going to pack that into the sales price anyway, so you're not even really going to pay it. But in chick-fil-a you, you can't just decide one day hey, you know, I'm going to sell this, right, you have to go through their proper channels and everything else. Now in a franchise.
Speaker 1:Kids inherit, it grow up working in it.
Speaker 2:Maybe, maybe depends depends on the franchise agreement how it's written. Like. I went through a franchise agreement recently because I was actually looking into buying one myself and I said um, hey, I want this franchise agreement rewritten. A little bit on on these items and here's one specifically for me was um, if my kids are interested in this business, they want to run it and I want to sell it to them or want to give it to them. I don't want to pay a transfer fee. I said it doesn't have to be for anybody. I don't want to pay a transfer fee. I said it doesn't have to be for anybody else. I'm happy to do a transfer fee for anybody else, but when it comes to my family, that's free. I want that to be free. And they're like yeah, all right, reasonable. So there are.
Speaker 1:By the way, there are some things in a franchise agreement you can negotiate. So if you're going to go, don't do it yourself.
Speaker 2:Yeah, I have a franchise attorney. I have a couple that I work with, one's more on the franchisor side, so if we're helping companies franchise, then that's who I work with. Otherwise, I have a franchise attorney that strictly works with people wanting to bet out franchises. They go through the whole FDD, they go through the franchise agreement, they help you negotiate the franchise agreement and they help you get all the way down past the finish line and they also generate like a shortened call it, like a cliff notes.
Speaker 2:I don't know if anybody remembers what cliff notes are anymore For goodness sake, I just dated myself, but it's basically a summary of here are your obligations on their franchise agreement, so that way you're not in default, and so you at least know you don't have to flip through hundreds of pages of franchise agreement. It's just right there.
Speaker 1:Is a franchise, a good first venture into entrepreneurship. I think it is just due to the fact that your systems are already created, your marketing and branding is already done, your the legal hr side of things are handed to you on a clean slate.
Speaker 2:Yeah.
Speaker 1:You know you're not having to build that stuff up, which is hard to do unless you've done it before from the ground up.
Speaker 2:Well, and you think about, you and I. We started our own ventures from nothing, from nothing.
Speaker 1:But I come from the corporate background where I kind of had I feel I had a very good foundation on understanding how businesses work the financials, the legalities, the logistics and everything else about running a business, because essentially in a VP of operations role, that's what you do.
Speaker 2:Yeah, I mean, franchising is good for a lot of people Not everybody, but it's good. And there are different models out there that are really good for the beginning entrepreneur, because the training, the coaching, the there's people there. And if you're nervous and going about something alone, I hear it all the time, so I get kind of sick of the phrase. But the phrase in franchising is you're in business for yourself, not by yourself. Um, and that's true, you do have a team behind you. You know people say well, I'm paying a royalty. Well, you're paying a royalty because you have a whole team behind you and it's well worth it, right, is it? If a royalty is 6% and you're making a million dollars, you really think that you know that's going to be a problem. And it's not only that, it's a, it's a write down off your gross revenue.
Speaker 1:So you're, you're actually getting taxed less and the brand that you're, the brand that you're working under, has gone through millions and millions of dollars developing that brand, fine tuning that brand.
Speaker 2:They paid for the failures.
Speaker 2:Weeding, yeah, weeding out all the failures, yeah. And so there's there's that way to look at it where you can be kind of a you know I don't really have an idea and a business to start, but I want to start a business franchising Uh, it's a great option, um. And then also there's there's people that see franchising as kind of like real estate investment, investing now, because multi-unit owners, you know, you have somebody come in and buy a. I'm trying to work with a client, um, in, uh, in the South, and I'm trying to. You know Papa Murphy's right.
Speaker 2:Of course, I think they're corporate headquartered out of Vancouver right, yeah, uh, vancouver Portland area yeah, they have an office, I know in Portland, but um 1,254 units or something like that. And this guy's out in the market where there aren't very many and I'm like, uh, you should do this, you should think about this one for sure, because he has experience in food, he's owned multiple franchises before and he's like the brand awareness isn't there and I don't have to pay for the awareness.
Speaker 1:It's like what in the world?
Speaker 2:Yeah.
Speaker 1:What do you mean? The brand awareness isn't there. I know Everybody knows Papa Murphy's.
Speaker 2:Well, not out where this individual is and I'm like, okay, but they've done this 1,254 times. I mean brand awareness isn't a problem they can solve. That's a solvable problem, and that's another part of business too, if there are problems.
Speaker 2:And it's a high margin business. Yes, if you can solve the problem, solve the problem, open up the opportunity. And and that's the other thing, when you think back on this performance, uh, the psychology performance. They actually measured the. You know they're focused on the problem, right. But then you see, there, they actually did one of those graphs where you could actually see that the brain changing color based on the activity and stuff. You could see the portion of people's brains like to have much more activity when a challenge came, because they were ready to attack the challenge. Those were the successful people because they had the growth mindset over the stagnant, limited mindset, right. And so that's exactly it Get rid of the problem. See the challenge, is that challenge overcomable? And yes, it is. So go do it.
Speaker 1:My father-in-law owns a construction company in Santa Barbara, california, and he said something that resonates with me, and he's so right. He puts everybody, everybody into two baskets. There's people who are part of the problem and there's people who are part of the solution. Yep, that's it. Everybody, everybody who he comes into contact with, falls into one of those two baskets.
Speaker 2:Yeah, and it's. It's. If you are not a problem solver, if you're not on that side of things, you're not an entrepreneur. Maybe you can be, maybe that's your goal, but you got to get yourself there first.
Speaker 1:You just got to make some serious personal reflection. It's, it's it's mental.
Speaker 2:I mean, it's really and I've always seen it a lot like sports. I think even Mark Cuban wrote a book about how to win. The light at the. How to win in the sport of business is, I think, the title of his book, and there is. So there are so many parallels between sports and business because you have to overcome challenges. You know I'm a basketball guy, so yeah, if the other team scores you are going to get knocked down and you're going to feel defeated.
Speaker 1:And how do you handle that and get back up?
Speaker 2:And the other team's going to score and they may score more points than you. You may be down the fourth quarter, but if you're the type that says, but I'm still going to keep going, then that you've already won the battle of entrepreneurship in a lot of ways and now it's time to believe in yourself to go do it. And if you're past it and you're already doing it congratulations yourself to go do it. And if you're past it and you're already doing it, congratulations. But if you're still stuck and you still can't quite figure it out, that's a great place to start. Is where am I mentally? Can I overcome challenges? Do they do? Challenges excite me or scare me? And if they scare you, ask yourself why. And if they excite you and go tackle more find a bigger challenge and see a potentially bigger return.
Speaker 1:So this I'm thinking back several years to a guy who I know he was working on a painting crew that was painting the interiors and exteriors of a facility that I used to run and he, you know, just sick of working for the man. He's like I'm a very good painter, I'm very experienced, I know what I'm doing. He said I'm great, I've got great social skills, I'm great with people.
Speaker 1:I'm gonna go out and start this on my own so you quit working for the man, or the man fires you the second he finds out you're starting to build, build out his competition on his dime, so to speak.
Speaker 1:Yeah, yeah, you're like okay, I need sprayers like four or five thousand dollars I need a van, I need it wrapped, I need, you know, a few thousand dollars in supplies. I need to decide on a vendor who's going to supply my paint and I need all their marketing materials and sample materials and stuff. I need a brand, I need a logo, I I, oh, and I need a bank account and LLC liability insurance. Where do you begin? Who's your first call? What do you do Me?
Speaker 2:Yeah, what do you advise?
Speaker 1:What do you advise? Talk to your wife first.
Speaker 2:There's that, or your husband, or whatever the case may be. We've had a couple of guests that said that kind of told the wife after the fact. But you know for have your community, I would say the people that have done it before. Find the people that you find a mentor, find a mentor that's done it before, somebody you trust. You know, for me, now that I'm a little further down the entrepreneur road, you know, when I'm about to launch a new initiative or launch a new business service or anything else that it might be, my first phone call is typically to my accountant how are we going to do this? And he's a business advisor. From that standpoint, we've dealt with business structure.
Speaker 1:Beyond the numbers but in the licensing side of things.
Speaker 2:And so that's usually who I call. Now I also have people that I vet ideas off of, so I have friends that I'll call and be like hey, this is what I'm thinking about doing. Poke the holes in it for me. Um, you know, honestly, my wife is great at that.
Speaker 1:Wives tend to be yeah, yeah.
Speaker 2:So, uh, you know, have your trusted business advisors um and and go there first, and that's where I start. What about you?
Speaker 1:No, that's great advice, and I was asking that question genuinely because when I started my business, I didn't have the luxury of, you know, keeping another job beforehand. It was literally out of the corporate world jumping in two feet. The very, very next day, the very first thing I I did was I decided on a brand, a logo, business name, I think.
Speaker 1:I went on to legal zoomcom and filed for an LLC through them because I'm like I don't care if it's going to cost me a little bit more money. It's not going to be expensive, no matter what. But at least they have your checklist and they have the process for you to do that and make sure that things are done right and heck, they even file. File it for you.
Speaker 2:Yeah, yeah, oh, it's easy.
Speaker 1:And then and then I think I to start out, I think I went, you know, went onto Squarespace and built a absolute piece of crap website to start with, where, a year later, I I spent a few thousand dollars and had it, had a good website built out by a professional yeah, um, but it was a good starting point. And then obviously, the you know make, making sure that I had the equipment necessary to deliver on the services that I wanted to provide. And then it was get out there and pound the pavement and hustle and drum up business. And then it was that, oh, you know, I I'm, I'm going into a lot of people's houses, I'm dealing with a lot of things, I'm driving around a lot.
Speaker 1:I should probably have some liability insurance. There you go. I should probably have some liability insurance. There you go. Yeah, good old insurance, yes, yes. So I got some liability insurance and then I insured all of my equipment and all that stuff. So I'm not sure if it was exactly the right order or the way a professional would have advised me to do it, but it's just how I did it, with no help, I mean at the end of the day, that's, that's how a lot of us start as we figure it out.
Speaker 2:You know, even Mark Zuckerberg said that he didn't know what he was doing to start with. And then here have that.
Speaker 1:I mean with AI and technology now and Google. There's no excuse for not figuring out how to do something.
Speaker 2:You can have AI write you a business plan if you want research, and you can have a business plan within 90 seconds.
Speaker 1:I drive a diesel truck, but YouTube can tell me how to change out the crankcase.
Speaker 2:That's right yeah.
Speaker 1:I watch a YouTube video on it and I'm like, nah, I could do it, but it's worth paying somebody else to do that.
Speaker 2:Yeah, it's like YouTube and projects around the house for me. I end up making a trip to Home Depot three times regardless. Oh gosh.
Speaker 1:It's so bad, yeah, it's so bad. In my house there's, you know, the the obsession I have in household work mowing lawns I love it.
Speaker 1:I love mowing my lawn, yeah it's so satisfying and pressure watching oh yeah, because you see instant results but when I'm out there pressure watching, I go oh man, this certain little tool that could do it at this angle, this attachment on the end would sure make my life easier. And so then I go out and I search online and, lo and behold, somebody else has done it and they have it. So obviously I buy that $26.99 part on Amazon or run down to Lowe's or Home Depot and get it. I'm a sucker for that stuff.
Speaker 2:Nice, nice. Well, I would say you know, just to kind of close us up here that if you're not sure where to start, think about maybe some pain points you have where you're at. You know where can you solve those pain points? You know, do you have pain points that you wish somebody could solve, but they're not being solved? There's not an option out there.
Speaker 1:Find somebody to confide in.
Speaker 2:Yeah, do you have an idea? Get some people around that idea and talk about it. People you trust. People who are smarter than you.
Speaker 1:Yes.
Speaker 2:And I do think there are some things that you have to be careful with when you're an entrepreneur. The NDA thing is fun and wonderful and everything, but don't have everybody sign an NDA because you had a freaking idea. Nobody gets a flying rat's ass frankly no, they don't. And so if you've worked on that idea already, you've thought it through, then why are you afraid to lose? And if you haven't done anything with it to begin with, nobody else is Unless.
Speaker 1:it's so unique and so world changing that you have to get a patent on this.
Speaker 2:Yeah, but here's the thing it's probably not right so, and plus the patents are expensive, so you probably don't have to start to get a patent anyway. So, and the other thing is is get yourself out of this thinking that you go out and raise funds for an idea. You got to put something behind it. You have to have the grit to do it, because I'm sure a lot of us who listen to this podcast are fans of shark tank, and if you're not, you'll love it. Go find it, um.
Speaker 1:CNBC and YouTube.
Speaker 2:There's a yeah, there's a lot of great products, great ideas, but you see that those folks are looking for the right people behind it. They ask what the performance is, what are the numbers, and they and they see if they're, even, if they even vibe with the these people, right it's not like.
Speaker 2:Yeah, it's like I don't even like these people. Forget it. There's, there's certain things that people are looking for. So don't go out there and just start running around asking for money. Like have your idea, have some momentum behind it, show some grit and show that it can do more, and then you can go for funding, but fund it yourself as much as you can. There's no reason not to. You take the risk, but you also take the the benefits with it and you keep your control over your business absolutely.
Speaker 1:And then, if you have no ideas and you have no other alternatives, look into some franchising and then run your business for a few years, make it really profitable and you get another wild hair to go do something else then hire somebody to run your first business for you or cash in and sell it.
Speaker 2:There you go.
Speaker 1:There's a lot of options and move on to the next one.
Speaker 2:That's right. A lot of options out there. Folks, you can do it, you got it. It's been a pleasure, it has Always. Who do we got next week? Oh goodness, I don't know, but I know we've got a great list of folks coming up ceos of ai companies, cio, ceos of uh, franchisors.
Speaker 1:I mean we've got a lot of really excited we want to share your questions, so reach out to us through wherever you get your podcasts on Spotify, iheart, apple, I don't know. There's like 15 of them out there, wherever you heard this. Look in the description. Click on the contact us form. Reach out to us. We'd love to hear from you Until next week.