Should I Grow Corporately or Should I Franchise My Business? – Ask Clay Anything

Show Notes

Are you thinking of scaling your business? Clay Clark and Dr. Z are answering questions from a Thriver in the man cave studio as he decides whether or not to franchise or go the corporate location road.

Thriver Question: As I grow, what should I delegate as we grow and what should I spend time on doing?

  1. Z – if there is anything you are doing that is not furthering you to the franchising goal then get it off of your plate.

Thriver Question: If someone is asking B and C player questions about the time they put in when should I fire them?

  1. Z – This is what happens when you have average or below average employees. They become entitled. When my managers ask if an employee can have a raise then I only ask one question, “Are they a long-term employee?”.

Thriver Question: Is it better to open more corporate locations after our first one or jump straight to franchising?

  1. Both – You will get the next location open and without you there you will learn some things about your business. You will have to hire a great manager and it will cost you. You will know whether you want more corporate locations after the first one.
  2. NOTABLE QUOTABLE – “Vision is dandy, but sustainable company excellence comes from a huge stable of able managers.” – Tom Peters

Thriver Question: What are the next roadblocks or hurdles that I am not thinking about that I should be thinking about?

  1. Opening corporate stores and the challenges that come with that.
  2. You must have a war chest if you want to grow so save money.
  3. Make sure you take care of your taxes and tax preparation.
  4. The more you go and the further you get from the actual operations you must make sure that you inspect what you expect.
Business Coach | Ask Clay & Z Anything

Audio Transcription

All right. Thrive nation. Welcome back to the thrive time business coach show on your radio. And on today’s show we have a guest who was actually a better listener to the podcast. He’s attended the workshops. He’s been a business coaching client and he is a guy who I would say has drank the thrive time show koolaid. He a guy by the name of Thomas Crossing and he went from a startup 24 months ago to now generating over 100. And what was your, your. What’s the most gross revenue you’ve generated in a month? Right now? So far? Thomas crossed it with full package media. Yeah. The highest gross revenue that we’ve had was 100, twelve thousand twelve thousand. And your profit margin is about 22 percent. Twenty one, is that right? Twenty two. Yup. So your 112,000. Correct. So 112,000 times point to to say you made a profit of $24,640 in one month.

See Dallas, Dallas. He dominates. Dallas. Changed the name to Talus Z. I don’t. I also got, I don’t feel good at all. So sick. So sick. So what is your question for Dr Robert Zellner. You’ve traveled here from Dallas. You can ask him anything where the man cave studio. Nothing’s out of bounds. What is your hot and fresh question for Dr Robert Zellner? Yeah. I think my biggest question is uh, y’all, y’all talked about on the podcast maybe about a month ago about a delegating and huge kind of choosing what you want to do and how you still do marketing because you like to do it. Um, and as we’ve grown, what’s, uh, what should I delegate and when and kind of what’s the best use of my time as we, as we grow and become a bigger business. Yeah. Just just did, is there anything that goes on in your business that you have to do?

I’m still involved with some of the day to day operations, so that’s stuff that gets done. Like what? Uh, like doing quality assurance and all the photos, uploading them to clients, that kind of stuff that you have to do that it has to do with me personally. No, it has to get done. But me personally now is that something difficult to teach someone? Is that like a, maybe a tower but the o, so an hour long, long time it takes to get by. I gave you an hour a day and I said, listen Thomas, what could you physically do that you would make the most money doing? What would you tell them? Probably focusing on processes, scripts, and kind of nailing those down. Right? Those out. What are you focusing on? Know new new cities and then franchising. Bingo. Bingo it, you think you’re doing. Other than that, I’m going to throw punches quarter Thomas, I must fight you to want to talk to you right now.

If you’re doing quality assurance on some photos and uploading them, paying someone 12, 13, 14, 15 bucks to do it and worry about getting it off your table. Get someone hired, hire, hire, hire, train, train, train. Keep it simple. I have input. I can’t afford to hire a manager until busy. See, I don’t know. I don’t know. I can’t afford to pay $20 an hour for me a what can I find such a management? Dr Thomas. I’ll ask these questions. I ask these questions because I visited Thomas’s head using esp technology. I read his brainwaves and I asked questions he thinks before he asked. So I asked you the question. Thank you. Find. Yes, they’re out there. You’ve got to go find them. You have to develop them. $20 per hour. Are you business coach kidding me? What? Listen. Tell you what? Go into a store. Go to the mall. That mall. Oh yeah. Mom worked at that weekend shifts. Oh yeah. Oh yeah. My baby go in there and I’m taking what you’re gonna. Find some sharp manager, site manager, shop manager. Opening. Closing the massage place on the second level. Oh yes. Get in back foot and back from the middle of Kiosk. Guests get you massage. Yes. No, you spend all your time there. I couldn’t find one. What’d you do in the mall? I got windows three hours. So should I talk about it? About

25 to 30 percent profit margin. Should I be okay with taking that step below that to to hire that person to free up more of my time? Absolutely. Because you’re going after the big fish. You’re going after whale franchising cities. You’re going after opening up in other cities. You’re. You’re about getting those. Like you said, your scripts tighter. You get your, your so they can. They can get the business in because that’s what’s all about is gaining the business. You want your team to take care of it. You don’t want to leave. Look at this, look at it like this. You’re the guy out hunting. Okay? And you’re going for the big game. Big Gang. You know what a lion can’t survive by eating chipmunks.

This just it. Uploading and doing quality assurance is chasing after chipmunks. So pizza don’t be the little terrier dog.

If somebody cannot get their crap together in the call center, these are the kinds of business coach questions that Thomas has never been asked, but Thomas, if you could travel to a parallel universe where somebody who has never worked for you but could work for you, could ask you questions or give you push back. What are some of the questions that you have not been asked in the, in our, in our current universe, but in a parallel universe, what are the kinds of questions or pushback or Jack Ass with you might hit, might or might not have experienced in the parallel universe where full package is hiring other people in a call center? Not In our current universe, but in a different universe. That was. Zeke can tell you whether it’s time to fire this person or not. Oh my. I think some of the questions I get a lot are about, you know, they’re not getting paid enough or time off or uh, you know, in I working too much, am I not bouncing my life? And that Kinda always kinda. I don’t know what the way to say it is, but just them not beer, uh, committed to the time and not the results.

Well, and that’s what happens when you have average employees. Oh, that’s what happens when you have maybe a little bit below average employees. That’s what happens when you get employees that maybe know too much of your personal numbers and business of what’s going on since teitelman rolls into them. Hey, I’m the one doing all this work. Oh, he’s over here. You know, he’s a big game is when you’re saying the dunes, I don’t even know what that means. And we’re over here wherever here popping these two chipmunks in the head and we’re, you know, hey, like I worked like eight hours yesterday. I spent like an hour. I’ve been on time all week long. I’m ready for it. Yeah. And one of the things that I do is when somebody comes up and asks me for a raise, you know, you, you come to that

decision. That’s so exciting. I’m so excited to give you the raise. I gave it to you right now. You have to go, what’s your legs? Castrated my bucket, or hold on microwaveable, Burrito it to pay you as much as you want. Thank you. When does the middle of it is to serve you? We’re here to work for you. You can take whatever you want. Mr. Employee, there is so much in front of coming here for eight hours a day. That’s still exciting.

When my managers come to me and ask if they can give a raise to an employee, I always asked him the same question, hey baby. I like, Oh yeah, that’s not the question, but I be like, ah, yeah, you ready for the question? I asked him, does anybody care? Thomas wants to know three clay, do you want to know? I want to know want to go?

Are they a longterm business coach employee? Oh, just take it to where it needs to go because that a longterm employee then yes. Yep. Is that a and they say, well, I don’t know. They’re not that. I’m like, then you’ve answered your own question, then the answer is no, and they’re probably looking for another job at that moment. If you say no to them, you realize you’re going to have to probably replace them because that is a.

I think a lot of people overcomplicate that. So can you repeat again the question that you would ask? Is this a longterm employee? In other words, do we see this person? Do we want this person around a long time and I think a lot and that just sums up a lot of stuff.

Z and a lot of people though will overcomplicate the question you just asked and so we actually had a caller who he called in earlier. Oh good. And he called it get it recorded. Why I cut them off after we, after we record, he has given us. He’s given Thomas Tips. Oh, I thought this. These are not the kind of tips that our show guests deserve. Our listeners deserved. So have a little audio excerpt of one of our cars. He called and he said, this is what you need to think about when you think about giving someone a raise or not. A lot of pressure. You’ve got to rise above it. You got a harness and the good energy out the band harness energy block that feel the flow happy, feel it. It’s circular. It’s like a carousel. You pay the quarter, you get on the horse. It goes up and down and around. Circular, circular with the music, the flow, all good things. No, it’s not that complicated is that it’s not that complicated and it take. What if you’ve got a good employee, a employee, you know, and they come to you and they say, Hey, can I get you to have a minute? And you’re like, oh no, that’s. I got a minute. But like, I’m sure you’re an employee.

I always had to step on it and he goes right into it. Hey Man, I’m going to kind of a tough way. I really could use a raise. I had this, this, this, you know, I’ve pulled out some tires on my car. I just need a little help and a little hill. You know what I tell you why you’re great, you’re great, or whatever it is, but tell you what, you build that report. That’s when people say, how are you?

We have doctors that have been with you 25 years. How do you imagine the teams had been with for Nineteen, 20 years? How do you have these people that are like, they act like they would take a bullet for you is because in those moments right there, you have an opportunity. Oh, you have an opportunity to step up and do the right thing and taking care of your people is like taking care of your family. If he ain’t going to do it, nobody’s going to do it, so whenever they come to you, warm guy will do it, or another guy will take your side and buying tires and treated like a king and take away your takeaway. You’re a employee, right? Absolutely. That will happen. Now it’ll. It’ll happen. Now you say to yourself, okay, what do I do about that? Average employee, that number? See, that’s why you’re always doing what Chubb group interviews now is hiring. Oh, if you don’t have a list right now of who, who’s your best employee? Don’t say their name. Who’s your worst employee? Don’t say their name. Right. Got It, got it all lined up and I know it sounds horrible, horrible, but sometimes pruning a bush, I, he removing healthy limbs is a way that you get more productivity.

Are you saying printing a Bush, you can get more productivity. It sounds crazy, but it’s true.

Sorry, I just wanted to be fun.

So you kind of rapid fire some, some employee issues there, you know, hey, I want, I want to raise. Well that’s individual. You take a look at that and you and you assessed that. Okay. And then you always run into the court. You always went to the field drug. Is this a longterm employee? Alright. And that tells you right there where they are because if they’re an a, I mean it comes quick like Oh yeah, Oh man, if I keep this around for a while, I mean he is a rockstar that, that’s a different question. I mean that’s a different answer at the end of. And you’re like, you know, I’m actually working on replacing that business coach person in my mind. Right? Because you do it on your time. Have a couple of felonies for assault and battery, but they’re going through a phase and they’re going to be good in the future.

No, that’s not the person you want to bet on. It’s a person just life coach them. But the person who’s always getting to work early, stay in late. Who’s overdelivering? That’s who you want to bet on. Thomas, what’s your next hot and fresh business coaching question for Dr. Robert Zellner. Uh, two more questions. The first booth, uh, you know, we’re, we’re gonna open one more corporate location for sure down in Austin and a couple of months there’s our software gets done. And then beyond that, do you think it’s better to open a couple more corporate locations or just jumped straight to franchising? Both. I think that what happens is, is that by having. You have the one office now, right? Yep. Just one office in Dallas in a couple months. Yeah. And what happened is this, you’re going to open up Austin and you’re going to see how your life changes.

You might not like the way your life changes. Managing remotely, bro is brutal because you don’t have somebody with that kind of passion that you have there unless you hire a guy z to hire a really good manager to manage the Austin location. Somebody who’s not Thomas, you’re going to have to put up what? 50 grand. Oh, minimum. 60. Oh yeah, totally. That’s what I’m saying. I mean, you’re probably out 70 grand. This is my. Take your out 70 grand a year. This is for a good one. A 70 grand a year salary to manage a remote location. So right away your overhead is out 70 grand before you even make mean you to have a manager that really gives a crap. I mean it’s, it’s, it’s 70 grand. It really is. And you may, you may do less of a base and more of an incentive. You might know. You might do some golden handcuffs about, hey, we’ll give you some sweat equity in this, in this store,

this office. But people with psychological problems will agree to be a manager for 12 and our. Yes, they will term 12. And Man, I just want a name said yes. Two questions before I agree to this, so it’s 12 and our parking spot totally on our plus incentives, but my big question I have for Thomas Real quick before I agree to this job is the black helicopters had to follow me around. Do you think I should talk back to them? Are just like email or tweet? Tim. So has been following me all day. How He needs brownies. Yeah, I’ll take that job. I mean 12 an hour for a for. I’m just telling you for a manager dude, I’m just telling you it’s 70 grand. So the league about it.

What’ll happen is though, is that when you open it and you may say, oh my gosh, this is the best thing that’s happened to me. Am I saying I love this? I love the, you know, traveling to Austin every now and then. I love the new, the new stuff. I like going down. What’s the big party street to sixth street street. Whatever. Grainy.

Yeah. It speaks to the street, the Boston, Massachusetts feelings. I don’t even care if we make money. I hope. I hope this. Hope it costs you 70. Okay, 70 grand a year just to manage stuff and making my fingers in these silly little rock on it. How come? I don’t think he care. We don’t even need an ally. Drones. Tography. I love the decor. Love. How long did it take to go from Dallas to often? Because I mean you’re talking about when you think about onto the tape, and I say we take a three hour, three hours, three hours, three hours. I could just get an. Every time the new Brian you get locked down in the backseat, that urban. Oh, you know, I’ll come. Don’t even. They just put their foot down that, that, that, that, that a tinted so they can’t feed. It goes down. They can’t see what’s going on back there, back there. Three hours of Uber. The ladies’ man isn’t some fancy Uber’s job. Uber to second hit the black car with the national black light and when you drive three hours down to often to manage an unprofitable business, nucleon $70,000 for somebody who might not be making a profit. One of the things that you do is you make time to make a take what you do, but you’re going to kick it in.

He’s just making all that cash. Oh, you don’t. You don’t know. You held a chapter down. Oh, chapter hop the chapter. How can get a job? Get the job you got. You can be tumor to tumor. We’re getting back together and okay, now we’re re re reset. You can definitely tell it. The podcasts, not the radio show radio show. We have timelines that we get out there a little bit about them, but to go so, so that’s the deal. If you open up one in Austin, it’s 70 grand a year. There’s no, but here’s. Here’s, here’s the thing about it is, is that whenever you open it, then you’ll know whether you want to do any more corporate stores because it’ll be, you’ll be, I really like this or I don’t like this and you’ll let. It’ll be your decision. Right, right. Makes Sense. Yeah, and I would just say to avoid the pain for you after you get mentally raped, you’ll definitely want to have a corporate location.

That’s like such a helping Nancy, you’re being negative. I’m just saying my mom’s name, I hear my successful corporate-owned businesses are and they all pay a lot of money for that first manager. So I’m saying to you, Thomas, if you’re going to pay 70 grand days one than you do that thing and you dominate, you’re going to have corporate locations everywhere, but if you’re going to skimp on the management and have some local dude with some local connection to makes the profit share. Who’s getting underpaid, get ready to fly drones, man, I don’t really, I don’t need to know Phyllis? I did this with, this is the point of mentorship with DJ connection. I had these, these, these, uh, remote managers who couldn’t string together five days in a row and they would call me and go, I just haven’t seen you in like five days.

If you come down here, I’m really depressed. I’m not kidding. I had to go down to Dallas every single week to motivate those people because I didn’t have mentally stable people that will go back and do it again. I would have hired people for about 70 grand a year who had, who are used to managing a quick trip or a fine establishment and I would’ve hired managers, but when you go out there and you have underpaid startup, kind of delusional starter people, I’m not saying you’re going to do that, but if you do, it can be very painful. We recently had Tom Peters on the show. Yes, and he has a notable quotable that says vision is Dandy, but sustainable company excellence comes from a huge stable of able manage and I have no doubt that you’re going to have a. you’re gonna have no problem getting leads or clients.

I don’t worry about that. Marketing is not a problem. It’s just finding somebody who will manage the people down there without the reality distortion of you being down there and encouraging them and seeing them and looking them in the eye on a consistent daily, if not weekly basis. What is your next question, Thomas, now that now that I’ve irritated you two to seven types? No irritation. I always ask Dr Z. This, I don’t know if you don’t remember, but uh, as we kind of reached these next phase in our business, uh, since you’ve been there and grown a lot of businesses, what’s kind of the next, uh, whether it be soon or a year from now, that kind of next roadblock or big thing that I am not thinking about that I should be thinking about? Well, um, I think it kind of surfaced on one just a little bit ago and that is that corporate store mentality, you know, opening up multiple locations. You did that Z with Imr. You did that. Oh, I know I’ve traveled the country and did that. Talk to me about that. Talk to Thomas about that because you actually went and opened up corporate stores and what was the biggest challenge of that? Because that’s what Thomas is dealing with now. If he decides not to put the major focus on franchising can decide to do corporate. I mean you were hired to be the president of [inaudible]. You are the business coach man.

Well here’s the thing about it is everything has to be excellent or it was a fail. And so you had to get a great location. If you didn’t get a great location, you’re in trouble, right? Because we were a brick and mortar, you know, eyeglass place. And so he had to be a great location, right? Number two, we got to get great people and you know, hiring doctors and, and the stigma sometimes of working for a, you know, not having your own business, you know, I’m gonna have it out, drive my own business. I don’t want to work for somebody. So you kind of have that a little bit out there and then managers and staff and then managing it from a distance. Um, those are all challenges. But the thing about it is once you start to do it, like I opened up 24 stores in one year, that’s two a month. And once you kind of get the template down, you’re like, this ain’t no thing, you know, and you’ve got to have your war chest because it takes money. Right? How much money to, oh, now I don’t know. Well, his, his floor plan, I don’t know what his was, just the base packages. In other words, your equipment, you need the software where they ask that question, I’m not asking for you to all of a sudden have a knowledge of, um, you know, what it costs to open up a full package media. All I’m saying is most businesses that I meet that fail, it’s because they’re underfunded and they don’t understand how expensive the human cost, the cost of having excellent humans is because as an owner, a lot of things that you do like Thomas, what time do you wake up every day? About 3:45. And what time do you wrap up your day? About eight. Z. I mean, is that normal to find anybody that would wake up like at six everyday for the company and go and wrap up their day at like six.

Oh no, that’s not normal. So that, but that’s an entrepreneur.

So I’m saying when you hire someone, they’re not an entrepreneurial manager. Right? Which means they might get to work if you open a store at like eight everyday. Let’s say they’ll get there at eight. Right? And they’ll wrap up their day at six or whatever or whatever. Yeah. Whenever they want to make the deal with him for him, but they won’t have that same passion that you do. That’s why your systems have to be tight and you got to pay them a lot.

I, I agree. I concur. So, um, you know, doing that was kind of fun. A little bit of it was fun, but um, you know, you, I enjoyed it and therefore it was sustainable for me to do it. Um, and like I said, whenever you do that, so, so some of the threshold you’ll get into it. Now the other thing is, is that if you open that up and then all of a sudden you go train wreck, train, wreck, train, wreck. I don’t want to do that. I just want to have this. And then when a franchise I want somebody else to do with it, I’d rather make less, uh, fewer, more locations than, than to do that corporate mindset. Right? So that could be a, that can be a big hurdling thing you have to overcome. And then what do you, how do you, how do you unwind out of there? Maybe you had that manager, you have somebody, maybe you sell that as a franchisee. I’ve already kind of got it started and kind of running down there. Okay. Um, some other hurdles I think that you have to be really careful of. And under the sounds, captain obvious, here we go, captain obvious this, Justin from the left coast of the beautiful Arkansas River.

One of the things that I find with entrepreneurs that start some growth and start making some money is they don’t do tax preparation correctly. Oh, and at the end of the year they’d get a tax bill for a couple hundred thousand dollars and it could just ruin them, you know? So I would really tell you to make sure you’re staying on top of, you know, anytime you’re a, you’re a 10, I mean the way that the pain, you’re not, you’re a w two employee, you’re a business owner, but you’re doing contract work for these guys and they send you the check rights and the invoice and send you the check. You dumped that in the bank. You need to make sure that you’re taking care of all your tax implications from that. Okay? Okay. All right. That’s, that’s another business coach hurdle that I see people do. They go, hey man, this year I made $4,000 and I got to pay taxes on them and you’re a big enough now z where you can have an in house.

Sure, sure, sure. But you find a good, you know, you find a good cpa down and you find a good accountant. I’m sure you have. And just make sure you’re staying on top of that and take that off the top so you’re not tempted to use that money and go, what? I’ll, I’ll make up for it next month, you know, so just make sure you’re diligent in that. Okay. I think another thing too that happens when did you start growing and you’re less in the business is making sure that you inspect what you expect because if you don’t, what will happen is if you shoot at a target and it’s just a little bit off here, the longer it goes, the further it goes awry. And so if you have some people that are not, I think doing spot checks on stuff that’s going out. I know we’ve just talked about earlier about you doing all the quality assurance on the pictures and then doing the uploads every now and then pop it in. Check one of those.

One of the guys I hired Dj connection when I only had a poorly paid manager, he made profit share so I paid him 30,000 a year and with profit share he could make 100,000 a year. I went down to Dallas one weekend to check on the shows for the Djs that were teaching for us because I knew what hotels they were at. And I’m not exaggerating. We probably had 20 djs out dj in probably 18, 19 different. Doing the worst job I’ve ever seen. They were all, I guess embarrassment. It was an embarrassment to watch our guys because I didn’t know these guys and I found that the manager I hired, even though he could have made $100,000 a year with profit share, he didn’t care. He just hire anybody with a pulse and the quality was so terrible. I wasn’t aware of that. And so then I hired a manager who I paid a little more.

The next manager didn’t care. Same thing. I was paying about 45 grand a year profit share you can make up to $100,000 a year. That’s an entrepreneurial idea that more than half of your salary could be based off performance based. So finally I got down to the my next manager, I’ve hit the guy about $65,000 a year and I gave him performance base, so two thirds of his income was guaranteed. Therefore he was an employee who had a performance based pay, merit based pay. And I go to the shows and the guys were great. Yeah. But I got just demonized and destroyed. Rightfully so for having bad djs at weddings because I had two managers in a row that were terrible. Yeah. So the guy ended up hiring, ultimately had a lot of managerial experience, was very good, uh, and what he had done. And he was excited to go from a job where he was making $60,000 a year with some merit based pay to 65 plus huge bonuses and he killed it.

But I’m just telling you, if you underpay that, that manager there in that new market, your marketing will never be a problem. It’s the ability to find good managers, see that will keep the quality where you want it to be and who have that kind of to the conspiracy theory to inspect what they would they expect. And then you need to have a conspiracy theory about them. Even once you find a good manager means he used to pop into your storage, you still spot check, you’re still always paranoid you, you always have to. So those are some of the limiting membranes. And then all of a sudden you know, you have to go backwards and start working more in the business because you’ve made some bad hiring decisions. And that’s always frustrating. I didn’t. That was the least favorable time of growing businesses is thinking you had someone good in place and then leaving them, you know, to do their thing.

And the checking back on them, realize that you have a train wreck and then you have to let them go. You have to step back in, you have to kind of get the reins back of the business and then get somebody else in there. That’s, that’s frustrating, but that’s part of the job of being the owner is to actually fire that person and step back in. Correct him, linger there and ruin your entire operations unless you don’t want that business. Thomas Thomas, I appreciate you being on today’s podcast and business coach radio show and for all the listeners out there, if you too would like to have your question answered by Dr Robert Zellner or myself, just email your question to [email protected]. That’s [email protected] and we will actually give you a call on a thing called a telephone chop. Why uptempo? People today are still using telephones. We’ll call you on a recorded blind and featured on the podcast I got to do is subscribe to the podcast. Leave us an objective review and email your question to [email protected], and as always we like to end the show with a boom. So three, two, one, boom.


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