Big Read: A millennial duo ditch a digital path for old-school success

By Thomas Heath

Left to right: Daniel McLeod, Alex Abramson and Patrick Bernardo of College Hunks Hauling Junk and College Hunks Moving remove furniture at the National Council of English Teachers office in Washington. Photo / Matt McClain
Left to right: Daniel McLeod, Alex Abramson and Patrick Bernardo of College Hunks Hauling Junk and College Hunks Moving remove furniture at the National Council of English Teachers office in Washington. Photo / Matt McClain

I don't write about many businesses a second time, but I am breaking that rule on College Hunks Hauling Junk and College Hunks Moving, founded by Washington buddies Nick Friedman and Omar Soliman, both 34.

Want to know why?

First of all, I was skeptical that their little project would survive.

But it did. And how.

Instead of trying to invent the next Facebook or Snapchat, these two sons of privilege (they were Chelsea Clinton's classmates at Sidwell Friends School) took a basic business concept, applied creative branding, stressed service and culture, and grew a college summer job into a real business.

At a time when millennials constitute the most underemployed workforce in the United States, Hunks stands as an example that the work ethic of millennials - including manual labor - is alive and well.

It didn't always look like that.

In 2007, Friedman and Soliman were scrambling to keep their $1 million junk-hauling business alive, working seven days a week and attacking tasks on an ad hoc basis more akin to a Whack-A-Mole arcade game than anything resembling professional management.

"We were pulling our hair out," Friedman said. "I would be looking in my notebook while trying to drive, then answer our 800 number on my cellphone from people complaining about our truck's erratic driving."

Then they read a book by Michael E. Gerber, called "The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It."

"The theme is, you work on your business, not in your business," Friedman said.

Don't spend all your time on the nitty-gritty. Instead, he said, spend your time creating systems so the business can grow.

Within a year, Friedman and Soliman started selling franchises.

Now, they have 100.

College Hunks Hauling Junk and College Hunks Moving, founded in the Washington area in 2005, now has $50 million in sales across 35 states. Together, the corporate and franchise systems have 1,000 employees and 250 trucks. The corporate holding company recently spent $3 million on a 50,000-square-foot office building in Tampa, which will house its headquarters and call center.

I wrote about these guys eight years ago.

The company, which started in a room in the Northwest Washington home of Friedman's parents, was grossing about $2.5 million at the time and had 20 employees and about a dozen franchises.

Now, their profit alone is somewhere in the neighborhood of $2.5 million on $12 million in corporate income, most of which goes back into the business. The corporate income comes from sales of franchises, annual royalties and three corporate-owned stores (Tampa, Rockville/D.C. and Dallas).

They still work hard, but it's the white-collar kind instead of the literal heavy lifting involved in their business.

With a US$40,000 (NZ$ 55,000) loan co-signed by their parents, these two turned a college summer job and an award-winning business project into a successful enterprise. When revenue dropped during the Great Recession, they expanded into point-to-point moving.

The moving side has grown into half of the business. They charge about $1,000 for an average move and about $500 for a junk job.

The company has been on a roll, adding 25 new franchises in 2015 and 20 already this year. The best performing markets are Long Island, New York; Atlanta; Nashville; and Montgomery County, Maryland, where Hunks has a regional headquarters in Rockville.

More than 60 per cent of Hunks' clients are female household-decision-makers over 40, married with children, with an annual household income above $100,000.

Downsizing seniors, commercial clients and professionals such as Realtors, property managers and assisted living facilities represent other major sources of business.

One attraction for Hunks franchises is the cost.

Our vision is to become an iconic brand in the service industry.

The franchise fee to launch a Hunks business is $50,000. Franchisees also pay 7 per cent of gross income. All in, an average franchise costs about $150,000 to get off the ground, far less than many other big brands. The average revenue is $600,000 a year.

The start-up fee covers training and support, as well as assistance from the technology center at the Tampa corporate headquarters. The technology team there has a routing system that constantly updates the status of each job and can see where every truck in the system is at any given time. It also allows customers to know when the truck is on its way.

"The key to franchising is all about consistency," Friedman said. "You have to have franchise owners who understand that we are all invested in the customer experience."

Franchise owners run the gamut from veterans to retirees to stay-at-home moms and established business people.

Friedman and Soliman spend most of their time on executive hiring, strategizing and building a culture that makes Hunks a place where employees feel they can grow and advance - and, for some, own their own franchise one day. There are full benefits for employees. Rewards can include anything from a $100 bonus to a pair of fancy sneakers.

"We are not just hiring guys to punch in and punch out," Friedman said.

I was most interested in how they grew the business so much over the past eight years. Friedman sent me an email with some of his business tenets, which can be useful to other start-ups.

Tips:

• First, start with a vision, create a strategic plan, and live by it. If you have a specific destination in mind for your company, you will create the necessary road map to help you get there.

• Act on ideas. People talk about a business idea but they do not take action to make it into a reality. It is the people who take action who ultimately end up making a difference in the world.

• Find out what you are best at (my personal favorite), and surround yourself with people who are smarter and better than you are. Neither co-founder was particularly good at finance, so they hired someone else to handle the numbers.

• Don't just chase the money. If you create a purpose-driven company with core values that people live by, then you will be able to weather the economic downturns.

Back in 2008, Friedman said the goal was to get to 100 franchises and become a household name. He and Soliman are now focused on tripling revenue to $150 million by 2019.

"Our vision is to become an iconic brand in the service industry," Friedman said.

Friedman said there has been some interest from potential buyers, but they don't really want to sell. "We view this business as our baby, and it's not something we would let go or part with," he said.

Life is sweet for these 30-somethings.

They still work hard, but it's the white-collar kind instead of the literal heavy lifting involved in their business. Incidentally, they did try working the trucks a couple of years ago, "and it was pretty exhausting," Friedman said.

And instead of working in a beat-up cargo van, he gets his exercise by driving to the gym in his Maserati Ghibli. Suggested retail price: $70,600 and up.

- Washington Post

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