Coffee takes time to brew

Ian Worsley and Isabel Jackson's first sale only came after 200 calls. Photo / Herald on Sunday

Buying a franchise turned out to be a bit of a grind, reports Steve Hart.

If you can't face the day job then running your own business may be your ticket out of the rat race.

It is something Isabel Jackson and Iain Worsley decided to do a year ago. The couple wanted to work less and have a business that earned money while they relaxed. A business that would use Jackson's knack of marketing and Worsley's people skills.

But it wasn't that relaxing after they handed over $62,500 for an Xpresso Delight franchise in Howick.

"We thought everyone would want our coffee machines in their offices," says former corporate marketing executive Jackson.

"As soon as our first seven machines arrived in January last year I called all the people I knew to see if they wanted a machine in their office. One by one they said 'no' because of the recession.

"It was a real slog getting the business going - we had no clients - so I had to go out and get them."

Jackson went door knocking to drum up business and began cold-calling firms. For a moment the dream of sitting at home while the machines went ka-ching, ka-ching, ka-ching seemed a long way off.

"It was very hard calling people I didn't know," says Jackson. "More than 200 people turned me away before we got our first 'yes'."

To her surprise, Jackson found it was the smaller firms who signed up for the seven-day rolling contract for the coffee machines, not the larger firms she thought were a sure bet.

"I hated calling on people so would do phone calls one day and door knocking the next," she says.

Jackson says the turning point came when they joined the local branch of Business Network International.

"It is a cost-effective way of marketing your business and there are BNI groups all over the place," says Jackson.

"We went to a few networking meetings, and while it was outside our comfort zone, there is no better way to sell than when it is face to face."

Jackson says to be in business you have to be determined, tenacious and be prepared for a few hard knocks.

Today, Jackson and Worsley have 11 machines, seven of which are earning money every time someone uses them to make a cup of coffee.

While Jackson still spends a few hours a week marketing the machines, for his part, Worsley spends half a day each week keeping them topped up with coffee.

He enjoys meeting clients and says it is a lot different from being an accountant, something he now does part-time.

"Xpresso Delight is a great business for a couple," says Worsley. "I thoroughly enjoy getting out and about and making sure the machines are working as they should."

The couple expect to get their initial investment back by next year and Worsley says the business model is so good that, with the right attitude, it would be very hard for the business to fail.

"I did a lot of research looking at the different business models of franchises before signing on the dotted line for Xpresso Delight," he says.

"The risk of losing money with this franchise is low as the break-even point is very achievable."

Worsley says they are just starting to consider buying a second Xpresso Delight franchise.

"It may mean taking on a member of staff to help out, but it could work," he says.

Buying in

Graham Billings, executive director of the Franchise Association of New Zealand, says people thinking of buying a franchise should do their homework before signing on the dotted line.

"Anyone buying a franchise must understand what it will take to succeed as it is a lot different from being an employee," he says.

He says people wanting to go into business should take a long hard look at their skill set and decide what type of lifestyle they want and get the support of their family.

"For example, if you like your weekends, avoid a retail franchise," he says. "If you prefer to work indoors, you won't want a mowing franchise."

It's common sense, but Billings says with 350 franchise options to choose from it can be easy for people to lose their way.

"Think about what you and your partner enjoy doing and understand that being in business is hard work - especially during the first year," he says.

Billings says the benefit of owning a franchise is that you are working for yourself, but are not on your own.

"A good franchise company won't want you to fail because that can affect the reputation of the whole business," he says.

While a franchisor will often promote the business in a general way, Billings says it is up to individual franchisees to get themselves out there and build their business.

"Franchise owners need to market the business and sell it - just like any manager might 'sell' himself to their staff."

When it comes to the cost of buying a franchise the sky is the limit. Billings says you can spend anything from $20,000 to more than $500,000.

Franchise statistics for NZ:

* Number of franchise brands in NZ: 350
* Percentage that are home-grown: 75 per cent
* Number of people owning a franchise: 14,000
* Number employed by franchises: 100,000
* Combined annual turnover: $15 billion

Source: Franchise Association of New Zealand