11 Most Common Ways To Fund A Franchise With Terry Powell – Ep. 2 – Parts 1-3

Audio Transcription

Get ready to enter the Thrive Time Show! Good looks is the father of five, that’s why I’m a dive. So if you see my wife and kids, please tell them hi. It’s C and Z up on your radio. And now 3, 2, 1, here we go. We started from the bottom, now we’re here. We started from the bottom, and that’s what we gotta do. Now moving on to number 7 here. This is the SBA loan. Some people call it the SBA loan, or it’s a Small Business Administration loan. And in order to stimulate the economy, business administration loan. In order to stimulate the economy, the small business administration has worked with the banks and basically what they do is they’ve come up with a system where they actually help guarantee loans. I think currently it’s like 85% guarantee. The idea is if a local bank lends you money, the small business administration will guarantee up to about 85% of that loan, meaning that if, God forbid, the small business owner does default on their loan and doesn’t pay their day pay off the loan, the federal government will come in and help get pay off that loan to the bank. But can you walk me through how common an SBA loan is anymore with franchising? Is this very common? It’s very, very common today and it’s become more common over the years. It used to be only for larger investments. SBA loans were typically for brick and mortar type businesses for large investments. But that shifted today where they brought the requirements down where most everyone can benefit from an SBA loan as small as $100,000 and even today there’s some that can be done for $50,000. I’ve heard in franchising there’s like a, you can actually have an SBA approved franchise? SBA registry. What does that mean? It means that they’ve gotten very proactive about having franchisors share information about their concepts with the SBA registry and then they put together details of that and then if they you meet the criteria they allow you to be pre-approved on the registry. Our franchise concepts for example are pre-approved on the registry. So the idea it’s kind of like the SBA has somewhat vetted or endorsed and said, hey, this business is solid enough of an investment that we’re going to go ahead and pre-approve this business, meaning that we’ll lend money if you’re going to buy this kind of franchise. Absolutely. They even look at the franchise license agreement. They look at the track record of the company. They look at the length of time it’s been in business. They look at the principles and the team that’s operating and assisting franchisees. Now, no business is perfect and there’s not a franchise out there that’s ever sold a hundred franchises and every single one of them is doing great. I mean, because ultimately it comes down to the human who bought the franchise implementing the system. But for your business, for instance, you guys are SBA approved, right? So, what does that mean? How long of a process was that for you to become SBA approved? The first time around it took a number of months. And now to renew each year, it’s not too time consuming because they have a record with us, a track record. In the early stages it can take a little bit of time. And sometimes you will be turned down from the registry until your franchise concept has a little bit more of a track record. Or you’re willing to make some modifications to the license agreement. some clauses that can be put in there that if it does not continue to be successful and relates to the SBA being involved. Okay, now we’re moving to look at the funding option number eight here. This is funding option number eight, cracking the nest egg. So even if like a 401k rollover is not an option for somebody watching this, many franchise entrepreneurs have actually tapped into the retirement funds. Maybe they have stocks and they’ve just said, I’m gonna get out of the stock market and invest in myself. How common is this? It’s become very common. People are really frustrated by the employment issue. They’re frustrated by the investment issues and they realize now that the only way to take control of your destiny is to be self-sufficient. And many times that means that you’re going to need to be self-employed to do that. So be able to control that and use that nest egg as a platform to enhance your future, to grow that return on that investment. So actually you still have a nest egg and now you become your own banker. You’ve gotten proactive about your investment, turned it into wealth and equity, and you’re putting that back into your nest egg. I, you know, as a business consultant, I’ve worked with businesses over the years and I’ve noticed a lot of people who are in their 40s who work for a corporation they’ve been at for 20 years, 15 years or so. Corporation comes in and lays them off. There’s some strategic merger or something happens. And now this 40 year old has said, you know what, I’m gonna start my own business. And they bring with them a wealth of experience, knowledge, they have a certain business acumen because they’ve been in business a long time. They understand systems and they do very well as franchise owners. Can you think of an example of somebody over the years who had no other source of funding available other than to just raid the retirement who’s done well? Can you think of some examples of that? Literally thousands. Once we help people see a possibility to accomplish their dream of being self-sufficient. And they have the vision that they can make this happen. Everything changes. They look at things differently. And they’ll pull out all stops. And money flows to those people with a passion about a new opportunity or a possibility. And once they get to that point, they’ll pull out all stops to make it happen. My grandfather was self-employed. He’s an electrician and I was always amazed at Grandpa Ben, but what he would do is he would have this business idea and then he would say, okay we’re moving to South Dakota and I’m gonna open up this electrical business. Okay, he moved to Hawaii, he would go over the place and he would see a niche and he would just go for it. And he more often than not was very successful with it. And he would never have thought about saving up a massive amount of money for retirement and then just hoping he lived long enough to eventually enjoy his life. He was more about, you know what, I’m going to invest in myself all the time, and I’m going to enjoy every moment I’m alive and own my own business and be self-sufficient and that kind of thing. I think it’s just a different mindset. And it’s unbelievable how much more energy people have who are self-sufficient, who are betting on themselves. It’s exciting to see that. Even retirement has become something that people are questioning. Whether it really makes sense to be setting a plan that has you stop producing at a certain age and then just live off of that. Well, this, okay, and I don’t mean to rabbit trail too much, but I think this is worth it. This is a big moment. The idea of retirement. I don’t know who created this idea, but I’ll give you an example. I met the founder of Hobby Lobby. And this guy, Mr. David Green, he has so much energy, so much passion. He literally has a bike he rides around his offices. It’s a big, I mean, it’s hundreds and hundreds of thousands of square feet of office space in Oklahoma City. And he rides around a bike every day. And he is motivating his staff. He’s training his people. He’s building his systems. I’m not kidding. He is more energetic than most employees I meet today. He’s unbelievably energetic. Then I met Maurice Kanbar. I got a chance to spend time with this guy. I did some consulting with him. He is the guy who founded Sky Vodka. He was in his 70s, and unbelievable energy. I’ve got a chance to meet a lot of these people. I met George Foreman. He’s got a ton of energy. He’s not looking to retire anytime soon. So who gave us this idea that we should work at a job we don’t like until some magical age where we retire, and then we just rail right off into the sunset? I mean, this idea that we could enjoy every day that we live and work in a job that we’re passionate about, are you seeing more and more people kind of call a time out on this and say, hey, I am questioning whether retirement makes sense? Are you seeing this? Absolutely. The trend is very significant. At one time, corporate America convinced us that this was a retirement idea because everybody went to college, they came out of college, and you got on the career escalator. And everybody sort of went up the career escalator, and then at the top was retirement. They got off, which made room for new people to come on. That’s not happening today. People aren’t retiring as quickly, so it makes it more difficult for the new college graduates to get on the escalator I mean, there’s not the same number of jobs and they’re now going the Millennials are becoming Focused on being self-sufficient right out of college rather than getting on that escalator aspiring to retirement my father Drove me crazy talking about the day that he was going to retire all of his life. He spoke about it He started as one company, was 19, and he retired at 56, which was early. And within three or four years, his health had declined, and it was not the best thing for him. And I just, if you’re watching this and you’ve been thinking, or you’re kind of delaying living or starting a successful business until some magical day, what I have discovered, and to kind of paraphrase Brian Tracy, who’s a self-help guy, I just love his training. He says, some day will never happen. There’s Monday, there’s Tuesday, there’s Wednesday, there’s Thursday, there’s Friday, there’s Saturday, there’s Sunday, but there’s not someday. So if you’re watching this and you’re going, well, someday I want to start a business, this might be that someday. This might, you might need to schedule it today. So now we’re moving on to the next one here. This is funding source number nine, home equity line of credit. Some people call it the HELOC. Anytime we start talking about something often enough, we begin to shorten it and make it confusing for other people. We start saying HELOC, but that’s a home equity line of credit. And getting a home equity line of credit means that you are able to borrow money against the equity that you have so far built up in the home that you’re paying off. So example, you own a $200,000 house, you’ve paid off $100,000 of it, and now you have a hundred thousand dollars of equity available to borrow against to do something. How often do you see people who start a franchise using their home equity line of credit? It’s pretty common and may not be the only source but it becomes one of a multiple source of ways of funding. Today they don’t just necessarily use one source. They may roll over part of their 401k and then they may tap into a portion of their home equity in combination to put the funding together. How common is it for people to have multiple sources of funding to get a franchise off the ground? Where they actually borrow money from maybe the home, the 401k, savings. How often do you see it where people put a lot of sources of funding together to get qualified? It’s fairly common. I’d say about 25% of the time. Okay. I’ve seen we’ve had clients that have used four or five different funding sources to make their dream come true. And if you’re watching this and you’re going, that sounds crazy, I want to give you an example. Sam Walton has a book called Made in America, which is his autobiography. And he explains that at one point, there wasn’t any bank in Arkansas that he knew of that he did not owe a significant amount of money to because he was hell-bent on growing Walmart to become the most successful retailer out there. And I’m telling you, Walt Disney, he borrowed money up to the hilt to get going. Sometimes it requires borrowing money, sometimes it involves taking savings, but the idea is you want to have a skin in the game, you want to invest in yourself, but you shouldn’t cross off a home equity line of credit as an option. Not at all, and there are some nice tax advantages from utilizing a home equity line. And the beauty of it is you can only pay principal back in the beginning. So you can actually just pay principal, I’m sorry, interest only in the beginning. And those interest rates on home equity loans are fairly low. So in starting a new business, you won’t have the debt service for the principal. You’ll just have the interest payments. Why is it that most people are more likely to pull out money out of a home equity line to redecorate their bathroom or to remodel their deck or to install a pool than they would be to start a business. I see people that pull money out of their home to install a pool in their backyard. And they have no issue with that. In their mind it’s like, well, we’re putting a pool, there’s no risk there, or to borrow money to get a car. But when it comes to taking a home equity line of credit to start a business, why are people so scared about that? Well, because the banks have realized how to motivate people to use that money for the things that that they’re more emotionally connected to. You rarely ever see a bank advertising to use your home equity to start a business, even though it has the highest return. So it’s basically the bank’s marketing to the consumers around them. So if the bank marketing has started to influence your thinking, please just take a time out and realize that it’s not more risky to invest in a business than it is to invest in installing a pool in your backyard. Which is a declining asset depreciating as you heard it from the godfather of franchising here so moving on to a source number 10 this is the conventional loan the conventional loan now basically a conventional loan is a loan not insured by any government program but it’s your local bank extending financing to you of some kind how often do you see people go to their local bank and get a loan to open a franchise? Well, we just unfortunately came through a difficult period where banks weren’t lending money for anything. And they really pulled back because they got themselves into some challenges again. That’s shifted back 180 degrees in the opposite direction now. Banks realize that if they don’t get the money into play, they’re not going to make money. So they are looking at their clients that they’ve had in their banks for years that have been customers of theirs and they’re now willing to make loans for the next career step for that client or customer. And doing that through investing in a business is something they’ll do on a limited basis. Or if the person has a lot of assets and a great track record and a great credit score, they’ll sometimes go out and that local bank will fund the entire amount without an SBA guarantee. Now I realize that I was born in 1980 and in the 90s you were doing franchising and in the 2000s you were doing franchising and now that we’re in 2014 you’re still doing franchising. You’ve probably seen a few cycles. Oh yes. I mean you’ve seen where the banks didn’t lend and the banks lend a lot and the banks didn’t lend. So you’ve seen this a few times. Absolutely. So you’ve probably had a little more of a measured perspective going through this last recession, huh? Yeah, and interestingly even the job markets and the stock markets and things that have changed, it really hasn’t had that significant of an impact on the number of people, the 75% who have a strong, a very strong desire to be self-sufficient. That state’s pretty consistent. The number of new customers that we’ve had is up 411% over last year. We are Jared and Jennifer Johnson. We own Platinum Pest and Lawn and are located in Owasso, Oklahoma. And we have been working with Thrive for business coaching for almost a year now. Yeah, so what we wanna do is we wanna share some wins with you guys that we’ve had by working with Thrive. First of all, we’re on the top page of Google now, okay? I just wanna let you know what type of accomplishment this is. Our competition, Orkin, Terminex, they’re both $1.3 billion companies. They both have 2,000 to 3,000 pages of content attached to their website. So to basically go from virtually nonexistent on Google to up on the top page is really saying something. But it’s come by being diligent to the systems that Thrive has, by being consistent and diligent on doing podcasts and staying on top of those podcasts to really help with getting up on what they’re listing and ranking there with Google. And also, we’ve been trying to get Google reviews, you know, asking our customers for reviews. And now we’re the highest rated and most reviewed Pest and Lawn Company in the Tulsa area. And that’s really helped with our conversion rate. And the number of new customers that we’ve had is up 411% over last year. Wait, say that again. How much are we up? 411%. Okay. So 411% we’re up with our new customers. Amazing. Right. So not only do we have more customers calling in, we’re able to close those deals at a much higher rate than we were before. Right now, our closing rate is about 85% and that’s largely due to, first of all, like our Google reviews that we’ve gotten. People really see that our customers are happy, but also we have a script that we follow. And so when customers call in, they get all the information that they need, that script has been refined time and time again, it wasn’t a one-and-done deal, it was a system that we that we followed with Thrive and in the refining process and that has obviously, the 411% shows that that system works. Yeah, so here’s a big one for you. So last week alone, our booking percentage was 91%. We actually booked more deals and more new customers last year than we did the first five months, or I’m sorry, we booked more deals last week than we did the first five months of last year from before we worked with Thrive. So again, we booked more deals last week than the first five months of last year. It’s incredible, but the reason why we have that success by implementing the systems that Thrive has taught us and helped us out with. Some of those systems that we’ve implemented are group interviews. That way we’ve really been able to come up with a really great team. We’ve created and implemented checklists. Everything gets done and it gets done right. It creates accountability. We’re able to make sure that everything gets done properly, both out in the field and also in our office. And also doing the podcast, like Jared had mentioned, that has really, really contributed to our success. But that, like the diligence and consistency in doing those in that system has really, really been a big blessing in our lives. And also, you know, it’s really shown that we’ve gotten a success from following those systems. So, before working with Thrive, we were basically stuck. Really no new growth with our business. And we were in a rut. And we didn’t know what was going to happen. The last three years, our customer base had pretty much stayed the same. We weren’t shrinking, but we weren’t really growing either. Yeah, and so we didn’t really know where to go, what to do, how to get out of this rut that we’re in. But Thrive helped us with that. They implemented those systems, and they taught us those systems. They taught us the knowledge that we needed in order to succeed. Now it’s been a grind. Absolutely, it’s been a grind this last year. But we’re getting those fruits from that hard work and the diligent effort that we’re able to put into it. So again, we were in a rut, Thrive helped us get out of that rut. And if you’re thinking about working with Thrive, quit thinking about it and just do it. Do the action and you’ll get the results. It will take hard work and discipline, but that’s what it’s going to take in order to really succeed. So we just want to give a big shout out to Thrive, a big thank you out there to Thrive. We wouldn’t be where we’re at now without their help. Hi, I’m Dr. Mark Moore, I’m a pediatrician. Through our new digital marketing plan, we have seen a marked increase in the number of new patients that we’re seeing every month, year over year. One month, for example, we went from 110 new patients the previous year to over 180 new patients in the same month. And overall, our average is running about 40% to 42% increase month over month, year over year. The group of people required to implement our new digital marketing plan is immense, starting with a business coach, videographers, photographers, web designers. Back when I graduated dental school in 1985. Nobody advertised. The only marketing that was ethically allowed in everybody’s eyes was mouth-to-mouth marketing. By choosing to use the services, you’re choosing to use a proof-and-turn-key marketing and coaching system that will grow your practice and get you the results that you’re looking for. I went to the University of Oklahoma College of Dentistry, graduated in 1983, and then I did my pediatric dental residency at Baylor College of Dentistry from 1983 to 1985. Hello my name is Charles Colaw with Colaw Fitness. Today I want to tell you a little bit about Clay Clark and how I know Clay Clark. Clay Clark has been my business coach since 2017. He’s helped us grow from two locations to now six locations. We’re planning to do seven locations in seven years and then franchise. And Clay has done a great job of helping us navigate anything that has to do with like running the business, building the systems, the checklist, the workflows, the audits, how to navigate lease agreements, how to buy property, how to work with brokers and builders. This guy is just amazing. This kind of guy has worked in every single industry. He’s written books with like Lee Crockerill, head of Disney with the 40,000 cast members. He’s friends with like Mike Lindell. He does Reawaken America tours where he does these tours all across the country where 10,000 or more people show up to some of these tours. On the day-to-day, he does anywhere from about 160 companies. He’s at the top. He has a team of business coaches, videographers, and graphic designers, and web developers, and they run 160 companies every single week. So think of this guy with a team of business coaches running 160 companies. So in the weekly, he’s running 160 companies. Every six to eight weeks, he’s doing Reawaken America tours. Every six to eight weeks, he’s also doing business conferences where 200 people show up, and he teaches people a 13-step proven system that he’s done and worked with billionaires, helping them grow their companies. So I’ve seen guys from startups go from startup to being multi-millionaires, teaching people how to get time freedom and financial freedom through the system. Critical thinking, document creation, organizing everything in their head to building it into a franchisable, scalable business. One of his businesses has like 500 franchises. That’s just one of the companies or brands that he works with. Amazing guy. Elon Musk, kind of like smart guy. He kind of comes off sometimes as socially awkward, but he’s so brilliant and he’s taught me so much. When I say that, Clay is like, he doesn’t care what people think when you’re talking to him. He cares about where you’re going in your life and where he can get you to go. And that’s what I like him most about him. He’s like a good coach. A coach isn’t just making you feel good all the time. A coach is actually helping you get to the best of you. And Clay has been an amazing business coach. Through the course of that we became friends. My most impressive thing is when I was shadowing him one time, we went into a business deal and listened to it. I got to shadow and listen to it. When we walked out I knew that he could make millions on the deal and they were super excited about working with him. He told me, he’s like, I’m not going to touch it, I’m going to turn it down because he knew it was going to harm the common good of people in the long run. The guy’s integrity just really wowed me. It brought tears to my eyes to see that this guy, his highest desire was to do what’s right. Anyways, just an amazing man. Anyways, impacted me a lot. He’s helped navigate. Anytime I’ve gotten nervous or worried about how to run the company or navigating competition and an economy that’s like, I remember we got closed down for three months. He helped us navigate on how to stay open, how to get back open, how to just survive through all the COVID shutdowns, lockdowns. I’m Rachel with Tip Top K9, and we just want to give a huge thank you to Clay and Vanessa Clark. Hey guys, I’m Ryan with Tip Top K9. Just want to say a big thank you to Thrive 15. Thank you to Make Your Life Epic. We love you guys, we appreciate you, and really just appreciate how far you’ve taken us. This is our old house, right? This is where we used to live a few years ago. This is our old neighborhood. See? It’s nice, right? So this is my old van and our old school marketing, and this is our old team. And by team, I mean it’s me and another guy. This is our new house with our new neighborhood. This is our new van with our new marketing. And this is our new team. We went from four to 14. And I took this beautiful photo. We worked with several different business coaches in the past, and they were all about helping Ryan sell better and just teaching sales, which is awesome, but Ryan is a really great salesman. So we didn’t need that. We needed somebody to help us get everything that was in his head out into systems, into manuals and scripts and actually build a team. So now that we have systems in place, we’ve gone from one to 10 locations in only a year. In October 2016, we grossed 13 grand for the whole month. Right now it’s 2018, the month of October. It’s only the 22nd, we’ve already grossed a little over 50 grand for the whole month, and we still have time to go. We’re just thankful for you, thankful for Thrive and your mentorship, and we’re really thankful that you guys have helped us to grow a business that we run now instead of the business running us. Just thank you, thank you, thank you, times a thousand. Whoa! The Thrive Time Show two-day interactive business workshops are the world’s highest rated and most reviewed business workshops because we teach you what you need to know to grow. You can learn the proven 13-point business system that Dr. Zellner and I have used over and over to start and grow successful companies. We get into the specifics, the specific steps on what you need to do to optimize your website. We’re going to teach you how to fix your conversion rate. We’re going to teach you how to do a social media marketing campaign that works. How do you raise cap? How do you get a small business loan? We teach you everything you need to know here during a two-day, 15-hour workshop. It’s all here for you. You work every day in your business, but for two days you can escape and work on your business and build these proven systems so now you can have a successful company that will produce both the time freedom and the financial freedom that you deserve. You’re gonna leave energized, motivated, but you’re also gonna leave empowered. The reason why I built these workshops is because as an entrepreneur, I always wish that I had this. And because there wasn’t anything like this, I would go to these motivational seminars, no money down, real estate, Ponzi scheme, get motivated seminars, and they would never teach me anything. It was like you went there and you paid for the big chocolate Easter Bunny, but inside of it, it was a hollow nothingness. 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