Soccer Mom Business Ponderings
Soccer mom business millionaire– this never crossed soccer mom Cheryl Rose’s mind. But she was knee deep in soccer, plus she was thinking of starting a business. Her 9 year old son played recreational soccer and her 16 year old daughter played competitive soccer. Her daughter not only played for her high school, but she played all year. When she was not competing she was in some soccer camp to improve her skills. Cheryl had been in the soccer world since her daughter was 6 years old, which was 10 years ago. She even was an assistant soccer coach early on, and then the soccer involvement pace just kept picking up.
Cheryl was a 50 year old house wife, with two children and a wonderful husband of 30 years who was going to retire in a few years. Cheryl had worked in hospitality and marketing when she was younger in New York, but had been a happy housewife for the last 15 years. She was thinking of starting a business and her husband was very supportive, but what should she do? From the beginning her mind never wandered far from soccer.
She knew there was a big need for a soccer specialty store in her area of Oregon. Especially since the owner of the only soccer store within miles closed with the owner’s death about a year before. So she got on the internet and started googling phrases having to do with opening a soccer store. She quickly ran across the Soccer Post franchise. It seemed like it might be perfect for her. Since she was from New Jersey and the headquarters was also in New Jersey, she was very familiar with the store too and was talking to them within a couple of days. This would prove to be a great match.
Soccer Mom Business Seeking Free Advice
Cheryl told me her best advice to anyone starting a business is to, “Allow yourself to listen to the advice of your advisors. Open yourself up to the experts.” She said you still have to make your own decisions of course, but do not think you have to know everything to start. You should also seek out all the advice from all the experts that you can, so you have the best information possible to make a good decision. Cheryl was blessed with having the right people willing to help her, but they are out there for everyone if they look. You may have to look harder than Cheryl but people are willing to help you. She had great things to say about everywhere she went for help and advice.
The Franchise Management
Cheryl did not start out thinking she was looking for a franchise; she just started doing research on opening a soccer store. I advise everyone to take more time in your evaluation to decide if you even want to own a franchise or your own store. And if you decide to own a franchise, do as much research as you can and talk to other franchise owners.
But Cheryl seemed to find the right place the first time with Soccer Post. She has glowing remarks about the franchise and their help and ongoing support. She says they are always available to answer her questions. She said they provided all the help and assistance anyone would want. All franchises are not equal, but this is what they are supposed to do, to give the franchise owner the template that works and help them execute it with assistance.
SBDC (courses and a counselor)
Many people start with the SBDC (Small Business Development Centers), but Cheryl found the franchise she wanted first and then went to the SBDC. Her father-in-law told her about the SDBC and she was glad he did. All the help is free and she used it. She worked with her counselor and said his help was amazing. He helped her with her business plan, projections, and good general information to include a good discussion about risk management. She also took three different courses offered by the SBDC which again was very helpful. One of the courses was on developing your elevator pitch. She really didn’t feel she needed an elevator pitch, but after the course she was glad she had, it allowed her to focus more clearly on the essence of her business. One of the missions of the SDBC is to help people to get the loan package together to have the best chance at getting an approved SBA loan. Plus since not all banks will consider an SBA loan, the SBDC also pointed her toward the right banks.
Cheryl has high praise for her banker too. He of course helped her with her loan to start her business, but gave her much more insight and specific advice for her business.
Keep You Advisors Close
There are others who have helped Cheryl, too many to mention, but these three were stand outs. Of course the franchise management will keep working with her, but so will the SBDC and, even her banker said he was always available to answer questions to help her if she needed it.
Soccer Mom Business Marketing
Potential customers have to know about you, know where you are, and what you sell. Part of the perks of being a franchise owner is possibly a national or regional effort done by the franchise. Many franchises will take 1-2% of your gross revenue for advertising. If they do or do not, you still must market locally for your own business. The franchisor will probably give you suggestions, but it is up to you. Cheryl seems to be doing a great job at this with community involvement as well as other initiatives.
Big Soccer Community Involvement
Cheryl’s Soccer Post’s community involvement is definitely above and beyond what is normal. She has reached out and is very involved in the local soccer community. She is involved in recreational soccer in the area as well in the soccer programs of the local schools to include high schools and colleges. Her employees are mostly high school and college soccer players and she even offers intern programs. She not only employees students, but she goes a step farther to help them understand business. The students learn lessons that will carry them well into their adult life. I have seen this kind of involvement with the community before with a toy store in Missouri. The toy store was very involved with the community and when the store got into trouble, the community came together and actually saved the store without being asked by raising $82,000. Community involvement is a powerful weapon that helps to make Cheryl’s business special and will help her growth.
Because her store covers a larger area, she felt some TV advertising might be a big boost. She checked with all the local stations and decided to go with the one that also owned a local Hispanic station. Since Soccer is big in the Hispanic community she thought this was a natural, and the station let her split her air time 60% on the English station and 40% on their Hispanic station. This I feel was a very smart move and I was surprised at the cost, $500 a month for at least 3 months. They also made and produced her commercials, all included in her price.
Cheryl took a small course on social media. She said it was very involved and seemed a little overwhelming since she really had no reason to be involved in all the social media until now. She initially decided to stick with her Facebook page, which does keep her in touch with the community. She knows she has more to learn and could probably use social media more later, it is on her to do list.
She was not sure she even needed a website. Many franchises do not need their own website, since corporate usually has a website that lists all locations. Soccer Post has a website that does just that, it lists all their locations, including hers. But of course a corporate website can’t be personal to a community or a specific location. So Cheryl decided to put a website up for her location. Cheryl was going to try and do it herself and looked into it, but then remembered her own advice, “let an expert do it”. She was quoted websites that cost thousands of dollars and she did not feel like it was the best use of her money, but then she found someone saying they would do it for $300. I talk about this in my book, One Million in the Bank, web development is the Wild West, you have all levels of skill and all levels of price. A higher price does not always mean a higher skill or better website. Get a few quotes; you will learn more each time one of your suitors makes his presentation. You will learn a lot if you know nothing about it before. Start with some kind of a website; do not try to get it all right the first time. Once it is up and running, you will start to see the things you need and you will probably make changes down the road.
Soccer Mom Business Cost and Revenue
The normal arrangement for a franchise is an upfront fee and then a royalty paid monthly on the gross sales. The Soccer Post is no exception and it is no secret that their current upfront franchise fee is $29,500 (subject to change) and they have a 5% royalty fee but with no additional fee for advertising. All in all that is pretty good; most franchises have a higher royalty fee. You pay the royalty fee when you sign your contract with them, then you start setting up your business. Cheryl said they were a big help in finding the location and everything else, but you must pay all those normal startup costs, the lease, the build out, inventory and anything else you might need. After Cheryl paid the $29,500, she needed about another $100,000. The SDBC helped, as well as the banker, to get her ready to get approval for her loan. She had to put $20,000 down and then a loan for the rest of what she needed, another $80,000. This would cover her start up and a little running time until she would cash flow and the business could carry itself. It only took a few months for the business to carry itself. For about $50,000 out of pocket, Cheryl was in business.
The First Year
Cheryl is within weeks of completing her first year. It was a good year; she estimated that she will gross about $200,000. She told me that she learned a long time ago pay yourself first, so she took a small salary starting from the first day of business. Even after taking her salary she will breakeven her first year which is excellent. All things being equal she should continue to grow and make a profit next year.
A good franchise will generally try to operate so that their franchisees can make 15-20% after they pay their royalties back to the franchise. Retail does have narrower margins; about 10% is not unreasonable. Based on my assumptions, with a little growth to $300,000, Cheryl could make about $30,000 her second year plus her salary.
Getting to One Million in the Bank
These are not hard numbers and again are based on my assumptions. But it should not be unusual for a well-run operation in the right demographic area to make $1,000,000-$2,000,000 in gross sales which would be a net profit of about $100,000 to $200,000 a year. You could earn and save a million dollars with one location depending on your spending habits within 5-7 years. Of course the business itself would have a value; it might be worth about $400,-$600,000 or more plus any assets like inventory or real estate with it.
For a franchise with a store front, if you are doing all you can for your location, the only way to scale is with other locations. Generally two to three locations is more than enough to really help you grow faster and increase your net worth. With three locations all up and going, you could be making $200,000-$600,000 a year. Plus the business now would have a value of about $1,200,000-$1,800,000. To have multiple locations you must as an owner step back and consider the big picture more. You must work on your business, not in your business. You must also develop store managers so you can delegate. Two or three locations with managers could actually allow you more time and possibly provide you some additional economies of scale.
Cheryl’s Soccer Mom Business Success
Cheryl chose a franchise and for her it seems like a very good choice. She apparently chose the right one too. She has a great story and it is a path to $1,000,000. This was not her stated goal when she started. It was to start a business that could replace her husband’s income when he retired and do something that she loved and was deeply involved in already. When I asked her when she thought she might have $1,000,000 in the bank from her business, she acted surprised. She told me she had not really thought about that, but it was an exciting thought and she was going to put some pen to paper to see if she could estimate when that might be. There are lessons to learn here, it you select a franchise or start your own business, seek all the professional advice you can, many people are available to help. You still have to make the decisions, but make informed decisions.. Cheryl worked hard, sought out advice, and worked with advisors. From her idea to start a business, to having a grand opening was only 6 months. Why don’t you have $1,000,000? You can do this too. Your life could change virtually overnight. And if you are worried about the $50,000 or whatever it would cost for you to start your own business, don’t. I discuss this in my book and in articles on my blog-the money is there and I tell you how to get it.
Disclaimer: None of the financial projections came from Soccer Post Corporate.
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