- Player: Frik van Niekerk
- Franchise: Minuteman Press
- Established: 1973 (US); 1996 (SA)
- Visit: minutemanpress.co.za
- Constant innovation: Minuteman Press head office in the US has a dedicated R&D department researching the latest developments in the print industry to help make the best equipment recommendations for its franchisees.
In the beginning
The company was founded in the US in 1973 and grew to five locations. It was then converted to a franchise model in 1975. Five existing company-owned stores were then converted to franchisee-owned stores, and all outlets since have been owned by franchisees.
From the US, Minuteman Press expanded to Canada and England, and in 1996 the first store opened in South Africa. In the time since, it’s grown to around 50 outlets in South Africa and has continued its international expansion to Australia, Ireland and Scotland.
Each territory has a regional office that answers to the US head office, rather than master franchisors.
“My role as regional VP is to expand our South African footprint, and offer support to existing franchisees with my support team, who are highly experienced in the print industry and travel between franchisees,” says Frik van Niekerk.
Related: In A Minute With Minuteman Press
The franchise model
“Our fees structure differs from other franchises. Royalties and marketing fees are an area where franchisees can get unhappy, no matter the brand or industry. There will always be complaints that the percentage paid to the franchisor for marketing is not being spent adequately or doesn’t work for the franchisees. Minuteman Press mitigates this by having no marketing fee,” says Van Niekerk.
Franchisees are provided with guidelines for marketing campaigns and are free to market their businesses as they see fit. Proprietary Minuteman Press software helps franchisees monitor their campaigns to assess viability and gauge the ROI.
“Minuteman Press creates a partnership which supports franchisees as they grow their own businesses. This means that we don’t force preferred suppliers on them — we rather provide a list of preferred suppliers, but if you find your own you’re free to use them. We don’t force store outfitting and revamps like the retail and fast food sectors are known to — franchisees are required to retain the Minuteman Press branding and logo, but stores can reflect their own tastes and personality,” says Van Niekerk.
Because its philosophy is one of partnership, and because it’s the new and inexperienced franchisees that require the most support, royalties are capped. Franchisees pay a 6% royalty that caps at a turnover of R200 000 per month.
Support for franchisees
“We’ve developed proprietary software that’s been improved and modernised to become the most comprehensive print software in the world — it does everything from estimates, to job comps, invoices, statements, production management, marketing scheduling, financial reporting, and everything else that goes into running a Minuteman Press shop. This means no industry experience is required of our franchisees — in fact, 98% of our franchisees come from other industries — because they’re given the training, support and tools for success,” says Van Niekerk.
Minuteman encourages entrepreneurial flair that’s balanced with ability to follow systems and guidelines, since franchisees must be owner-operators. With the right attitude, proper self-motivation and discipline, Minuteman Press franchisees can be successful business owners.
To this end, the organisation selects franchisees on attitude and how well they get along with the regional office staff.
“When expanding, we ensure every franchisee’s prospective area is properly assessed to ensure it has the right density and mix of small to medium businesses as they make up the core of a franchisee’s business,” says Van Niekerk. “If an area has reached saturation, we focus on keeping existing franchisees’ radiuses exclusive and profitable, while tapping new markets for new franchisees.”
For new franchisees, Minuteman Press assists with area studies, location assessments, and lease negotiations. When it comes to franchisee support, staff are 100% flexible and mobile.
“If there’s a problem, a franchisee calls us up, and if it can’t be resolved on the phone we will physically drive to their store and provide support. Where franchisees are so busy and successful without requiring support, like our top ten performers, we will have scheduled, periodic meetings so as not to cause disruption,” says Van Niekerk.
Related: Xpress Operation On A Roll
“Last year, one of our franchisees turned over close to R17 million, and it came from a good mix of B2B relationships with small to medium-sized business, networking, direct and indirect marketing, extensive SEO generated business, website leads, word-of-mouth referrals by existing clients, and, of course, walk-ins,” says Van Niekerk.
Minuteman Press is a quality-driven business and part of the area assessment is doing a pricing survey of competitors to ensure that the brand is in the middle to upper third. For Minuteman, being quality driven doesn’t stop at quality output, but is also about excellent customer service.
“Our ultimate goal is not for clients to think ‘I need printing… Minuteman Press’. Then they’re only half way there,” says Van Niekerk. “We want clients to think, ‘I need printing… Frik’s outlet.’ And if a franchisee doesn’t have the services to complete a job, they need the ‘can do’ attitude and access to reliable vendors that can aid them in being a one-stop-shop for all printing projects.”
Future of the brand
One would think that digital innovations are threatening the print industry, yet every year paper consumption of the previous year is exceeded as early as August or September. We are clearly nowhere near becoming a paperless society.
“What has changed, however, is the printing behaviour of businesses: It’s very much print-on-demand in much smaller, more frequent and more customised batches — and at much shorter notice,” says Van Niekerk. “Print jobs arrive on USB sticks or Dropbox, and technology and equipment are becoming better, cheaper and more efficient, but there is always a place for printing.”
Minuteman Press’s head office in the US has a dedicated R&D department that monitors industry trends and tech advancements, analyses equipment investments in terms of quality output, maintenance costs and manufacturer support and then makes recommendations to its regional offices.
“Regional offices conduct feasibility studies with their franchisees to determine the best equipment purchases or rentals to help their stores become the most efficient, profitable, and best in class,” says Van Niekerk.
6 Top Tips For Reading Management Accounts
There is a golden key that reveals the secret of whether your business will survive and thrive. It is keeping tabs on the figures that summarise the strength of your business – your monthly management accounts.
There is a golden key that reveals the secret of whether your business will survive and thrive. It is not the brilliance of your business concept. It is not your talent for talking clients to sign on the dotted line. It is keeping tabs on the figures that summarise the strength of your business – your monthly management accounts.
Many entrepreneurs are usually more interested in operations and find product development or sales much more enjoyable than catching up on accounts. I sympathise – I’m one of them! So if you feel the same way, my top tip is always to make sure that you partner with or employ someone who can oversee the finances for you.
But that does not mean you can let the figure boffins and the finances take care of themselves. To function properly in your business, you need to know the outcome of your sales and development strategies – and the story of that is told in your management accounts.
If you never look at your management accounts, it is like blinding yourself in one eye. It means you risk being literally blindsided by a big surprise, whether it is heading for a significant loss or being confronted by an unexpected provisional tax payment.
Here is how Engela van Loggerenberg, our Group Financial Manager, puts management accounts in perspective for our new franchisees. She urges them to focus on six key areas:
- Priorities: Management accounts can help you pinpoint areas that you need to prioritise, whether to capitalise on growth or because they are not performing as well as you hoped.
- Strength: All businesses aim to grow their assets over time and the balance sheet in your management accounts will reflect whether and how you are achieving that.
- Control: A strong balance sheet is one that shows you have your business liabilities well controlled. The key marker here is your current liquidity ratio, which results from dividing your current assets by your current liabilities. To keep your business healthy, always aim to keep this ratio at least 2:1.
- Revenue: Ideally, you want to see your revenue grow month by month. Check your income statement both for the trend in actual revenue and also for actual against budgeted revenue to check how well your strategies are delivering results.
- Profitability: Of course, revenue is not the same as profitability. You need to know your gross profit – the basic figure of your sales less the cost of those goods – and net profit, which also deducts a range of other expenses including taxes. Track the percentage of these two profit figures as well as the actual cash amount they represent to keep a check on whether your costs are creeping up too high.
- Finance: Most businesses at some point want to finance their growth by borrowing from a bank. A set of well-regulated management accounts is a prerequisite to obtaining finance.
Your management accounts do not have to be particularly complicated to give you these vital pointers – and if you are figure-shy, the more straightforward the better.
The important thing, though, is that you do not allow yourself to be too scared to ask if there is something which is not clear to you. That is the way to keep control of this key to your business fortunes and to keep building your business from strength to strength.
A Three-Pronged Approach To Franchise Success
Danie Nel, head of business development for Cash Crusaders franchising, says the brand’s success over the past 22 years is attributed to the sentiment that “a profitable franchisee is a happy franchisee.”
What is your current footprint?
220 Stores. We’re looking to increase that number by another 20 stores for the 2018 financial year, which will then bring us to a total of 240 stores. Depending on the economy, we’re looking to grow our footprint even more to around 300 to 350 stores nationwide in the near future.
What are some of your brand’s biggest achievements that other franchises can learn from?
Our ability to read the retail market and innovate to stay ahead of times. We have recently launched an online platform where customers can sell their goods or borrow money — all online. This was a first for online retailing. One other achievement that I would wish to highlight is the launch of our mobile phone range, Doogee, exclusive to Cash Crusaders. Personally, having the honour of opening our 200th store was a tremendous achievement.
Franchisor involvement has also played a big role in the success of the organisation. Our CEO Sean Stegmann and other senior managers are as much involved in the business as any other operations manager or operator.
There is simply no ‘ivory tower’ management in our business and it makes a huge difference.
What are some of the challenges you’ve encountered and how have you overcome these?
Some of our daily challenges include securing a premises at a favourable rental and securing a franchisee with sufficient unencumbered capital, who is credit- worthy. Once the store is open, cash flow management and stock procurement is key.
In addition to this, it’s a challenge to achieve profitability immediately and to meet franchisee expectations. It’s also vital to ensure superb customer service and to retain those customers in the current retail and economic climate. I would say that our single biggest challenge is to retain and to build our customer base.
What attracts franchisees to Cash Crusaders?
Our unique retail model that allows for multiple streams of income through one business. These three profit centres include: New goods (variety of imported quality goods), second-hand goods (which we buy directly from the public, either through customers coming directly to our stores, or via our house-buy system offered by some of our stores) and secured lending (a financial service where customers can borrow money against valuables, determined at store level, and the loan is repaid within 30 days — or the contract is renewed for another 30 days with interest and service fees charged).
Why is it important for successful franchises such as yours to have a strong banking partner and how does it benefit both the franchisor and the franchisee?
Gone are the days where you just got a deposit book or cheque book and a little business loan from your bank. Banking has become more sophisticated and the technology that the bank offers is as important as its service, making life for both the franchisee and the franchisor easier on a day-to-day basis.
5 S-Words Make Your Store Site Pay For Itself
Richard Mukheibir, CEO of Cash Converters recently addressed delegates at the FASA (Franchise Association of SA) conference on the topic of choosing the best location for their business. He spoke about the 5-S technique to assist business owners with deciding which premises is best suited for their business.
The combination of continuing trading uncertainty in South Africa and the new financial year for many businesses can add up to carefully reviewing costs – including leases on premises. Choosing a site to set up or relocate your business can be just as stressful as deciding where to buy a house – and just as fundamental to its health, finances and sustainability, says Richard Mukheibir, CEO of Cash Converters.
This is not the time to snap up the property with the cheapest rental as that might turn out to be something you regret in the long run. Nor is it the time to be dazzled by the swankiest premises you can find. The potential for bragging rights could turn out to be poor value for money.
“This is a time for your head to rule your heart regardless of the industry you trade in.” he says.
The real-estate mantra of “location, location, location” works just as effectively in commercial as it does in private property but you will often be looking for rather different factors. Mukheibir shares his 5-S technique to help you begin narrowing down the areas where you will consider locating your business – first at the macro level, focus in further to the meso level, then look more closely at the micro level before you start weighing up specific sites.
Remind yourself of the medium and long-term strategies you have developed for your business. Keep your understanding of your business’s customers, purpose and growth prospects top of mind when you are selecting the areas where you will start looking for sites.
Within those areas, redline any sections where you feel the competition from other businesses will detract from your potential to grow your market. Greenline areas where there are good synergies between the people who live or work there and the demographic that you have identified as your target market.
Make sure there is clearly a good pool of potential customers for you – size definitely matters when it comes to ensuring that there are plenty of customers available to you. Look specifically for facilities that cater for the kind of customers you want to attract. Sports stores benefit from being close to schools and tertiary colleges, for example.
Although many businesses now have an online element, most still benefit from attracting customers to walk through the door. For your premises to be a good fit for your business, you should be located in plain sight and ensure that your ability to market yourself locally through signage and lamp-post posters is not restricted by local bylaws.
You will attract and retain good customers and staff if they feel they’re secure in the area. This perception includes factors such as easy, safe parking and a welcoming environment.
“Making a success of your business is not just about the product or your branding,” says Mukheibir. “It can be as fundamental as finding a site that ends up paying for itself. To do this, it must offer you a well-calculated gap in the market where the strong demand for the product or service that your business offers ensures sales and profit. If you have considered all these steps carefully, you will never worry about making rent and wages payment again.”
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