This time tomorrow: Franchising to move forward

Meeting goals, then beating them

“A second small business loan from Prospa has helped us with access to funding that saw us through lockdown and helped achieve our goal of being able to start franchising the business,” says John. Two franchisees in Tauranga and Rotorua are set to open before the end of the year. The boost to cash flow has also seen John take on two new staff and provide further training, which is helping them maintain a competitive edge.  

“The Prospa loan has had a massive impact on the company at a really challenging time” says John. “In fact, even with the lockdown, we’ve doubled our turnover in the past 12 months.”

Building the business

Making Sofa Doctor the leading upholstery care, repair and cleaning service in New Zealand remains John’s driving ambition –  creating franchise opportunities is a key part of the plan to make that happen. Those opportunities are proving to be in hot demand.  

“People who want to buy a franchise are looking to get out of a 9-5 job, be their own boss, and create a better future for themselves and their family,” says John. Is this part of the so-called great resignation? “Well it’s hard to say yet how those trends might play out in New Zealand but there’s definitely a lot of interest in these kinds of opportunities right now.”

“So many people are asking to buy franchises and they see our company making good money – it’s an attractive option,” says John. “But you have to make sure you’re bringing on the right people. Finding the right people, whether staff or franchisees, is critical to success.  

“We are looking for people who are like-minded, decent, honest and understand the importance of cash flow. It makes our job so much easier to have a great team and create a family atmosphere,” says John. 

Apart from finding the right people for the business, the biggest challenge for John is training.  

“I spend four to six weeks of my time training each person to make sure they are up to the same level as my experienced staff. Yes, I could get someone else to do it, but I’ll keep focusing on it for the time being as training must be at a level I’m happy with.”

Creating marketing momentum

John has an even 50/50 split of commercial and domestic clients, and says they are equally important to the company’s future success.  

“We can go from fixing a single stitch on a chair in someone’s home to re-upholstering an entire fit-out at a restaurant,” says John. “Yes, commercial clients tend to pay better but I wouldn’t want to lose my domestic clients. They are an essential part of the business and contribute a lot to word of mouth.” 

And while word of mouth from satisfied clients is good for business, with this year’s cash flow boost, John has also been able to ramp up his marketing efforts.  

“We are going nuts on marketing at the moment,” he says. “We’ve taken on a full-time marketing staff member and we’re producing content for radio, television and social media. We are finding video is especially effective for Facebook. It’s cheaper to use video advertising on Facebook than display and it’s a more compelling way to communicate, so the return on investment for our marketing spend is much better.”

Bouncing back

“I’ve been in business for more than 20 years but it wasn’t until lockdown that I fully appreciated the importance of cash flow,” says John. “Before, if cash was running a bit low, I’d just work a bit harder. But when we had to close the doors for three months we didn’t know how long it would last. The uncertainty was really tough.” 

John says he’s seen many other businesses close because of cash flow difficulties. “They still have to pay rent and staff. But there is no doubt they would bounce back once restrictions end. All they need is the cash flow to get through.” 

This time, he couldn’t solve the cash flow issue by working a bit harder, so he turned to a Prospa Small Business Loan.  

“So for me, getting the loan was a no-brainer. I didn’t feel stressed anymore because I knew we could deal with lockdown for however long it lasted and we’d be able to bounce back. And now we can concentrate on growth and expansion. We want to dominate the New Zealand market and have the country covered in the next 12 months.”