Kim Daly – How to find financial freedom with franchises (non-food industry).
My next guest was a 4.0 medical student who decided she truly wanted to enjoy more freedom in life which motivated her to get into entrepreneurship, specifically franchise opportunities. Today she’s a franchise coach who helps people escape the rat race and find opportunities that generate recurring revenue and at the same time build equity, so you can sell a business for a significant profit. In this episode, we talk about the types of franchise businesses she works with (hint, these are not food franchises), how big of an investment is required, how long of a timeline you can expect from approval to revenue, and the mindset you need to even get approved. Please welcome Kim Daly.
Payback Time Podcast
A Podcast on Financial Independence. Hosted by Sean Tepper. If you want to learn how to escape the rat race, create passive income, or achieve financial freedom, you came to the right place.
- (01:00) – Show intro and background history
- (01:25) – Deeper into her background history
- (08:23) – Understanding her franchise consultancy business model
- (09:56) – What types of businesses does she focus in
- (18:54) – Another example of a franchise business to invest
- (23:06) – What kind of investment is needed to start a franchise business
- (26:57) – How the owner can operate that type of business
- (35:51) – What are the revenue expectations
- (35:55) – Is keeping the full-time job parallel when opening a franchise business possible?
- (39:55) – How about the sales, marketing, and advertising in her business model
- (49:23) – Deeper into her philosophy
- (54:46) – What is the worst advice he ever received
- (55:05) – What is the best advice he ever received
- (56:51) – Guest contacts
[00:00:04.460] – Intro
Hey, this is Sean Tepper, the host of Pay Back Time, an approachable and transparent podcast on financial independence. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go. My next guest was a 4.0 medical student who decided she truly wanted to enjoy more freedom in life, which motivated her to get into entrepreneurship, specifically franchise opportunities. Today, she’s a financial coach who helps people escape the rat race and find opportunities that generate recurring revenue and at the same time build equity so you can sell a business for a significant profit. In this episode, we talk about the types of franchise businesses she works with. Hint, these are not food franchises. How big of an investment is required, how long of a timeline you can expect from approval to revenue? And the mindset you need to even get approved. Please welcome Kim Daly. Kim, welcome to the show.
[00:01:02.130] – Kim
Thank you, Sean. I’m excited to be here.
[00:01:04.370] – Sean
Good to have you here. Why don’t you kick us off and tell us about your background?
[00:01:07.910] – Kim
Sure. So I’m a franchise consultant, which means that for the last 20 years, I’ve been helping other people realize their dreams of business ownership through franchising. All the while, Sean, I have been living my own dream of business ownership through franchising.
[00:01:25.480] – Sean
All right, we’re going to dive into everything franchising and how our listeners, if they’re interested in starting a business, this may be a good option for them, but let’s rewind the clocks a bit and find out what were you doing before?
[00:01:37.840] – Kim
Okay. So it’s a great question. In our industry, everybody says, how did franchising find you? Because nobody really wakes up and goes, Oh, yeah, I think I’m going to open a franchise. So I was actually on my way to medical school and I answered a classified ad in the newspaper, which might show my age. And it was for a franchise consulting company, not the one that I’m part of today. But it turned into a one year full-time job, which, of course, changed the whole trajectory of my life. But actually, it did not. That’s a whole another story. And I just found this industry when I was young in my 20s of people helping people. It’s so entrepreneurial. Every day, people are waking up to live their dreams and help other people live their dreams. And I just fell in love. So I did the thing that almost everybody does when they think I’m going to own my own business. I went and started my own business. So I became an entrepreneur and I did that for five years. And it’s okay, but it was very lonely. And it always felt like I was flying by the seat of my pants because I was making it up as I went along.
[00:02:45.110] – Kim
There was really no strong foundation underneath me. And so at 29 years old, I turned back to my franchising roots and needed structure. I needed the support that’s very innate in a franchise. And I found the opportunity opportunity that I’m a part of today. So at the age of 29, I became a franchisepreneur. And here I am 20 years later. So you know about how old I am.
[00:03:10.150] – Sean
Okay, got you. Now, let’s backtrack just a little bit. You mentioned you turned back to your franchising roots. Were you doing something that was not a franchise that made you switch to franchising?
[00:03:22.530] – Kim
Yes. So I started my first company when I was 25. Yes, correct. And because I wanted to be a business owner and I was going to make it on my own. And I went out there and I did it and I did make it on my own. But it was really, really, really hard. Starting a business from scratch is so hard. And really, the easiest people for me to help grasp the fundamental s of what a franchise affords are former entrepreneurs, people who started it on their own totally get that buying down the learning curve of starting a business is worth any amount of money. And then partnering yourself with people who can train you and support you and pick you up when you fall down and help you, encourage you that you’re on the right path, you’re doing the right things, keep doing what you’re doing. A franchise is like a giant Mastermind where we’re all collectively shareholders in the same brand. So we can work together. We’re all rowing the boat in the same direction, if you will. Even though we’re rowing our own boats and it’s up to us to succeed or fail, it’s just collective and collaborative.
[00:04:27.890] – Kim
And it’s really one of the greatest advantages to being in business because you’re not trying to figure out or solve all the problems of a business on your own. For all these other people that have the same problems, we can combine our efforts and solve those problems.
[00:04:44.610] – Sean
We’ll dive into some of the benefits here of a tried and true template. We’ll get into that in a second. But I’m curious here, what was this business at age 25 that you did create? What business model?
[00:04:55.750] – Kim
Awesome. So it was at the dawn of the Internet. Sounds like it was pretty historic times today in 2023. But it was the beginning of the Internet as a tool for business. And I started a health and fitness company because that’s my real passion in life. I’m a nutritional bio chemist by degree with a minor in sports nutrition. I was a personal trainer. So I built a health and fitness or health and wellness marketplace that I was able to get partnered with usatoday. Com. So if you went to usatoday. Com and you clicked on health and fitness marketplace, it actually clicked over to my company called Be Healthy Now. But because of that national exposure, it launched me into the stratosphere of health and wellness. And I was able to attract big advertising dollars from all the big companies, again, because I was partnered with USA Today. So I literally threw myself into the deep end of the pool, not knowing how to swim, but making it up as I went. I did very, very well. It was always fun. Like I said, it was super entrepreneurial. Flying all over the country. Just people would ask me, Could you do this?
[00:06:02.940] – Kim
And I’d be like, Sure. You get off the phone and be like, Oh, crap. How do I do that? But I’d figure it out. And it was really awesome and fun. And I wouldn’t take it back. But it was no real way, unless I was going to go for the big sell out for private equity money. There’s no real way to really sustain what I was doing. So I just decided to throw it in, come back to franchising, be like, all right, I want to build something real and stay table.
[00:06:30.450] – Sean
Was this an online marketplace where you’re bringing people together?
[00:06:35.110] – Kim
Correct. It was online. It was almost everything that the app, My Fitness Pal, is today. If you have the app or you know of that app, it was almost exactly. It’s a little eerie how similar everything we created back in 1996, ’97 is, at least on the template, it wasn’t all built out at that point, but that’s where we were going. But is to that app what that app is today in 2023.
[00:07:04.480] – Sean
You were like a good 15, 20 years ahead of the curve. Part of me is like, we’re going to get to a time machine question here at the end of the episode, and I almost want to lean into this, but I’ll let you answer the question. But that’s a rocket ship of a business model. And then you turn to franchising. I don’t want to downplay franchising, but oh, my gosh, Kim, that’s.
[00:07:25.890] – Kim
Talking You could have a.
[00:07:27.120] – Sean
Billion dollar entity.
[00:07:28.230] – Kim
I love that comment because I think a lot of people downplay franchising because they think that real wealth can’t be built. I have built amazing wealth for myself and literally shone the life of my dreams. Over the last 20 years, I’ve broken history, made history in my industry, broken history in my own history multiple times. And all the while, the best part about what I do isn’t for me. The best part about what I do is how many other people I’m helping to live their dreams of business ownership, which is really the most gratifying part of the business I’m in today. When you look back, I wanted to be a doctor. I wanted to help people. I was a personal trainer. I wanted to help people. And so when you really look at the role of a franchise consultant, I’m helping people change their life. It’s all the same. The core of me has always been the same, even though how I’ve achieved what I’ve done has been different.
[00:08:24.140] – Sean
Right on. Okay, so I might, in the little intro, talk about transition from a marketplace that could have been a rocket ship. I won’t phrase it like that, but we’ll get into what you’re doing now. So you’re a franchise consultant. Tell us what that means.
[00:08:39.220] – Kim
Okay. So people come to me, Sean, when they’re in some place of transition, looking for a way out of a W2. Maybe they’ve been let go from their W2 or they’re worried they will be let go. But I also work a lot with real estate investors, Airbnb single multifamily investors looking for diversification, especially with with the real estate market and the interest rates the way they are right now. A lot of people are like, all right, take a break over there. But I have money to deploy. Where can I put it? People that are really looking to build cash flowing assets, equity that they own and can control and build a future, right? That they can retire and be financially free, whatever the words are that different people use. And it means different things to different people. That’s what I do. And all of my services are free. So I’m paid by franchisers to do what I do because I’m preparing people financially and mentally for the exploratory process. And I’m guiding them and coaching them through their fear into funding sources. And all of the parts of the process that really can be black holes for people when they’re out there on their own.
[00:09:50.390] – Kim
That’s why franchisers pay me in addition to making the match to their specific company.
[00:09:56.200] – Sean
Got it. Okay, so I’m going to tie back to franchisers and how they pay you in a little bit. I made a note here, but let’s dive into what types of businesses do you focus on? Because I’m looking at this from a 30,000 foot view and I look at franchises, you have food as probably a segment. Then I think of taxes and finance, which is like H&R Block, that franchise. The look, okay, audience here, you’re not seeing the video here. The look she’s giving me is like, Oh, wrong on both of those regards. So why don’t you answer the question?
[00:10:28.580] – Kim
Okay, awesome. So what business businesses are there in franchising? Oh, so many and not the ones you mentioned. Those are not the ways I’m going to lead you to your wealth building vehicle. Okay? Okay. So I love it, though. I love that we start there because most people do. Let’s be real, most people think franchising is Chickfil A, Jersey Mikes, and they’re executives and they think, I don’t want to go work fast food. I don’t want to manage fast food workers. No offense to the fast food workers, but I don’t want to do that. And so I’m not looking at franchising. And then they meet Kim Bailey somewhere along the line, and I show them all kinds of options that have nothing to do with food and retail. These are meaningful investments where people are building 5, 10, 15, 20 million dollar operations in franchising, and they’re not leveraging their home to do it. Like you do oftentimes with an SVA loan on a brick and mortar build out, you often have to have the collateral to get that loan, which means collateralizing your home. So I love service. If people say, Well, what’s your favorite franchise?
[00:11:31.350] – Kim
I say, I don’t have a favorite franchise. I have favorite characteristics. I love low investment, low fixed cost, high margins, and reoccurring revenue. Did I hit all the high but?
[00:11:43.150] – Sean
Yes. Okay. And give us an example or give us several examples here.
[00:11:47.790] – Kim
You got it. So some of my favorite options right now because they’re growing and changing all the time. So we have a business, Sean, that puts up… Have you ever walked into the lobby of a hotel or into any commercial building where part of the lobby or whatever is sectioned off by a temporary wall because they’re constructing maybe a new Starbucks in the hotel, right? So that temporary wall is a franchise. So listen to this business model, people. So you go build relationships with contractors who when they’re quoting the build out of whatever they’re building for that company, they include you in the quote. So your customer is one contractor or a few contractors and you move job to job to job to job. So once they’re ready for the temporary wall, couple of unskilled people that does not require high skill or high liability go in, pop up the temporary wall and they pay you rent, weekly rent for the temporary wall. When the project is done, you go back, you take it down, and you move the walls onto the next job. That is a franchise and that is how you build wealth.
[00:12:57.090] – Kim
So that’s one model.
[00:12:58.130] – Sean
I love this because there’s no real maintenance, you don’t get complaints probably a lot. This is a wall. This is not a complex thing we’re dealing with. It’s a wall. You either like it or you don’t. And it sits there and you’re earning reoccurring revenue for putting it up. Are you allowed to say any type of franchise names?
[00:13:19.100] – Kim
Well, I’m allowed to, but I don’t really want to because if someone hears this and they’re intrigued, I want them to come to me. Because there are pre qualifications, there are state regulations to are they franchising in your state? And all of that stuff is what I get paid to do.
[00:13:35.040] – Sean
I totally get that. So we’ll refrain from names, but yeah, give us another example, another solid business model.
[00:13:42.800] – Kim
Another fantastic solid model. Now, when I say this one, I’m going to say the name because… So this business goes business to business and they literally smash trash. Okay. Imagine now this one’s a little bit of a bigger investment, but if you’re looking for depreciable asset, it’s a really nice business. So you have to buy all this equipment, which includes this truck that can drive this commercial trash compactor. You have outside sales effort that goes to businesses that have commercial dumpsters. So think hotels and restaurants and contractors and anywhere. And you literally, weekly or monthly, you come in, two guys drive the truck. They move this like Smashing arm over the dumpster. It’s like a huge rolling pin. It goes down. It flattens the trash, so it reduces the haul away volume. It’s a green company, therefore, and it’s recurring revenue. So it’s B2B. It’s recurring revenue. And guys, it’s trash. It’s never going to become obsolete. So it’s a win, win, win all the way around.
[00:14:48.050] – Sean
So it sounds like the customers in this model, the businesses, they’re paying you a monthly fee to come and take care of their trash. Like, hey, I need your help taking care of my trash. How much does it cost per month? And you can just take my worries away and you’ll deal with it. That’s essentially.
[00:15:06.420] – Kim
The model. We’re not talling it away. We’re just smashing it so that we can reduce how many times the dumpster has to be emptied by the waste management company. Got it. So we’re just slowing that process down, again, reducing emissions. So it has that green spin to it. It is a massively successful franchise. A small team of people, Monday through Friday. It’s scheduled work. It’s not 24 by seven. It has all of the characteristics that people love with no wards. So again, these are the characteristics that Kim Daily loves. Yes. And here’s the thing. These these franchisers need a consultant to tell their story because they’re not the ones. If you’re looking at entrepreneur 500, even if they’re on there, which they’re probably not, and I’ll tell you why in a minute, but even if they were on there, ever on there, they wouldn’t grab your attention. Because people, we all make assumptions about what something does or how profitable it is or how saturated it is. And we eliminate options so prematurely. My process demands an open mind. If you come to me, you got to be willing to have some fun. It doesn’t have to work out.
[00:16:23.910] – Kim
There’s no obligation, but you got to be willing to take my hand and let me lead you to some crazy places.
[00:16:30.400] – Sean
I love that. And you’re hitting on something really important. We’ll tie this back to both the entrepreneurs and the investors on this podcast that you don’t need a glamorous business model to make some real money. And Warren Buffett is big on that. You want boring, reoccurring, stable businesses because that’s how wealth is built. Whereas people out there, they’re sometimes looking for that flashy new thing that’s going to be all over TikTok or YouTube. And that may be cute for a moment, but that’s not how you treat ruly build wealth at reoccurring revenues. So both these examples you provided are brilliant. They’re simple, but they’re necessary, straightforward, boring businesses.
[00:17:10.170] – Kim
It’s so true. And on the flip side of that, for those people that want something a little bit sexier, what it comes back to, Sean, is in my upfront consultation, we talk about what your goals are. Look, if you want to invest in fitness, look, I’m a fitness girl. I’m all over it with you. That’s just not generational wealth. That’s like, hey, I’ve got a five to an eight year gap. I want to have some fun, be a business owner, get entrenched in my local community. Even if you’re a semi absentee owner, meaning you have a full-time manager, but you’d like to open three, five or 10 clubs in your local area and have some fun doing it, you can totally build wealth that way. But the idea would be that you’re going to build something to position it to sell it. Don’t get into some of those more faddish businesses with the idea that you’re going to hold on to it for 10 or 15 years. If you get to the end of your life, what you thought was going to be your end, and you’re having the time of your life and you’re like, There’s no way I’m selling it.
[00:18:05.860] – Kim
Well, it’s still a win. But this way, if it starts to get harder than you thought it was going to be, or you just get tired of the burn in, then you have an exit. And again, it’s a win in your mind. My goal is to set people up for the win. So before we start talking about specific concepts, we’re going to talk about what outcomes you’re trying to create with the business. So I’m infinitely more interested in where you want to go 3, 5, 10 years from now more than I am what business you think you want to own. Let me figure out the option that’s the vehicle to drive you to that outcome. You tell me, Tim, I’m trying to build $50,000 a month in relatively passive income. How do I do that? Then we back end you into the right type of vehicle.
[00:18:54.780] – Sean
That’s brilliant because so many people are trying to overanalyze and overengineer their path and how they achieve the goal. And it’s like, Nope, go to somebody who already knows how. You have the blueprint. All right, let’s pick a vehicle and go. I always say the same thing with stocks. You want to pick the right vehicle that helps you achieve the goals you’re looking for. All right, jumping back to the examples here. I love the first example, which is put up the walls, like these mobile and visualizing these movable sectional walls, not a glamorous business, but it makes recurring revenue. Then you have your second example, which is the Smashing Trash, again, not glamorous, but recurring revenue. Do you have a third example you can share with us?
[00:19:36.960] – Kim
Sure. Let me pick something totally different. I have hundreds of franchises that I’m obsessed with. Want to talk about something a little more fun. So how about this one? We have a business that goes in and brings a lot of times on school budgets, especially for private school, day school, preschool. They don’t really have a budget for physical education or art or music programming. So we’re just going to pick one of those. We’ll pick the physical education. So there are franchises where you bring in the coaches and the programming and you sell it into the school. Talk about long term sustainable. The founder of this business, she’s from South Africa, she moves to South Florida, she starts this business. Now, what’s great about it is she was a martial artist before she… Or she is a martial artist, I guess, in training. And so she brought the mentality of martial arts where you learn a skill and then you’re rewarded by testing for a belt and you learn more skill. So the programming is all designed like that for the kids to… A lot of times gym is just like… The teachers don’t really let the kids throw the ball.
[00:20:49.370] – Kim
If they’re playing dodge ball… I know my kids just went through elementary school and I’d be rolling my eyes like, It’s not politically correct to throw a ball at somebody today. And it’s very limited for the kids, right? You’re shaking your head, so am I. So this programming has more to it. We’re teaching kids all sports, from golf to Frisbee to tennis to kickball and dodgeball, the traditional physical education sports. But they are also at the core of every class. They’re learning push up s, even the little preschoolers and sit ups and the physical fitness aspect to gym. But the idea is that the schools aren’t paying for it. The parents cough up the money. And the founder, what I said when she started this program in South Florida, she has some of the original institutions when she first started this business 17 years ago that pay her every year. And so, again, long term, reoccurring relationships, real value add to the customer. You’re managing a small team of coaches that are moving from school to school to school. All the programming is trickled down from corporate. So you’re running a sales marketing effort. You’re managing a small team of people.
[00:21:58.050] – Kim
It’s a totally flexible schedule. It’s no nights, no weekends, no holidays. Again, this is a business that is seemingly so simple. Why would I even need a franchise for that? But can go on to become something really substantial.
[00:22:15.290] – Sean
Right on. Okay, let’s take a quick commercial break. Are you a beginner investor and want to increase your confidence with investing? Tykr E DU is now live, which includes investing courses. The first course is titled stock investing for Beginners, which includes over 60 videos that take you through modules, including overcoming myths, the difference between stocks, ETFs, Index Funds, and mutual funds, investing versus trading, the number one reason why stocks go up and down, knowing when to buy, knowing when to sell, increasing confidence, how to invest your first $1,000, and real life examples. It’s like looking over my shoulder to see how I buy and sell stocks. Simply go to edu. Tykr. Com or go to Tykr. Com and click the courses link at the top of the page. Okay, back to the show. Thank you for these three examples. Now, what I’d like to talk about is, because my listeners are asking this question, I can feel them asking me this, what investment do we need to bring to the table, whether it’s my own money or if I have to raise or get a loan from a bank?
[00:23:22.460] – Kim
Great question. So there are franchise businesses in all ranges. So there’s a myth out there, Sean, that the level of investment going in to a franchise will correlate to the potential to earn. It’s absolutely untrue. The level of investment going in correlates to the owner’s time commitment from day one. And there are always exceptions, but the general rule is the lower the investment, like under 100,000. And yes, there are franchises 30, 40, 50,000 dollars in. These are going to be your home based businesses like that last one that I just mentioned, where owners are going to be very full-time. Home based never means I’m working from home. It means I don’t need an office because nobody’s coming to me. I’m going out and driving a sales process. But I will tell you, some of those lower investments, like the one I just mentioned, have some of the highest earning potential. There are people that have put less than 100,000 into a franchise who have built big seven figure plus businesses. So don’t get fooled by money in equals money out. No, money in equals time commitment. So on the other extreme of that, let’s pick a laundromat because that’s a franchise.
[00:24:39.480] – Kim
So that’s about a million dollars build out. Let’s say you’ve got 30 high efficiency washer and dryers, plumbing, electrical, the space, the rent. But once it’s constructed, it’s a very minimal time commitment, maybe five hours a week or less by an owner to collect coins, make sure your equipment is working. If you have an attendant, maybe a little management. So a bigger capital investment, but a smaller time commitment. And then there are a million shades of gray in between. And that’s, again, where I come in to really help people understand, are you keeping your job? Do you plan to leave your job? Do you have the leadership skill to hire somebody that you can leave your business in the hands of and feel like they have your best interests at heart? So all of these conversations we have before I match opportunity to you, the answer to your question is there are franchises that are, we’ll say, 50, 60,000 dollars, and there are franchises that are 3, 4, 5 million dollars and everything in between. I’d say the average investment for the person I help with, the average investor I work with probably has about a million dollars net worth.
[00:25:46.050] – Kim
Again, some have three to 5 million, some have a half a million, but we’ll say on average a million with about 2-3 hundred thousand of that relatively liquid, like between a 401 equity and a home cash in the bank. And I’d say the average total investment is probably somewhere around that same number, 2,000 to 3,000, where the portion of that being from them and a portion being from a loan or something. But again, I do it all because I help a lot of people. So don’t let money be the reason you don’t reach out to me. The very first conversation I have with people, we slow down and I educate people on what their money buys. So with clarity, you’re going to understand what every franchise business costs and why. I can’t make earnings claims, but I will help you understand, like I just did, that a lower investment can lead to big outcome. And if you think like a real estate agent, it’s a really nice visual, and that category. If you’re a real estate agent, what determines whether you sell 10 homes a year or 10 homes a month? You, the agent. The same thing will be true in so many franchises.
[00:26:58.000] – Sean
Now, that’s really good expectations because some listeners are thinking about, Okay, how much… They’re thinking about their 401, how much equity they have in their home, and what can they do there in conjunction with a bank loan to get started with something like this? And then this ties into the next question, which is, are these investments owner operator situations where you’re both the owner and you have to operate the business? Or do you have situations where you can just be the owner and you can be hands off?
[00:27:26.320] – Kim
So I would never say that a franchise is passive. I cring whenever I see franchising videos with the word passive in them, it’s really setting people up to fail. A business needs a leader. It’s not a piece of land. It needs a culture. It needs you to inspire people now. The better you are at leading and managing and inspiring your team, perhaps the less time you can put into it. But I always feel like that’s earned, not given from day one. You earn the right to step back from your business, whether it’s 30 days or three years depends on you. So we say in franchising on the part time role would be semi absentee. So to answer your question, though, most of my investors are not owner operators. There’s not enough scale. Oftentimes, if you start a business with it centered around your center of influence, it’s really hard to scale. And wealth is always created through scale. So just like in real estate investing, it’s not going to be about one property. It’s about leveraging your time by owning 10 properties or 30 properties. Well, in a franchise, it’s not going to be about one team, one truck, or one location.
[00:28:44.430] – Kim
It’s always going to be about being able to double, triple, multiply those efforts. So that’s where the wealth is created. And so that implies that if you really want to build wealth, you have to be what we call an executive owner who has the ability to lead and guide other people to do the work while they are focused more on strategy and vision, financials, marketing, bigger picture, more like C suite skills versus rolling up your sleeves and doing it.
[00:29:14.570] – Sean
Right. Because I know that’s a fear of some people have is getting in and they’re going to have to leave their job and get into something because they’re both the owner and they’re operating. They’re rolling up their sleeves, they’re in, they’re doing the hard work, and then they almost think to themselves, was this shift worth it? But if they can find something that’s somewhat hands on, somewhat hands off, that’s an ideal situation. I know some of the listeners are probably going to be coming to me and saying, Sean, yeah, that’s what I’m looking for.
[00:29:44.160] – Kim
Yeah. And I think to answer your question, is it worth it? I hope people would still say it’s worth it because when you work for somebody else, you’re just trading your time for money. Even if you’re working in your business, you’re not trading your time for money. You’re building an asset, you’re building equity that is yours. So I was just recording an episode on my podcast with a person who’s ready to sell a business that I helped him get into in 2018 in the automotive space. And he’s going to be able to sell what he’s built, potentially for about a 4 to a 5 multiple of… It could be close to a 7 figure buyout by the time he’s ready to exit. So in a job, you don’t get a buyout, you get a pink slip. And he’s happy. He said to me, I’m happy happy. The desire to own a business was in him for so many years, and he did it. He’s so proud of himself. He’s satisfied with his day to day life. He lives to get positive reviews on Google and Yelp. He’s just that owner that wants to bless every customer that walks through his door and let them know how important they are to him.
[00:30:52.400] – Kim
And all of that has so much meaning. We think of success only defined in monetary terms because in a job, that’s how it’s defined. But in business ownership, it is so much more than that. It’s the pride, it’s the competitive spirit. It’s that you dared to do it, something that most people talk about but never do. And then if you do make money and a lot of money on top of it, it’s just like that’s the win on top of all of the personal and professional growth and satisfaction.
[00:31:26.400] – Sean
Right on. That’s a great reminder to think about you get to control your time. You’re not working for somebody else. You’re serving your customer, but you’re essentially running your own business. And two, it’s that windfall event. You’re right. That four or five X multiple. I’ve talked to a few other people on the business that if they have a service business, you aim for that three X. If you can get more, that’s great. But let’s say it’s a $200,000 investment and you go, you go three, four years, you sell for 600, that’s a solid payday.
[00:31:54.950] – Kim
Well, what if you put 200,000 in to build a business that was, let’s say, grossing three million and netting to you 300 grand. Let’s just be super conservative and say you’re getting a 10 % net out of your business. So you’re doing three million in top line revenue and you’re netting 300,000. But let’s say that you’re invested in a business like in the senior care space that is absolutely growing and will not stop anytime soon, then what you’ve built has so much value that’s easily worth a three, four, maybe even a five multiple. So to take a $200,000 investment, make 300 grand after a couple of years of operating it, if you got it to that three million dollars, it’s a fictitious scenario, three million dollars top line to where you’re netting 10 and maybe you’re netting 20. You know, even better, right? Because that’s a realistic expectation, too. And then you go and you can sell it even for somewhere around a million or 1.2 million. I mean, not to mention the joy along the journey, but that payout is amazing. And these these are stories. These are common everyday stories in franchising. They’re not the stories you hear because the ones we hear are the ones when people fail.
[00:33:10.160] – Kim
The people who are making money and building wealth, they’re doing it in the background mostly, unless it’s somebody close to you. And they’re not on the internet blasting their franchise or scaring you away from living your dream. They’re just passing it on and going on and doing something after they retire. So you have to come to someone like me who can bring you inside of the world and bring you to the really solid opportunities as well as really solid franchiso rs, because not all franchiso rs are created equal. And I have 20 years of relationships here. So you’re leveraging not just my knowledge of what we’re doing, but my relationships as well.
[00:33:50.800] – Sean
Totally. Can you set expectations on a timeline to get into revenue mode? Are we talking three months, six months, something like that?
[00:33:58.930] – Kim
So when you work with me, just to get to a yes is about one to two months. So if someone was looking to be open for business in the first quarter of next year, we’re in June of 2023, I’d be like, oh, this is a perfect time to be. Because I can have you confidently to a yes, probably by August or a little before. Depends on you, one to two months. And then from there, let’s say you’re opening a service based non brick and mortar. Let’s say you have to buy a truck and the truck with all the bells and whistles that needs to come with or outfitted with all your equipment takes eight weeks to 12 weeks to get, take possession of. Once it comes, you go to training. So you have your equipment, you go to training. That’s a week long. So maybe it’s from signing to opening, 3 to 4 months. So All right, so now we’re at the six month mark and now you’re up and operating. Well, breaking even in a business is going to vary. Now, during your due diligence process with the franchiso r, you’re going to be validating with other owners who’ve already opened to get a rough understanding of what they’re doing to drive activity and create revenue.
[00:35:03.560] – Kim
And on average, how long it takes people to get to that profitability point. So as your consultant, I’m never going to answer the question, but I’m going to lead you down the path to the people, and I’m going to give you the specific questions. So this is a long term proposition. Starting a business is not kill today, eat today. But long term doesn’t mean you got to wait five years. But it might take you 6 to 12 months to build something that is cash flowing positively. And then from there, it starts to grow exponentially. Sometimes the foundation is the hardest part to build. But once you build it, then you start to take off. And then other times from day one, like in fitness, you start pre selling membership during construction, you may open with your break even membership. So every business is different. And I have to say every business owner is different.
[00:35:56.580] – Sean
Let’s use that timeline of four months, do you recommend somebody keeps their full-time job and bootstrap? You want to bootstrap this in parallel and then jump in? Or do you want people like when you start searching, this is the moment you jump in, you quit your job.
[00:36:13.710] – Kim
I’m saying if you’re planning to keep your job, keep your job. I don’t need you to be full-time in the business. Now, during your due diligence process, you may come to the conclusion because many people do. They think they want to keep their job, but this is so much more exciting. So there’s that factor, right? Controlling your own life gets so much more fun to think about and talk about. They’re like, I’m having a hard time focusing on my job. And then you’re putting your money into this, your hard work savings, hard earned savings. And so the thought of leaving it in somebody else’s hands is a little bit anxiety producing. But oftentimes, what happens is people realize how much money they’re leaving on the table by not quitting their job and diving in. But on the flip side, Sean, I’d say more than 50 % of the people I work with keep their job for the whole first year or longer because I do work a lot with the semi absentee options. Look, a lot of people, they got kids in college, they got private school tuition, mortgages, they can’t afford to not have their income or maybe two incomes.
[00:37:17.560] – Kim
So we work around it. And the thing is, people are like, can I do it? You’re the only one who can answer the question. No one can tell you what you can do except you. It depends if it’s worth it to you. What’s inside of you? How bad is that burning? And how much do you believe in the outcome? Because it’s those things that will enable you to do anything. You’ll move mountains if there’s the right amount of internal fire. And I’m not saying you have to move mountains. Don’t get me wrong. I’m just saying as an analogy that it’s up to you. You are the creator of this opportunity for you. So what are you envisioning? How bad do you want it?
[00:37:59.730] – Sean
And what I usually and I’m going to give you my comments there is I usually tell entrepreneurs, you definitely want to bootstrap for a while. Keep your job because you’re going to figure out what moves the needle in your business. You’re going to get the structure, the operations in place, but then you’re going to figure out what works best with sales, what works best with marketing, and what works best with advertising. And you want to find the templates that work first before you quit your job because then when you do find them, your confidence is elevated. Okay, now it’s like pouring gas on the fire. I can go full-time and really ramp this thing up. So that’s the reason I tell people bootstrap smarter. Like, for example, with Tykr, I bootstrapped Tykr three and a half years. Took a year to build the first version, so it wasn’t monetized. And then it was like two and a half years of building this thing. So that’s a long runway. Some people are like, I got to go three and a half years to bootstrap? I’m like, not always.
[00:38:53.890] – Kim
But sometimes you do. But would you look back and go, I regret it? Or was it worth.
[00:38:58.450] – Sean
It, Sean? It was the right choice. I knew, and I won’t talk about me in this case too much, but with Tykr, I knew at some point you just got to go. And where I wanted the revenues to be, I wasn’t close to. But I was at the point where I’m like, No, it’s time to do this. It’s time to put the pedal to the metal and go because the templates of what works has proven and now it’s time to throw gas on the fire. That’s the… I love it. Crude way to phrase it. But yeah, to you listeners out there wanting to do this, I would probably set expectations. Let’s boost rep a little bit and then go in full-time.
[00:39:32.500] – Kim
Yeah. And I say when you start the process, you just stay open. You’re going to get to meet a lot of other people in a franchise who’ve already said yes and hear their story and find the ones that resonate with you and do what they did. But then at the end of the day, sometimes you just can’t afford to quit your job. And so we’ll dial you into options where you don’t have to quit your job.
[00:39:55.510] – Sean
Yes. One thing that a lot of people can fear is is sales, marketing, and advertising. And when they work with you, do you give them the templates that work in certain markets? If you go forward with this model and you gave us a few great examples earlier, do you say, Hey, this is the sales strategy. This is the marketing strategy. This is the advertising strategy that has proved to move the needle the most. Here you go. Is that where you lead people?
[00:40:24.270] – Kim
So the franchiso rs do that, Sean. I don’t give this specific information about any franchise. So when you invest in a franchise, you’re buying a partnership, and it’s their business model to defend, to help you understand, to coach and lead you on. So when you go through the one to two month due diligence process, both parties are feeling each other out. This has to be a mutual fit. Franchises are awarded, they’re not sold. So the franchiso r ultimately is in control because it’s their brand and they’re looking for a certain type of an investor. And I tell people, look, if you get turned down by a franchiso r, don’t sweat it. That’s their opinion for their business. There’s thousands of other options out there. But I’m going to prepare you so that when you get in front of them, you’re the person that they’re begging to join their franchise. So it’s awarded to you. Then it’s yours to say yes to, and then it’s yours to make a break. But they’re looking for people that they can find that internal drive in. They’re motivated, they’re hungry for something great r in their life. They’re coachable.
[00:41:32.390] – Kim
Got to check your ego at the door in a franchise, right? And you’re coachable, you’re open to learning, you’re looking for that. You’re hungry for that professional growth. Because I always say to people, they’re like, Well, how do you get quickly can I build a million dollar business, Kim? And I can help you build a very simple plan for your business, and I will. I’ll do the business coaching with you to do that. But I tell you, you will have the million dollar business when you become the owner worthy of the million dollar business. And what you just said, Sean, about knowing where the levers are, if you will, and then putting the gas on, that’s what I mean. And that takes time for every single owner. It takes focus, tenacity, goals. It takes desire because not everybody has it. And that’s why we can’t really measure our results against anybody else when we’re business owners, because it would be like going to the gym and measuring the way your muscles look next to everybody else. I mean, we do it. I look like I’m a gym rat. We all do it. But everybody’s genetics are different.
[00:42:38.960] – Kim
Their diet is different. Their tenacity, consistency, focus is different. All of those things play into how your body develops or changes with what you’re doing in the gym. And the same thing will be true in a franchise business like market variability, you the owner, your leadership. Again, the guy I was just interviewing today, I asked him, he’s one of the top performers in an automotive business in Dallas, Texas, which is one of the most competitive markets in the country, arguably a saturated market for automotive. He comes in and he becomes a top performer. One door away from him was another automotive shop. He dared to follow the franchiso r’s lead to say, This is a good location. He could have been like, No way. One door away? Why are they going to come to me? That’s an established business. You should have heard the stories he was telling today about how they screw it up. And people just walk next door and come to him. And he has all these glowing reviews. And it was amazing. And I asked him, So to what do you attribute your success? And he said, My passion for being successful.
[00:43:46.850] – Kim
And I’m like, that is so beautiful. It’s so simple and so intricately complicated all at the same time. He desired to have a solid business. He wanted to be the owner his customers knew. He’s not turning right manches. He’s running a business. He’s delivering a customer experience. He’s managing teams of people. And he goes, It’s not just me. He goes, I have really good people that work for me. I go, Joe, you attract those people because you’re that guy. If you’re a crappy leader, you’re the guy that’s saying, Nobody wants to work hard these days. It’s so true. You got to own what you’re creating. And look, I’m a very honest person. I don’t hold, pull my punches in any way. So if you work and they know that, but not to make anybody defensive, but just to help you own your moment. You want to own your business, you want to own a future, then you got to own your results. You got to own what you’re putting out there because what you’re putting out there is going to be a direct reflection of what you’re putting in.
[00:44:44.780] – Sean
Let’s take a quick commercial break. Are you a beginner investor and want to increase your confidence with investing? Tykr E DU is now live, which includes investing courses. The first course is titled Stock Investing for beginners, which includes videos that take you through modules, including overcoming myths, the difference between stocks, ETFs, index funds, and mutual funds, investing versus trading, the number one reason why stocks go up and down, knowing when to buy, knowing when to sell, Increasing Confidence, how to invest your first $1,000, and real life examples. It’s like looking over my shoulder to see how I buy and sell stocks. Simply go to edu. Tykr. Com or go to Tykr. Com and click the courses link at the top of the page. Okay, back to the show. We could probably talk for hours on this subject, which is mindset. In the mindset of an entrepreneur, you can’t go into a business idea with a backup plan. You can’t go into thinking there’s going to be a 1 % chance of failure. It’s like, this is happening. Come hell or high water, I’m making it happen. And that if you can put your mind in that state, then again, this goes to attracting the right people.
[00:46:01.520] – Sean
You bring in the right people, you bring in those right customers, people that want to work with you because that attitude upfront is really setting the tone from everything thereafter. I talked to a lot of entrepreneurs in the tech space, and I can just feel the fear in their voice and the uncertainty. And I’m like, You’re not owning the space. You got to get out there and get the F after it. Otherwise, you’re going to get steamrolled, son. I could really get passionate about this. And it’s just in there, well, we’re on pivot number four. And it’s like, Oh, my gosh. I would say go get a job and think about if you really want to be an entrepreneur.
[00:46:38.280] – Kim
I know. It’s great. It’s a learning curve. And you know what’s great is when it’s not going right, it’s a greater opportunity to learn how to make it go right than when things go right, right out of the gate. Everybody fears failing a little bit in your business. But I mean, look, I’ve been a business owner now for 26 years. I’ll tell you that the times when it isn’t working are the times when I’ve grown the most. And you develop all, going back to my gym analogies, you develop all of this hardcore muscle. And when it gets easy again, because it will, because everything cycles, you are so much better. And the more times you go through the cycles, the less you’re taken down by them. And the more you can smoothe… Like the pandemic, my business didn’t miss a beat because I went through the recession in 2008, where everybody lost their 401 and their job. And we didn’t talk about how you can use your 401 to fund a franchise, but there is a way without creating a taxable event to use your 401 and self fund. But when everybody lost it and they lost their job, I had my first breakout history making year in 2011, which I will directly attribute to the strength and the skill that I had to develop to stay in business in 2009 and 2010.
[00:47:55.180] – Kim
So when it started to ease up a little bit, I was perfectly positioned for blow sub growth. So had it not been for 8 or 9, who knows if I would have been where I was in my mindset. And so when the pandemic came, 2020, I created exactly the same year. I didn’t grow, but I didn’t fall back, which is really crazy. People were buying franchises when we didn’t even know the world was going to end. You better believe they were. The same amount of people in 2020 that I helped in 2019. And then 2021, I grew. 2022 was the best year I’ve ever had in 2019 one years of franchise consulting.
[00:48:32.130] – Sean
That’s incredible. And that’s from that experience in 2008. We’re very sensitive to market behaviors, especially you go 2000 to 2002 was the dot com bubble. Then you get to 2008 and nine was the crash. And then we had the bear market in 2022. It’s like you felt the pain in 2008, 2009, and that training allowed you to really hammer down here in this last bear market. So it’s no surprise that that was your best year. That’s amazing for using the pain of the past to plight forward.
[00:49:03.760] – Kim
Yeah, it’s awesome. And again, all the while I’m over here living my dream, I’m living my dream because I’m helping a lot of other people live their dreams. The whole thing, not to just talk about my own success because it’s not even about that in any way. It’s about all the other people, the business owners I’ve created in the 20 years that I’ve been doing this, 21 years.
[00:49:24.370] – Sean
So you made a good comment here, which really, I would say, relates to helping people. But what you’re probably doing, if you peel back the onion, is really listening to what their goals are and just finding the best because you’ve got a lot of different experience with different vehicles. You could say, like you said earlier, different business models and what really works best for them because what may work well for this person over here might not be the same business that works for this other person. So it’s your ability to listen and that’s how you help people. Would that be a correct statement?
[00:49:56.860] – Kim
I hope so. I do really try to listen and genuinely care, and I’m direct. I’m also not afraid. I’m never going to play God with anybody’s life. I’ve worked with people that when I was working with them, I thought, let this person take themselves out. One guy in particular he’s like, massively successful today. He allowed this business to completely transform his life. God bless him. But if I had played God with his life 10, 12 years ago, whenever I worked with him, I would have been like, I don’t know if you should say yes to this. So I do not tell people it’s not the right thing. I just ask the really hard, challenging questions and make you confront yourself. And if you stand up to it like he did, the more we challenged him, the more he fought back. And that’s what he did with his… That’s what he made true in his life. So I’m just going to be that person that can challenge you to think through it, not because I want you to fall out by any means. I want everybody who comes to me to say yes if it’s their dream.
[00:51:02.290] – Kim
But to do it with realistic expectations, make sure that you’re investing in a business you can comfortably afford because the fastest way to fail is to buy a business you can’t comfortably afford and that you’re right in the right mindset. I’m a mindset coach, if I’m nothing else. You said it, Sean, I feel like the franchisors are going to teach you the tactical information, like how to build their business. But Kim Daily wants to teach you how to think like a top performing franchisee. And you know what? The only reason I can teach you is because I’ve experienced it myself. It’s not something I’ve read in a book, although I’ve read all the books. It’s taking what you learn in a book and applying it to your life and watching it work because experience is the only teacher. And again, I’m going to teach you, but then you have to apply it because you’re not really going to learn it until you try it and it works or.
[00:51:55.750] – Sean
It doesn’t. Yeah, exactly. I always use the analogy, you can read books how to run a ride a bike until you’re blue in the face, but you’re not going to learn how to ride a bike until you actually go get on the bike and pedal forward. You got to.
[00:52:07.070] – Kim
Feel what it feels like to have the weight of the bike between you, exactly, and balance that weight.
[00:52:12.920] – Sean
Yes. Before we jump to the rapid fire round, a quick comment here for the listeners. Be prepared to be not interrogated, but you will get a lot of questions from Kim to really determine if this is the right fit. And I’ve talked to other people in the franchise space, so I know the process a little bit, but this is a good reiteration on what to expect. It’s like at the end of the day, the franchiso r wants the best, I’m going to use sports analogy here. They want the best quarterback for the job.
[00:52:40.400] – Kim
Right. Right. They want people that have… It doesn’t mean experience, right? They want people that are financially qualified but that have that passion, right? That hunger, competitiveness. If you ask a franchiso r, what’s the most important characteristic to you for success in your business? They’ll say grit. That’s the word you hear over and over and over. Grit. How is that defined? It’s hunger, it’s passion, it’s relentless desire to pursue and to get better. That’s grit. And that’s what we’re looking for. You don’t have to have experience in the industry or even an MBA or even experience owning a business. You just have to come with those things that we can’t teach you. You have them inside or you don’t.
[00:53:24.420] – Sean
Right. I love it. All right, let’s jump into the rapid fire round here. This is part of the episode when we get to find out who Kim really is. I’m ready. If you can try to answer each question in 15 seconds or less. Here we go. First question, what is your favorite podcast?
[00:53:41.630] – Kim
My favorite podcast is the one I listen to the most is Break Away Wealth.
[00:53:46.540] – Sean
Okay. I’ve never heard of it.
[00:53:47.950] – Kim
I’ll check it out. My mentor, Jim Oliver.
[00:53:50.080] – Sean
Got it. Okay, second question here, what is a recent book you read and would recommend?
[00:53:56.130] – Kim
Oh, I’m in the middle of Dr. Wayne Dyer. Right now, I’m reading Wishes Before filled for the second time, probably going to go through it a third time. My all time favorite book, though, Sean, is Earl Nightingale, The Strangest Secret. If you haven’t read it, you have to read it over and over and over and over again. It is a life changing book if you do the work.
[00:54:17.070] – Sean
If you do the work, that’s key. Awesome. All right, third question here. What is your favorite movie?
[00:54:22.890] – Kim
I’m a movie buff like you are. So I have so many favorite movies. I’d say my all time favorite movie is probably, you’re going to laugh, Jerry Maguire.
[00:54:32.870] – Sean
[00:54:33.650] – Kim
All right. And I was recently interviewed by the sports agent who inspired the movie Jerry Maguire. I was a guest on.
[00:54:41.050] – Sean
His show. He has to find that. Show me the money.
[00:54:43.050] – Kim
Yeah, show me the money.
[00:54:45.410] – Sean
Nice. All right. I got a few business questions here. What is the worst advice you ever received?
[00:54:52.200] – Kim
I think the worst advice anybody could ever receive is get more data, get more data, get more data. More data does not get you anywhere.
[00:55:01.310] – Sean
Analysis paralysis. Yes. 100 % agree. Okay, flip the equation. What is the best advice you ever received?
[00:55:09.480] – Kim
The time is now. If you are ready, go. Don’t overanalyze it. Don’t keep asking everybody else if it’s the right time. Just trust your instincts and go.
[00:55:22.220] – Sean
Speaking my language. Love it. All right. Time Machine question. Here we go. If you could go back in time to give your younger self advice, what age would you be? Would you visit? And what would you say?
[00:55:31.980] – Kim
The best advice I would give myself, my little self. So I started out in medical school path and thought that my grades were everything. And I gave up so much time developing friendships and really enjoying high school and college to have that 4.0. And I graduated with a 4.0 premed, so sum it up loud. I would 100 % go back and tell myself who the F cares. I tell my kids, I want you to work as hard as you can, but who cares about straight A’s? Live your life. Enjoy the experience of learning and make friends. It’s way more important than the A’s you get in your life. Has anybody ever asked me if I was a 4.0?
[00:56:19.280] – Sean
No. Nobody cares.
[00:56:21.440] – Kim
Nobody freaking cares.
[00:56:24.150] – Sean
[00:56:26.000] – Kim
My parents, God bless them, they would come in my room. They would slam my books closed, they would tell me, Kim, go out, stop. And I was so driven. Now, one could say your drive that you learned there is what’s made you a top performer as a business owner. But I’d still say, yeah, but sometimes you got to stop being a doer and be and enjoy your life.
[00:56:47.030] – Sean
Yes, I love it. Life is about living, not working or studying. Yes. All right. Where can the audience reach you?
[00:56:54.200] – Kim
The best place, Sean, is on my YouTube channel, Kim Daly. T V. It’s a rapidly growing channel, over 500 videos. New ones coming out, multiple new ones coming out every week. From there, you can go to my Instagram, my LinkedIn, everywhere, my website, contact me. If this conversation has intrigued you, I would love to meet you for wherever you are. We’ll start the conversation right there. You don’t have to be ready to know you want to buy a franchise. You just have to be ready to learn.
[00:57:22.070] – Sean
Absolutely. Totally agree. Awesome. Well, thank you so much for your time, Kim.
[00:57:25.840] – Kim
Thank you. All right.
[00:57:27.230] – Sean
We’ll see you.
[00:57:27.770] – Kim
[00:57:28.490] – Sean
Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple podcast and leave a review? The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision based solely on what you hear. All right, thanks for your time. Talk to you later. See you.