That's only one of the secrets to Jim Gendreau's success
Don't let his 'aw, shucks' attitude fool you: Jim Gendreau is one heck of a salesman. Here's a guy who cheerfully tells you he graduated second in his class of 98 ('second from the bottom!'), talks about his learning disabilities, and wonders at his great good luck.
But here's also a multiunit franchisee based in Edina, Minn., who has owned units in 10 different franchise systems, and made a success of all of them. At one point he owned 54 Cost Cutters hair salons. He was an early-in (and out) franchisee of Clean and Press for Less and of Mr. Movies. He owns a Shred-it, HomeVestors, Great Crates, and just bought a Two Men and a Truck franchise.
'I only wanted one!' Gendreau laughs. 'To be honest, I never thought I could own one. I wasn't sure I was smart enough.' Clearly he was, and is.
After graduation in the late '50s, Gendreau went into the army, and then into doing pop displays in Canada. At one point, he was asked to take a new variety pack on a route, call on the stores, and bring back orders. He was terrified that he would be fired for not selling every store on the route. After five days, he found out he was the high salesman.
But it did motivate him to work hard, and he found that he took to sales. That skill took him to Revlon and then to 3M, where he worked his way up to sales trainer in the consumer products division.
'I never thought I'd leave the company,' he says, 'but I did, and started my own manufacturer's rep business, which lasted about three years until 1981, when interest rates went sky high.' That left him with some time. His oldest son, who was 15 and in high school, needed some maps and suggested he buy a little map company that had displays of Rand McNally maps.
'I bought it one weekend,' he says, and 'the very next weekend, a minister knocked on my door, asking if he could sell the maps to earn enough money to go to Israel to be a tour guide. I said, ëIf you can sell God you can sell anything.' I told him he could keep 30% of what he sold; he ended up selling 450.'
Gendreau started to make money with the map company; in fact, 'more money than I'd ever made in my life.' He finally sold the company and its 3,700 customers about five years ago.
He began to discover one of his secrets in that company: old and boring industries. 'The older, the more boring the better,' he laughs.
Meanwhile, he took a job selling franchises for Cost Cutters. 'I sold the first 70 franchises,' he says. 'I could see it was a good moneymaking thing, so I raised the money, and eventually ended up with 54.'
And that started him on the track of buying franchises. They turned out to be service businesses, where marketing and salesmanship made all the difference. Gendreau also has a keen sense of when a market is heating up or cooling offóone reason he decided to sell off the Cost Cutters after 20 successful years.
'The reason we were successful,' Gendreau says, 'is when we do our due diligence we write a book, or story, about every line expense item: what makes it goes up or down, what are the best practices and worst practices. The goal is to build a plan around best practices.'
That, he says, is where most franchisees go wrong: 'Most franchisees, even if they put a plan together, really don't know what makes everything go up and down, and you have to know that before you get into a business.'
But how did he learn what makes everything go up and down? That, he says, is his other great secret, which he gladly shares: an advisory board.
Gendreau has made a strength out of what he considered a failing: He assumes that other people know better than he does, and so he seeks out the best advice he can get. 'I didn't have expertise' in finance, marketing, legal, and other areas where he thought he needed help.
'Our greatest strength has been not my good looks or charming personality,' he says. 'It's really the advisory board. Having an advisory board before you get into business is the key.' Gendreau says he discovered it from reading a magazine story. 'I read enough things about advisory boards to know that companies with them are nine times more successful than those without. Their failure rate is relatively close to zero,' he says.
He set out to create his own advisory board by going first to meet the owner of a top accounting firm. He found out that the owner wasn't the best bookkeeper, but he was great at bringing in customers. 'So I went over and introduced myself, told him, ëI can't afford you, and here's my plan; what do you think of it?' He thought that was brassy, but said he'd like to join in.'
He took the same approach to finding an attorney, a marketing advisor (he found a past VP of General Mills), and so on. His approach was simple; he didn't offer compensation because he couldn't afford that type of advisor, but they were willing to help. He suggests that you simply ask; most business people are actually glad to help out if the challenge is interesting.
His advice is not to get too many people on your advisory boardófour or so is good.
'The people on our board have been as good as we can find,' Gendreau says. 'If you put together a mediocre advisory board, then you can't expect more than mediocre results.'
Gendreau held quarterly meetings of his advisory board, usually Wednesday afternoons at 4-5 o'clock, and held them to two hours. He rarely got all the advisors to one meeting, but that worked out, and enough came to enough of them to ensure his success.
'We've been unbelievably fortunate,' he saysónot only in the advisory board, but the people on his staff.
But luck favors the prepared, and Gendreau is always prepared. He's also demanding: 'I hate mediocrity,' he says. As with his first company, he's always interested in where a business leads. No matter what the business is, he says, 'there are peripheral things' opportunities, challenges, intriguing side issues'and sometimes they become more important than the business.'
He's also constitutionally incapable of sitting still.
'I tried to retire a couple of years ago, but it didn't take,' he laughs. He built a home in Naples, Fla., and now splits his time between 'retirement' and his Minnesota business base.
What happened in retirement? He got interested in publishing, and started a small handout for small cafes called 'CafÈ News.' It has a staff now, and is making money. What made him do something so different?
'It's a lot of fun starting companies.'