The past five years have been tough for those in the tax business, but things are looking up and Ken Leese's positive attitude has never waned.
"With the state of the economy, you look at how fewer people working translates into fewer tax returns that need preparing," says the 47-year-old Jackson Hewitt franchisee. "Our business has struggled somewhat to remain status quo, and one of the realities we discovered is that the tax business is not so recession-proof." Regardless, Leese has remained steadfast and has made calculated and strategic moves since we profiled him in 2010.
He's divested all of his Delaware territories and replaced them with Jackson Hewitt units in Southern New Jersey, his home base. He still has a few locations in Pennsylvania but the core of his operation is now in New Jersey. Proof that the market is picking up? He's grown from 40 locations at the end of 2013 to 45 today.
Since we last spoke with him, Leese had grown his Play N Trade stores from one to three, but has cut back to a single location. "That business model is struggling and there has been a lot of change in computer gaming," he says, adding that there's a new management team at the brand and he's eager to see what they have in store.
Leese is "cautiously optimistic" about the Jackson Hewitt brand. He points to the brand's recent change of ownership and leadership changes at the top. "I plan to stick it out. I like to say I'm cautiously growing," he says.
And he certainly knows how to do that. Early in his Jackson Hewitt career, Leese was overseeing more than 100 locations up and down the East Coast. It was tough but lucrative work that involved a lot of travel. But when kids came along, a twin boy and girl, things changed. "I wanted to be home and see my kids grow up," he says, and began to consolidate his operations closer to home.
These days he's comfortable with the number and more centralized location of his locations. However, the New Jersey native, who loves living in his home state, says he's worried about the fallout from the closing of casinos in Atlantic City. "This could be devastating for people here," he says. "The layoffs could be 50,000 to 60,000 people. I'm already thinking about what we can do to help. Maybe offer free tax returns. I don't know, but we want to do something if we can."
Leese says he never could have made it as far as he has in business without his dedicated and talented management team. Together, he says, they have faced increased governmental regulations, the emergence of online tax filing, and growth in tax preparation competition. "I promised my team several years ago that I would keep them and that we would all get through this," he says. "I think that time has come. We made it and things are looking promising for the future."
Leese always has his eyes and ears open for business opportunities. One avenue he is actively investigating is large retail stores, such as Walmart or Sears, that allocate space to Jackson Hewitt to prepare customer taxes in-store. "It's a managed risk that offers a less expensive option for me," he says. "That makes sense."
Name: Ken Leese
Company: The Tax Authority Inc.; Video Game Authority LLC
No. of units: 45 Jackson Hewitt, 1 Play N Trade
Family: Single dad with boy/girl twins, 12
Years in franchising: 20
Years in current position: 20
Working in franchised businesses during high school and college.
Jackson Hewitt Hall of Fame 2003, Jackson Hewitt National Advisory Council President 2003-2006.
Overexpansion without enough capital.
Overexpansion without enough capital.
Decision I wish I could do over:
Not diversifying early enough.
I work around my time with my kids. Currently Mondays, Wednesdays, and Fridays are short days (8 a.m. to 3 p.m.) and Tuesdays and Thursdays are longer days (8 a.m. to 8 p.m.). I am generally always available to my team 24/7.
How do you spend a typical day?
During tax season, I read reports in the morning, and then visit offices to encourage the team and give out impromptu awards.
Favorite fun activities:
Concerts and sporting events, tennis, fishing, and being with my kids.
Not enough, but starting to walk, bike, and play tennis more often.
Favorite tech toys:
What are you reading?
I like reading about history. Currently, I am reading a book about George Washington and his spy ring during the Revolutionary War.
Do you have a favorite quote?
I came, I saw, I conquered.
Best advice you ever got:
Make sure you are working at something you enjoy!
What gets you out of bed in the morning?
Teaching each of my children to become a better person each and every day.
What's your passion in business?
To allow my management team to retire when I do.
How do you balance life and work?
Through technology, I make myself available 24/7 to my team whether I'm in the office or not.
Person I'd most like to have lunch with:
Management method or style:
Centralized administration and decentralized management.
Hiring, training, and motivating a seasonal workforce.
How do others describe you?
Laid back on the outside, but a fierce competitor on the inside.
One thing I'm looking to do better:
Hiring and motivating.
How I give my team room to innovate and experiment:
I often solicit suggestions from my team, from the managers to the tax preparers. I will reward an idea that we implement.
How close are you to operations?
I am involved. But I allow my team to run the business, and to use me and my experience as a resource.
What are the two most important things you rely on from your franchisor? Software and products.
What I need from vendors: Seasonal programs.
Have you changed your marketing strategy in response to the economy? How? Definitely. We are using online advertising more frequently. We use more email and text campaigns, as opposed to direct mail. We also have switched from television to radio to save money.
How is social media affecting your business?
More and more of our customers are online and using social media, so we have to have a strategy that keeps them informed.
How do you hire and fire?
Hiring is difficult in a seasonal business and something my team needs to get better at. We try not to fire team members unless we are left with no other choice.
How do you train and retain?
Every year we train and retrain our team, mostly online.
How do you deal with problem employees?
Discuss issues with them. We train and retrain. We let them go when necessary.
Fastest way into my doghouse:
Don't do what you say you will do.
Growth meter: How do you measure your growth?
Office count and revenues.
Vision meter: Where do you want to be in 5 years? 10 years?
In 5 years, 75 offices; in 10 years, retired.
How is the economy in your region affecting you, your employees, your customers?
Currently, we are having a big problem in Atlantic City with regards to all the casino closings.
Are you experiencing economic growth in your market?
No, see above. This affects the whole area.
How do changes in the economy affect the way you do business?
The economy affects how many offices I open/close.
How do you forecast for your business?
From experience and type of office.
What are the best sources for capital expansion?
Internal cash flow.
Have you used private equity, local banks, national banks, other institutions? Why/why not?
It's difficult in our industry to get funding owing to the lack of hard assets.
What are you doing to take care of your employees?
Low-cost incentives and win-win bonus programs.
How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)?
Trying to become more efficient as a company.
How do you reward/recognize top-performing employees?
Additional time off and bonuses.
What kind of exit strategy do you have in place?
Work in progress.
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