Making the big leap to self-employment

The successful entrepreneur is typically portrayed as being passionate, fearless and persuasive, according to Caloy Ang, founder and franchise manager of Suds Laundry and Dry Clean Services. Suds has 21 branches that serve a customer base of 80,000 a week mostly in Metro Manila.

But even if one doesn’t fit into the stereotype, a sound franchise business with smart systems can more than make up for an aspiring business owner’s limitations. A natural advocate of entrepreneurship particularly to the growing number of “salaried men” desiring to make it on their own, the former Intel reliability engineer has coached ex-professionals – some of them, shy and retiring personalities – to run profitable businesses through Suds Laundry and Dry Clean Services.

Given the warm reception of his laundry operation, mostly run by franchisees, Ang intends to expand the business nationwide within the year.

He shares a number of guidelines for choosing a franchise business to those hoping to make the successful jump from employment to entrepreneurship, an aspiration widely shared these days by employees in high pressure jobs.

• Choose a business with a big potential market.  Once an employee with no time to do his own laundry, Ang decided to go into the business in 2003 to serve the many professionals like him employed at the Cavite Export Processing Zone and the environs and living on their own. 

In partnership with his wife who operated the store while he was at work, he differentiated Suds from the many other laundry shops through bright, attractive and air-conditioned interiors in a convenient location with parking on top of consistent service levels. With operations quickly picking up within three years, he went into Suds full time and began franchising.

At about the same period, the residential communities of Metro Manila, especially condominium complexes, were being snapped up by young professionals longing to live on their own and with no time or facilities to do laundry. Suds branches proliferated from Quezon City to Makati to Lipa City.

Ang reports that today as much as 45 percent of the population of the National Capital Region use laundry and dry cleaning services regularly, according to studies. The potential market of Suds is bound to grow even further as more condominiums spring up. Real estate industry studies disclose that around 140,000 residential units are projected to be built from 2012 to 2016 — representing a huge untapped market of people needing laundry service.

• The best customers are repeat customers. An average of seven out of 10 Suds customers return to branches near them week after week to have their laundry done.  Satisfy a customer and he will by habit return to you, says Ang. After all, it would take a lot of time and effort on the part of the client to find a new service. This means more predictable revenue streams to grow the business.

• Get all the help you can get. The more trainings and manuals offered by a franchise, the better for beginning business owner. Suds, for instance, assigns an officer to coach franchisees onsite for a month after opening. In addition, it organizes quarterly talks on a number of relevant topics.  When the business is up and running, Suds shares standard costs for running a business so that partners can benchmark against those. A Suds computer program that tracks sales and accounts receivables by the day, nevertheless, has by far proven to be the most helpful tool to the company’s partners.  It constantly provides information on how the business is doing so that a franchisee can plan and act accordingly. The program is also a customer data base that can be mined for insights into the behavior and preferences of patrons.

• Watch out for royalties that encourage performance. Not all royalty programs are created equal. Some are kinder than others.  The Suds’ program, for instance, assumes that a franchisee cannot be expected to make profits during the startup period. Thus, no royalties are charged at this time. Ang point out: “Only when a franchisee hits a certain sales level do we begin collecting our fees.  As a franchisee’s sales climb, our royalties increase. But past a set revenue milestone, our fee decreases and remains constant.”

• Grow with a brand. Suds franchisees are organized to tap a defined micromarket of residents within driving and commuting distance to their stores. In addition to these retail clients, franchisees are encouraged to likewise win business from commercial clients in their territories. These include spas, companies that need to have uniforms and other garments laundered regularly, beauty parlors and other centers that provide towels to their customers. Ang explains: “We reward our franchisees for their marketing efforts by giving them low rates on bulk orders. We process large quantities in plants designed to do just that. Commercial clients represent additional sources of revenue. We recognize that when we help our clients achieve greater growth, our brand grows too.”