69 - Franchise Success Secrets: Mastering your Marketplace & Finances for Growth with Grasons Co's Simone Kelly

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Hello, Kelly. Welcome to Listening with Leaders. You are the founder and brand president of Grayson's, and that can be found at graysons.com. Welcome to the show.

Hey, thanks for having me, Doug.

So you are a serial entrepreneur, and I think it goes all the way back to your preteen years. Business has been in your blood forever. Tell us the backstory.

We moved a lot when we were younger. My dad was in the Navy and he just— and then he was at 30, he was out of the Navy and He had gotten diabetes, so we had to move on. So, but he never got over the fact of moving every 2 years. So we would come home and be like, we're moving. And there was no plan or nothing. We just packed up and moved to the next place and got another job. And, and, or he already had a job. It just depended on what mood he was in. So I never really like got like a ground level relationship with people because never knew if you were going to stay. So why bother? It's like heartbreaking. So we, I guess that's what started the whole wanting to own your own business because we want to, I wanted to have the freedom to make the choice to stay or leave. When you're growing up, you don't have that. You go where your parents say you're gonna go and that's it. So that's pretty much what started it where, and he would always, oh, my boss this or my boss that. And I thought, oh, I don't want one of those. So it just kind of instilled all those things in my head like, I need to own my own business. So that's what really triggered it during those years.

You were looking for freedom.

Still am.

Yep, freedom and autonomy. Correct. So tell us how you got into— that's the start of it. Then, then how did your journey progress from there?

I graduated high school and then I got a job and I decided I needed a job that started from like, one, because I moved out, so I had to pay bills. But two, that started from the very beginning. And then I took jobs after that, um, that would teach me everything, like every single thing of a business running. So I started as a receptionist, right? And then after receptionist, I went into, um, loan servicing within the same company. And then I went into property management, which is in the same company, which Then I went to a general contractor who was a union general contractor. So I ran their payroll department and all their timings and their bids and doing the liens. And then I went to another general contractor that was not a union, and I realized I don't want to be in union. Wow. But anyway, so I moved on from that, and by the time I got into the lending business, I, that was more of on the sales side. I'd never been on a sales aspect of it, of how that worked, how the systems work, the marketing of it, how we got the phones ring, how we got the customers in, how we sold to those customers. So by the time I was done with that lending company, it ran its course. I opened up my first funding company.

And when was that approximately?

What?

When was that approximately? How many years ago?

Oh, 29, 29, 30 years old. Uh, oh, date myself. Um, 22 years ago.

You're still pretty young.

Yes, I heard that several times. Oh, you're the young lady. Oh, you're the— yes, I heard that a lot. I actually thought— I got really self-conscious about that in the beginning. I wish that I would have known that that was actually a great thing to have rather than a hindrance, because it would have saved me a few years of trying to get over that hump.

Right. So what kind of a lending company was it?

Real Estate Lending. So just homes, things like that. Nothing in commercial yet.

Right. So you have the lending company, you sold that.

Well, I had that, and then I also morphed it into a real estate company as well. So we had lenders that I trained them how to sell real estate. You can train a lender how to do real estate. Real estate agents, not necessarily the lending. They have their special kind of salesperson. So in lending, you're more into, what would you say, numbers, which is everybody's interested in that and they have to make sense. So I did that and then we were spending too much time trying to get business from big brand names. So I ended up purchasing a RE/MAX, and then I opened an escrow company and a TC company and a sign company, and then I sold all those together.

So you had— I know, build a vertical enterprise all around real estate, residential real estate mostly. Yeah, without knowing, without knowing that you had created a vertical enterprise.

And then, yeah, I think—

go ahead.

I think that, um, when you have a business, you have to provide those people who are working with you the services they need. If they want to use them, great. If they don't, great. But I can tell you that they will use them because I will only build the best. Because that's— I mean, why, why would you build something that nobody wanted to use or wasn't good enough to be used, if that makes sense?

It does. So you, you, you, you have all these businesses you combined into one business where it was kind of a one-stop shop for lending, real estate brokerage, escrow. I don't know if you did any title work, but, and all the associated services that are involved in a real estate transaction. Then what happened?

Well, I sold that and then I went and started an independent real estate company again. And then my mom had gotten ill, so I took care of her for 6 months and then I got lost in the weeds for a while because taking care of somebody that rigorously, you kind of lose who you are and what your self-worth is. So I got like a normal hourly job with a friend of mine who literally did not want to hire me because he thought I was going to like take his business and redo it or something. I don't know. It was really weird. But I'm like, just give me a job. Like, I need 6 months. I'll give you 6 months. I need my brain to really come back to what I needed to do. I was just lost. So after that, 6 months to a day, I gave my last $405 check to my friend Lewis and opened a TC company downtown. So he had an office downtown and he wasn't using it. So he's like, that's $400 a month. So give me $400 and I'll give you the key. And so I started that TC company. Not my cup of tea, but—

When you say TC, what do you mean by that?

Oh, I'm sorry. Transaction coordinating.

I've never heard of that before. I thought I knew everything.

Oh, that's part of real estate. We added in my other company that. So it basically takes all the paperwork. So once the listing agent signs it, he gives it to his TC, the listing contract, gives it to the TC, and the TC schedules all of the appointments, termite, home inspections, gets all the disclosures done, turns in a file at the end, completed to the brokerage. The brokerage can pay the real estate agent.

Got it. And then, and then the listing agent uses that during the sales process, or maybe this is all happening during escrow.

Use, yeah, during and through escrow and at the end. So it's really just the concept of it and why I wanted it in the other company that I had was because you want the people who are good at sales and good at being around people to be out there in sales. If they're sitting in there doing a $15 an hour to $20 an hour job, they're not bringing in sales, right? So they're not doing what they love and what they're excellent at. If you give them paperwork, they're going to tend to not want to do as much and generate as much business because they're like, God, I have to do all that paperwork again. So you pay a TC to do it. You can pay them $395 to $450 per file. You can charge that back to the transaction as well. So you're really not paying it, but then you're able to concentrate on what you're really good at.

Makes total sense. So you did, so you did that business for a little while, then what?

Oh God, it got really boring. So a friend of mine, well, it's just paperwork, right?

So let's do it this way. How did you get into the, into the, um, liquidation and estate sales business, which is what Grace's was?

By a fluke. Um, a friend of mine, I'd helped his son, um, in regards to housing situation, and he had said, oh, I have a warehouse and it has an office in front, and you've helped my family so watch, please come in. And, you know, I know you'll come up with something. So I sat in this big warehouse with this little office space in front and had no clue what I was going to do. And then a realtor who's also a friend of mine had asked me to come pick up a couch, um, and I thought, I don't need a couch, so no. He's like, no, come pick it up and then you can sell it. And I thought, well, that's just like the recycler. I didn't know what used I didn't know there was actually a used business out there, like for pre-owned items and so on. So he's like, no, no, put it on Craigslist. And I'm like, who's Craig? Like, I don't know Craig. And he's like, what's this guy? I was so out of it, like had no clue at all that that was something that existed. So I told him, but okay, fine, I'll try it. You have to drop it off. So he did drop it off. It was very ugly. It was off-white striped, moon-shaped but only half-moon shape. I think it was missing some pieces. Yes, it had like, you know, a couple brown stains. It was just like not something I would ever purchase, but whatever. So I put it on there and they, um, that day it sold for $350. And I thought, what? Like, and I kept looking at the people who bought it like, really? Like, I can't imagine what their couch looked like, right? Because if you're gonna buy that, whatever, maybe they could steam clean or something, I don't know. But anyway, so I had called up my friend and let him know, wow, that was Amazing. And so he ended up telling other realtors and brokers that have known me in the business forever and said, hey, Simone's got this warehouse, she's got nothing in it. You drop stuff off, she'll get rid of it for you, sell it. Because, you know, when realtors take a listing, if it's full of stuff or the buyers or the sellers can't remove it, they're older or what have you, then they have to find a way to get rid of it. And so instead of purchasing storage units to store all this stuff, they were coming over and dropping it off and then I was selling them. And so I had my brother come over because I couldn't do it all. We started a consignment shop, which was fun but not profitable, but it did keep the doors open. And then I was asked to do an estate sale for another realtor friend of mine, and that's where it just changed my life. That was, that was a moment where Grayson's— I mean, we had Grayson's Consignment, but what we're talking about now for where the future of Grayson's is, that's where it really changed, was that, that one particular sale.

And then you decided to franchise. Yeah, that's a big jump.

I know my friend thought I was crazy. I told her one night and she's like, you're nuts. Like, that's not going to happen. I'm like, it's going to happen. It has to happen. We— I owning a franchise because I am buying the RE/MAX. I knew what our franchisee wanted because I was one and I knew what like a franchisor would provide. And what more they could provide without such a big scale-up, right? Um, RE/MAX was an amazing franchise to be a part of, and I love franchising. Looking back, given the opportunities to people who wouldn't normally have to, like, think outside the box or build a business on their own, or just want this, like, you know, business all set up, they just go on and say, I own my own business, which is like an amazing feeling, um, for pretty much anybody who's done it.. But I could not service all the people that we were getting sales from because it was 7 days a week, you know, years straight, if not 2. And the hardest part for me was that I would have to turn people down. And the alternative was like a private estate sale company. There's like 20,000 private estate sale companies, not franchised. And so, which is fine if you do a good job, but How do you vet those that are private, right? Independents. How do you know that that person coming into your house isn't just going to order electricity on and live there for the next 6 months and you're trying to get them out? Or how do you know the money you're getting is what the money was sold? Because they're not tracking it, right? So it just really was, for me, upsetting that I wasn't able to provide everybody with that system that I put in place so they could trust us. So that's why I franchised. It's a cash business. It's the owners of the business will take care of the cash. If you were to hire a bunch of employees, they handle cash all the time. But the problem is it's not the same inventory. We can't track inventory because every house has something different to sell. So you can't really know what they're selling it for, what they're doing, unless you have like Las Vegas and you have cameras in the ceiling in every house and you can see what they're doing. And that's not a good place for anybody to be, employees or us. So I decided franchising was the only way that Grayson's could grow and service everybody properly.

And how'd that work out?

It was fun. I learned a lot, a lot, lot. It worked out great. I mean, in the end, we ended up selling to a private equity group last year just so we could expand. I needed more help when you get to a certain, like we had, 32 franchises at the time. When you get to a certain point, you either decide, am I going to go that extra? Do I have enough to go that extra mile? Or can I rely on somebody else and still be a part of that business while they are using their systems they have in place? Because I think there's stages in business. There's your startup, which is super fun, and then you start to, you know, expansion, right? Whether you franchise or divisionalize. But when you get to a point where you're gonna start really putting hundreds of thousands of dollars on one drop into one thing, let's say marketing, that's when you have to decide, are you gonna put that $200,000, $300,000 in there and not have the tools to really get it where you want it to go? Or are you gonna research who has the tools and then move on from there? So I did my research.

I've interviewed some other people that were kind of the same story as you. They started out with a business and they went into franchise. And one of them told me that in his view, the golden number was 100 franchises. When you hit 100 franchises, that's when you know you're on your way. What have you heard or what do you think?

It's funny because they say like, oh, well, you're at 10 franchises, you're at break-even. 20, you're making a little. 30, you're really on your way. 50, it's kind of like you have a girlfriend and someone says, or boyfriend, I don't know, whatever. And I say, oh, when are you guys getting married? And you get married and they're like, oh, when are you going to have a kid? And you have a kid and they go, when's the next kid? I just had a kid, you know. Oh, when's this? When's— I mean, it's just nonstop. When's the grandbabies? It's like, it's the same thing with business. Like, oh, you have 10 and then all you have to do is get 20. Now you get 20, 30. You have to really realize your marketplace. Your financial ability, and also how many of you are there. We are in a really small ship for 32 people. I mean, we really had like 3 people total, and myself included, running this. And so to think that we could have taken it to 100 franchises successfully and continue to do what I love more than anything, which is to help people build businesses— I wouldn't be able to help those people that bought, or the people who you know, wanted to build a business because I would be too busy doing mundane and, and things that don't— I don't enjoy. And when you do something you don't enjoy, you're not good at it, right?

So what gets you today, as you reflect back on a very successful business career, what gets you really excited? What gets you so excited you're ready to get up in the morning and go?

Helping people build their own business.

Yeah, that's really exciting.

That is like Yeah, that's like a— I call it a hobby, but apparently it's turned into something a little bit more. But yes, my passion, desire, everything I am, everything. There's nothing more. I think if you have the tools to help people build a business, whether it's a franchise or whatever, they have their own idea, then you should, in a, in a time in your life where it's capable, right? Then you should most definitely help them get there because it is the coolest thing ever to see. They don't know it until they're there, right? So they're like, oh, I'm building a business, and then all of a sudden they're like, oh my God, like, I totally built a business. And that, like, when they have that light that turns on, that's what I love.

Wow, good for you. So what is it, do you think, that's unique about you that you bring to the table to make all this so successful?

What was that first part?

What is it that's unique about you that you bring to the table that makes, makes us all so successful?

I mean, I don't look at business as money. Um, I've never gauged something on money, like how much money. I think possibly that might be a hindrance or it might be an amazing thing. I don't know. But like, if you can do what you love, support your family, and help others, if that's what your goal is, like, which would be mine, then you are successful. So if you're going to build a franchise and you thought, I'm going to build a franchise because I want everybody else to work really hard and pay me royalties, I'm going to make millions and millions of dollars when I sell, then you will not be successful. If you are, it will never be enough. Like, to me, it's never enough because I don't think I have enough time to help as many people as I want to before I expire, right? But for people like that, it's like it's never enough because it's never enough money. The boat's never big enough, the trips are never expensive, the hotel is never good enough. So I, I don't know if that's unique because I haven't, I haven't really heard anybody else say it.

And I'm going to reframe it this way: what makes you unique as a businesswoman is your desire to serve others in a really deep and profound way.

Oh yeah, you, you said that very eloquently. Thank you.

You're welcome. And that is, and that is unique because you're right, I've met many, many very wealthy people, ultra-wealthy people who are miserable. Never good enough. Oh, I have a billion and she has 2 billion. Oh, woe is me.

You know, I mean, competitiveness. Now I have competitiveness, but it's not about money, right?

I mean, but when you share, at least in my experience, and when you shift your attitude from thinking about making money or being the biggest, being the greatest, or being the most famous or whatever, and shift it to how do I, how do I help other people today? What, what am I going to do to help other people? Then all those other things, those externalities, don't matter because you're filling yourself with the joy of service. And that to me is really powerful. And that's your, that's your unique quality, I think.

Yeah, I always just thought it was part of me. I didn't know it was unique. I never asked people. I guess I should.

Yeah, I mean, a lot of the people— I mean, I interview, you know, obviously a very small percentage of business people in the world, but I'm finding that the ones who are most successful are the ones that have this unique feature of serving others. I interviewed a guy today, earlier today, who's got a— he's in— I'm not sure where he operates. I couldn't— don't know where his headquarters are, but he's, he's got a $6 billion company, and it's all about servicing. What he does, what his company does, is they, they build— they buy, buy brand new houses from contractors And then they have a whole program where they— it's a rental program for renters to move into a new house that's a rental. And it comes with a health package. I mean, his whole thing is service to others, especially lower income people. And it was amazing to listen to him. And he's built an $8 billion company on that.

That was cool. That is really cool. I love that. Yeah, that company's coming up that I want to They're almost there, actually. It's specifically, again, for servicing a specific dynamic of people. Because if you open a real estate company and you're like, I'm just going to sell and represent everybody, right? You're no different than the next one. But if you open a company that is specific to a need, that is not being satisfied right now in the marketplace, that is a really good feeling. And, and you can be successful at that regardless because you're helping a, a certain group of people that are being either ignored or taken advantage of. And so I like that. His idea is cool. I'm gonna have to— I'll have to watch that.

Good for you. I've got one more question for you.

Yes.

So, Simone, what's the one thing about you that we would never know? Unless you revealed it to us.

I've always thought I was an open book, that you would never know. Well, that kind of defeats the purpose of never knowing, right?

Oh, you're turning it back on me.

Where's the mystery in that? Um, I have no idea. I mean, I love hugs, I guess. I don't But everybody knows that.

You would never know that I'm a jazz violinist.

I would not know that. And that's actually really cool.

Right.

You know what? You nailed it. I have always wanted to learn how to play the piano and never had time. It is my favorite instrument of all time. And very, very few people know that because I hate the fact that I haven't put the time aside to actually learn it.

Perfect. Thank you so much for your time. What a great conversation, Simone.

It was nice meeting you, Doug. Thank you.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, Would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.