EP #16 - From Balance Sheets to International Franchising (with Stacey Goulding)

So what inspired you to take the leap from being a qualified accountant to co founding the local guys?

Yep. So I was a tax accountant for five years. So working in a private firm. I did university, got an accounting degree and then went straight into that. And so yeah, so working in there for five years and like I did, I did enjoy it. It was good. But I guess it wasn't fulfilling enough for me. And as I always say to you, Jared, when I was working there, there was so many businesses that I was doing their tax and financials for and I thought, oh, they're doing so many cool things. Like, cool, you know, being in business. And I thought I'd love to. I'd love to be doing something cool like that. So I guess that was my thought process and when the opportunity arose for us to go into business together, I took it and I immediately quit and ran and let's do it. I was very excited. So yeah, so we went into Boost Juice and we purchased a Boost Juice franchise and we were the franchisees. So we really got to see things from a franchisee point of view. So we had two. Two stores, two Boost Juice stores for a few years and then we went into.

And how was that experience?

Yeah, really, really positive. So definitely like a positive franchise experience from the get go. So from the onboarding side of things, it was very seamless. We could easily contact our, the staff. The training was very, very easy and fun. So we flew over to Melbourne, went to their training headquarters and that was really enjoyable. And throughout the whole time that we owned the Boost Juice, there was always and support our franchise partners that owned other stores we became friends with and we were always in contact with them.

Okay. So yeah, it was really positive experience.

Yeah, very positive.

Okay. And then what sort of.

So from there. Yeah, Yep. So from there we ended up purchasing another franchise. A restaurant business.

Yep.

So that experience, I'd probably say wasn't as positive. It was probably showed us the negative side of franchising.

Sure.

And which I guess I would say is a positive now when I think back, because we got to see both sides of franchising, the positive and negative side of it. And that's I guess taken us into the local guys and we've been able to bring that in. So. But yeah, so back to what I was saying, we owned the restaurant franchise. And then from there, as we know, you were in the test and tag field as well for a few years.

Yep.

So I guess, you know, talking together every night about life, we decided why couldn't we, you Know, become a franchisor. Yep. And do something like that for ourselves. So that's where the local guys was born.

Okay, sure. And what was, I guess, like some of the negative stuff that you saw? What was some of the stuff that. That when we're in that franchise, that was the lessons that you didn't want to bring into.

Yeah, I think with. With the restaurant franchise, it was the training side of things. Definitely wasn't, I guess, up to scratch, if you, you know, if you will. We did probably didn't get enough training and then this ongoing support as well. That was definitely not. Not there or not enough. So even, like, when we were going through the onboarding process, they would tell us, say something would cost a certain amount and then it would end up blowing out. So the communication was. Was. Wasn't there, and it just made it hard. Yeah, yeah. So, yeah, so there were. Yeah, definitely a few. Few negatives.

Yeah. But as you say, I feel like that's probably been a blessing now because having that experience of what a great franchise is and then having that experience of a not so great franchise, you kind of get the both sides of it. And then when you're trying to start something brand new up, I mean, there's not too many franchisors, I would say, that's out there, that being franchisees themselves and certainly not in a couple of different. Different brands as well. And. And also not having a good experience and a bad experience. So definitely, as you sort of said, I think it probably lays the foundation really well of the pitfalls to look out for and the really good stuff to go for as well. And it sounds like support was a massive element in that.

Massive element. No, definitely. And, yeah, definitely. Taking. Taking the positives, obviously, is great, but the negatives are probably more important because we've come into our, you know, creating our own franchise and we. We know what not to bring in and we've felt it as well. So being a franchise franchisee, it can be frustrating. And we felt those frustrations in that. In that franchise.

Yeah.

So, yeah, we don't want our franchise partners to feel like that.

Yeah.

So, you know, we do our best not to bring those in.

Yeah, yeah, yeah, no, absolutely. And going back to the accounting just for a minute, did you ever feel like you were sort of stuck in that accounting career and there was no way out of it?

Yeah, a little bit. Yeah. So I feel like, yeah, in. In my accounting role, there was nowhere for me to grow. So, yeah, I did feel a little bit stuck. I guess if you will. And I guess as well, the unfulfilling side of it, like I was, you know, I was just processing numbers, I guess in the role that I was in.

You say like you feel like you're on a production line.

Yeah, yeah, I feel like I'm in a production line where coming into the local guys and creating that we, you know, there's a sense of helping people. You know, our why is definitely, you know, we want to help other people be able to, you know, own and open their own business. You know, that, that dream of being a business owner in whatever capacity they want to. So being able to do that, it's just so much more fulfilling. And I just couldn't get that in my accounting role.

Yeah, yeah, yeah, yeah, Absolutely.

Yeah.

So tell me a little bit about the first couple of years. Did you ever feel like we were going to fail or.

Not that we were going to fail, but. But we actually opened the local guys right. You know, at the beginning of COVID Great time, which is fun. Yeah. So we, I think we had one franchise partner, Peter, and then Covid hit and everything's gone into lockdown and no one's operating. No one's definitely getting a test and tag done, that's for sure. And we had our second franchisee, Daniel, who was really, really keen to come on board and we just had to keep pushing him back because we couldn't provide him work because know no one's getting test and tag done. So that was definitely a hard time right at the beginning. But I don't. I feel like we know to the failure because we were very passionate about what we were doing and, and very driven and, and wanting it. So. Yeah. Yes, it was hard, but I, I don't think we would have failed.

No.

Yeah.

Yeah. I don't think we're anywhere near that.

Yeah.

So I guess backing up to that after Covid's finished now and all the rest of it. Was there ever a time since then that you thought about throwing in the towel just to go back to a stable paycheck, you know, like the accounting and stuff?

Yeah, yeah, yeah. No, definitely not again. I guess going back to the why, you know, we get to help so many people, you know, achieve their dream of owning their own business and getting that work, life balance and, and all of that positive stuff, even giving back. We were able to do that within our business. So no, I've never, never wanted to throw in the towel. We're just. Yeah. I think the passion and drive is there too much for us to do that. But. Yeah, so no. Yeah.

Okay. Okay. So fast forward to now. You handle the accounts for the business. So what do you think's the biggest financial blind spot that new franchise partners make when starting up their businesses?

Yeah, so I would say that your tax obligations are a big one. So, you know, you start your business and you're focused on your, obviously on your service that you're providing and getting the business right and all of that side of things. Then there's the side of obviously your finances, but the tax obligations, because you know you're going to have taxable income, so your tax return is. There's going to be a payable, you're going to have GST obligations. And not preparing for those or, you know, having an action plan for when those arise can really. Yeah. Be a big blunder for you. And I guess because those things come out of the blue. So. Yeah, so it's really important for people to be aware of that and to think about it. That's definitely one of the biggest things I would say.

And that's a big part of what you do in training, isn't it?

It is, yeah.

So you educate everyone around the different types of taxes and when they're payable and what people need to be aware of and setting aside money for, et cetera, et cetera.

And I guess the thing is, if you're not preparing for that, those amounts to come in the months you're spending money that is not actually yours. So not having an action plan for it can get you in a bit of trouble.

Because I think that's one of the biggest things with new franchise partners is in any business, really. But it might be the first time they've ever owned a business and they're so swamped with learning all of these new things, like, oh, I've got to learn how to be the technician and I've got to learn how to run this business. And then I find that the financial side of things is kind of the things that people probably don't understand the most. And then it can be especially taxes, as you say, and then if they're not preparing for taxes, then that can be one of the biggest things that bites them in the butt later. Because all of a sudden they get this big tax bill and they don't have any of the money, therefore.

That's right.

So how do we go about combating that for our franchise partners that join so that they don't get caught off guard in that side of things, do we?

Yeah, so we use the profit first. Method.

Okay, so what's profit first?

Yep. So the way I would explain profit first or the way I would think about it is if you think about your grandma and how she used to do her finances. So money would come in and she'd probably have three or four envelopes and she'd have a percentage, a certain amount that goes into each envelope, one for food, one for shopping, etc. Etc. So we, that's pretty much the basis that we're going off. So in terms of the tax, what I would recommend is every week, whatever money comes into your bank account from sales or from your services that you're providing, a percentage of that will go into a second bank account and you can call it tax account. What do we call our government money?

We know it's not our money.

Not ours.

Yeah.

So that will, every week they'll transfer, say 10 or 15% into that second bank account and that slowly that money's just accumulating. And then when those tax obligations come up and when your bas comes, which is your GST payments, the money's ready, it's there and you just pay it. You don't have to think about it. And that pressure's taken off and then you're not spending money that you don't realize is meant for the tax man.

Because it's actually like it's Parkinson's law where what's on your plate, you eat.

That's right.

The thing I always talk to new franchise partners about in training is I say I've got a Greek mother in law and she's a fantastic cook. And when she gives me a plate, the food's piled up to here. And then she stares at me and expects me to eat it all. And then all of a sudden I'm 45 kilos heavier like I was and something's not right. So now I make sure I've got a small plate and it's a small amount because if it's on the plate, you eat it. If it's in the bank account, you'll spend it.

Yeah, that's very good.

So, yeah, so really important to have those separate plates or separate bank accounts. And then, you know, this money is for spending. This money over here is for the tax man. This money over here might be for something else.

Yeah. And yeah, you can take this as, you know, as far as you want. Really, you can break it down because.

We'Ve got about five or six.

Yeah, yeah, yeah, yeah.

And it's, I think it's honestly been one of the most.

Oh It's a game changer.

Yeah, it's been a game changer. Take so much stress off of you. And I know in every franchise partner training, I'm always strongly recommending it to everyone because it's just been one of the best things possible for us.

Yeah, no, definitely.

So what's one piece of advice then that you'd give to someone who's in the very early stages of starting a business?

So I would probably say to not forget to focus on the financial side of things. Is it easy to forget and leave it by the wayside because you're. You're so caught up, obviously, in doing the main thing that your business is your service. And a bit further on from that is making sure that you're looking at the numbers. So doing monthly reviews.

Okay, so how does that look?

Yep. So basically what I would recommend is every month. So let's say, for example, January ends mid February, we would open up our profit and loss and look back at that and see how our business is.

Performing and what's a profit and loss?

So profit and loss is basically a report that will show you your sales that you've made for the month and then your expenses that have. You've incurred as well. And then the bottom line is your net profit or your net loss, whatever's left over.

So your report card for the business, basically how you've been tracking. And you can look at that on a monthly, you can look at it on quarterly, or you can look at it on an annual.

Yeah, okay. Yeah.

All right. So. So we look at that once a month. And. And what are we. And yeah, yeah.

What are we looking at? So the first thing we look at is our expenses. So we start by looking at each line item and where. What. Where we've expended our money and seeing if we're overspending in any areas and where we can sort of fix that if we need to. Yeah, and I always say it's good to look at it on a monthly basis because if we're leaving it, say, for example, six months go, and we go, okay, let's have a look at our profit and loss for the last six months. We've left too much time to be able to make changes where if we're looking at it on a monthly basis, we've got time to make changes and actually make a difference within our business because ultimately we want our franchise partners to get the most out of their business. So. Yeah, so looking at our expenditure and where we can sort of, if we need to cut or any changes. Yeah. And then the other side of it is looking at our income.

Yep.

And the way I like we talk about it in training is we say, okay, let's. Let's have a goal with our income.

So this is the forecasting side of things.

Yeah, right. Yeah, true. Yeah. This is the forecasting side of it. Yeah. So what's our goal? What do we want to make for. For the year?

Okay, so let's say franchise partner comes out and round numbers. They want to make $100,000 for the year or $120,000 for the year. Make it easy.

Yeah. So let's say $120,000 a year. So from there we would go, okay, there's 12 months in the year. Let's divide $120,000 by 12.

Okay, so we're at 10 grand.

And then from there we break it down further. So we go, okay, we need to make $10,000 a month.

Yep. That's our goal.

Yeah, that's our goal. So now what's our average transaction value? So the average amount you make for a job.

Yep. We break down that information for our franchise partners. So we've got all of that within their scorecards and stuff like that. So they should know roughly per division or whatever it is. This is what my ATV or average transaction value should be.

That's right. So they know that number. So they'll divide that number, your ATV average transaction value, into the $10,000.

Yep. So divide the $10,000 by the ATV and that gives them.

That will give you an amount of how many jobs you need to complete within that month to get to your goal of $10,000 per month. Okay, so then we go even further and we go, let's divide it by four. So on average, we need to complete X amount of jobs, let's say. Yeah, so let's say five jobs.

Yeah.

So when they're doing that, that. That monthly review, they can look back and you know, are we hitting that goal?

Yes.

Can we go bigger? Because we're getting there easily. Do we. You know, and if we're not getting there, what do we need to do to get there? Do we need to alter our marketing tactics? Like, do we need to. Yeah. Just alter things there. So. So it gives you the opportunity to make a change and. And ultimately get the most out of. Out of our businesses.

Okay. Yep. So then this is all the sort of stuff that you go through with new franchise partners when we're onboarding them.

Yeah. So. So in. In yet local, when I'm doing Training. Yeah, I'm basically educating them on the financial side. So going through bookkeeping, accounting, or we chat about taxes and our obligations within those taxes. And then as we just spoke about the forecasting and. Yeah. Financial planning side.

Okay. Yeah, beautiful. All right, so I guess going into that then. So you would take them through bookkeeping, you take them through accounting just on bookkeeping. What do you suggest they do? Because I know some people do their own bookkeeping, other people get their accountant to do the bookkeeping or they get a bookkeeper. What do you think the suggestion is in that area?

Yeah. So I would suggest or recommend that our franchise partners do their own bookkeeping. I think, I would say most of our franchise partners do do their own bookkeeping. And the reason I would suggest it is, well, first of all, it's pretty user friendly now because we've got bookkeeping software, so it makes it very user friendly. But also, if you're doing your own bookkeeping, you're seeing your numbers, you know, on a weekly basis, you know what's happening within your business, whereas if you have a bookkeeper doing it for you, you're not seeing it. You're just, you know, going along and you've got no idea unless you, you know. Yeah. You do your, your monthly reviews.

Yeah.

But doing the bookkeeping, really, you know, your, you're getting those intricacies and seeing everything that's happening on a daily basis. Really. Because you're having to categorize every single amount that's coming in and going out of your business. So it's really important.

And I think, you know, those monthly reviews, I don't know the data on it, but I dare say the people that actually do those are probably a lot more likely to people that do their own bookkeeping as well, because they're actively going into their accounting package and.

They'Re already in it.

They know, they're living and breathing.

Yeah. Where if you're, if you're not, it's, it's easy to forget.

Yeah. And it's easy just to say, oh, the accountant or the bookkeeper handles all of that. And I just go out and make the money.

Yeah. And you don't know what's coming. You don't know what's going out. It's, it's. You're not on top of it.

Yeah.

And it is easy to let it, let it go by the wayside.

So.

Yeah. If you're actively in it and having to, to do it, it's definitely. Yeah. More of a positive, I think.

Okay, cool. I think that gives a pretty good snapshot of the. Some of the stuff that you kind of go through during that training process.

Yep.

What's some of your favorite. What is your favorite aspect of training up new franchise partners?

Oh, I think my favorite aspect would probably have to be meeting everybody. Yeah. So coming in and. Yeah. Spending the day with them and just putting a face to the name. That's always nice. So then, you know, as I chat to them in the months to come, you know, I can, yeah, obviously have that. The face to name, as I said. And then just getting to come into the office is nice because I, you know, I'm usually at home when I'm working, so it's nice to come in and see everybody. But, yeah, definitely meeting everyone and just having that relationship with everyone. Yeah. In person is really nice.

We're a people business, aren't we? And I think it's cool to come here and do all the work stuff and all the rest of it, but ultimately it's just relationships.

Yeah, definitely.

All right, so, Mrs. Accountant, what's your favorite financial hack that everyone should know?

Okay, a financial hack. This might sound a bit boring, but I'd probably say having a budget, it's really, really important. Like, it's probably not. I don't think there'd be many people that are on a budget, but it's really, really important, a personal and a business budget. So, yeah, I'd probably say, yeah, having a budget, sticking to it is probably a good idea.

Yeah. It's not sexy or glamorous. And the thing that everyone loves. The B word. Everyone loves, but. But it works.

Yeah, it's no magic. Magic fix. But if you could get a budget and get it right, yeah, it could really help.

Yep. What excites you about the future of the local guys?

So it's been exciting to see where we've come, you know, this far in the last six years. It's been really nice to see us and where we've come to, you know, starting on the couch at home on our laptop, and then going into, you know, a small, really small office where there's a few of us squished in there to, you know, growing into. Into a nice, large office with our, you know, awesome staff, which is. Yeah, it's been really, really amazing to see. So, yeah, the future of the local guys. Yeah, I'm really excited for, I guess I'd say international. International expansion. We've obviously expanded to New Zealand now. We've got some amazing franchise partners there. So to see that Grow in New Zealand and then expand into other countries would be amazing. And then I think the other one would be seeing our. The local guys become a household name. So, you know, if someone wants to get their pest control done, they'll think of the local guys straight away. That. That would be really amazing and, yeah, really cool to see. Yep. Yeah.

Awesome.

Yeah.

All right, so finally, then, one more question for you. Where would you like to see the local guys go next? Have you got any crazy ideas for the business or anything like that?

Oh, there's a few divisions. I could do the local guys beauty. I don't know how you'd go at doing people's makeup.

Yeah, I don't think you want to be on the other end of that one.

Yeah. Oh, gosh. There's so many ideas you could come up with, but, yeah, no, I think I'm really, really, really proud of the local guys and all our franchise partners and our staff team, and to see where we've come. I'm really excited to see where we go.

Yeah. Awesome. All right, well, thank you for allowing me to twist your arm and get on the couch and talk to us today. I think that, you know, a lot of people would enjoy hearing your story and how we sort of got here, and I think it adds color to the story of the local guys, and I think it's really valuable. And I think there's some really good lessons in there as well from the financial side and the tax side. As we said, a lot of people don't ever think about that stuff, and sometimes until it's too late. So I think being on the front foot of it and understanding it, when you're in training or even people, things get out of this podcast and stuff like that, there's genuine value there. So thank you so much for coming on board. I really appreciate it.

No worries. Thank you.

You okay?