Michael Sipe, an investment banker, entrepreneur and business consultant, worked with FranNet consultants on small business development projects in California and the Pacific Northwest for 20 years. In July, he decided to become a FranNet consultant himself, purchasing the FranNet territory covering Idaho, central and eastern Oregon and eastern Washington state.
The 56-year-old Arizona native also is president and founder of CrossPointe Capital, a mergers, acquisitions and business development firm that helps owners of small and mid-sized businesses with business purchases, sales and transfers. Over his career, he’s worked in civil engineering, publishing, multimedia production, direct sales and other fields — ideal training for a small business consultant responsible for guiding the career paths of other professionals. He’s also active in church and civic organizations in Bend, Ore., where he’s lived for eight years after moving from the Silicon Valley in California.
What’s your professional background?
I’ve worked in civil engineering, publishing, computer simulation, multimedia production, direct sales, business consulting, training and education, manufacturing, retail, real estate – you name it. I’ve started several companies of my own, so entrepreneurship is familiar to me. In the process of buying and selling my own companies, I noticed a lack of a well-developed market for consulting services for small- and mid-sized companies to address ownership transfer issues, which can be very tricky and complex. I founded CrossPointe to help remedy that problem. Over the years, I’ve been involved in numerous professional associations for CEOs and business leaders.
How did you get into franchising? Why FranNet?
I began helping people buy, sell and start businesses around 1991, when I was living and working in the Silicon Valley, so naturally I found myself working a lot with Joan Young, who’s the FranNet consultant for the Bay Area. I always admired the work Joan and FranNet did to help people find new, fulfilling career paths through franchise business ownership and recently decided this was the right path for me at this time. What I see now in the demographics is a huge opportunity to serve baby boomers with franchises — to help middle-aged, high-quality executives who have either sold their businesses or left their corporate jobs involuntarily and have to figure out how to make a living at the standard they’re used to in an economy that’s radically changed. We can help them build some equity, get some cash flow and enable them to control their own financial futures. That’s why I think franchising is the perfect business for me to be in right now.
What are some of the best franchise opportunities in your territory?
One is senior care, of course, because many of these areas are popular for retirees. Also, fitness, wellness and health franchises are very strong in these markets. In general, the fitness quotient of people in these areas is very high. We’ve got a lot of athletes, and plenty of people move to these areas because they love sports. We have a gym franchise that is very strong in Bend, and a therapeutic spa business we represent will be fantastic in all these communities. Education franchises and businesses that relate to kids are very strong because people in these communities tend to be very pro-education.
Do people still have preconceptions about franchising? How do you educate them about the diversity?
They do, but I find that more and more people are realizing how much diversity there is in franchising. The first thing to do is to acknowledge is that people do think of restaurants when they think of franchising. Although they certainly are very viable businesses, for our primary candidates those franchises are too expensive. The challenge is to provide an affordable path to business ownership. Some of our lowest-dollar investments produce the highest return on investment. There are about 3,000 different kinds of franchises, from business services to personal services to pet services. Just about any kind of business people can make money at is franchised.
What advice would you give someone thinking about buying a franchise business?
Anyone who wants to get into business for themselves and starts by looking at a particular kind of business is making a mistake. Start by looking at yourself: What your skills are, what your interests are. That’s why FranNet’s personal profile and assessment tool is so helpful, to help clients figure out first of all whether they should go into business, then whether should they be in franchising, then what might give them the most personal satisfaction. When people are truly satisfied in what they’re doing, that optimizes the possibility of success. That’s the big distinction between a franchise salesperson and a franchise consultant.
What kind of person makes a successful franchisee?
Number one, you really need to have a strong desire to be in business for yourself. Number two — and this sounds contradictory, but it’s really not — it’s helpful if they like to work within a system, within the concept of a team. You’re running the business, but you’re not all alone. With a franchise, you get the safety and security and predictability of a system, but you get to be your own boss. So the wild-eyed entrepreneur who wants to be the next Steve Jobs is not a good match for franchising. You need to be disciplined and coachable and self-motivated, kind of like an athlete. The most successful athletes are self-motivated, but they work with a coach.
What are the benefits of franchise ownership?
I believe it’s the safest and most secure way to get into business and the quickest way to profitability. I’ve started businesses, bought them, sold them, and my experience is that the money you pay up front to the franchisor turns out to be absolutely worth it. You’ll have higher performance that more than offsets the franchise fee and initial expenses because the franchisor provides you with the blueprint for running the business and making it work. The last is the camaraderie you can have with your franchisor and fellow franchisees. It’s often said that entrepreneurship is a lonely path, but it doesn’t have to be that way. You can have great friends and a great team to play on in franchising.