Jim’s lessons

Amanda Gome’s interview of Jim’s Group founder Jim Penman is required reading for any entrepreneur, and not just those in the franchising sector.

Not only does Penman share some insights on how he’s prospered during the downturn, but also explains his strategies around leadership, branding, growth and franchising.

Here are five quick tips that I picked up from the interview:

• A strong brand is crucial. Penman’s strategy of whacking the “Jim’s” brand on everything from mowing to bookkeeping franchises seems a little strange at times, but Penman argues that image of consistency that it provides is crucial to his ability to attract customers and, equally important, franchisees. Amazingly, Penman spends just $3 million (about 1.5% of turnover) on advertising – his established brand recognition is so strong that he can keep his marketing costs low.
• The personal touch is critical. Penman says every franchisee has his personal contact details and he also advertises a guarantee that any dissatisfied customer can personally call him. He says he gets one call out of 100,000 jobs a week, but that’s hardly the point – Penman’s commitment gives customers (and franchisees) confidence and trust in the business.
• Systems underpin a successful business. The reason Penman can give his personal contract guarantee is because he is confident that he won’t get many calls. This is because he has carefully built robust systems within the business. He says his management team is made up of just 15 people; the real operational power lies with the master franchisee of each business segment. This allows Penman to concentrate on big picture matters, like developing new business areas and promoting the company.
• Figure out your priorities. While some recent franchise collapses have raised questions about the relationship between franchisees and franchisors, Penman leaves no room for argument – franchisees are his number one priority. Provide them with a high level of services and in turn they will be able to provide their clients with a high level of service – which, of course, flows back to Penman through franchise royalties. It’s a thought-provoking point of view – so many business owners say their customers are their number one priority, but Penman’s lesson suggests this might not always be the case.
• Keep growing. Jim’s Group has 25 separate divisions, but he’s always looking for the next profitable niche (check out the last page of the interview for his next ideas). The lesson is clear – entrepreneurs must continue to evolve if they want their business to last.