Why Are Successful Executives Buying Such Ordinary Businesses?

By Sean Goldsmith

Experienced executives are discovering that an ordinary service business can be a surprisingly serious investment.

Experienced professionals are putting years of corporate experience and their own capital into home services, cleaning, maintenance and other businesses that rarely make impressive dinner-party conversation. There are some very practical reasons why.

Spend 20 years building a corporate career and you become quite good at things most small businesses need. You learn how to manage people, read a budget, deal with difficult customers, hire employees, set targets and work out why last month's numbers were worse than expected. If you worked in marketing or sales, you should also know something about finding customers and persuading them to spend money.

Increasingly, some experienced professionals are taking those skills into businesses that look surprisingly ordinary. They are buying companies that fix houses, clean buildings, maintain gardens, remove rubbish or provide other services customers already understand.

There is nothing particularly glamorous about most of these businesses. For an experienced professional putting their own capital at risk, that can be part of the attraction.

Nobody Has to Explain Why the Customer Needs It

A new product can require years of marketing before enough customers understand why they need it. A home with damaged drywall does not have that problem, and neither does a blocked drain, dirty office, broken air conditioner or garden that needs maintaining.

The customer already understands the problem. The business has to win the work, price it correctly and deliver the service reliably. For somebody coming from a large company, that can be attractive because the commercial challenge is familiar. Instead of trying to invent demand, the owner concentrates on building an organisation capable of capturing demand that already exists.

Home services provide a good example. America's housing stock requires constant maintenance, while an ageing population creates additional demand for modifications that allow people to remain safely in their homes. The individual jobs may involve handrails, bathrooms, repairs and routine maintenance, but the business behind them requires technicians, scheduling, lead generation, pricing, customer service and repeat business.

Those are responsibilities that experienced managers can understand, even if they have never personally fitted a handrail or repaired a wall.

The Owner Doesn't Need to Hold the Hammer

People sometimes misunderstand what they are buying when they look at a service franchise. The owner of a handyman franchise does not necessarily buy the business because they want to become a handyman. The commercial opportunity is to build the company that employs the handyman.

That requires recruiting good technicians, keeping their schedules productive, generating enough work, controlling labour costs and making sure customers are happy enough to recommend the company. The same principle applies across many practical service franchises. The owner of a commercial cleaning business does not need to clean every office, just as a waste-services franchisee does not need to personally service every customer.

A successful operator builds the people and systems that deliver the work. Managing ten technicians in a local service company may look very different from managing a department inside a large corporation, but many of the underlying disciplines are familiar.

The Franchise Can Remove the First-Time Owner's Biggest Problem

Being good at business does not mean somebody knows how to start a particular type of business. A person who has spent 20 years in finance may understand cash flow extremely well while knowing little about running a restoration company. An experienced marketing executive may know how to acquire customers but have no idea which software a home-services company needs or how technicians should be scheduled.

A good franchise system can fill those gaps by combining the buyer's existing commercial skills with knowledge specific to the industry.

TruBlue Home Service Ally provides a useful example. One of its newer franchisees, Chris Czachor, spent more than two decades in corporate marketing before buying two territories in northern Chicagoland. His career included roles with James Hardie, AZEK, Oracle and Alteryx.

Czachor spent about two years considering different routes into ownership, including buying an existing company and starting independently. He ultimately chose franchising because he wanted structure and an operating playbook around his first business.

TruBlue provides an established service model, training and support around a business focused on home maintenance and helping older homeowners remain safely in their homes. An owner such as Czachor can bring marketing, management and commercial experience to the local operation while relying on the franchise system for knowledge specific to the business.

That division of responsibilities can be valuable when the franchisor provides a strong operating system and the franchisee brings the skills and discipline required to execute it.

Boring Can Be Quite Attractive When Your Money Is Involved

Franchise buyers can easily become distracted by businesses they personally find exciting. That is understandable when somebody is preparing to put a substantial amount of their savings into a company they may operate for many years.

Experienced investors tend to have more practical questions. They want to know how often customers need the service, how expensive the labour is, how much equipment is required and whether employees can deliver the work without the owner being present. Customer acquisition costs, repeat business, territory capacity and resilience during weaker economic conditions become more important than whether the concept sounds exciting.

Viewed that way, many ordinary businesses become considerably more interesting.

There can also be an advantage in entering a fragmented industry. Home maintenance, cleaning and many other local services are still supplied by thousands of independent businesses. A well-run franchise does not necessarily need to create a new market. It needs to win a larger share of demand that already exists.

For an experienced executive putting their own capital at risk for the first time, understandable demand can be more appealing than an exciting idea that still needs to prove customers want it.

The Franchise Still Has to Earn Its Fees

None of this means an experienced professional should automatically choose franchising. Someone with strong management skills and sufficient capital may be perfectly capable of buying an independent business, while others might prefer to start from scratch and avoid paying franchise royalties altogether.

That should make experienced executives demanding franchise buyers. The franchisor has to demonstrate what its system provides that the buyer could not reasonably build alone.

The answer might include customer acquisition, technology, purchasing, recruitment systems, operating procedures, territory design, national accounts or a brand that genuinely helps win work. The question becomes particularly important in simple service businesses because the underlying service may be relatively straightforward.

The strongest service franchises should welcome that scrutiny. A well-developed system can save a first-time owner years of mistakes, provide operating knowledge they would otherwise have to discover themselves and give them an established network of franchisees to learn from when problems arise.

For somebody accustomed to making commercial decisions inside a large company, that is a much stronger proposition than simply promising the chance to become their own boss.

Maybe the Ordinary Business Is the Ambitious Choice

Corporate success tends to come with visible markers such as salary, title and the size of the company employing you. An owner starts measuring progress differently, looking at customers, employees, cash flow, territories and what the company might eventually be worth.

That helps explain why an experienced executive can leave a recognisable international company and become genuinely interested in a business fixing bathrooms or cleaning offices. The service itself does not need to be impressive if the company they intend to build around it can become valuable.

Franchise brands operating in practical service categories have an opportunity if more experienced professionals start thinking this way. They can attract buyers who already understand management, budgets and customer acquisition while providing the industry knowledge and operating systems those buyers do not yet have.

TruBlue is a good example of how those two sides can fit together. Its services address understandable household needs, including helping older people remain safely in their homes, while the franchise structure gives owners a system around which they can recruit teams and develop a local business.

For an experienced professional looking for a first company to own, that can be considerably more compelling than chasing whichever franchise category happens to be fashionable. Some are discovering that an ordinary service business can be a very serious investment.

What We Can Learn From This

Experienced professionals considering franchising should start with the economics and operating demands of the business rather than how exciting the concept sounds. Practical service franchises can be particularly interesting when they combine understandable customer demand with the ability to build teams, add territories and reduce the owner's dependence on personally delivering the service. Buyers should still compare the franchise with acquiring an independent company or starting alone and establish exactly what the franchisor provides for its fees. For brands such as TruBlue, attracting commercially experienced owners could become an important advantage as demand for professionally managed home services continues to develop.

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