Q&A with 4-unit owner with stores in Maryland and Pennsylvania

When Dustin Myers started his first Batteries Plus Bulbs store at age 24, no customers walked through the front door at first — and he says this was the best thing that could have possibly happened.

While retail customers were slowly discovering his location, he devoted his energy to developing relationships with potential commercial clients. Even now, 15 years later and with four locations under his belt, commercial clients make up 55% of his revenue. The retail side of the business has grown substantially, but the relationships with commercial clients have powered his growth and success.

In this conversation, Dustin shares his perspective on the strengths of the business model and the support team. He also shares his growth strategy and what he thinks new franchisees need to do to replicate his success.

Let me ask you, because there aren’t a whole lot of 24-year-olds that are starting retail businesses. What was it that got you interested?

My parents were public school teachers who left that career path to start their own daycare. I was kind of groomed growing up to understand the challenges of running a small business, including the dedication and sense of urgency you need to have.

After college, I got a job as an operations manager for a company that manufactured decorative ribbon. I lived at home, and I just saved every penny that I had. Then I researched what I could afford, as far as franchises. I wanted a franchise because I was aware of how hard it is to start your own business from scratch. It’s worth the money to have the concept that has already been developed, and you just have to execute the strategy opens in new window.

How did you choose Batteries Plus Bulbs?

When I boiled it down, Batteries Plus Bulbs was a clear winner because it provided the most potential revenue at the lowest cost, while servicing customers with products that they can’t live without. Regardless of whether the economy is good or bad, you still need batteries for your car. You still need a battery for your watch. You still need a battery for your phone.

Some people might worry about the ramp-up time, but you cite ROI as a definite strength. What’s your perspective on time to break-even?

My perspective is, I did not worry about ramp-up time. That was irrelevant to me. All I wanted to do was give my best effort every day, and give every customer a little bit more in value than they paid in price. I thought if I did that, the return on investment would take care of itself. It did. Some people may say, “Well, that’s foolish. How do you know if you’re going to run out of money or not?” That’s a valid question. But first of all, when you open one of these stores, it can grow revenue in different ways. Some stores open and they go gangbusters with retail and they’re doing well right away. Some stores are better suited to grow their business accounts. In my market, I could only afford a C+ location, and people didn’t really know about us, and there was already some local competition that had been around way before us. So instead of focusing on the retail, I pursued business customers. With commercial, you can be proactive. With retail, you have to wait for somebody to walk in the door. But with commercial, you can make a phone call and say, “Hey, is there anything today that you need batteries for that you can’t get or I can help with?”

I became proficient at soliciting businesses for commercial opportunities, and that’s what I focused on.

That’s interesting. Low retail traffic would seem like a nightmare scenario, but you seem to have turned it into an advantage.

One of the experiences of growing up with parents who are small business owners is you learn to be mentally flexible. I didn’t get too set on how the revenue stream was going to come in, because I knew there were different ways it could happen. Commercial was my opportunity. My first store is in a very industrial area. There were many different large manufacturing and distribution businesses, and lots of opportunity. My competition, while they had been established for a long period of time with retail locations, they had never tapped into the commercial part of the business. I had virgin territory with commercial customers.

If I had been locked into a mindset of, “Hey, nobody’s walking through my doors. I’m not really doing well. I guess I’m just going to sit here and keep waiting,” I would have probably went out of business in the first year or two. Instead, I found my customers, and I was successful.

Walking me through the types of commercial customers that you found to be especially receptive?

Any business that uses many different types of batteries. For large businesses and organizations like schools, the conventional supply chain would be to buy your two-way radio batteries from your two-way radio supplier; your emergency light batteries from your emergency light supplier; and your generator batteries from your generator supplier. I would find a business that has battery needs in all these different areas, and can come to them and say, “Hey, I can consolidate all those vendors to just one, and then provide the service of free delivery, free recycling opens in new window, and having access to all the batteries at a competitive price.” It’s very attractive to just deal with one person for all the different needs.

System-wide, the revenue split for Batteries Plus Bulbs is about 30% commercial, 70% retail. What does it look like for you?

My first store is 70% commercial, 30% retail. Overall, with all four stores, it’s 55% commercial, 45% retail.

Do you talk to many Batteries Plus Bulbs franchisees who ask you, “Hey, man, how did you do that?”

Every day.

What do you tell them?

It was a blessing in disguise for me not having much retail business in the beginning, and having the ability to make calls. The thing about commercial battery customers is they tend not to have a lot of turnover, not a lot of churn, meaning I still have customers I’ve been servicing for 15 years. That’s not true of a lot of other industries, but once you get a good battery supplier, you stick with them, because batteries are usually running a critical component of a plant, factory, retirement community, school, whatever it is. Batteries are always running something critical. You want to have a good battery supplier so when you have a problem, you can get taken care of quick.

I have been able to establish commercial relationships and really build on them over the years, and then back fill them with retail as time went on and we became more well-known.

Walk me through a little bit of your process. How many hours are you spending making commercial calls in a given week? What does that look like?

Now, I’m not doing many. But early on, I was making about 50 cold calls a day, and constantly following up with those people, because no matter what business it is, they’re already buying batteries somewhere. All you have to do is wait for their supplier to make a mistake, or have a battery on back order that the customer needs today, or not have the newest or “latest and greatest” that their customer is looking for, or raise prices.

But you have to be persistent. You can’t just give up if there’s not an immediate opportunity. It takes time. I’d say it takes, on average, six months to a year for me to land a large commercial account.

What’s your advice for new franchisees who are trying to balance between a retail and commercial?

You have to have the discipline to make the commercial investment, because that’s the investment that will pay off long term. Retail trends can come and go, but commercial opportunities stay relatively steady. For instance, if something happens where consumer technology changes in an instant, all of a sudden our retail concept may have to adjust. But commercial customers have a lot invested in their current infrastructure. It would take 5, 10, 20 years for that to ever catch up on the commercial side because commercial product demand evolves very slowly.

I’m curious. What would you say are some of the more interesting evolutions you’ve seen over your 15 years as a Batteries Plus Bulbs owner?

That’s an easy one. Five years ago, I had six revenue streams for batteries alone: Laptop batteries, digital camera batteries, camcorder, cordless phone, PDAs and cell phones. Over a five-year period, those revenue streams all disappeared because you use your smartphone for all of those functions now. By the time your phone needs a battery, you’re trading it in to get a new phone. We needed to replace those revenue streams. That was pretty significant. We were selling many hundreds of units of all of those per month. We entered the device repair opens in new window game to replace that revenue. Now, not only has it replaced that revenue, but it’s gone above and beyond what we ever did in those other categories.

That was a very fast evolution, strictly driven by technology. Device repair went from 0% of our business to 30% of our retail business in a matter of two or three years, and it’s continuing to grow at a rapid pace.

What would you say about the support you receive from the corporate team?

The nature of the support has changed over the 15 years I’ve been here. When we just sold batteries, the products didn’t change as much. Now, we’re no longer just a battery franchise. We’re more on the borderline of being a technology franchise. Because technology changes so fast, our support team today devotes more time to keeping up with change, developing new processes, and figuring out the ins and outs of training so that everyone will be able to sell the new product or service. There’s less one-on-one personal support, and more of an emphasis on supporting franchisees by providing R&D and creating new opportunities.

What do you enjoy most about running the business?

I enjoy the selling aspect. If you’re a student of sales and you’re a real salesperson, it’s a great business to be in, because every day there’s a new opportunity or uncovered opportunity or something that you can go after and try and capitalize on. When I get up every morning, I’m looking for the next sale, the next customer, the next opportunity.

Also, the nice thing about the business is that you’re solving people’s problems. Nobody cares about batteries until they fail. When they fail, you’re the most important person on earth to them. They come in frustrated, and they leave happy. We like that we’re doing that.

Do you feel like you’re achieving what you set out to achieve when you started the business?

I have gone way above and beyond what I ever thought could be achieved. I was just hoping to run a profitable business, one location, just give it my best. I would have been happy with that. But it turned into so much more. I couldn’t have done it without the support of the franchise. So many people just said, “Hey. Why don’t you just open up your own store and do it yourself? You don’t have to pay the fees.” People don’t realize how much support the franchise gives, just from the branding and the sourcing of products and keeping up with all the new technology. There’s no way I could have done it by myself. You need the help and the resources that a franchise can provide. I’m very pleased with the outcome.

It’s just like anything else in life. You’re going to get out of it what you put into it. You work hard, and you make the right moves, you’re going to be able to have a decent income and a good return on your investment. If you think the business is just going to run itself, you’re going to find out otherwise.

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