The Top Reason People Don’t Start a Batteries Plus Bulbs (And Why Franchisees Say It’s a Mistake)
If you’re looking for a get-rich-quick scheme, this isn’t it. But if you’re looking for a long-term wealth-building investment, read on.
Batteries Plus Bulbs has 30 years of store and sales growth, but when Batteries Plus owners first open, they’ll need to build a following before they hit break-even. That’s true of any business, but it’s particularly true for specialty retailers and businesses with large B2B sales components. Customers need time to find you, and you need time to find your customers.
Once your store is cash flow-positive, the next milestone is paying back the original investment so you can begin to enjoy ROI. From there, the benefits of the business model generally compound.
But we’re not going to sugarcoat it: New franchisees need to be patient. Our business model isn’t designed to generate instant returns. We’re a long-term play for people who are thinking about the life they want to build in 5-10 years. Delayed gratification is the biggest reason candidates decide not to move forward with a Batteries Plus Bulbs franchise. But if you have the patience, the rewards can be outstanding.
Batteries Plus Bulbs businesses have minimal staffing needs, so as revenue grows your costs of doing business remain relatively flat. That’s one reason Batteries Plus owners are happy. Once the business has ramped up and hit break-even, additional revenue has an outsized impact on the bottom line.
‘The kind of business that has a lot of staying power’
David Harshfield, who owns two Batteries Plus Bulbs locations in California, opened his first location in May 2015. The former salesman for tech and IT companies was looking for a stable, always-in-demand business model when he discovered Batteries Plus. After a career spent chasing quarterly results, Harshfield was attracted to the the leadership team’s longevity and focus on building long-term results.
“You weren’t talking to a room full of newly minted MBAs that thought they knew everything,” he says. “These were people that had been there for 20 years and knew how things worked. … They had a vision of, ‘Let’s get this done. Let’s have long-term viability.’ “
His first location ramped up very quickly thanks to strong retail sales. His second location ramped up even faster, but sales tapered off due to seasonal traffic patterns at the location. To build long-term revenue, he has focused on winning commercial clients. Commercial clients not only purchase more, they tend to have ongoing needs and value reliable partnerships. Those factors translate into recurring revenue streams for Batteries Plus owners.
“I’m real happy. The one store’s doing exceptionally well,” he says. “Getting cash-flow positive does require patience, but it’s the kind of business that has a lot of staying power.”
Commercial accounts can move the growth curve
Dustin Myers has been a Batteries Plus owner for 15 years, and has far exceeded his initial goals. When he started his first location at age 24, he imagined himself owning a single location. Now he owns four.
Keys to his success were patience and following game plans for winning commercial business. His first store was, he admits, in a C-grade location. But, at the time, that’s what he could afford.
When he first opened his doors, retail traffic was light, so he set out to win over the local business community.
“With retail, you have to wait for somebody to walk in the door,” Myers notes. “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?’ “
Even today, 15 years later, his first store gets about 70% of its revenue from commercial clients. Between all four stores, commercial accounts make up about 55% of revenue.
“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,” says Myers, who has had several commercial accounts for more than a decade. “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.”
17-year veteran shares the mistake that can slow growth
Bates Kennedy, owns 12 locations in South Carolina and Georgia and is eying expansion opportunities, echoes the value of commercial accounts. He says ramp-up time is driven significantly by mindset. Commercial accounts are key.
“You have to be willing to get out of your store,” he advises. “Some people come from corporate life and open their store and just expect people to walk in. The retail usually comes in slowly at first, because it’s an ‘as needed’ purchase. It’s not a ‘let’s go browse the aisles’ type of store, so you’re waiting to build traffic through advertising, word-of-mouth and repeat business. The retail traffic grows year-after-year, but it takes time.
“With commercial, you go out and knock on doors or make phone calls to grow. We’re able to sell to security companies, hospitals, schools, hotels, motels… There are just an unbelievable number of potential customers out there.”
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