Business Opportunities Journal Feb-09

Business Opportunities Journal®

SINCE 1969 | CELEBRATING OUR 40th YEAR

FEBRUARY 2009 I ISSUE 479

Specializing in Business Opportunities, Franchising and Real Estate Investments

www.boj.com

Bark Busters - Speaking Dog . . . .Pet Butler - Scooping the Poop. . . .Central Bark Doggy Day Care . . . .Matthews Cremation. . . . Directory of Pet Opportunities

plus+Willmar Pizza Family Expands

. . . .

Martinizing Turns 60 . . . .

Forest Beetle Blues - Or Opp?. . . .

Scaled Down Phoenix Homes. . . .

Foreclosure Rates up 81%

Online Edition Turning Homeowners into Landlords

Pet RelatedOpportunitiesSpecial Report Section

Business Opportunities Journal®SINCE 1969 | CELEBRATING OUR 40th YEAR

2

PUBLISHERMUIR CAPITAL, INC.

EDITORMARK ADKINS

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ADVERTISING(800) 854-6570 X108HOW TO REACH US2185 Faraday AvenueSte. 110Carlsbad, CA 92008Phone 800-854-6570http://[email protected]

Magazine is published monthly.

Note: Business Opportunities Journal does not know-ingly accept fraudulent, erroneous or misleading ad-vertising or other content. The appearance of business, franchise, real estate or investment opportunities in this publication does not constitute an endorsement on the part of Business Opportunities Journal and/or its pub-lisher and/or its employees. Readers are solely respon-sible for thoroughly investigating each opportunity prior to making an investment decision. To help make an in-formed decision, consult an attorney and contact your state Attorney General or the Federal Trade Commission at (877)-FTC-HELP or visit www.ftc.gov/bizop. Business Opportunities Journal, its publisher and its employees expressly disclaim any and all liability in connection with any content or statement made in this publication.

Business Opportunities Journal and Franchise Opportu-nities Journal are registered trademarks of Muir Capital, Inc. Entire contents © 2008 by Business Opportunities Journal, unless otherwise noted on specific articles. All rights reserved. No part of this publication may be repro-duced or transmitted in any form or by any means, elec-tronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission. Proud to specialize in Business Op-portunities, Franchise Opportunities, commercial Real Estate, and Businesses for Sale, since 1969. (ISSN 0193-3221)

Business Opportunities Journal

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special report: pet related opportunitiesIntroduction to Pet Opportunities P.4

Interview with Bark Busters CEO P.8

Pet Butler CEO, Matt Boswell P.13

Central Bark Cofounder, Jackie Jordan P.16

Matthews Cremation P.20

Expert View: Economic Outlook P.24

AKC Economic Survey P.26

Directory of Pet Opportunities P.28

How to Pick a Dog Collar P.30

Seattle Man challenges poop law P.30

franchisesLicensing Key for Einstein Growth P.31

Willmar Family’s Pizza Expands P.32

Martinizing Turns 60 P.34

Fast Food Outsourcing in Charlotte P.35

Tulsa Man to Expand Dippin’ Dots P.36

NV Ranks 2nd for Business Climate P.39

Don Callender dies at 81 P.39

business opportunities Forest Beetles Turned into a Profit P.40

Small Business Woes Have Big Impact P.41

Pasta Makers’ Business Cooking P.42

real estate investingUS Foreclosure Filings up 81% in 2008 P.45

Real Estate Pioneer T. Crow Dies at 94 P.46

Scaled-down Phoenix Houses P.48

Oahu Office Vacancy Rates to Climb P.49

Times Turn Homeowners to Landlords P.50

Spec

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The Time is Right for Pet Related Opportunities

We love our pets!

And why not? They’re not just loyal compan-ions – they’re a part of our families.


The Time is Right for Pet Related Opportunities


They are such a part of American life that one might not realize that they translate into big, big business. In fact, total U.S. pet industry expenditures for 2008 are estimated to be $43.4 billion, as gathered by the American Pet Products Association (APPA) from vari-ous market research sources.


Already Big, But GrowingStrong

That’s up from an estimated $17 bil-lion in total pet industry expendi-tures in 1994. Some put the figure for 2008 even higher.

What is behind this industry growth and size? In part, it is as simple as con-sumers’ deep-seat-ed love of their pets. But also, pet owner-ship is growing. Ac-cording to the Amer-ican Pet Products Association, 63% of U.S. households own a pet, which equates to 71.1 mil-lions homes. That’s up from 56% of U.S. households in 1988, the first year the sur-vey was conducted.

OpportunitiesPet Related

Plus, there are more and more products available for pets. Not only has there been a proliferation of pet products, but also there has been an increase in professional services available. From pet waste removal, innovative pet (and owner!) training, doggy day care, kenneling and grooming, to complete funeral services and related memorialization services to address the grief of losing a pet, today’s pet lover has it all.

With many of these services available as franchised business models, and with many of these services being relatively new in comparison with other franchise categories, entrepreneurs inter-ested in franchising should take a good look at the pet related opportunities currently available. Many excellent territories still exist.

As readers will see, a big caveat for many of the opportunities is that entrepreneurs must first ask themselves, “do I love pets?” If the answer is “yes,” then the time might be right for a good look at pet related opportunities. In the pages that follow, Business Opportunities Journal interviews executives from across the pet related opportunities spectrum, including pet training (p. 8), waste removal (p. 13), day care (p. 16), and pet memorialization (p. 20). In addition, we have selected fifteen opportunities for in-clusion in a directory of pet related opportunities (p. 28).

But what about the outlook given the current economic con-ditions? Many (including us, see our January ‘09 edition), have predicted that pet related businesses may be more recession re-sistant than other industries. But what do the experts think? We asked Pet Care Services Association CEO, Joseph Lyman, to com-ment on the current economic outlook (p. 24). In addition, take a look at the American Kennel Association’s recent member poll (p. 26), which has some good news for the industry despite the harsh economic times. --Mark Adkins


Already Big, But GrowingStrong

pet t

rain

ing

Bark Busters has grown rapidly, garnering many industry awards along the way for its innova-

tive training techniques. Recently, I met with Bark Busters CEO, Liam Crowe and Director of Franchise Development, Joan Trinka, to discuss the growth of the business, why entrepreneurs are acquiring Bark Busters franchises, and goals and objectives for the future. --Mark Adkins

BOJ: How did Bark Busters get started?

Liam: Bark Busters started in Australia. The com-pany was formed in 1989 by Sylvia and Danny Wilson and at the time, Sylvia was running an RSPA shelter similar to the ASPCA or the SPCA here. She was saddened by the number of dogs that were euthanized due to behavioral issues that she knew she could fix in minutes. I don’t know if you’ve ever been into a shelter where there are dogs barking. It is earsplitting, deafening. She could train these dogs literally in minutes to be calm. That’s how Bark Busters started. She was just sick and tired of seeing dogs euthanized when she knew she could help them.

BOJ: When you say “train them,” do you mean that they had a behavioral change that lasted minutes or that actually lasted forever?

Liam: They literally have a behavioral change. To give you some background on the philosophy of the company, it’s really to teach owners to speak dog. It’s communicating to dogs in such a way that they understand that there is leadership around them -- where they don’t have to fret or worry or be anxious. We see this time and time again when we go to clients’ homes. After we’ve explained the philosophy of the system, within minutes the clients can communicate with their dog. This might be a dog that has been doing something for the last five or ten years, like bark-ing when people arrived at the door or jumping on visitors or showing signs of separation anxiety or fear aggression, and in a matter of minutes, you can calm that dog down. You’re communicating in a way that the dog understands. You walk into

the person’s house and the dog says “Ah, finally someone’s here that I can understand!”

BOJ: Does this work for every dog? Or, are there some dogs for which it doesn’t work?

Liam: Really, it’s that there are some owners that don’t get it. No one can guarantee a result. What we guarantee is the support for the lifetime of the dog. If you say to me that my dog has bitten 15 people I can’t guarantee that it won’t ever bite another person, but I can guarantee that I’ll sup-port you for the lifetime of a dog.

Joan: We are ranked to the best of the best in pet service training by the International SPCA. That’s the international form of the Humane Society. And they don’t give that out easily, so they recognized how able we are to turn a dog around.

BOJ: You mentioned that people do not have to have experience in this line of work to become successful as franchisees. But is this something you can teach anyone to do?

Liam: My wife and I were clients of Bark Busters. I am the typical dog owner in so much as I grew up with dogs and had dogs all of our lives and thought we knew what we were doing as far as training them. But then we got Buddy, who is still with us to this day mind you. He is an Australian cattle dog/border collie mix. He is about 16 1/2

Teaching People to “Speak Dog” -

with an Aussie touch.

Business Opportunities Journal 8

Bark Busters: A Lot More to Say than G’Day

(Above) Bark Buster trainer Connie Archer & client in Houston, TX.


A conversation with Liam Crowe, CEO of Bark Busters, and Joan Trinka, Director of Franchise Development.

now. Well we got Buddy and we tried every-thing else that we had tried with previous dogs and it just wasn’t working. We were at our wits end. We tried various trainers. Then one day we spoke to our veterinarian. Ironically, to this day, about 40% of the work we receive or inqui-ries that we receive come from recommendations from the vet. So he said “Call Bark Busters.” So we called them. We were just absolutely blown away by how quickly and effectively we were able to train our dog Buddy. That was it. We said we want to do this for a living. So, with little or no dog training background, we were trained by Danny and Sylvia, the founders, and here we are today. We’ve been doing this since 1995.

It’s not necessarily someone who’s got a dog training back-ground that’s going to be suc-cessful. What we have found is successful franchisees know how to build relationships. They are looking at this as a business as opposed to a hobby.

BOJ: I know the business model is one that the franchise owner can conduct from his or her own home and that the services can be provided at their clients’ homes. I also know that the primary revenue model is to provide training. Is this a model that works in all regions of the country or is it better suited for some areas?

Joan: It is an urban-suburban type model because it really is about working with dogs and people where they overlap. That’s where dogs’ behavior matters. We assess the territory’s statistics before we look at selling any marketplace. It really needs to fit the dynamics of our model as far as household counts, targeted dog counts (a number that we have refined), and vet clinics, which are important for marketing.

BOJ: Are there good areas still available?

Liam: Oh yes. For example, markets like Oklahoma City, Kansas City and others are still open.

BOJ: Do successful franchisees need to have good networking skills to bring in business?

Liam: We do have quite a rigorous selection schedule for potential franchise owners. This includes doing a profile on them to

make sure that they have people skills and that they are business-minded. Obviously, liking dogs is important, too.

We have a four week training course. We split it up with two weeks done remotely at the beginning and end of the course, and two weeks of intensive hands-on dog training in Denver.

The beauty of this business is that you could be standing in a mixer or a Chamber of Commerce networking function--I’ve done this myself--and stand there just with your Bark Busters shirt. People will be drawn to you because they love talking about their dogs. This is not a hard push or a hard sell. We market to vet clinics to help them with their clients that are frustrated with their dogs. Anyone from any walk of life that

has an animal or a dog just loves talking about them. It’s really just opening up that dialogue.

We definitely train them with the skills that they need to network and phone abilities to close sales with prospective clients. It’s beautiful from both ends because if you’re

a dog owner yourself, and 99.9% of our franchise owners are, you love talking about dogs, and so do your clients.

Over and above all, we have a professional marketing team and a PR and communica-tions firm that we use that generates a lot of press for us. Last year alone we got 700 unique stories in the country.

Joan: We actually have a trainer who’s go-ing to be on Martha Stewart’s TV program tomorrow!

BOJ: How are you so good at teaching people to speak dog?

Liam: We have a saying that we train people the “Aussie way.” People the world over know that Australians have an affinity for animals. You see this on the shows, particularly our long-lost friend the Crocodile Hunter.

(Below) Bark Buster trainer George Kleva from New Jersey.


SPECIAL REPORT | PET RELATED OPPORTUNITIES

as well. Also, dog walking services, pet sit-ting services, and poop scooping services. The amount of money that is created by the pet industry is just phenomenal. We want to be able to tap into that to be able to en-hance our existing franchise owners’ ability to earn as a professional services provider.

BOJ: What are typical backgrounds your franchisees have?

Liam: We’ve got people from all different walks of life. We’ve got scientists, police officers, teachers, former business owners,

all sorts of people. The fact that they can be their own boss with the flex-

ibility of the lifestyle in terms of hours is a huge attraction to people.

Joan: There are three types I see frequently who are much more satisfied with Bark Bust-ers than in previous

careers. First, management professionals from corpo-

rate America. T h e y g e t

rid of the headaches

a s s o c i a t e d w i t h m a n -aging many

employees and they now have the ability to run everything themselves. With Bark Busters, they are building equity in themselves and can’t be downsized as in corporate America. They have the ability to multiplex themselves and be responsible just to themselves. The second type are technology people (as long as they have people skills). They get to go out and troubleshoot. Then they see the results in a couple of hours. It’s not like a project they work on in the tech industry where they worked on something and two years later 20 different people change something and it doesn’t work. Military people are a third group of people in fran-chising that have been really successful. In part because they really get the pack order thing. [Laughter]. They have an innate abil-ity for leadership.

BOJ: What kind of advertising and mar-keting support do you provide for local franchisees?

Liam: We are constantly tweaking that to try to get the best advertising or mar-keting that we can get for our franchise owners. We have PR campaigns as well as advertise nationally . On yellowpages.com, for example, if you were to do a search for “dog training” or “pet training” in any city, Bark Busters would come up number one on every single city page. That drives a lot of business to franchise owners. Also, we have a big presence on the web in terms of organic searches and pay-per-click. One of the things that we try to give our franchises is the opportunity to reach out to the local media or the local community with the message that, for example, “it’s national bite prevention week,” or it’s “child safety week,” etc. We put all those things out there for our franchise owners and they in turn try to engage the local community. We even prepare presentations that they can make to the local community

Joan: We have a series of ongoing mar-keting promotion programs for franchise owners. Plus, they are all networked to-gether. So, any idea that they’ve tried locally spreads through the franchise network.

We have everything available for a com-plete campaign. There’s a campaign on the “Naughtiest dog contest” that the local Bark Buster can use with a local television station. They pick a dog, complete the train-ing, and then come back with a trained dog on camera to promote their local business.

BOJ: In is there an ongoing royalty?

Liam: It is broken into two components. You pay a royalty of eight percent to the home office based on gross revenue. There is also a two percent national marketing fund which supports the marketing we’ve discussed.

Joan: Our business is about building a profession of being a dog behavioral therapist. Franchisees pay royalties based on when they earn the money. So they have freedom. If they’re off on vacation or something, there’s nothing to pay. Many other models have minimum payment requirements--we don’t.

BOJ: How much has Bark Busters grown in the United States?

Liam: Well when we first arrived here, we thought, “We better train dogs here and make sure that they speak the same lan-

There are other qualities that distinguish us from our peers. For one thing, we come to the client’s home. This is really important because for a lot of people this is where the dynamic of the family is obvious. This is also where a lot of the issues are occur-ring. So, we train in the comfort of the client’s home. We are able to get results very quickly and very effectively as a result.

More importantly, we offer clients’ a lifetime guarantee which is transferable across the world. Bark Busters as a company has about 400 offices across the world. We’ve trained about 500,000 dogs collectively. So, if you were to move from, say, Denver to Phoe-nix, and there’s an office there, they will honor that guarantee free of charge. That is absolutely unique in the dog world to have something as powerful as this lifetime guarantee.

In the first visit, we’re there for about 2 to 3 hours and we get results for the peo-ple. Sure, we follow up with as many follow-up visits as we need, but the fact that we can get there and show them how to communicate in such a quick and effective way so that the dog gets it and they get it and then they’ve got the insurance policy, as I liken it to, where they can call us and we’ll come back and do follow-up work.

BOJ: What other revenue streams exist for franchisees?

Liam: We are finding ways to allow franchi-sees to make passive residual income. For example, a client that you have may make purchases of various supplies from our website and then these are shipped directly to the client. The franchise owner doesn’t even have to touch the products but still gets a percentage of the sale. That includes anyone in their territory even if they’re not an existing client.

We want to develop additional revenue streams for our franchisees. If you’re talking about recession resistant items, everyone has to feed their dogs, so we’re getting to the point where we’re delivering dog food

(Above) Liam Crowe & friends.



guage here as they do in Australia.” Sure enough, they did. It took us 2 years to sell 10 franchises. From there, once word got out that “yes, you can make a living out of it, and yes, it’s fun,” it really spread like wildfire. We are at around 255 franchise locations now. In the last five years we have had explosive growth.

BOJ: Have you had growth in same-store sales as well?

Liam: Absolutely. People in the United States are absolutely “gaga” about their dog. When we got here, the pet industry was about a $20 billion industry. This year it’s about a $52 billion industry. Next year, they’re talking $55 billion. People have a love affair with their dogs. And they will spend an inordinate amount of money on their dogs. Dogs are part of their family.

BOJ: Would you characterize the industry as recession resistant?

Particularly in the current climate people become a little bit insular. The family unit is particularly important. We find that people might not be going out and spending as much money on going out to dinner, but the fact is they want their dog to be happy. It’s almost a priceless commodity that we provide because imagine if we come to their home and within 2 to 3 hours get rid of all that stress that’s been brought on by the communication not being clear between dog and owner. They will pay whatever they need just for that harmony. They love to see their dog happy because it’s unconditional love for their dog.

BOJ: What is behind the growth that you have had in the last few years?

Liam: We’re only on this earth once and I think it’s important that we do what we enjoy in life. We get paid to do what we enjoy, and it’s really hard to beat that. I think in years gone by people didn’t realize that there’s such a demand for professional dog training services. Once that door has been opened, it has really opened the floodgates for people who want to give back to their communities and get paid for it.

Joan: We’ve also seen a lot of candidates come out and become Bark Busters be-cause they’ve had their dog trained by a Bark Buster. After having the lessons they were so blown away by it they just wanted to join. Ours is really a pack mentality and the pack continues to grow. So a lot of our

growth is based on someone opening a territory area and the results of their work gaining more and more momentum for the business as far as selling more franchises.

BOJ: When you brought the franchise to the United States, did you think there would be this enormous growth?

Liam: Yes. I can say that now, can’t I? [Laugh-ter] We always knew it was going to grow because we could just see the trends. It had already started in Australia and New Zealand. Then we thought “My gosh, we’ve got to get to the United States.” The love af-fair that you guys have here with your pets is just so dominant. There’s so much room for growth. It really excites us.

If you look at the trends where people are spending their money today, people are spending more on the pet industry than on the music industry, going to the movies and video games combined. In addition, more and more people are getting more and more pets and the industry is just go-

ing to keep on growing.

BOJ: What are your objectives and goals for Bark Busters going forward?

Liam: We want to continue riding this wave of helping people learn to communicate with their dogs. In addition, we want to make sure that our growth is sustainable. We want to support our existing franchise owners. We put systems and staff in place so that we can support those franchises. We want them to be successful. It’s important to have growth but it’s just as important if not more important to have sustainability in the model. That’s one thing we’re really focusing on for ‘09.

Joan: The proof of that has been demon-strated by the awards we have received. Franchise Business Review has always ranked us in the top 50 franchises in terms of franchise owners’ satisfaction. Same with other third-party surveying that look at the franchisees of the company. This has been a key to our growth. | BOJ

Greg Kleva, dog behavioral therapist and master trainer with Bark Busters, the world’s largest home dog training company, will host ‘A Dog’s Life’ on Martha Stewart Living Radio – Sirius Channel 112. Greg will help owners understand their dogs thinking, reduce problem behaviors and improve their relationship. Many people go through their lives tolerating their dog's bad behavior and never getting to the point where they have the emotional bond that we know can exist. 'A Dog's Life' will provide information to help people understand the principles of dog behavior and training, so their dogs can become the perfect, loving companion they dreamed of having.

Bark Busters, the world’s largest dog training company (325+ locations worldwide), has trained more than 350,000 dogs of every breed and age, using its dog-friendly, natural methods. As a world leader in natural home dog training, Bark Busters and its global network of dog behavioral therapists are championing responsible dog ownership to enhance enjoyment of our canine friends and reduce the possibility of abuse and euthanasia of companion dogs. For details, call 877-500-BARK (2275) or visit www.barkbusters.com.

New Dog Behavior and Training Show Thursdays at 8pm Eastern, 5pm Pacific

‘A Dog’s Life’

hosted by Greg Kleva Bark Busters Dog Behavioral Therapist & Master Trainer

Don’t Miss it – every Thursday at 8pm Eastern, 5pm Pacific – on Sirius, Channel 112

(Below) Ad for Bark Busters Training Show.


Pet Butler serves busy people, cleaning up after their beloved pets. Serving

residential, as well as commercial clients, Pet Butler is rapidly becoming a household name synonymous with pet waste removal. I recently interviewed “Chief Excrement Officer,” Matt “Red” Boswell, to discuss the history of the business, the model, and his franchising philosophy. -- Mark Adkins

BOJ: How did Pet Butler start?

Matt: I had started Pet Butler in 1998 and in about 5 years built it up to two-thirds million gross billable dollars in the Dal-las area. I realized I hadn’t even scratched the surface of potential. So I looked at the various options for expansion, whether it be franchising, licensing, or expand-ing corporately. I realized that, without a doubt, franchising was the way I wanted to go. It’s not that it’s a more profitable way to grow my business, but rather it’s a way I could help other people achieve their dreams. Just from a life fulfillment perspective - I find real fulfillment in help-ing other people achieve their dreams. It’s my passion.

BOJ: So tell me how you got started in

1998? Not everyone dreams of going into the pet poop scooping business – you didn’t always plan to be Chief Excrement Officer, did you?

Matt: It was not something in a million years I would have imagined myself doing. I heard about the concept and thought it was a ridiculous idea. But when I was challenged by some friends to stop and look at it from a business standpoint and take the pride, my personal pride, out of the equation, it just seemed like the most ingenious concept. Our society is busier than ever, pet ownership is at an all time high, yards are smaller than ever, the en-vironmental aspects of pet waste is more known than ever, the negative aspects if you will, and the home services industry is exploding. Then you have the secure cash flow of the opportunity, meaning it’s not a one time service but rather a secure ongoing subscription service that never ends. That just really attracts me – the security of the cash flow. As I started running the numbers I realized that if you could provide good quality service at an affordable price, the sky’s the limit on the amount of money you could make. The

Pet ButlerPet Waste Removal A Recurring Revenue Model

margins were incredible as well – I mean the profit margins. I realized once you got to a certain volume the profit margin was incredible.

BOJ: What was your background before doing this?

Matt: I had a degree in marketing and just loved the psychology of marketing. I had been in a number of sales jobs and I had started about a dozen businesses, many of them the cool, impressive, sexy if you will, internet type businesses from the late ‘90s. I got caught up in that as many entrepreneurs did, but fell flat on my face time and time again, and each time learned from it and got up and did better.

With this business, the first two years I really still thought I was going to be an internet millionaire. This was just a fun thing on the side that I could say I did. But as those internet businesses failed, and failed, and failed, and Pet Butler over here on the side just kept trucking along – low overhead, low maintenance, high profit margins, suddenly I kind of got, you know, the proverbial “whack in the head.” A light bulb went off and I said “why do I keep chasing this internet dream when I’ve got this thriving business over on the side that I can’t kill if I wanted to!” That’s when I spent really about three years growing it and building it up to over $600,000. I worked for over two years studying, learn-ing, realizing the franchising opportunity. Testing our model, I had two people on both coasts testing our systems and so then in the last quarter of ‘05 we began offering the franchising opportunity.

BOJ: And from 2005 to present, you have successfully grown the business as a fran-chise concept?

Matt: It’s grown significantly faster than expected. It’s been a real blessing. I knew the opportunity, I knew what we had our hands on, but I didn’t know if I could communicate that clearly so that they really understand the opportunity like I did. And it’s been a blessing that they have. Also, I have been very pleased with the caliber of individual that has come on board with us. You never know what kind of folks you will attract when you have an odd, ground floor opportunity like this,

Matt “Red” Boswell, Pet Butler CEO.



and so the biggest blessing we’ve had is the people that have come on board, the true business professionals that under-stand and see the vision of where we can be.

BOJ: You say on the website that you ser-vice 1600 towns nationwide, how many franchise locations are there?

Matt: In less than three years, we have launched 132 franchises, in 27 states.

BOJ: Is that something that is a curve, is it continuing to pick up steam?

Matt: You know it has been very con-sistent, from almost day one it has been very consistent. We launched about four a month, three or four a month, for 30 plus months, then the economy hasn’t really significantly hurt us from an end-user, client standpoint. What did have a huge impact on our franchise numbers was that banks stopped lending. So the bank’s lending has had a negative impact on people being able to buy a franchise just because the two most popular ways they were getting funding was through their home equity loans and through retirement, leveraging their retirement

accounts. Both of those have you know been very negatively impacted. But from the franchises standpoint, the business has continued to grow regardless of what the media says on the economy, we con-tinue to have customers.

BOJ: I have been hearing a lot of talk that the pet related services are somewhat re-cession resistant. Do you feel that that’s true?

Matt: Well we continue to see increasing store sales and we continue to see in-creases despite what the media may say. We’re not so much a pet service as we are a home service that is related to pets so you’re referring to the pet industry con-tinuing to be unaffected by negatives in the economy while a lot of home services are negatively impacted so why we’re not so negatively impacted is because our number one demographic, above and beyond everything else that influences people to hire a Pet Butler is the word, one simple word, “busy.” People are busier than ever and when the economy gets bad, they get even busier than ever be-cause many times they will have to go get a second job or the spouse will have to go

get a job, and so the busier the people get, the better it affects our service.

BOJ: What exactly is the service? And is it profitable?

Matt: People are just fascinated and it’s kind of the only-in-America idea of “Wow, anything’s possible.” The service is very simple. We don’t incorporate any crazy technology to scoop the poop. We don’t look like a big Ghost Buster pop-ping out of a van or something with all of this equipment. The service itself is very simple. We simply take away the worst hassle of pet ownership, which is clean-ing up the disgusting stuff in your yard. Every 70 plus million dogs out there in the United States, every one of them goes to the rest room every day, often times three and four times a day and no one in the country, that 100 million own-ers, or whatever the number is now, none of them like cleaning up after it, so it goes back to the age old adage, “find a need and meet it,” something no one likes to do and do it, and do a lot of it for a reason-able fee. We’ve incorporated very high tech business management software that we’ve built proprietary from scratch over half a million dollars invested in this software that helps the franchises man-age and route. We actually sign up every customer, they call us directly through a national call center 1-800-PET-BUTLER and we put them on the correct route, on the correct day, and the correct techni-cian route with the correct order the cor-rect franchise and it builds up for them and tracks every service, times every ser-vice, so it just does an infinite amount of things for the franchisee.

People are so busy, we see less than five percent of our clients. It’s very rare that someone sees us, maybe two yards a day that we actually see an individual. It’s subscription. Less than two percent of our business is a one time spring clean-up. Very subscription focused. In fact, 25 percent of our business is twice a week. You get somebody paying you – I don’t care how much it is – twice a week for-ever, that’s a lot of money.

I recently sold the business here in Dallas-Fort Worth for $1.2 million. It does well over a million dollars a year. And what


are the costs? He has employees, and he has 6 Pet Butler technicians in the field. Let’s say he does $1.2 million, which is probably close to accurate, divided by 6 technicians actually doing the work, that is $200,000 per year each technician brings in for him. Well, you can be certain they don’t make $200,000. Most of my technicians actually do have a college de-gree so they’re attracted to the idea that they don’t have a boss that microman-ages them all day. They don’t have to sit in this stale cubicle, they have some control over their own pay, they can work at their own pace, they can enjoy the outdoors, they can play with dogs, they really don’t get dirty. We have tools they use to clean up. It’s a job that many white collar indi-viduals have been really attracted to.

BOJ: Tell me about the appeal to franchi-sees?

Matt: The number one thing that attracts franchisees to our model, believe it or not, is not that it’s ground floor, although that’s probably third most important, it is not only that we have a national call center, but that we do all the billing and collections. So the combination of the call center that handles every call for-ever, our billing and collections handles all accounts receivable forever, and our software that handles the managing of the business, means that the franchisee is free to do two simple things: invest their time and money in marketing, and scoop the poop, or hire somebody to scoop the poop. So, if they can do those two very simple things, they can run their business from any beach in the world.

BOJ: What training do you provide?

Matt: It’s called “Poop University” or “PU” for short. It’s five days of in depth training at our national headquarters “Poop Cen-tral Command” in Dallas, Texas. A third of it is our software technology, a third of it is marketing related, and then a third of it is the rest of the business: managing it, understanding how things work. It’s very in-depth training. And of course, you get the software. The number one thing people get – is our people, the Pet Butler franchisees already out there in the field – that’s priceless.

BOJ: Take me through a typical life in the day of a franchisee.

Matt: On our website, on the franchise tour, or I think on the franchise homep-age, there is a day in the life of a Pet Butler. Most franchise owners are owner-opera-tors, so they literally are out there doing the dirty work. If they are an owner oper-ator, and they don’t have any employees, they are still fairly new, they can just jump in their uniform and take off because our software is also mobile so from any hand-held phone, any internet enabled phone, they can see every yard, every detail of every yard, all the additional services for every yard, in the optimized order using Microsoft MapPoint our software is incor-porated with and it times them between yards, it times them in the yard, the sec-ond that the yard is completed it puts the tracking in our software, and our cus-tomer service reps at Poop Central Com-mand know when it was done and how it was done and if a customer calls and has a question it just tracks everything you could ever ask for regarding the work. They simply go out there and scoop some poop and do some marketing activities. Scooping and marketing.

By the way, we do quite a bit of commer-cial business too, it’s not just residential. We have hundreds of apartments and multifamily communities around the country that we service, whether it be the pet stations or the actual service of clean-ing up their properties.

BOJ: So the marketing is done locally. Do you do national marketing as well?

Matt: Absolutely. We have a national marketing and PR fund which is two per-cent of the franchisee’s gross and that’s out there doing a good amount and its now over six figures a year. The national marketing that we do for the franchisees in a few years it will be seven figures and it will really have a big impact, but right now its primarily we coach them, we train them, we have national buying coopera-tives, buying programs that allow them to save money, save hassle and not waste time on things that don’t work. Ultimate-ly, it is up to them to get out there and make the noise.

BOJ: Is there an ideal franchise candidate out there or do you see all types?

Matt: We’ve seen all types, all aspects of life. Our most popular age range is the 30 something’s, those folks who have ambi-tion, are ambitious, and have been in the corporate world just long enough to real-ize two things: that they’re never going to get their golden dreams in the corpo-rate job and they’ve had enough time to save up some money to do something else. And that’s about half our franchise partners are in the mid to late thirties. The rest are all over the map. We have two franchise partners in their early seventies, and then we have several that are in their early twenties. So all over the map.

BOJ: You talked about there being a two percent co-op fee. How about the fran-chisee royalty?

Matt: The franchise fee is $29,900. The royalty is seven percent. The national ad fund is two percent. We have a customer service center fee that goes to handle all the routing and phone calls and billing, collections, they’re miscellaneous really. .

BOJ: What are your goals and aspirations for the business over the next few years?

Matt: Number one is to become a house-hold name synonymous with the indus-try. By far the number one thing we are all shooting towards is becoming that household name that is the name of the industry. Like the Kleenex, the Chapstick, the Xerox of the industry. Beyond that, six months before we launched our first fran-chise, back in ‘05 I set five goals and we are exceeding every one of them so far. They were to have a hundred franchises in five years. We’ve already surpassed that. To operate in all of the 50 largest metro markets. We are well on our way to that. I think we are in 32 of the top 50 metro markets right now. To offer service to 50 million people – that’s not provide, but that’s offer service to 50 million people. To collect half a million dollars per week for our franchisees. So basically do $26 million in five years. These were five year goals. And then collectively to donate $100,000 per year to family friendly orga-nizations and another $100,000 a year to pet friendly organizations. | BOJ

Speaking with successful businesspeople in the pet related fields, one is quickly struck by a common

theme: “passion about pets.” Obviously, they must get the business-side right. But it is the passion for pets that I find interesting. I recently interviewed Central Bark Dog-gy Day Care Cofounder, Jackie Jordan. She had a lot to say about passion for dogs, as well as about the growth of the business. -- Mark Adkins

BOJ: How did Central Bark Doggy Day Care come about as a company and then as a franchise?

Jackie: I have been running my doggy day care loca-tions for almost 13 years. I started with one facility back in January of 1997 in blue-collar Milwaukee, Wisconsin, when no one had ever heard of doggy day care yet and everyone said it couldn’t be done. It was a challenge to get people not to laugh at me! Eventually, I was able to get a home equity line of credit to start my business. I opened my second location within the next 2 and a half years. I opened my third within 2 years after that. It’s done nothing but grow.

In the process I always thought of the idea of franchis-ing but wasn’t sure if that’s the route I wanted to go. I had a friend who was in the MBA program at the Uni-

versity of Chicago and he did a venture capital chal-lenge class which was a competition. You come up with an idea, a business plan, a new one or existing one you want to take to a larger scale. So he said “Well lets do doggy day care,” and I said “OK, fine I’ll help you.” So in a world of high end technical, medical, computer and all that kind of stuff, we were presenting doggy day care. Everybody thought it was funny and cute but we kept making the different levels of the competition. We kept getting approved and getting approved and passing to the next level. So finally we’re in the finals of this competition, and we presented to a room full of venture capitalists. They really liked the concept but they didn’t feel it was a VC type of opportunity but was more of a franchise model. They wanted to acknowl-edge the plan so we won a fourth place acknowledge-ment. They really only had first through third but they created fourth because they liked the idea so much!

BOJ: Did you just continue to grow the business or-ganically?

Jackie: Organically. We decided that it was something where we could get investors but we wanted to try do-ing it on our own. We didn’t want to give up any kind of

Central Bark Doggy Day Care


pet d

ay c

are

Jackie Jordan and dogs.


Central Bark Doggy Day Care staff and friends.

of shares or any control of our business and our concept and our dreams. So we have done it organically. We’ve invested in ourselves.

BOJ: Did you have an interest in pets or dogs in particular before this?

Jackie: Oh yeah. I grew up with pets. I was awarded a lifetime membership of the Tri-County Humane Society in the sixth grade for my volunteer work. I’ve just always, always been involved with pets and I do have an undergrad in veterinary technology that I would never use work-ing per se as a vet tech but I do use my knowledge daily in my business and just with my own pets. I own three dogs now, or I should say they own me, and a cat. We are very passionate about our pets.

BOJ: So when did you start the franchis-ing?

Jackie: About 4 years ago.

BOJ: Where is the company now in terms of franchise locations?

Jackie: Well we’re 32 sold; we’re in 8 states. All of our stores are open now, except for 5. We were very committed to maintain at least a 50% open-to-sold ratio because we just felt that it was very important not to just be a selling machine, but to actu-ally open our stores and help them in the process. Its one thing to sell franchises and another, especially in our industry, to open them. You know, because of zoning and we’re not doing widgets, we typically have to have special use permits. It’s a process, it’s not like we can just pick any type of building we want and go in. There’s neighbors and there’s landlords. There’s the health department. It’s quite a process so we’ve really honed our skills on what to look for and where to be, and what’s going to work for us as well as what’s going to work in the community. So we’re really proud of the fact that in the past year we have opened 14 stores, since 2007.

BOJ: How would you describe the busi-ness model of Central Bark Doggy Day Care?

Jackie: There is not another model out there like us. Others are more of a glori-fied kennel that offers a Day Care. We’re

really truly a Day Care. We offer 5 core ser-vices, but our bread and butter is the dog Day Care. I’d say 65-70% of our revenue is on Day Care, then the rest is icing on the cake. We also offer sleep overs. We don’t call it boarding. We don’t call it kenneling. It’s sleep overs because your dog has to be part of our Day Care program in order for them to sleep over. So it’s very differ-ent. There are a lot of glorified kennels out there that will try to have the Day Care component to it, but we are truly the Day Care model. The reason why we choose to do that is because it’s what’s best for the dog. Anytime you have dog-to-dog interaction there are potential problems. If you’re not putting the right dogs with the right dogs. People can not get along and argue, but the way dogs argue, it’s with their teeth, so we want to make sure that we’re screening the dogs really well, that we’re putting the dogs with the right playmates and making sure that we’re creating the safest, healthiest, most nurturing environment that we can for the dogs. We’re about the dogs, so the dogs have to come a minimum of once a week in our program. We don’t take the “Gee, it’s convenient for me to get the dog out of the house because the cleaners are coming today” kind of custom-ers. We’re com-mitted, and our customers are committed to what’s best for the dogs. And it’s a consistent program. The dog comes con-sistently, most of our custom-ers use us a couple of times a week, with a

minimum of once a week. The dog knows the environment, the dog knows the staff, the dog knows the routine, the dog knows its playgroup.

BOJ: Is this what attracts customers to you?

Jackie: I think so, and that’s something that we have to screen out with the franchisees. Are you in this because you want to make a quick buck? Or are you in it because you have a passion for it and you want what’s best for the dogs? We’ll screen out franchisees that way and we’ll screen out customers at the store level. You know, if you’re not committed to coming once a week then this isn’t the program for you.

BOJ: What is the ideal franchisee for the business?

Jackie: The ideal franchisee is somebody who wants what’s best for the dog and who has a passion for dogs. You can like



dogs, but to be fully ingrained in them 24/7 basically, I mean you’re constantly with them and you’ve got to love what you’re doing. It would be like somebody who doesn’t really like kids being a day care provider. It just wouldn’t work. That would not be fun for either the child or the provider. You have to really love what you do. We look for people who want to give back to the community and to local rescue shelters and humane society type organizations because that’s a big part of who we are and what we do.

We raise money for our Dog Bless Amer-ica Program. It has taken a number of different routes throughout the years. Right now what we’re working with is the Prison Dog Program so we raise money to provide dogs to the prisons that in turn train the dogs as service dogs for veterans who are coming back from fighting in wars. It’s a win-win. I’ve picked up dogs that have been trained by the prisoners, I’ve dropped dogs off to pris-oners. I’ve talked with these people and they say this is the best thing that’s ever happened. One quote from one prisoner out East said “I can’t take back what I did yesterday but I can make a difference for what I do tomorrow.” That just was really insightful to me because he’s in for life for murder, yet he’s doing something good. He trained a dog that we then transport-ed out to somebody in California who needed a service dog. It’s just absolutely amazing. That’s something that we’re re-ally proud of with our organizations that our franchisees help to support that as well as locally.

BOJ: Is this something that anyone from any walk of life can succeed in if they have the right passion?

Jackie: We have accountants, insurance backgrounds, airline pilots, flight atten-dants, computer backgrounds. We’ve got franchisees from a variety of backgrounds that just decided they were successful in their professional career and decided “You know what? I want to work for my-self, I want to do this, I want to be with my dogs.” We’d prefer to have someone with some business background, some busi-ness management background, because you have to have some basic knowledge

on how to run a business. But we also help with that as well. We give them a lot of training in dog behavior and dog training and even first aid and things like that for the dogs. But they still have to come with a basic understanding of dog behavior and be able to manage a pack of dogs.

BOJ: Do you have a formal training pro-gram for new franchisees?

Jackie: Yes, three weeks. Two weeks are at our corporate headquarters, and one week we’re on-site with them.

BOJ: What is it about Central Bark Doggy Day Care, if you can put your finger on it, that would make potential franchisees want to consider it?

Jackie: I think it’s a couple of things that we’ve heard from in the sales process when franchisees come to our Discovery Days. We encourage them to go check out other business, other dog care or pet related businesses because we really want to make sure that this is a model that works for you. We are in partner-ship for the next 10+ years and we want to make sure it’s right, that it’s a good fit for you and a good fit for us. So we really encourage them to check them out and when they come back to us, the biggest thing that we hear is the passion. You know, “this place was all about selling,” or “this place I didn’t get warm and fuzzy about.” We really are a different group. Somebody came to us and said “We want to buy a ‘master franchise agreement.’” We’re not about that. The biggest thing that I found as an individual store owner is that people are giving you their kids, they want you to care for their kids, their four-legged kids, and they want to know who’s behind that counter taking care of their kids. So if you’ve got this big inves-tor who’s opening up all these different stores and there’s not really a personality behind it, I think it’s a detriment to our business model, so we’re really about the people who are caring for the pets. That’s a big difference between our fran-chisees and franchisees that go into a dif-ferent kind of franchise system.

BOJ: Do you have an advertising and marketing cooperative program for the individual franchisees?

Jackie: Yes, they pay in two percent of their gross revenue for the national mar-keting fund. So we produce ads and ma-terials for them to use at the store level. We use that to continue our website. We do a bimonthly newsletter for the stores. We’re not doing radio and TV ads neces-sarily. We’re still very young so that fund is minimal. In the metro Milwaukee mar-ket, we’ve got 14 stores so we encour-age them locally to join together and do things that way.

BOJ: How have current economic condi-tions affected individual locations and the franchise as a whole?

Jackie: Well time is taking its toll. Peo-ple are nervous. At the store level, our stores that are a little bit more mature, they seem to be doing fine. For the most part, they’re not taking a big hit. Some customers lose their jobs, some are cut-ting back. Instead of two times a week, they’re cutting back to one. But we’re still getting new customers in the door. So I can’t say that it’s made a significant im-pact on those stores. The newer stores, the growth is a little bit slower than what we were experiencing, but they’re still growing. So we’ll see. I wish I had that crystal ball.

BOJ: Some say that pets might be more recession resistant, because in times of trouble, people need more emotional support, more companionship. Do you think there’s some truth to that?

Jackie: Absolutely. Over the 13 years that I’ve been doing this, I think about what kind of economy we’ve had. It’s been good and it’s been bad. We went through 9/11 and that was a tough time too for our country and we continued to grow during that time, so I think that there’s some truth in that, that people are going to not cut back or not stop providing for those that they love. And well, their pets are who they love. That is their baby. So they might financially be forced to cut back a little bit. People who have had to drop out on those rare occasions were like “I’ll be back when I get my job back” or “I have to but I don’t want to.” It’s very emotional for them. | BOJ

Pet Cremator - Power Pak II



Here is a unique scenario: instead of pur-chasing a franchise, you purchase the

equipment you need to start your business, and the manufacturer helps you every step of the way, assisting in the design of your store plans, filing for permits, even provid-ing sales collateral and a professionally designed website. You gain many of the benefits of a franchise, without a royalty or national marketing fund payment.

Matthews Cremation is offering this support to its crematory equipment

customers. According to the company, pet owners in the United States are under served in death care services for their pets, with too few options for pet memorializa-tion. Matthews Cremation sees enormous growth ahead in the field as entrepreneurs are beginning to address this need, pro-viding a much needed emotional outlet for grieving pet owners. What follows is my interview with Steve Schaal, Division Manager, Sales & Marketing, Matthews Cremation. --Mark Adkins

BOJ: I understand that Matthews Crema-

tion is a leading equipment manufac-turer?

Steve: Matthews Cremation is one of six divisions of Matthews International, a publicly held company, and is the largest manufacturer of crematory equipment for the human and animal audience. Matthews International acquired the company, previously known as Industrial Equipment Engineering, or IEE, back in the late 90s. That business was started in 1946. So, for over 50 years we’ve been building equipment.

BOJ: So this is an industry that has been around many years?

Steve: We have customers that go back to the start of our own business. The early pioneers started in the ‘70s and ‘80s. They were basically contracted by the county or the state or the local jurisdiction to help in, and I hate to use this word, the disposal.

But for the past four or five years, we have been championing the development of a pet funeral home business model. Serv-

ing the animal care industry has been an intricate part from the beginning, so the equipment that we’ve been building has been appropriate for both audiences, meaning the human side as well as the animal side. It has only been within the last five years that we have been studying quite intensely the opportunity in devel-oping this model as a pet memorialization positioning.

BOJ: What is behind this shift toward pet memorialization?

Steve: Back in 2003-2004, we began a very thorough consumer research study on various components of the death care industry. We had an independent company come in and conduct research for us and in the process captured over 190 hours of video footage of people sharing their stories about not only the experiences of going through the loss of a family member, but equally important the loss of a family pet, especially the process of how they were, or were not, able to resolve the grief of the experience. What really hit home for us was when you are video taping, you have people sharing their stories about a loss, about a father, a mother, a brother or sister, but when we began shifting the focus from the human loss to the pet loss, the tears just began to flow. I had to stay out of the way and basically sit in a room watching video footage of this taking place, watching people breaking down, crying because the grief was so dynamic and the loss was still real. They had no outlet. They had no channels through which to get care. So for us it clearly symbolized there was a market opportunity. There was a service opportunity that stands before us.

BOJ: And you developed a franchise busi-ness model out of this research?

Steve: No, we’re simply a supplier. Our business is in the manufacturing side. But we do an awful lot of consulting, we do an awful lot of marketing and brand development. We have an extensive line of pet loss memorial products that can be built into the retail center of the pet funeral home, so we have all of the differ-ent aspects. It’s kind of one of the more interesting discussions when you talk

Championing the Memorialization Trend

Matthews Cremation


about franchising, because we do all of it, but we don’t do franchising.

But I will share with you that there are many that we have set up who are looking at franchising, and are carrying a big picture vision of what this truly could mean from a national perspective.

BOJ: What do you see as the business opportunity that is available for entre-preneurs in this field? Is it providing pet memorial services from a more holistic perspective, helping to take care of the pet owner’s needs in the grieving process, above and beyond the physical cremation process?

Steve: What we are championing, and this is a different model from the earlier pio-neers, is we’re actually encouraging them to invite families to come to their facility and have an area laid out that not only is professional in nature, but more impor-tantly gives them a chance to sit down and discuss the types of arrangements they would like that can be as modest as the service itself or may be a committal which allows them a chance to have a minister come in and provide a memorial service, offer a variety of different products from which to choose. From garden memorials to burial products to scattering products, all the things that you would find in the hu-man side would be just as applicable to the animal care side. Even including memorial video tributes.

We just recently went through the loss of a dog, our dog passed away, 11 years old, and my children spent a few days going through the albums, and we came up with a collage of pictures that we put to a video tribute for our dog Samantha. You know, my children are older, but it’s funny, the tribute they have is located on their Face-book page. My one son is 6’3”, 220 and he can’t even talk about Samantha without choking up with this video that he helped create with us. It’s been a wonderful relief for him to occasionally be reminded, to be able to turn it on and to work through the celebration, as we like to call it, of

companionship.

BOJ: So it is a major shift toward serving the pet owners’ grief, not simply providing the cremation services?

Steve: There are many people carrying this profound loss, and still hiding for fear of be-ing minimized, the pain being minimized, and there are many of those who until you talk about it, until you identify it, until you build the community network, the awareness of it, there’s a lot of them out there that are simply just going through the process and can not talk about it. And this could be a death of a pet that could have passed away years ago that they’re still harboring inside. What we’re doing, the movement that is happening, and believe me, it’s being driven by the consumer, the consumer is driving this direction, not us, we’re simply recognizing the calling and making it an opportunity across the country. The fact is that they’re looking for something that is appropriate and mean-ingful for them and the definition of that can be anything. It could be someone that says “you know what, I really don’t want my pet back, go ahead and do whatever you do,” and they simply let the pet go. Or, like we did, they say “No, I want Samantha returned, I want her back, I want to pick out what we’re going to do, I want to pick the right garden material, I want to pick the right cemetery ground, I want to pick what we believe is most appropriate for us.

BOJ: Are the services provided in the in-dustry fairly uniform?

Steve: There are two types of services that you will find when you are network-ing with these facilities and that is either what is called a communal service or a private service. You can imagine that the communal service is nothing more than a cremation taking place with a certain quantity of pets, all being done at the same time. The private cremation services are obviously one pet only, one container at a time being cremated so that way those cremated remains are not comingled or confused with any other pets. They are

distinguishably yours so that this way they can be returned directly back to its owner. What we see is that for the early pioneers, for the ones that first got into this busi-ness, almost 90% or better of the services they provided were in the community type relationship. People were just asking for their pets to be cremated without an awareness or understanding. What we’re discovering is that now that percentage is more like 65% are private, and the smaller percentage is communal.

BOJ: And consumers are willing to spend more for these enhanced services?

Steve: The real revenue dollars are in the pet loss memorial care. Once you build the educational awareness for consum-ers, whether its at the veterinarian’s office or the humane societies or at the funeral homes, wherever the audience, wherever the contact is made, once you describe the difference, the last thing they are going to do is have that pet be placed with a group of others and scattered in their field. More appropriately, they would be returned to them so that they can decide how they wish to memorialize. So what we see, or what we’ve learned over the last several years, is that people can distinguish the difference. If you are looking at your com-munity and see that there are providers and think “I can’t possibly do this in my community because XYZ business is down the road handling it.” Please don’t be con-fused about those who do mass incinera-tions and those who are building a funeral model for pets. As the profit number, the revenue driven number is a distinctly dif-ferent because you’re building the model based on cremation rates per pound versus a cremation rate per service and the dollar variant is substantial.

We’ve learned that when a family is mak-ing arrangements for their pet and they’re advised what the cost is, the odds of debat-ing or negotiating is absolutely minimal, in contrast to other services where you al-most anticipate a reaction or a negotiation or “can I cut this out, or can I remove this.” It’s amazing when it comes to the services for pets, how the wallet is wide open.

BOJ: What are the components, as well as equipment, needed to provide this

Interview with Steve Schaal, Division Manager,Sales & Mar-keting, Matthews Cremation



service?

Steve: First of all, you would have to decide on a piece of equipment that would be rated by its production speed. What I mean by that is that the equipment is designed to do a certain amount per hour. Let’s just say in this particular instance, pounds per hours. Typically an entry level piece of equipment runs about 75 pounds per hour and has the capacity to hold somewhere in the range of 300 pounds. Now that’s just cremation equipment itself. You also should be aware, and most people don’t know this, that cremation does not dissolve the bones. Cremation develops the ash and bone fragments, but those still need to be processed. What that means is that they have to be processed to a fine powder and that would be done by a machine that you would transfer the bones from the equipment, the crematory equipment to a processing machine that actually is an industrial type blender that cremates the ashes and bone fragments to a powdery substance which is what is transferred to an urn. So you need a piece of equipment and you need a processor to be able to conduct the service. Certainly because of the volume, it’s wise to have refrigeration, whether it’s a refrigeration cooler or a freezer. It’s important to have something to hold while you are conducting your day to day business. Since most veterinary clin-ics have similar type equipment, normally when you are out making your removals during the day and you’re bringing them back to your place of business, that needs to be staged. It’s not only for the dignity and the handling of the pet, but also for the protection of the operator.

BOJ: What are the basic steps a new busi-ness owner needs to go through to get started?

Steve: First of all, they have to find a loca-tion that will allow them the proper zoning in which to invest in equipment because of the crematory equipment. A lot of them are in residential communities, but it’s important that they identify the ap-propriate approval process. The first thing that you’re going to have to understand in your review of commercial real estate is that you have to be able to obviously get

the permission to install equipment. For most of the clients that we work with today, because we work with a couple hundred a year in the business development side, it’s the fact that they probably are looking at industrial areas for this initial model. But I caution anyone that is looking at that as a possibility is although there might be a lower threshold to get permission to install equipment in an industrial area, if you are trying to build a true funeral model for the animal care industry, it has to be a place that people will feel comfortable going to. So if you have to lock the doors and chain the windows after 5 o’clock in the evening, I would probably suggest that you would be nothing more than a back door provider. What I mean by that is that the services will be rendered through the community but it won’t be your face as a part of it because you are nothing more than going in the back door of a veterinarian office, handling the cremations and giving them back to the veterinarian and the face of the busi-ness represents the veterinarian, which is totally fine. There are a lot of successful operations that are doing it, but the chal-lenge that you have with that model is the fact that veterinarians are not interested in memorial care services taking place at their place of business. You are not going to have a committal area where the pet will be laid out and the preacher will come in and your family and friends will walk in and you’ll have a moment of silence and the ability to say goodbye, or video that might be running in the background that sort of tells the entire story. You know, the same experiences you have today at a funeral home where you go and you express grief and you take comfort. It is important for you to have that somewhere in mind in the idea of where the real estate is located.

BOJ: Is networking with veterinarians and others important to the model you propose?

Steve: Well, certainly the business that we see available is one we see as a network that allows us the ability to identify those who we would say “first of call.” In the animal care industry, obviously “first to call” would be your veterinarian network. If they are adamantly against the thought of handling these services internally, then

this is a network for us to be able to build this service as an extension of service. That still rings true in regards to the funeral side. If you have a funeral network in the area that is not interested in handling the ser-vice but certainly wanting to be an outlet for families who need that support, there is an opportunity to be an extension of service for them as well. So literally you are building yourself a business model which has positioned itself within a network of veterinary clinics, groomers, humane so-cieties, kennels, you name it. Anyone and everyone that is affiliated to the animal care network.

BOJ: You talk about “championing” the shift toward pet memorialization. How does Matthews Cremation help go about that?

Steve: Well, for example, we recently host-ed a six city business development confer-ence. We had one in San Francisco, one in Phoenix, in Texas, Florida, Ohio and in Massachusetts. The last one we completed was in August, and we spent a couple of months sort of digesting the material and digesting the reaction. We had over 500 guests attend the conference, so we had a great turnout. I’ve been getting a lot of calls since the last one simply asking when will we host another one. We are consider-ing conducting another series throughout the country. We’d like to continue bring-ing people who have gone through the experience and have built the business model who can share their scars or all the different things that they’ve gone through so that this way anyone that comes to the conference is given an armful of ammuni-tion with which to go back to their market and begin building the business model.

We have built an arsenal of collateral ma-terials that can be placed at all the neigh-boring veterinary clinics that, if you know that a veterinarian doesn’t want to speak of death because that may symbolize failure, can be placed that are nothing more than educational pieces so that at the time of loss, it gives people comfort in knowing that there is a place to go to.

We have built a free standing pet loss web-site called Faithful Forever Pets at www.faithfulforeverpets.com. That actually shows a lot of illustrations. It’s basically a


piece that we include with equipment be-cause when people look to buy equipment, especially early entrepreneurs, there are two things we try to provide. Number one, we have a great finance network to help people starting their business. Number two, we love to give you all of the collateral pieces at a modest cost, because we know that advertising and brand developing and all of the awareness components that have to be a part of the equation can cost a substantial amount of money. So what we have done is we have built a boiler plate for anyone wanting to get in that can give you these tools that can literally be branded. You can leave them as Faithful Forever, which is our template, or you can literally have it transferred as something of your own. All of the pieces look and feel exactly as you.

BOJ: What is the time line from someone getting interested in the business, to actu-

ally getting started?

Steve: It’s kind of tough to quantify this because as you can imagine, the fuse is rather long. The first thing is that they need to understand the working capital to make it successful, and then they need to begin identifying a location. Once they get their location identified, then the zon-ing component comes in place, and then we file on behalf of the client all of the permitting components, meaning, pretty typically you have to file an air permit. It’s usually nothing more than formalities. We’re guaranteed in all 50 states. Our engineers do that. We do a lot of layout drawings. Literally we give all of the sup-port within the framework of the company. These aren’t add-on costs. We’re doing all we can to guarantee their success.

BOJ: What would you estimate the range of start up costs are to enter this business?

Steve: The real estate is a major variable number because that’s a tough number to kind of get your hands around because of the market variances. Typically in equip-ment, you could probably start at an entry level that would get you in the business for about $50,000 up to $100,000. You need a vehicle. Plus you need plenty of working capital. You know, prepare yourself for the haul. Most businesses we see somewhere in the range of about $250,000 to $300,000 for start up needs. But to get into your equipment and the development side, the gradual side of that equation, it can be as low as a $50,000 investment. | BOJ

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E m b r a c E t h E

o p p o r t u n i t y

EQUIPMENTSERVICE & SUPPLIES

guest expert>>

This past month, the Pet Care Ser-vices Association performed an infor-mal poll to ask members the follow-ing question: “How much is business down (in revenue) this year?” Of the 2,400 members asked to complete the survey electronically, 246 mem-bers answered, or more than

10% of t h o s e it was

s e n t t o

and is significantly sig-nificant. Although the survey was unscien-tific, it does shed light

on how the pet care industry is fairing.

The results were extremely interest-ing:

• 51%ofthoserespondingsaidtheir revenue increased in 2008.

• 15%ofthoserespondingsaidrevenue was down 16% or more.

• 34%respondedthatrevenueshad decreased between 0-15%.

However, the story is not in the num-bers, it is in the details. After speaking

with a number of facility owners to discuss the re-

sults, there were many sides to what has hap-pened with regard to 2008 revenues and

how timing has affect-ed their ability to create

positive business condi-tions.

Wendy Oleksiak, R.N. of Co-hasset and Duxbury Ken-nels located in Cohasset and Duxbury, Massachu-

setts, respectively, says that early

gains she saw at the b e gi n n i n g of the year are just now being di-

minished by the economic

downturn that has affected the

fourth quarter of 2008. She says, “While we saw revenue growth in 2008 as compared with 2007, I believe we are now starting to feel the impact of the economic recession in our area. The Thanksgiv-ing season was up slightly in 2008 as compared with the same period in 2007 (approximately 3% growth). However, we saw a 25% decrease in revenue during Christmas 2008. Our next big focus is February vacation and the winter ski season. These will be good indicators for the balance of 2009 and will help us understand what we need to do to ensure a prof-itable year.”

Others such as Nicole MacDuff of Manoir Kanisha located in Montreal, Quebec have not been affected by the downturn, yet. However, this is largely due to the fact that she has been earning business from those that were once customers of other pet care facilities that have since gone out of business. Nicole says, “The economic downturn is beginning to affect the boarding industry in the Montreal area. We have experienced clients losing their job, therefore can-celing their vacation and pet board-ing reservations. However, the closing of four local kennels & grooming fa-cilities in our area has resulted in their clients coming to Manoir Kanisha. This has resulted in many new clients and an increase of 14.6% in 2008 fall revenues. The long term effects are hard to quantify. The business of Pet Relocation is driven by slightly differ-


Joseph Lyman, CEO PCSA

Economic OutlookPet Care Services Association

ent dynamics. Relocations take place for two main reasons, moving home or for new work appointments in oth-er countries. One must assume that there will also be an overall downturn in both of these activities.”

Still, there are those that have in-creased revenues for the entire year, such as Charlotte Biggs, CKO of Stay N Play Pet Ranch, Inc® located in Drip-ping Springs, Texas. She says, “We have seen boarding stays especially over the holidays be shortened by days, but we filled the gaps with ad-ditional boarders and there has been a reduction in the number of “add-on” services that our clients usually order. However, we’ve proactively countered that with specialized promotions of some of these services to gain inter-est and use of the services by an in-creased number of our clients. We’ve also had to get creative and come up with other new, different and exciting services to offer.”

Biggs is a strong believer in making a plan and sticking to it. Through proper planning and sticking to sound busi-ness practices, Stay N Play Pet Ranch, Inc® has been able to continue prof-iting through tough times. She says, “The same good business manage-ment practices that we use during the good times, will take us through the tough times. The decisions we make may be different, we may increase our marketing and advertising to ensure our client base doesn’t drop instead of implementing what we thought would be a major expansion. Our cre-ativity may have to rise to the surface instead of us just maintaining the sta-tus quo. The one thing I do know is that we in the pet care services busi-ness are some of the most determined

and strong-willed entrepreneurs out there. With our passion for the pets and our businesses, we can survive and even prosper during these times.”

Although a majority of individual pet care facilities answering the poll have increased revenue in 2008 as com-pared with 2007, it is clear that the economic downturn will affect the pet care industry in the coming year. David Lummis of Packaged Facts, a leading market research firm pet care and product sectors, believes provid-ing dogs and cats with the best pos-sible pet care is an important way for facilities to survive in 2009. He says, “In the current economy, it’s more important than ever that pet indus-try participants of all stripes tie their products and services directly to pet health and position themselves on the front line of preventive pet care, which can be far less expensive than the kinds of long-term health condi-tions that can result from, say, poor nutrition or inadequate grooming.”

Despite the state of the general econ-omy, there are indications that the pet care industry will be able to weather the recent financial downturn. The American Kennel Club recently sur-veyed 1,000 pet owners and many responded that they are willing to sacrifice many of their own personal luxuries to provide for the needs of their pets. More than 96% of respon-dents with a taste for gourmet coffee would forego their daily caffeine habit to provide money for their dog’s ex-penses. Moreover, nearly 79% would cancel a teeth whitening appoint-ment in order to afford their dog’s teeth cleaning. Joseph Lyman, chief executive officer of the Pet Care Ser-vices Association, believes the AKC

survey reinforces the idea that pets are an integral part of families and people are willing to make sacrifices for family members. He says, “The pet care industry’s demographic is primarily female-based and the chief decision maker in the family. Family issues are important to these women and they are willing to make the nec-essary sacrifices to ensure that their pets lead a health and fulfilling life.” Although times are tight for most extravagances, many women do not consider their pet’s expenses a luxury.

Someone once said, “You develop courage by surviving difficult times and challenging adversity.” With the pet care industry filled with creative and progressive individuals, it reasons that the industry will not only sur-vive, but thrive these tough economic times and exit it stronger and more resilient than when it began.


About the Author:

Joseph Lyman recently assumed the po-sition of Chief Executive Officer of the Pet Care Services Association.

Prior to joining PCSA, he was Executive Director of the Insulating Concrete Form Association and was the Executive Direc-tor of the Small Firm Council of the Amer-ican Council of Engineering Companies, representing the political and business interests of over 3,800 small engineer-ing companies throughout the United States.

Econ

omic

Out

look

A survey conducted by the American Kennel Club® shows that despite a tough economy, pet owners are willing to sacrifice many daily luxuries to provide for the needs of their canine companions. The survey of over 1,000 people on www.akc.org found that more than 96% of respondents with a taste for gourmet coffee would give up their latte habit to save money for their dog’s expenses. Ninety-seven percent also said they would forego massages or spa treatments in order to afford a vet bill, and nearly 79% would cancel a teeth whitening appointment so that Fido could have his annual teeth cleaning. The only item that seems to compete with people’s love for their pooches is Internet access, with more than 70% of respondents indicating that they would not be able to abstain from their web addiction. One respondent would give up “pretty much anything. I need the gym and I need the Internet, everything else is fair game.”“In general people are more dedicated to their dogs than ever before. No doubt dogs bring comfort and stress relief to many people during this difficult time,” said AKC spokesperson, Lisa Peterson. “This is reminis-cent of what we saw during hurricane Katrina. With people facing great hardship, many remained so loyal to their pets that they were willing to risk their lives. Our survey demonstrates that they are also willing to forgo some of life’s luxuries for the welfare of their pets.” The survey also found that with the holidays coming up, most dogs can still be assured that they will find a bone under the tree. More than 69% of respondents would cut back on gifts for their friends or extended family before they would skimp on holiday gifts for their dog. Nearly 9% would even scale back on gifts for their spouse before cutting back on presents for their dog. Healthcare is another area that dedicated pet owners

seem to be consistent about. PetPartners, Inc., provid-er of the AKC Pet Healthcare Plan, says that sales rates are holding up and owners are renewing their poli-cies in consistently high numbers. This shows that pet owners view pet insurance as a way to manage their pet’s health care costs. Some dog owners have even opted to purchase health plans for their dogs over

themselves. One survey respondent admitted, “My Cavaliers have health insurance, however, I do not.”Holiday Gifts• 81% of respondents purchase gifts for their pups

during the holidays • 69% spend up to $50; 24% spend $50-100; only

3% spend more than $150 • 59% expect to spend the same amount on gifts

for their dog as they did last year Giving up Like for Like• 67% would cancel their travel plans if they could

not afford to pay to board their dog. • 65% would regularly eat Ramen noodles before

they would skimp on their dogs high quality food. • 59% would perm or color their own hair in the

kitchen sink in order to keep Fido’s appointments at the groomers.

Cutbacks Owners Are Willing to Make For Their Dog• Eat more meals at home (97%) • Cancel gym membership (72%) • Cancel cable or satellite service (50%) • Curb spending on new clothes (94%) • Push back plans for home remodeling (89%) • Forgo buying new car or buy a less expensive

model (88%) Money Saving Techniques • 52% look for sales and/or clipping coupons be-

fore shopping for pet products • 48% are purchasing fewer toys/treats and other

non-essential dog supplies • 34% have begun buying dog food in bulk Explanatory Notes:The survey was conducted on the American Kennel Club Web site during a one-week period in Nov-Dec 2008. A to-tal of 1,088 surveyors responded voluntarily. Self-selecting methods were used in recruitment for this study. AKC does not guarantee that these statistics are scalable to the over-all population. This data is for anecdotal purposes only.

AKC Survey Finds Dog Owners

Willing to Kick Caffeine Addiction

for Canine Affection


Current Economic Woes No Competition For Americans’ Dedication to Their DogAKC SURVEY RESULTS

Pet C

are Serv

ices Association

Basic Training

OURREVIEWS

As a future dog daycare owner, I thought that the PCSA Basic Training Seminar...was valuable and informative. I was pleased that the presenters were people just like me who brought forth real business experiences. The sessions focused on requirements for daycares and provided numerous sources for specific aspects within our industry. The four day seminar gave me an excellent opportunity to meet and network with existing and future owners. The atmosphere really made me feel connected to the PCSA community.

- Kim Smith, D.I.G.S. Dog Daycare

I very much enjoyed the talks, and I feel that I was given so much information that I would have had to spend countless, painful hours trying to put together myself. I enjoyed the networking opportunities and the very open atmosphere that everyone says makes up PCSA. I would definitely recommend this seminar to anyone who would like to get into the kennel business.

- Regina Bohannon

to start a business in the lucrative Industry of pet care!

L E A R N H O W

FEWOPPORTUNITIESThere are few business opportunities in life that will afford you the freedom to do exactly what you want—few opportunities that will reward you financially for doing exactly what you enjoy.

For more information go to: www.petcareservices.org or call (877) 570-7788 ext. 17

THEEVENTJoin us for the Pet Care Services’ Spring 2009 Basic Training at Tuscany Suites and Casino in Las Vegas, March 15 - 18, 2009.

PCSA’s Basic Training is the leading provider for all the informa-tion you need to develop and grow your pet care services busi-ness.

Learn the “do’s and don’ts” of pet services, •

Pinpoint ways to finance your facility, •

Identify a plan for establishing sound business operations, •

Develop an understanding of your target market, •

Gain insight into staffing your facility, and •

Find out how to provide expert customer relations•

Contraband Detection


Interquest Detection CaninesNumber: 1-800-481-7768Website: www.interquestfranchise.comFounded: 1988, franchised in 1999Category: Contraband Detection Canine Services.Number of Locations: 40Description: Interquest Detection Canines specialize in detecting contraband, firearms and other illegal items. Interquest Detection Canines are usually found assisting local schools to detect substances that may be harmful to the surrounding environment.

Bark BustersNumber: 877-300-BARK Website: www.barkbusters.comFounded: 1989Category: Dog TrainingNumber of Locations: Over 320Description: Bark Busters provides in-home train-ing services for pets of all breeds and ages. Having trained over 500,000 pets worldwide, Bark Busters has been named “Best of the Best” by the SPCA for their global excellence in dog behavioral training.

Canine Dimensions In-home Dog TrainingNumber: (888) 281-DOGS (3647)Website: www.caninedimensions.com Founded: 1997Category: Dog TrainingNumber of Locations: 5 Description: Canine Dimensions helps teach pet own-ers 2-way communication techniques between the owner and the pet.

Hydro-Groom Number: (336) 361 0706Website: mobilepetwash.comFounded: 1991; Franchised in 1998Category: GroomingNumber of Locations: 9Description: Hydro-Groom Mobile Pet Wash provides mobile grooming services straight to pet owner’s homes, providing a convenient service for those with a busy schedule.

Aussie Pet Mobile Number: (949) 234-0680Website: www.aussiepetmobile.comFounded: 1996Category: GroomingNumber of Locations: 81Description: Aussie Pet Mobile is a mobile grooming service providing at-home grooming services. Services include bathing, grooming, nail clipping, brushing teeth, undercoat removal and flea and tick control.

Pet Training

Grooming

Pet Related OpportunitiesWe picked the following 15 pet related opportunities to pro-vide an at-a-glance overview of some key categories in the field. There are many more opportunities available, but these caught our eye for one reason or another. Please check with the businesses for the latest information and disclosures.


Day CareTailWaggers Doggy DaycareNumber: (920) 954-1000Website: www.tailwaggersddc.comFounded: 2004Category: Day CareNumber of Locations: 1Description: TailWaggers Doggy Daycare provides daycare, overnight boarding and grooming services to their clients. Dogs receive constant supervision by pack leaders.

Home away from Home

Central Bark Doggy Day CareNumber: 866-799-2275Website: www.centralbarkusa.comFounded: 1997 Category: Day Care and BoardingNumber of Locations: 32Description: Full service facilities for day care, boarding, supply shop, grooming, vet care and canine cab pick-up and drop-off service.

Preppy Pet SuitesNumber: (407) 420-1060Website: www.preppypet.comFounded: 2003; Franchised in 2006Category: Day Care and BoardingNumber of Locations: 18Description: Preppy Pet Suites pro-vides day care and pet boarding services for a wide range of animals, including dogs, cats, birds and small animals. Superior kennel designs unique to Preppy Pets Suites are pro-vided exclusively for more flexibility in setting up facilities.

DogtopiaNumber: 240-514-0210Website: www.happytailsdogspa.comFounded: 2002; Franchised in 2005Category: Daycare and BoardingNumber of Locations: 50Description: Services available at Dog-topia locations include day care, over-night boarding, spa services, dog train-ing and a gift boutique.

Fetch! Pet Care Number: 866-338-2463Website: www.fetchpetcare.comFounded: 2002; Franchised in 2004Category: Day Care and BoardingDescription: Pet care service that pro-vides in-home pet care visits in over 1,700 cities. Visits include waste man-agement, dog walking and dogsitting (both daily and overnight), as well as regular household maintenance like watering plants and retrieving mail.

Pet ButlerNumber: 1-800-PET-BUTLERWebsite: www.petbutler.comCategory: Pet Waste RemovalNumber of Locations: 132Description: Pet Butler is a pet waste removal service, providing profes-sional removal of pet waste to private residential areas and community parks. Other services include yard maintenance to ward off bugs and maintain lawns and patios.

DoodyCalls Number: (434) 244-0143Website: www.doodycalls.comCategory: Pet Waste RemovalNumber of Locations: 35Description: DoodyCalls special-izes in pet waste removal, providing residential and community cleaning. Services include cleaning, disinfect-ing and deodorizing pet areas.

Waste Removal

Lil Pal’s Pet PhotographyNumber: (901) 682-9566Website: www.lilpalsphoto.comFounded: 2004Category: PhotographyNumber of Locations: 5Description: Lil’ Pals Pet Photogra-phy is a mobile pet photography service, working primarily in host locations among pet groomers, vet clinics, fundraising organiza-tions, grocery stores and pet sup-ply outlets.

Photography


Pet Supplies PlusNumber: (866) 477-7747Website: www.petsuppliesplus.comFounded: 1988Category: Pet Food and SuppliesNumber of Locations: Over 215Description: Pet Supplies Plus has grown to over 215 locations in 21 states, providing pet products for a wide range of pets. Products are carried for dogs, cats, aquarium fish, birds, reptiles and small animals, including everything they will need, from food, to housing to grooming supplies.

Pet Food& Supplies

Just Dogs! GourmetNumber: 888-332-0307Website: www.justdogsgourmet.comFounded: 1998Category: Pet FoodNumber of Locations: 41Description: Just Dogs! Gourmet specializes in baking hand-cut, all-natural dog treats.

How to pick a dog harness

By LINDA LOMBARDIFor The Associated Press

No-pull harnesses come in a variety of styles. You may need to try several to find one that works on your indi-vidual dog.

Some harnesses, like the Easy Walk and the Softouch attach the leash to a point on the dog’s chest rather than neck or back, which make it more dif-ficult to pull while walking forward.

Another approach, used by the Sporn Training Halter and Non-Pulling Mesh Harness involves straps that go under a dog’s front legs and tighten when he pulls.

The Weiss Walkie is the simplest de-sign. Unlike others, it come in only one size that fits most dogs over 25 pounds. It’s basically just one strap around the dog’s chest that tightens when he pulls.

Designer Emily Weiss created it while working at an animal shelter so it would be easy for volunteers to use. She recommends that you not use these harnesses to give leash-jerk cor-rections

`Ìt works best when we let the dog figure it out,’’ she says. `Ìf we apply a correction, it makes it harder for him to figure it out.’’

There are several brands and styles of head halters available as well, in-cluding the Gentle Leader, Halti and Snoot Loop. The difficulty with halters is getting the dog used to them, and at least one study suggests dogs dis-like all brands equally.

Trainer Victoria Stilwell of `Ìt’s Me or the Dog’’ on Animal Planet says it’s very important to desensitize the dog to the head halter gradually.

``Take a week before taking it out on a walk,’’ she says. Associate putting on the harness with an especially desir-able treat, and also reward the dog for not pawing at it. If you have the patience, most dogs will get used to them, and they do stop pulling.

All of these prod-ucts, trainers emphasize, should be seen as a way to get the situation un-der control so you have the opportu-nity to train your dog.

Equipment doesn’t teach you to com-municate with your dog the way training does, and communication gives you a big head start on solving other behavior problems when they arise.

When she gets called in by a client, Weiss says, she often thinks, `Ìf your dog just knew that when you do X I do Y, we’d be 10 steps ahead in fixing this behavior problem.’’

SEATTLE (AP) A man who was given a ticket while walking his dog in a Seat-tle park is challenging the city’s poop scoop law.

The man, Steve Guiling of Mount Ver-non, was given the $54 citation in November for failing to carry scoop equipment as he walked his dog Amy in Discovery Park.

He told The Seattle Times there’s no definition of such equipment, and he could easily find a plastic bag or use his hands.

Animal control enforcement super-visor Don Baxter says a lot of people make excuses that they would use their hat or gloves to pick up dog waste.

The city issued 65 dog poop citations in 2007, including the scoop law and allowing an accumulation of waste on property. The waste carries parasites and diseases and washes into water-ways.

Information from: The Seattle Times, http://www.seattletimes.com

Man challenges Seattle’s pooper scooper law

Franchises Making News

31 Business Opportunities Journal Business Opportunities Journal

AP Wire Service


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We specialize in covering the serious business of franchises, business oppor-tunities, and real estate investments.

Our editorial staff includes real world business-ownership experi-ence. We take great pride in our fair coverage, in-depth research, a n d b r e a d t h o f e x p e r i e n c e . Call 800-854-6570 ext. 108 today.

LAKEWOOD, Colo. (AP) Einstein Noah Restaurant Group Inc. is sticking to plans to grow mostly by adding licensed locations in 2009 as diners eat out less and credit markets remain tight.

The fast-casual coffee and bagel chain said this month that it plans to open six to eight new restaurants on its own, matched with the same number of franchise restaurants this year, where franchisees develop a new store that meets company guidelines.

It also plans to open 30 to 35 license restaurants, where licensees use the company’s brands to open bagel and coffee operations in such locations as airports, colleges and hospitals.

Einstein Noah started the year with 648 Einstein Bros. Bagels, Noah’s New York Bagels and Manhattan Bagel restaurants. A little more than one-third were franchised or licensed locations. The company aims for about half its restaurants to be franchised or licensed by 2012. Einstein Noah had 612 total restaurants at the end of 2007.

Paul Carolan, senior vice president of franchising and licensing for Lakewood-based Einstein Noah, said add-ing licensed and franchised stores will be key to meeting customer demand.

``We just can’t build them fast enough ourselves,’’ he said.

Still, the sour economic climate has affected sales. In the quarter ending Sept. 30, comparable store sales fell 1.7 percent.

Carolan said fast-casual chains haven’t been hurt as much as casual dining restaurants where customers typically stay to eat a meal and tip their servers. Franchisees have reported

tighter requirements from lenders but also some room to negotiate with landlords on rental terms, Carolan said.

The process of opening new stores also has slowed, he said. In September, Einstein Noah said it hoped to have five new franchised Einstein Bros. Bagels locations open at the end of 2008. Instead it had two, according to a regulatory filing with the Securities and Exchange Commission.

Einstein Bros. Bagels launched its franchise program in December 2006. It has not changed its requirements for franchisees to be worth at least $1 million, with $400,000 in available liquid assets.

Licensing key for Einstein Noah growth in ‘09

“ As of De-cember, Jim-my’s Pizza Inc. has 44 franchise stores spread among the smaller towns of Minnesota, Iowa, Wis-consin, the Dakotas and one store in Colorado.


WILLMAR, Minn. (AP) Jim Gordon greets customers about six times a year while standing behind the coun-ter of a Willmar pizza joint, the relentless aroma of to-mato sauce and spices surrounding him.The owner of Jimmy’s Pizza Inc. based in Willmar, Gordon has plenty of office work to keep him busy with Jimmy’s Pizza franchises popping up all around the Midwest, but he still likes getting back into the kitchen.And why not? After 23 years in the pizza business, side by side with members of his family, Gordon is just start-ing to reap the fruits, and perhaps vegetables and meat toppings, of his labor.``There’s been a lot of times when it’s been tough, just like any business it’s hard work,’’ Gordon said. ``But over-all I think it’s been an exciting, fast-paced business. Mak-ing a pizza is fun, it always has been.’’In 1986, Gordon opened the first Jimmy’s Pizza in Pine City after buying the store space from his father, Frank Gordon. His father had operated a full-menu restaurant there before the sale.`Ì told him it was crazy,’’ said Frank Gordon of Willmar. ``But he is a very good businessman. He makes very good decisions, he thinks them out. And he did that when he was younger. He just loved the (restaurant) business.’’Frank said his son ``had a knack’’ for restaurant manage-ment and remembers when his son was 11 years old, opening up one of the family’s restaurants in the early morning hours. Gordon’s parents had owned numerous restaurants in Minnesota after the family moved from Laguna Beach, Calif., when Gordon was a first-grader.Even with that experience, Gordon had his failures. When Gordon went into the pizza business at age 23, it was after a hard lesson learned. Just a year prior, Gor-don had tried opening a full-menu restaurant in Pine City and didn’t succeed. `Ì tell people I was able to lose $10,000 in about six months,’’ Gordon said.The pizza business seemed like a logical option, Gordon said, because he had been a cook for a St. Cloud pizzeria while finishing high school in Sauk Rapids. He said his in-laws also injected the business into him: his brother-in-law had worked at a St. Cloud pizza shop and his father-in-law opened a pizza store in Rice.Nine months after that first Jimmy’s Pizza opened in Pine City, Frank Gordon opened a store in Braham in Sep-tember 1986 and quit his full-time job with 3M. Shortly afterward, Jim Gordon said, he and his father bought a

store in Mora.``We were in a lot of small towns,’’ Gordon said. `Ànd at that time, in ‘86, we were the first chain that was deliver-ing in these small towns. You did not see delivery service in small towns in those days, and I think that was a niche for us.’’Soon, Gordon, his wife, Jana, and Gordon’s parents were operating five pizza stores per couple and then selling them to store managers.Jana said the family found that `èvery town has its own personality and it’s always kind of a challenge to see what works in what town.’’Over 10 years and numerous stores later, the state of Minnesota contacted Gordon about the business ar-rangement he was making with his store managers. The state said Gordon needed to protect the new owners using the brand name by making Jimmy’s a franchised company.The Gordon family is glad it did. As of December, Jim-my’s Pizza Inc. has 44 franchise stores spread among the smaller towns of Minnesota, Iowa, Wisconsin, the Dako-tas and one store in Colorado. Expansion into Nebraska also looks imminent, Gordon said.Gordon’s oldest son, Jimmy, is leading the Nebraska expansion project, and the 21-year-old already owns stores in Isanti and in Watertown, S.D. Gordon’s 18-year-old daughter, Justine, works as an assistant manager for the Willmar corporate store, which is used as a training ground and showroom for prospective franchisee own-ers.Gordon made Willmar the corporate center because it was close to his family’s fall hunting grounds near Ray-mond. And it probably doesn’t hurt that Minnesota is the land of 10,000 lakes. Gordon is also a professional fisherman for the FLW Walleye Tour.``Not only do we sell it, we believe it,’’ Gordon said. ``When we say family business, it’s been a family busi-ness.’’Gordon said he wants his three youngest children to try something else before following the family path like their older brother and sister.``We’re a lot closer than your normal family,’’ Jimmy Gor-don said. `Ì know I spend probably how many hours a day talking to my grandparents and (my parents),’’ Jim-my said. ``(The pizza business) is in your blood. It’s like an addiction.’’

FRANCHISING NEWS

Willmar family’s pizza company expands in Midwest By GARRET FELDER

West Central Tribune


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FRANCHISING NEWS

MARTINIZING TURNS 60Led by CEO George Strike for past 30 Years(Loveland, OH)--- George L. Strike’s first job was helping the local milkman on his daily deliveries, running cold bottles of milk to neighborhood houses. He was 10 years old and Strike earned 10 cents a day for his before-school job; 25 cents on Saturdays because he could work half a day. It was a good wage in Salt Lake City, Utah at the time.

“For 10 cents in those days, I could see a double-feature at the movie theater, including the newsreels,” Strike recalled.

Strike’s parents, Louis and Christina, were self-educated Greek immigrants. George was the youngest of their four children. Strike’s parents instilled important lessons in their children and Strike took them to heart.

“My parents told me that if you do the very best you can in whatever job you have, opportunities will come for you and they were absolutely right,” he said.

Turning his parents’ advice into his own creed, Strike today is CEO and Chairman of Martinizing Dry Cleaning, founded in 1949 and now one of the oldest and most recognized brands in the $7 billion dry cleaning industry as Martinizing cele-brates its 60th anniversary in 2009.

Since taking over the company in 1978, Strike has been in-strumental in growing Martinizing into a worldwide brand and today it is the largest dry cleaning franchisor in the Unit-ed States, with more than 160 franchisees operating more than 550 stores across the United States and in eight other countries and U.S. Territories.

“It just comes down to the basics: quality and service,” said the amicable Strike. Strike’s father was an inventor whose inge-nuity helped create significant improvements in the clothes pressing industry. That inventiveness enabled Louis Strike to start Ajax in 1929, a company that manufactured laundry presses and where George got his start in the industry, work-ing part-time as a delivery clerk as a teenager.

Strike inherited his father’s sense of curiosity and passion and parlayed it into a business career that is as interesting as it is successful. His parents endured hardships in the Greek village that they left to come to the United States and Strike says he couldn’t have achieved his own success anywhere else.

After attending the University of Utah, Strike went to work for Ajax, his father’s company. Afterwards, it was bought by American Laundry Machinery Co., the largest laundry ma-chinery manufacturer in the United States. The family con-

tinued to operate its own division and within five years, at age 32, Strike was named president of the entire company, a particularly proud moment for Louis Strike since American Laundry had been his chief competitor.

After a decade as president of American Laundry, Strike re-signed and in 1973 purchased Hess & Eisenhardt, a leading automobile engineering and manufacturing company that had customized the limousine that John F. Kennedy was rid-ing in when he was assassinated in Dallas in 1963. Hess & Eisenhardt specialized in building hearses, ambulances and other specialty vehicles such as armored automobiles, but Strike helped expand its business even further by adding markets and product lines, including a project with Jaguar, in which the company produced a special-order XJS convert-ible. “It was a fascinating experience,” Strike said.

CHARLOTTE, N.C. (AP) _ A fast-food giant has been trying to de-termine whether its easier to place your drive-through order with someone around the world instead of around the corner.

Jack in the Box Inc. has been outsourcing order-taking for some Charlotte-area restaurants to a call center elsewhere, testing whether the idea could improve efficiency.

Company spokeswoman Kathleen Anthony told the Charlotte Observer that the technology is intended to improve speed, ac-curacy and service. The San Diego-based restaurant chain hopes the process will free up on-site employees to process orders, ac-cept payment and address other needs.

`Ìt is something we’re testing, not something we’re necessarily committed to at this point,’’ said Anthony, declining to discus the results of the Charlotte trial that began in the middle of last year.

Anthony told the Observer that the orders are routed to a Texas call center operated by Bronco Communications, and she said some orders may be routed outside of the country.

Restaurants including McDonald’s and Wendy’s franchisees have tried centralizing orders but neither has used the program na-tionally because they have found it difficult to prove it saves money, said Sherri Daye Scott, editor of QSR Magazine, dedicated

to the quick-service restaurant industry.

Customers in Charlotte have noticed heavy accents among order-takers only to find different workers at the drive-through window.

`Ì had noticed it (several months ago), but I just thought the per-son taking the order was somewhere else in the store where we couldn’t see them,’’ said Elizabeth Banks, a Charlotte teacher and mother of three. `Ìt never occurred to me they might be out of the country.’’

Kate Mosteller, marketing director of Andover, Mass.-based Exit 41, which focuses on off-site order taking, said the technology can help eliminate barriers between customers and employees who speak different languages. But it can also be difficult to match order-takers with customers who may have different dia-lects or expectations.

``You want someone who’s friendly and articulate and who can understand ... different nuances,’’ Mosteller told the Observer. ``(Otherwise) you’re going to know you’re (being routed) some-where else, and that’s exactly what you don’t want to do.’’


Fast-food outsourcing gets trial run in CharlotteAP Wire Service

In 1978, Strike returned to the family business, purchasing the struggling American Laundry Machinery Co., which in-cluded Martin Franchises, Inc. (Martinizing’s parent company) and continued the legacy his father began. In 1987, Strike in-troduced a new franchise agreement that offered improved support and was more reflective of a full-format franchisor. Three years ago, Strike once again assumed a more active role in the company after son Anthony “Tony” Strike, who had been serving as president and CEO, began focusing more on other family businesses.

Recently, Strike spoke to some graduate business students from the University of Utah and gave them three pieces of advice: 1) An education lasts a lifetime and doesn’t end with formal schooling; 2) Do the best you can at every job; and 3) Follow your moral compass.

“Since we were young, each of us has been able to recognize the right thing to do in any given situation,” Strike said. “It’s important in business that you do the right thing. Most of the time it’s easy, but it matters most when it’s difficult to do.”

Martinizing is holding up well during the current economic climate. The franchise has more than 100 stores to open un-der Exclusive Multi-Unit Development Agreements over the next few years. Stores opening in 2008 were up from the previous year and it anticipated that 2009 will double those openings since there is an increase in the availability of rental space and at lower rental rates due to the economy.

“We always say our business is recession-resistant and we believe that, but it has definitely been proven in these dif-ficult times, Laesser said. “We’ve had lots of competition in recent years from competitors who had some big ideas, but they’ve fallen by the wayside. We’re a conservative company. We don’t do a lot of flashy things, but we get it done.”

About 30 percent of Martinizing franchisees own more than one store. And while the company guides and directs its fran-chise owners, Strike trusts them to operate their stores in the way they know best.

“You always like to have a strong relationship with your cus-tomers, which in our case are our franchisees, but our rela-tionship with them transcends that,” Strike said. “The franchi-sor-franchisee relationship is a very strong bond. We view our franchise owners as our partners.”

In many ways, Strike said the current recession has served to spotlight Martinizing’s strengths. It is in times like these, that a company’s strengths and weaknesses are magnified, either positively or negatively. Thus, Martinizing truly does have something to celebrate during its 60th year.

“This difficult economic climate really enhanced our feelings about the future of our business,” Strike said. “The true value of a business really comes through in difficult times. We have a strong, competitive advantage and we’re gaining market share. The outlook for Martinizing is the best ever.”


FRANCHISING NEWS

Tulsa man wants to expand Dippin’ DotsTULSA, Okla. (AP) _ Ryan Hausher foresees great opportunity in Oklahoma’s first full Dippin’ Dots store.

But he anticipates even more potential building sales beyond that 906-square-foot Promenade Mall site, which he sees as a launch pad for offsite sales.

`Òur goal is to do as many outside sales as possible -- fundrais-ers, catering, corporate events ... anything fun,’’ said Hausher, a franchise industry and corporate American veteran. `Ì’d like to take the three franchise locations that I have now and develop an attraction in each area where Dippin’ Dots is the go-to com-pany when you want to raise money.’’

At $12,500 each, his new firm Ryadd LLC of Tulsa acquired fran-chise kiosks from the 22-year-old ice cream chain at the Towne East Mall in Wichita, Kan., at the Northwest Arkansas Mall in Fay-etteville, Ark., and at Tulsa’s Promenade Mall.

While these kiosks offer lower costs, Hausher said the smaller platforms not only restrict the number of flavors he may stock _ such as Strawberry Cheesecake, Java Delight or Birthday Cake _ but also don’t allow room for distinctive products like Dot Cakes, Dotwiches, or Dots’n Cream.

And there’s definitely no room for shakes, malts, sundaes or oth-er traditional treats made more distinctive by the cryogenically frozen pellets, which must be stored at 40 degrees below zero.

So Hausher took his Promenade location to a leased storefront, the first in the Sooner State for the Paducah, Ky., company. He will celebrate its grand opening Jan. 24.

``We thought we’d pioneer the inline store in Oklahoma and make it as successful as possible,’’ he said.

The choice increases his cost from the $30,000 to $60,000 ex-pected for a kiosk to the $80,000 to $235,000 he said may ac-company an inline store. Since the Promenade slot formerly housed a Dairy Queen, providing all the necessities for a food operation, that limited his expenses to cosmetic changes _ color scheme, signage and the like.

Hausher estimated his initial investment at less than $100,000, although he plans to move the Wichita franchise to a smaller mall in Fort Smith, Ark., for closer proximity. He hopes to record monthly sales of $7,000 to $15,000 at the kiosks and $15,000 to $25,000 at the Promenade storefront, with a minimal staff of three employees at each location.

``That’s the beauty of it,’’ he said. ``You don’t have such a vast menu that your labor eats you up.’’

The extra room at Promenade allows Ryadd to stock and manage offsite events, either through direct sales or by staffing booths. He already has deals to sell Dippin’ Dots at festivities with Union High School and Guts Church in Tulsa.

`Èvents are where I’d like the lion’s share of the profits to come from,’’ Hausher said. ̀ Ìt’s great exposure for the product, it’s great exposure for the company, and we’re able to give a little back.’’

Such offsite sales also allow him to expand Ryadd’s franchise area without adding storefronts.

``Dippin’ Dots as a store is very accommodating in your ability to branch out,’’ he said. ``My goal is to have more outside business than inside business.’’

The larger Promenade spot also gives Ryadd room to create new specialty products like the Birthday in a Box, which features a Dippin’ Dots cake, balloons, hats and other celebration fixings for 12 to 14 people. Its price remains undetermined.

Getting into business for himself promises a quality-of-life change for Hausher and his 13-year-old daughter, Addison. Their first names determined the company’s moniker.

``She can’t wait to help out in outside events this summer and learn the ropes,’’ he said. ``Maybe one day she’ll have an empire to take over.’’

That depends on his starting and building a business under one of the worst economies in decades. But with long-term relation-ships under two lenders to draw from, Hausher remains optimis-tic.

I think something fun is always good to bring to kids and adults when times are tough,’’ he said. `Èven in tough times, people still want to be happy and eat ice cream.’’

He has already fielded expansion offers from other malls in Okla-homa. In February he intends to launch a Dippin’ Dots vending machine in a Bartlesville shopping center. The Dripping Springs Yacht Club at Grand Lake may receive one this summer.

An inline store at Quail Springs Mall also may develop this year, providing a similar events platform in Oklahoma City.

``We just watch how we expand and do it very methodically and definitely not try to overexpose ourselves,’’ he said of expansion. But he also pointed all such moves to one foundation for suc-cess.

``When you have Dippin’ Dots, they come,’’ he said of customers. ``For a lot of people, it’s a destination location. They’ll seek out Dippin’ Dots.’’

By KIRBY LEE DAVISThe Journal Record

All American Pet Resorts Opportunity barks

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Considering the return on investment, it’s perfectly acceptable to pant.

* The above location opened 2004. Gross profit is based on actual results for the year ending December 31, 2007 as published in the Uniform Franchise

Disclosure Document, Item 19. Actual results vary from unit to unit and we cannot estimate the results of any particular All American Pet Resorts Business.

We recommend that you make your own investigation and determine whether the All American Pet Resorts Businesses are profitable. We recommend that

you consult with an advisor of your choosing. Even though the above figures are actual results, the FTC requires us to include the following statement in

this advertisement - “Caution: These figures are only estimates. There is no assurance or guarantee that you will do as well. If you rely upon our figures,

you must accept risk of not doing as well.” 941-661-1175 [email protected] www.allamericanpetresorts.com

Job #: 09-APR-001 • Job Title : Pet Resorts AdPublication: Business Opportunities Journal (online) • Colors (include spots if used): RGBBleed: n/a • Trim: 8.5” x 11” • Live: n/a Date due to Pub: 1.27.09 • Run Date: February

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Don Callender, pie entrepreneur, dies at 81AP Wire Service

LONG BEACH, Calif. (AP) _ Don Callender, an entrepre-neur with a passion for pies who built his mother Marie Callender’s home-based baking business into a pop-ular brand, has died. He was 81.

Callender died Wednesday at Hoag Memorial Hospital Presbyterian in Newport Beach from injuries he suf-fered in a fall in 2007, said his wife, Katy.

Marie and her husband, Cal, set up a wholesale bakery in Long Beach in 1948. Marie worked long hours produc-ing pies for Cal and Don to sell to restaurants.

``We had three rolling pins and this old oven, and we used to work all night,’’ Marie told the Los Angeles Times in 1986.

The pies were hugely popu-lar and Don Callender even-tually came up with the idea of opening a pie and cof-fee shop in Orange in 1964. Named after his mother, Marie Callender’s Pie Shops Inc. was so popular that Don Callender opened two more stores in the region.

Those shops only sold pies but Don Callender wanted to add other dishes, so after experimenting with various recipes he went on to add hamburgers, ham sandwich-es, chili and cornbread to the menu.

By the time Don Callender sold the company in 1986 to Ramada Inc. for a reported $80 million, the chain had grown to 120 locations na-tionwide. The restaurants are now a subsidiary of Cas-tle Harlan Inc.

Marie Callender died in 1995.

Kent Kitselman, who started with the company as a dish-washer in 1972, and now owns three Marie Callen-der’s in Southern California, said Don Callender had con-siderable drive and would reward hard work from his employees by giving them opportunities.

`Àll he wanted to talk about was food recipes,’’ Kitselman said. `Ìt was his interest. It was his life.’’

Callender continued to work in the restaurant business until the end, launching Babe’s Barbecue and Brew-house outlets in Southern California and a Jackalope Ranch restaurant in Indio that opened the day after he died.

RENO, Nev. (AP) _ A report says Nevada ranks second nationally for its friendliness to small busi-nesses primarily because of its fa-vorable tax structure.

Nevada was second only to South Dakota in the Small Business Sur-vival Index, which looked at all 50 states.

The index’s rankings are based primarily on a state’s public poli-cies and how they affect small businesses.

Nevada ranked first in several areas, including tax rates for per-sonal and corporate income and capital gains.

Nevada also ranked first for hav-ing the lowest number of gov-ernment employees per 100 resi-dents.

California was ranked 49th overall in the index.

The report was released by the Small Business & Entrepreneur-ship Council based in Oakton, Va.

Report: NV ranks 2nd for small-business climate

AP Wire Service


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DENVER (AP) _ A tiny middle school tucked in a snow-covered mountain valley ditched its decades-old coal-fired boilers for a wood pellet furnace, partly due to a beetle not much bigger than an eyelash.

Mountain pine beetles have ravaged wide swaths of trees in Colorado, leaving the surviving forest more susceptible to fire from decaying trees.

A handful of businesses are trying to capitalize on a bad situation, and may incidentally prevent it from getting worse.

Sorocco Middle School contacted one of the two wood-pellet plants in Colorado that have opened since the beetles began attacking trees a number of years ago, and now draws heat from pellets.

`Ìt’s a disturbing situation to watch all of our trees die and we know this is going to dramatically impact our landscape,’’ said Mark Mathis, president and chief executive of Confluence Energy, a pellet producer about 100 miles northwest of Denver.

In Colorado, beetles had infected at least 1.5 million acres of for-est as of 2007, creating vast tracts of dying red and gray forest.

The beetles that have scarred breathtaking vistas from Alaska and British Columbia to the Southwest have spread because warmer winters allow more to survive, according to the U.S. Forest Service.

Forest Service officials believe most lodgepole pine _ the pre-dominant pine tree at higher elevations _ will be killed by 2013 and it could take decades before they return.

The predominant use for beetle-killed trees is still housing lumber, but the downturn in real estate has piqued interest in harvesting more dead trees for fuel, said John Swaan, executive director of the Wood Pellet Association of Canada.

Producers have relied on saw-dust from mills that cut lumber for housing. If they are forced to collect dead trees and process them, the cost could be three to four times greater, Swaan said.

That could make the business less competitive when oil is cheap.

Crude has given up two thirds of its value since peaking near $150 over the summer, which led to sharp increase in sales for wood pellet producers, particularly in the Northeast where heating oil is used widely.

Despite its cyclical nature, investors believe the business model is workable.

At Grand Lake on the outskirts of Rocky Mountain National Park, Joe Kostelac and his neighbors began talking about dealing with the dead trees and created the Rocky Mountain Pellet Co. in nearby Walden. The 20,000-square-foot mill began producing pellets last fall and has sold as much product as could be manu-factured through April.

``We really believe the growth is in the industrial side and com-mercial application of this product because of gas and oil and all the other energy products,’’ said Kostelac, who came out of retirement to run the company.

In the Yampa Valley, the South Routt School District installed Sorocco’s wood pellet heating system as part of a $4.1 million renewable energy project that also includes a geothermal heat pipes. It was financed by state grants and a bond issue.

`Ì think it’s definitely a conscious effort to make a green impact on the community. By using products that are close to home, it multiplies that effect drastically,’’ Sorocco Principal Dennis Alt says.

Scourge of forest beetles turned into a profitBy SANDY SHORE

AP Wire Service

Business Opportunities

& Entrepreneurship

BUSINESS OPPORTUNITIES


NEW YORK (AP) _ Times are tough for small business owners, those whom politicians tout as the backbone of America. As the recession marches on, it’s those businesses _ which employ about half of the country’s private-sector workers _ that are particularly vulnerable to the squeeze.

To cope, small business owners _ from neighborhood plumbers to graphic design firms _ are paying employee salaries before their own, trying to renegotiate leases and pleading for customers on neighborhood blogs. But despite their best efforts, the custom-ers aren’t there.

`Ìt’s all feeding on itself,’’ said Raymond Keating, chief economist at the Small Business Survival Committee, an advocacy group based in Oakton, Virginia. ``People are scared. They’re not quite sure what to do.’’

Not every small business is facing impending doom. But the economic quicksand brought on by the longest recession in a quarter century is getting worse as the nation’s unemployment rate reaches a 16-year-high and banks become more careful about lending money. That’s consuming even local favorites like Heine-mann’s restaurant chain in Milwaukee, Olsson’s Books & Records in Washington, D.C., and The Music Mill, a popular performance space in Indianapolis.

Small businesses _ defined by the government as having 500 or fewer workers _ are a key portion of the U.S.’s commerce food chain. They account for more than 99 percent of all employer firms, according to federal statistics, pay nearly 45 percent of the country’s private payroll and produce almost a third of the nation’s export value.

That means when they hurt, everyone feels the pain. Closures affect communities, where friends are co-workers and custom-ers, and the cost-cutting creates a hard-to-stop cycle. Charitable donations wilt. Storefronts sit empty. Cities and towns get less tax revenue, and have to cut their budgets. And people wind up spending even less as those who are unemployed _ or those who worry they will be _ trim their own budgets at the expense of other businesses, large and small.

While falling sales and the credit crunch have made headlines, the small business owners left standing are facing problems as varied as the businesses they run. Manufacturing is slowing. Layoffs are looming. Financing is hard, if not impossible, to come by. Vendors are being skittish about extending credit for inventory. Rents are rising. And profits are falling _ or vanishing altogether as sales slip.

Ajay Ekesa, 29, worries that his Kahawa Coffee House in Chicago may not last through the spring. He’s spreading flyers around

the neighbor-hood, opening his shop’s space for community meetings and writing letters to a popular local Web site, asking them to publicize his plight.

``Right now I’m trying to do everything I can do,’’ he said, adding that he’s using his own money to pay the coffee shop’s bills and the salaries of his two employees. ̀ `With every hour that I’m stay-ing open, I’m not making money. I’m losing money, which doesn’t make much sense.’’

That’s why Bonnie Mihalic closed her eponymous costume and bric-a-brac store on New Year’s Eve, after sales fell by 50 percent during the all-important Halloween season. When she shut down the Ventura, California shop, she laid off her seven employees and said goodbye to loyal customers she had come to know during 30 years in business.

``They’re like my children. Or my grandchildren,’’ the 76-year-old

Small business woes have big impact on US economyBy EMILY FREDRIX and ASHLEY M. HEHER

AP Retail Writers

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said. `Ì’m heartbroken.’’

Now she’s emptying her 10,000-square foot (910-square-meter) store and moving things to a warehouse. If she doesn’t get rid of her stock, including hundreds of wigs, tiki torches, and leftover holiday decora-tions by the end of the month, she’ll owe another $15,000 in rent.

It’s not just communities that feel the pain. Small businesses that are pinching their pennies also thwart corporate America.

Just ask Wal-Mart Stores Inc., which blamed a pullback in spending by more cautious small business customers shopping at its Sam’s Club stores for lower-than-expected December sales figures on Thursday. The surprise shortfall stunned investors in the world’s largest retailer, which had been weathering the recession by catering to bargain shoppers.

The scrimping is spurring Office Depot Inc., which gets about 80 percent of its business from corporate customers, most of whom operate small and home-based businesses _ to change some of its merchandise, said Chief Executive and Chairman Steve

Odland.

The office supply chain is bumping up the number of sheets in some reams of paper and repackaging items such as pens into smaller _ and cheaper _ packages.

``They say ‘I just can’t afford to buy a bulk pack of this,’’’ Odland said.

Officials said fewer customers were buying more expensive items like desks and file cabinets or computers.

`Ì do what I’ve got to do to keep the busi-ness running and the employees paid,’’ said 36-year-old Parrish Walker, who owns Walker’s Oak and More Furniture store in Fort Oglethorpe, Georgia. `Ìt’s really having to think about every purchase and decision instead of buying willy-nilly.’’

Being deliberate about expenses is one way he’s coping with the fact that sales are down more than 10 percent at the north-west Georgia store his father opened 15 years ago. He’s also scaling back on inven-tory, making sure the schedules of his four employees are as efficient as possible and forgoing his own paycheck to make sure

his workers get theirs.

More than 110 people lost their jobs this month when the Heinemann’s restaurant chain, a Milwaukee institution for 86 years, shut the three restaurants that remained of what was once a 10-location chain.

‘’Their clientele was aging, and as they were aging and dying they weren’t able to replace all those people with new people because younger people want chains they can recognize,’’ said Jerry Kerkman, a law-yer for the company.

Customer Dennis Sell, 58, was a regular for more than a decade, ordering oatmeal pancakes and eggs, toast and sausage at Heinemann’s on weekends before settling in for hours with a newspaper. He ate his last meal there on Saturday.

`Ì’m hoping it’s a dream and I’ll somehow wake up and hopefully none of this really happened,’’ he said.

BUSINESS OPPORTUNITIES

KANSAS CITY, Mo. (AP) _ As struggling consumers turn to casseroles, soup, pasta salad and good old macaroni and cheese to stretch their food dollars, the nation’s pasta makers are returning to a rolling boil after many years overshadowed by the low-carbohydrate fad.

Sales of pasta products in the United States _ including frozen and refrigerated pasta, canned pasta, soup mixes and prepared dinners _ rose 5 percent last year to $6.4 billion, according to Kansas City-based

American Italian Pasta Co., the nation’s largest manufacturer of dry pasta.

Most of that increase came as manufactur-ers passed along a stiff jump in the price of wheat and other costs.

But Peter Smith, chief executive of Harris-burg, Penn.-based New World Pasta, which makes such brands as Ronzoni, American Beauty and Creamette, said he was amazed commodity price hikes last year didn’t dampen pasta sales the way they did sales of other consumer goods.

`Ì think what happened this past year is with all the inflation running rampant through the stores,’’ he said, ̀ Ìt’s like a cer-tain number of people rediscovered pasta.’’

Smith said revenue at his company rose 25 percent last year to around $460 million while volume grew between 1 percent and 2 percent.

Total U.S. consumption rose 0.4 percent by volume, according to The Nielsen Co., although those number don’t include sales at Wal-Mart Stores Inc., where industry of-

By DAVID TWIDDYAP Business Writer

Pasta makers’ business cooking as economy droops


ficials say noodle numbers grew even faster.

The volume increase is particularly welcome because pasta consumption had been falling 1 percent or 2 percent annually for years because of high-protein diet fads, said Carol Freysinger, spokeswoman for the National Pasta Association.

``There’s this renewed vigor, this renewed energy in the pasta companies,’’ Freysinger said. ̀ `They really got beat up by the low-carb diets, which showed to not be that effective in the long run.

``Pasta has been vindicated,’’ she said. `Ànd (now) the economy is driving consumers to more cost-effective options.’’

Judy Donnellan, 45, was shopping for macaroni at a grocery store in Kansas City Tuesday and said her family eats pasta about three or four times a week.

`Ìt’s simple and cheap and I have kids and that’s something they like,’’ Donnellan said.

She said she couldn’t tell if she was buying pasta more than before but said the staple’s price and flexibility `ìs basically why I use it.’’

``When they sell it for, like, four for $1, I stock up,’’ she said.

The U.S. division of Italy-based Barilla Group, the world’s largest pasta manufacturer, saw a 15 percent boost in pasta volume and a 22 percent increase in sales, said the division’s president, Kirk Trofholz.

He said the company, which makes Barilla-branded pasta, has also seen success with pasta made with whole wheat or extra fiber, calcium, omega-3 and other nutrients.

``We expect the ‘better for you’ pastas to continue to grow fast,’’ he said.

In 2008, consumption of dry pasta hit its highest level since 2003, according to American Italian Pas-ta, which makes consumer brands such as Ronco, Mueller’s and Pennsylvania Dutch and supplies pasta for in-house grocery store brands and for manufacturers who use pasta in prepared dishes.

Annual sales at AIPC soared 42 percent to $569 million in 2008, and AIPC’s net profits more than tripled to $19.1 million _ even as its volume fell 0.5 percent.

CEO Jack Kelly expects higher volumes in 2009 as his company focuses on its best markets, and he predicts improved sales of grocery store brands, which have benefited from bargain-hunting con-

sumers.

The company has seen its stock price rise 76 percent to $25.90 since mid-November when its shares were relisted after it spent three years dealing with an internal accounting matter.

`Ìt is still an incredibly great value,’’ Kelly said of pasta. ̀ `For about $5, you can feed a family of four.’’

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Opportunities

US foreclosure filings up 81 percent in 2008

WASHINGTON (AP) More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81 percent in-crease from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.

Nationwide, more than 860,000 properties were actually repossessed by lenders, more than double the 2007 level, according to RealtyTrac, a foreclosure listing firm based in Irvine, Calif., which compiled the figures.

Foreclosure activity rose 26 percent last year in Ohio, a state that had one of the nation’s highest foreclosure rates, the report said.

Moody’s Economy.com, a research firm, predicts the number of homes lost to foreclosure is likely to rise by another 18 percent this year before tapering off slightly through 2011.

Still, foreclosures, which keep breaking records going back 30 years, according to the Mortgage Bankers Association, are likely to remain well above normal levels for years to come, and that will continue to keep home prices from rebounding.

``Hitting bottom is a lot different than coming off the bottom,’’ said Christopher Thornberg, a principal with Beacon Eco-nomics in Los Angeles.

The RealtyTrac report comes as Demo-crats, including President Barack Obama, develop plans to use up to $100 billion

of the remaining $350 billion in financial bailout money in an attempt to prevent the foreclosure crisis from getting even worse.

The four states with the highest foreclo-sure rates last year were Nevada, Florida, Arizona and California. Ohio ranked 7th.

More than 1.1 million properties in the top four states received a foreclosure notice, almost half the national total. And more than one in five of those households were in California, which is coping with massive job losses in the housing and mortgage industries as well as a rapid decline in home prices.

Among metro areas, Stockton, Calif., was first, with 9.5 percent of all housing units receiving a foreclosure filing last year. It was followed by Las Vegas, Riverside and Bakersfield, Calif., and Phoenix.

In December, more than 303,000 proper-ties nationwide received at least one fore-closure notice, up more than 40 percent from a year earlier and up 17 percent from November, according to RealtyTrac.

Nearly 79,000 properties were repossessed by lenders in December, a 61 percent in-crease over a year ago.

New state laws, particularly in California, Massachusetts and Maryland, that required giving homeowners advance notice of foreclosure proceedings, reduced filings in several states. But the effect of those laws has worn off, and lenders appear to be going ahead with foreclosure, rather

than trying to modify loans.

`Ìf all you’re doing is basically giving a stay of execution, then the inevitable will follow,’’ said Rick Sharga, RealtyTrac’s vice president for marketing.

Foreclosures would have been about 10 percent higher in California last year, Sharga said, if it were not for a law requiring lenders to give borrowers a 30-day warning before starting the foreclosure process.

Meanwhile, the president of the Federal Reserve Bank of Philadelphia said Wednes-day he expects the economy to slowly start recovering in the second half of 2009 and inflation to remain below 2 percent over the next year.

In a speech at the University of Delaware, Charles Plosser also said that the unem-ployment rate probably won’t drop any-time soon, but that he doesn’t expect it to rise to double digits, as it did during the recession of the early 1980s.

`Ì expect the housing sector will finally hit bottom in 2009 and the financial markets will gradually return to some semblance of normalcy,’’ said Plosser, adding that the cur-rent recession could be one of the longest in the post-World War II era.

___

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By ALAN ZIBELAP Real Estate Writer


REAL ESTATE OPPORTUNITIES

Real estate pioneer Trammell Crow dies at 94

DALLAS (AP) --Trammell Crow, a one-time accountant with no real estate experience who built one of the largest real estate development companies in the nation, has died. He was 94.

Spokeswoman Cynthia Pharr Lee said Thursday that Crow died Wednesday at a family farm near Tyler in East Texas. The cause of death wasn’t immediately released. In 2002, Crow’s wife disclosed that the prominent developer suffered from Alzheimer’s disease.

Friends and associates spoke glowingly of his long and dynamic life.

``He was America’s greatest developer,’’ said A. Mack Pogue, chairman of Lin-coln Property Co., and a former Crow partner. ̀ `He was everywhere. He prob-ably did business in most of the states of the United States. He started little and got huge.’’

Pogue said courage propelled Crow through the ups and downs of the industry.

``He had nerve,’’ Pogue said. ``He would do things that other develop-ers wouldn’t do. He’d take certain risk. He said, ‘You only had to be right 51 percent of the time.’ He wasn’t just my partner. Trammell was a great friend to all of us.’’

Crow grew up poor in Dallas, accord-ing to longtime business associate and family friend Anne Raymond. After serving as an ensign in the Navy, assigned to finance duties, Crow re-turned to Dallas after World War II and built his first building, a warehouse near downtown, in 1948.

Six year earlier, in 1942, Crow married Margaret Doggett, whose father was a successful grain merchant. Her inheri-tance helped fund his early entrepre-neurial efforts, Raymond said.

In the 1950s, Crow introduced Dallas to the idea of building on speculation --without a tenant lined up in advance. He soon became a major industrial developer in the city, building the Dallas Market Center in 1957 and his first downtown office building two years later.

In those days, Crow conducted busi-ness on a handshake. He relied on hundreds of young leasing agents, and those who proved themselves talented and hardworking became partners.

This approach marked the evolution of Crow’s then-unusual methods of working in the real estate industry. As he brought in new people to work on residential and commercial projects, he gave them an equity stake in the busi-ness. Crow explained that he believed the projects would thrive if the people managing them were partners rather than employees.

``He was just such a wonderful man,’’ said Denny Alberts, Crow’s banker in the ‘70s until the developer asked him to head Trammell Crow Residential Co., a national apartment program. ̀ `What a legend and a visionary. He was prob-ably the greatest partner you could ever have. ... His word was his bond.’’

Biographer Robert Sobel said Crow had another reason for using the part-nership strategy: By offering equity instead of pay, he conserved his capital

for putting up buildings.

Crow’s agents did more than $15 bil-lion in development and eventually gave him an interest in 8,000 proper-ties, ranging from houses to hospitals, hotels and office buildings.

Crow affected something of an aw-shucks manner in describing his suc-cess.

`Ì just happened to come along in the right city at the right time,’’ he once told The Washington Post.

But Raymond, managing director of Crow Holdings, the private investment business, said there was more to it than good timing.

`Ì think what made him so successful was his vision, his unwavering opti-mism, and his never-ending quest for knowledge,’’ she said. ``He was the most curious individual I’ve ever known.’’

By the 1960s, the changing econom-ics of the real estate industry forced Crow to change his loose network of partners into a formal, centralized cor-porate structure. The company bearing his name expanded beyond Texas, breaking ground on the Embarcadero Center office project in San Francisco in 1968.

But the U.S. recession in the mid-1970s hit the real estate industry hard. Crow’s company was forced to renegotiate bil-lions of dollars of debt and restructure, taking back many assets as partners left.

By LINDA STEWART BALLAssociated Press Writer


Crow stepped down as chief executive in 1977.

But he remained active in politics, the arts and philanthropy. He helped secure Dallas’ winning bid to host the 1984 Republican convention. Crow and his wife, Margaret, supported arts groups and beautification projects in Dallas and beyond.

They collected Asian art and founded the Trammell & Margaret Crow Collec-tion of Asian Art in downtown Dallas.

``He was a true Renaissance man,’’ said Alberts, who serves on the board of Crow’s museum.

A lover of great poetry, friends said Crow could recite entire poems by heart on most any discussion topic.

``He was quite a remarkable individual,’’ said Dr. Kern Wildenthal, president of the Southwestern Medical Foundation and president emeritus of University of Texas Southwestern Medical Center at Dallas.

The family has donated at least $1.1 million for Alzheimer’s research to UT Southwestern.

In spite of Crow’s gradual, cognitive decline, his physician, Dr. Craig R. Rubin said he remained positive and was physically healthy except for the Alzheimer’s. ``Basically he just went to sleep.’’

Crow’s company was sold in 2006 for $1.8 billion to CB Richard Ellis Group Inc., which was interested in Trammell Crow’s list of blue chip corporate cli-ents, including Exxon Mobil and Bank

of America.

``His remarkable life stands as a testa-ment to hard work, visionary leader-ship, and the unlimited potential of the entrepreneurial spirit,’’ said Bob Sulentic, CEO of Trammell Crow Com-pany. ``We deeply mourn his passing.’’

Survivors include Crow’s wife, Mar-garet; six children: Robert, Howard, Harlan, Trammell S., Lucy Billingsley and Stuart; 16 grandchildren and three great-grandchildren.

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47



PHOENIX (AP) Megan Foster didn’t foresee the changes coming to her Gilbert neighborhood when she closed on her house in February.

The prices of the houses in Freeman Farms used to begin in the $300,000s. But the deteriorating economy prompted builder Fulton Homes to introduce cheaper models.

The new houses are less colorful, finished in a different stucco and aren’t as tall, she said.

Angry at the builder’s action, Foster and four other families filed a consumer complaint with the Department of Real Estate and the Arizona Attorney General’s Office, hoping to prevent such prac-tices from happening again. The families say if they had known the house designs would change before they bought their homes, they would have thought twice about moving there. The com-plaint is likely to be considered within several months to a year.

Builders across metro Phoenix are introducing pared-down ver-sions of their models to boost their chances of selling houses in a challenging market, but existing homeowners fear those downgraded models may negatively affect their property values.

At Freeman Farms, the new houses begin in the $190,000s and are a far cry from what some neighbors say they paid for their homes. Residents understand that home values are dropping in the depressed market. But they are concerned that once the market rights itself, their values won’t recover as well as they would have because of the new models.

``We may never get what we could have, with our houses having these lower-cost homes next to us,’’ Foster said. ``They are the same square footage but are lower-quality.’’

Builders trying to sell houses in the slumping market are reducing what it costs to build them by scaling back on architectural details such as windows, stonework and cathedral ceilings. The savings are being passed on to buyers.

Once-standard features, such as additional cabinetry and smooth stucco, are now options. Ironically, the reduced features translate into more space in some models for the same amount of money.

The changes are a result of builders adapting to radically differ-ent market conditions. Houses that sold in 2005 and 2006 aren’t selling as well now because many buyers prefer good deals to the lavish features so popular in the boom.

Builders are trying to get their house prices down from well over

$300,000 to the $200,000s, said Rusty Shaffer, a real-estate agent with Century 21. Even with architectural changes, the houses don’t look drastically different, Shaffer said.

Builders say that once the market is better, homeowners who invested and upgraded their homes with more expensive options and have more architectural details will enjoy higher values even with the new, less-expensive models next door.

Other builders are using similar strategies. Trend Homes, which recently emerged out of bankruptcy, now uses vinyl instead of wood for window frames and is putting in fewer windows if they don’t affect lighting.

The new models haven’t been built yet in Freeman Farms, but Fulton Homes went to the Gilbert Town Council for approval on the changes.

Residents opposed the builder at the meeting, but the plan was approved. Fulton Homes President Norm Nicholls did not return calls.

``We love our house. We don’t want to move, but we don’t want to be made fools of,’’ said Teri Jaress. ``We feel like we’ve earned what we have, and now it’s been taken away from us.’’

Wayne Balmer, planning manager for Queen Creek, understands

Scaled-down Phoenix houses spark home-value fearsBy CHELSEA SCHNEIDER

The Arizona Republic


residents’ plight. Even one subdivision that deviates from a neigh-borhood’s plan can cause property values to fall, he said.

And the long-term vision of a community can be at stake. The houses built today have the potential to be there 100 years, so a cheaper product can affect a municipality’s viability.

``Will it be seen as a good long-term decision to change the de-velopment’s standards to a plainer-looking house or better wait a year or two until the economy turns around and then build the

same type of house?’’ Balmer said.

One of the challenges Mesa is facing comes from the high number of less-expensive houses in the city, said Balmer, an authority on urban planning in the area. The houses attract first-time buyers, who live there temporarily and then move on, which can affect schools and people’s participation in the city.

Less stable neighborhoods also have an impact on sales-tax col-lections and the ability to pass bonds in elections, Balmer said.

Queen Creek would like to maintain its second-time home-buyer niche because that’s the house people usually settle in for a long time.

``They need to ask, ‘Is it a neighborhood that will stand the test of time positively and be an asset to the community?’ `` Balmer said. `Òr are we having an area of the community that wouldn’t maintain the standards we’d like to have?’’

Now more than ever, buyers are in the market for a deal.

``Most people are trying to find the best and biggest bang for their buck,’’ said Sabrina Porter, vice president of sales and marketing for Trend Homes. ̀ `Most customers want a good-sized home. They want it to be beautiful with architectural details at a low price. As a home builder you just have to decide what are the most valu-able items for your customers and try not to do away with those.’’

Oahu office vacancy rates to climb higherHONOLULU (AP) _ One of Hawaii’s largest commercial real estate firms is predicting that office vacancies in Oahu will climb higher this year.

Last year, the vacancy rate settled at a bit more than 7 percent. A report by Colliers Monroe Friedlander estimates that figure will rise to more than 8.5 percent this year.

That is the equivalent of almost 140,000 square feet of empty space.

The firm predicts the vacancy rate will rise to 9.5 percent next year, the equivalent of an empty 13- or 14-story building.

However, anything below a 10 percent vacancy rate is considered a normal market and not likely to cause alarm. The rate in 1998, for example, was 14 percent, and in 2006, it was 7 percent.

`Ìt’s not the end of the world,’’ said Jay Shidler, chairman of Pacific Office Properties Trust Inc., which owns seven Honolulu office buildings. `Ì think we’re in a period of steady uncertainty, where nothing dynamic is happening. We’re OK.’’

The cause of the higher vacancies are closing or shrinking companies, weak business confidence and rising unemployment.

Shidler noted that a recent report from Merrill Lynch Research determined that Honolulu is the second healthiest office market in the country.

Jeffrey Hall, in another study for CB Richard Ellis Inc., described the city’s commercial real estate market as ``relatively unscathed’’ by the turmoil afflicting such markets in other U.S. cities.

While vacancy rates are on the rise, rents have slightly increased in recent years. Full-service gross rent last year rose to an average of $2.84 a square foot, the result of higher operating expenses for common areas.

Still, the Colliers report expects rents to drop a bit and landlords to offer more concessions this coming year as owners look for ways to hold onto current tenants and attract new ones.

AP Wire Service



When Dave and Gina Schudi of Phoe-nix went house hunting last year, they knew the time was right to buy --not sell --a home.

So when they did purchase a new one, they rented out their old home.

`Ìt all depends on the market,’’ said Dave Schudi, who plans to sell the old house eventually. ``We’ve got good renters in there.’’

Falling house prices and a slow market are forcing more homeowners to con-sider renting their properties.

It’s something Tampa, Fla., Realtor Julia Vakulenko suggests to potential clients.

``Basically, we ask all the people who contact us, ‘Must you sell it right now?’’’ she said. ``Most likely, it will just sit there or maybe sell below the market

value.’’

For many, the role of landlord is some-thing they’d never considered. If done right, however, renting out a home can help the owner ride out the housing slump, said Vakulenko, of Tampa4U.com. But the process does require doing some research, said Vakulenko, who owns five rental properties.

She often refers clients to property management companies who can de-termine what their home would rent for and whether there’s a market for it. Homeowners are often disappointed to learn that their home would rent for less than their mortgage payment, added John Nuzzolese, president of the Landlord Protection Agency in East Meadow, N.Y.

``Whether it’s for sale or for rent, it’s only worth what people are willing

to pay for it,’’ he said. ``People have to be realistic and put themselves in the tenants’ shoes.’’

Real estate analyst Danielle Babb often sends people to www.rentometer.com to see what the going rent is in their area. The Web site allows users to see what comparable properties in the area charge.

Once you’ve set a rent range, deter-mine your demographic --students, families, young professionals --and market the house to them, said Babb, author of ``The Accidental Landlord’’ (Penguin Group, 2008). Babb, who has owns 27 rental properties, wrote the book after watching friends and col-leagues trying to rent out houses they couldn’t sell.

``You’ve got to think like a renter.

By MELISSA KOSSLER DUTTONFor The Associated Press

Tough times can turn homeowners into landlords


There’s lots of availability,’’ she said. ``They’re going to choose the most exciting option.’’

Babb, Nuzzolese and Vakulenko of-fered the following suggestions for homeowners who are considering renting their home:

--Familiarize yourself with local laws dealing with rental properties. It’s important to understand the eviction process, how to handle security depos-its and what type of access you have to the property once it’s rented.

--Determine whether you want to select the tenant and handle property issues or hire a company to do it. If you take on the responsibility, you are obliged to fix any problems (leaky faucets, broken furnace, etc.) or find professionals to do it.

--Develop a rental application. Ask questions on the application that will help you quickly determine whether you want this person for a tenant.

Consider asking about pets, smoking and employment, for example.

--Ask for references. Call former land-lords and ask about the person’s rental history. Verify that the references listed are really landlords and not the appli-cant’s friends posing as landlords.

--Screen potential tenants. Once you’ve narrowed your field of potential ten-ants, hire a service to run a criminal and financial background check on the applicants. Be wary of tenants with previous evictions or bankruptcies.

--Consult with an attorney or the Landlord Protection Agency, www.thelpa.com, before writing a lease. A well-written lease is crucial to protect your property. It will help you evict a tenant or hold them accountable for damage if necessary.

--Collect a security deposit equal to one month’s rent. This will help cover any damage to the property and pro-tect you if a tenant moves without

paying rent.

--Perform a walk-through of the prop-erty with the tenant before he or she moves in. During the walk-through, make notes and take photos of any property damage such as chips in the tile, spots on carpeting, etc. You and the tenant should sign the paper as an acknowledgement of what condi-tion the property was in at the start of the lease.

--Check on the property. Drive by at least once a month and look for signs of trouble such as garbage in the yard, extra cars in the driveway, or excessive wear and tear. Make arrangements to walk through the property three months into the lease to see how well the tenant is caring for it. (Make sure you give the proper notice required for entering the property.)

--Do not accept partial rent payments. Accepting money from tenants who are not paying the full rent can make it more difficult to evict them.


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