The out-of-towners

Written by ProfitGuide Staff
Risk. From the moment I decided to start my own business, I knew this was a word I would learn to both love and loathe. The decisions I make as a company leader affect the hundreds of franchise partners who follow the 1-800-GOT-JUNK? model—not to mention the staff who support them. So, when I decided to expand internationally, I knew I had to plan our incursions carefully. Moving into new territory brings many challenges, but it’ll also give you an unmatched indicator of the strength of your core business.

One of our goals at 1-800-GOT-JUNK? has been to become a globally admired company with a presence in 10 different countries by 2012. We took the first step in 1997, when we expanded into the U.S. America’s population is 10 times greater than Canada’s. As a nation built on consumerism, I knew there would probably be 10 times the need for our junk-removal services.

We decided to sell our first U.S. franchise in Portland, Ore. Not only is Portland a close cultural match to Vancouver, where we began, but the location is easily accessible, the climate is similar and our concept fits the city’s bylaws.

Moving to the U.S. proved a great way to test international waters. Doing business south of the border is similar to working in Canada, although there are differences. We discovered we couldn’t put flyers in people’s mailboxes because they are owned by the U.S. Postal Service. Gone, suddenly, was one of our fundamental marketing tactics!

But diversity within the U.S. also brought challenges. Our bright blue uniforms had to change. In Vancouver, winter workwear means dressing our staff in a logoed rain jacket. In Chicago, it means a thick blue parka and ski hat. In Phoenix, we need Dri-FIT shirts and blue shorts to handle 40°C summers. Environmental laws also vary from city to city, forcing us to implement our own recycling programs in some markets. Luckily, we had solid training systems in place to get us over such hurdles.

With Canada and the U.S. under our belt, last year we ventured into the U.K. and Down Under. Australia, in particular, seemed the perfect place to test our systems: It has a population similar to Canada’s, but it’s so far away (an 18-hour flight) that we couldn’t possibly babysit it.

We encountered positive surprises along with the bad. For instance, I was told that all our manuals and forms would have to be customized for overseas markets. To avoid the cost of new systems, we decided to test our 25-chapter operations manual in our new markets anyway. The wording turned out to be so close to Australian and British norms that it was easily accepted by customers, employees and franchise partners—saving us a bundle.

Technology also cut our costs. The Internet helped us save money by discovering where to advertise, which suppliers to contact and what other franchisors we could learn from. Google enabled us to scan newspaper headlines and the websites of competitors. We even saved on travel costs by hiring our general manager through video conferencing.

As much as I’d like to say all our ideas were brilliant, some were not. FedExing boxes of marketing materials to Australia proved extraordinarily costly. We also learned it’s very expensive to ship our trademark blue “dump boxes” when they’re pre-assembled. We didn’t think to ship the components in containers and then have them assembled on the truck chassis locally. We’re now sourcing suppliers to build our boxes from scratch in Europe and Australia.

Keeping our brand consistent across borders wasn’t easy. In the U.K., 1-800-GOT-JUNK? became Gotjunk.com, because European phone keys don’t contain letters. The size of our trucks also had to be modified to accommodate Britain’s narrower roads. Creating territories to sell to franchise partners was also different in Australia, where postal codes follow logic unlike that used in Canada and the U.S.

These trials taught me a valuable lesson. In many ways it has become easy for businesses to go global. Brands such as FedEx and chains such as McDonald’s and Starbucks have not only inspired and mentored us, but proved that North American formats can be welcomed in foreign markets. Still, it’s important to stay focussed when entering new markets. No matter how well you do your research, there will always be unexpected details that have to be managed differently.

Expanding into Australia and the U.K. wasn’t cheap, but with our North American growth averaging 80% a year over the past seven years, we could afford to make mistakes. At the time we started expanding, we were already in seven provinces and 40 states. Our systems were all well tested and widely accepted. We’re now actively selling franchises in both the U.K. and Australia, but we’ve decided to put a hold on moving into any new countries until 2008 or 2009. In the end, I realized that if the core of your business isn’t rock-solid, you’re unlikely to profit internationally. Taking risks is good, but sticking to smart risks is even better.

Brian Scudamore is founder and CEO of Vancouver-based 1-800-GOT-JUNK?, North America’s largest junk-removal service, with more than 280 franchised locations. You can reach him at Brian.Scudamore@PROFIT.rogers.com.

Originally appeared on PROFITguide.com