Franchise Players is Entrepreneur's Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email [email protected].
When Chris Jester and his wife returned to the U.S. after traveling around the world for a year, the duo knew it was time to embark on a new adventure: entrepreneurship. SailTime, a franchise that allows customers to share boat ownership, proved to be the perfect entrepreneurial vehicle for Jester. Ten years later, his business has allowed him to save up enough money to repeat the trip – this time with two kids in tow. Here's what he's learned over the last decade.
Name: Chris Jester
Franchise owned: SailTime in Newport Beach, Calif.
How long have you owned a franchise?
While getting my MBA in the early 2000s, I studied the success rate of new businesses and knew that the statistics were dismal. Since I had never started a business of my own, I was very aware that there was a lot I needed to learn. I felt that purchasing a franchise would equip me with proven systems, brand recognition, and marketing campaigns in one of the most crucial phases of the business—the startup phase. These tools were more than I would have been able to acquire on my own, especially at the onset of the business. I firmly believed this would give me a competitive advantage and ultimately, give me a better chance of being successful.
What were you doing before you became a franchise owner?
I spent about decade is the tech/telecommunications industry. I was in business development selling global data networks to multinational companies. My functional expertise was in sales and sales management. I had enjoyed quite a bit of success hitting numerous President's Club annual awards in my career. During the last three years of my telecomm career, I also attended UC Irvine's Masters in Business Administration (MBA) fully employed program. My goal was always to have my own business one day.
Despite having no free time, due to a demanding sales career and the rigors of MBA course work, I was lucky enough to meet the right girl. After she completed grad school and I completed my MBA, we fulfilled a life-long dream of quitting our jobs and travelling the world for a year. We spent the first 365 days of our marriage living and traveling abroad. It was the best year of our lives. We immersed ourselves in the cultures of nine countries over that 12-month period.
During our year abroad, we encountered an enormous surprise. Within just a few short weeks of embarking on this worldwide adventure, my wife became pregnant. We always wanted to have children but we weren't planning to start a family that quickly. I had been saving for about seven years to make this adventure financially possible. Needless to say, the pregnancy was a shock and a few adjustments had to be made. We had the malaria pills ready to explore the Amazon and South East Asian jungles, but we had to put those off for some other time. Fortunately, my wife was healthy throughout and we continued to travel for the first six months of her pregnancy. As her third trimester ensued, we settled down on the Mediterranean Island of Malta. My wife has extended family living on the island, so it made a perfect place to live the expatriate life while preparing for our first child.
Our first child was born on the island of Malta. When he was three months old, we returned to the United States. We stepped foot on American soil exactly one year from the day that we left. The time had come for me to support my new family. It was time to get back to work. It was time to start my own company. It was time for me to purchase the SailTime franchise and embark on a new chapter in my career: entrepreneurship.
Why did you choose this particular franchise?
After working about 8 years in the high tech/telcom arena, immersing myself in my MBA program, and facing the age 30 transition, "What to do next?" was constantly on my mind. I wholeheartedly felt that working for a Fortune 500 company did not fit my personality. I desired more autonomy, wanted to create something of my own, and craved being able to chart my own course.
I've always believed that if your career position is not right for you, success will be limited. I knew I would be happiest running my own business but I had to identify what type of business and in what capacity. Without an engineering or computer science background, I knew I most likely wouldn't be the person to invent the latest high tech gadget. But, I knew if someone had an innovative idea, in a new disruptive technology, I could market it and sell it. The SailTime franchise fit the bill. In 2004, fractional asset sharing—particularly in the marine industry--was new, innovative and most certainly a disruptive "technology."
There are several stages of the business lifecycle. I had already recognized that I wasn't the best candidate for the first "idea" stage. However, I was quite confident of my skills being suited to the the second stage, which was to prove that an idea was marketable and could be sold to the public. I believed that I could take a relatively unproven concept, such as sharing a recreational asset (e.g., a boat or a jet), and cross the chasm. The SailTime franchise offered the idea and I was up to the challenge of bringing it to the market.
An alluring facet of the SailTime franchise was that it would allow me to have a local business. I didn't want to have to travel several times a month and be away from the family I had just started building with my wife. I also knew that I wanted to identify a business with an outdoors element. I have always loved being around the water, whether it was surfing, sailing or scuba diving. One of my ideas was that I would enjoy the work more if I were able to incorporate one of my passions.
Another enticing aspect of the SailTime model was that it would allow me to use my functional expertise, which was sales. In addition, I wanted to sell a product with a monthly recurring element to the pricing. In telecommunications, the wide area networks had a fixed monthly fee associated with the service. SailTime, with their fractional lease, also had a fixed monthly recurring element to their pricing. Based on my prior experience, I knew that it was a smart idea to build a business around a fixed monthly fee.
How much would you estimate you spent before you were officially open for business?
First and foremost, I had to buy a new sailboat, a 2005 Hunter 33 to seed my base with a boat. That was about $150,000. I put down 20 percent ($30,000) in cash and look out a loan of $120,000 for the balance.
In 2004, SailTime was selling licenses for $15,000 if you signed a Letter of Intent before December 31, 2004, which I did. This purchase granted me exclusive rights to the Orange County territory, starting in Dana Point, Calif. and reaching to Alamitos Bay (south of Los Angeles).
Before becoming cash flow positive, I invested another $45,000 in start up costs for sales materials, boat show exhibits, advertising, PR, signage, computers, printers, flights, insurances and uniforms.
For the first few years, we had no employees other than my wife and myself. We worked without drawing a salary. To save money, we lived and worked out of my parent's house for the first year. We shared a car. Because we had just returned from traveling for a year on a shoestring budget, we were accustomed to budgeting when we started the business two months later (even with a new baby added to the mix).
Where did you get most of your advice/do most of your research?
Neither my wife nor I had a background in the marine industry. We only knew of one local couple who owned a boat. I had learned to sail as a teenager, but had no experience with boat ownership.
Prior to us purchasing the SailTime franchise, there was a small group of candidates who had considered buying the territory together. They were an astute team of older professionals, with decades of experience in the marine industry. They had completed a comprehensive market analysis and decided not to purchase the SailTime license. While I do not know the exact reasons of why they walked away from the opportunity, I did receive a copy of the team's market analysis report. Fortunately for me, it was very thorough and gave me an excellent introduction to the industry.
Research on the internet was plentiful and I consumed as much information as possible. Then, my wife and I started visiting different harbors, introducing ourselves to marina managers and asking questions to anyone who would give us the time of day. We started meeting boat owners and tried to pick their brains. Most boat owners told us "people don't want to share a boat; it is too personal." Many brokers, sales people and local journalists in the industry echoed their same sentiments. We quickly realized that current boat owners were not our target market.
For someone like me who had dreamed of buying a new boat and had never owned one, the SailTime fractional sailing concept made so much financial sense. I was sure that there were other people like me out there. We were the "wafflers and dreamers." These are the guys who drag their wives to boat show after boat show, dreaming that one day they are going to get a boat, even though their wives have no plans of letting them actually buy one unless they hit the lottery.
To put my theory to the test, we began talking to couples who had never owned a boat in the past. We would discuss how they could lease a share of a new boat for less than the cost of a slip alone. The light would go on, the numbers worked out, and everything started to click. The guy would get his new sailboat, sooner than he ever thought possible… and we would get a new customer. Bull's eye: we found our target market!
What were the most unexpected challenges of opening your franchise?
Our biggest shock came after we put the money down to buy the franchise and the boat. We were in the midst of a major slip shortage. Supply was practically non-existent and demand was very high. After all, Newport Beach was – and still is – an affluent and major boating destination with fair skies year round.
In 2005, slips were sold out in Newport Beach. Marina after marina told us they were full. We could get on the waitlist for a slip, but that could take a couple of years for our name to come up. This was a real challenge and added stress to an already stressful startup phase. Not to mention the fact that I was living with my parents and getting very little sleep with a six-month-old baby. Wow, I can't believe we survived. I'm lucky to have married the perfect woman for me, because if not, who knows what my marital status would be. Anyway, our boat was being built in the Hunter factory in Florida and we had just two months to find a slip.
Week after week, I pounded the pavement looking for a slip. Finally, my wife and I went to explore the very back of the harbor – the least desirable location because it was a 45-minute motor sail to the exit of the harbor. We spotted a sign that had just gone up: "Slip Available." I was already calculating how many people could be on the waitlist, so I brought my smiling wife with baby in tow, and we walked up like a nice cute family to enquire about the slip. The marina manager asked us several questions about our boat. The slip he had was unique in that it could only accommodate a narrow, smaller boat. Most of the boats on his waitlist were wider powerboats. Our boat would fit! The manager looked at us and said we could have the slip if we put down a deposit! We got the slip just in time, as our boat had already left the factory and was in the commissioning process. We dodged a major bullet.
What advice do you have for individuals who want to own their own franchise?
What's next for you and your business?
After 10 years of starting, building and growing our business, my wife and I have planned to take a year off and travel the world again. We want to show our children, who are now 10 and 7, the world. Maybe we will finally get a chance to take those malaria pills and see the Amazon and the South East Asian jungles. We've been dreaming of this trip since the day we returned from our last world tour.
Last time we left on our world tour, our situation was different. We were newlyweds with no roots. Prior to departing, we sold my house, my wife's car, and anything we owned of value, then stuck the rest in storage. We left without a return ticket home. Didn't matter back then when we came back… we were in love and were ready to see the world.
This time around, we have a family, a home and a community, which we cherish. We also have a business and customers who we treasure. We are embarking on this trip, but this time there is a definite return ticket. We have hired a manager to run the base while we are gone, an office manager to assist him, and a bookkeeper. It is a huge challenge to hand our business over to other people, especially when we will be on the other side of the world. But this is also a wonderful opportunity to test the pros and cons of hiring additional staff. We look forward to seeing how they will work together to carry on the traditions and work ethics we have instilled in our workplace.
We will be back in a year. We hope to continue building our business for another 10, 20 or even 30 years (with a couple more world tours in between)!
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