Mark Day was sure he would be an entrepreneur. After graduating from the University of Georgia with a business degree, he planned to do two years of corporate work and then set off on his own. His success in the corporate world, though, prevented him from executing his dream right away.
“I started as a sales rep, then decided to get my MBA, which enabled me to move into multiple roles in marketing, product management and sales management,” he said. Day was promoted to global vice president and then to divisional vice president for Asia, Africa and the Middle East region, where he served 10 years.
Upon retiring, Day began looking at opportunities to buy a small business. “After 35 years in the corporate world I decided I really wanted to do something entrepreneurial. I was not ready to do nothing, not yet.”
He was frustrated, though, in trying to acquire the right business. “They were over- or under-valued or had skeletons in the closet. I could not find a good stand-alone entity to acquire at my price level.”
Day came close to buying a seasonal equipment rental business in Seaside, Florida, but the seller ended up dragging his feet on the sale, so he walked away. In late 2016, he approached the DeKalb office of the UGA Small Business Development Center for help in analyzing his options. He had known business consultant Steve Newton since their undergrad days together at the University of Georgia.
“We talked about his Seaside experience, and I invited him to several SBDC training sessions,” said Newton, “but he was unable to attend. I took notes at broker Leslie Kuban’s class on owning a franchise and invited him to meet her.”
Kuban introduced Day to several new franchise businesses, and he found others through his contacts. He worked with Newton to analyze each for its potential.
“We’d look at industry trends, references and cash flow analyses for these businesses, anything we could do to help Mark see how each business would develop over time,” said Newton. “Finding the perfect fit is the challenge. Each business has its own unique characteristics, so you must dig through the financials and other data to see what makes it profitable. The numbers may look good, but that may depend on its owner’s charisma, which may not transfer to a new owner. Leadership is important.
“We also look at whether it’s scalable. Can it grow? Is it in a growing industry? We help our clients recognize that. We do not do business valuations, but we can help a buyer understand what a typical business in that industry may be valued at, based on certain guidelines like owners’ discretionary earnings, inventory levels, average sales and profits. In Mark’s case, he ended up purchasing the franchise that was the least difficult to analyze and the most difficult to operate.”
After doing what he called “a lot of brainstorming with Steve,” Day, during a six-week period beginning in October 2017, acquired nine Smart Style full service hair salon franchises located in Walmart Supercenters in outlying metro Atlanta counties.
“I was very close to signing on with another franchise but changed my mind when I realized the salons belong to Regis, the world’s largest haircare company, and are located in the world’s largest merchandiser, where foot traffic averages 5,000 people per day,” said Day. “And hair is recession-proof. Amazon can’t do it.”
Day now manages nearly 50 employees in the nine shops while keeping his profits steady. He has learned turnover and customer loyalty are big issues. He also admits he has developed a new understanding of business management.
“I learned quickly that operating your own business is a whole different animal. You are HR, finance and the fixit person. Everything falls on you,” he said. “Steve has owned a business, so I’ve always respected his logic. Quite frankly, just having the resources of the SBDC, and being able to use Steve as a sounding board, is the best resource. I tell everybody about the SBDC now.”
