Franchisor Interview - Femalefranchise.co.uk exclusive interview with Rachel Elnaugh
17th September 2007
Femalefranchise.co.uk speaks to Rachel Elnaugh – a high profile business woman and mother of four about the challenges of balancing business with family, franchising for women and how her early business experience is helping to shape her latest venture.
Rachel Elnaugh is one of Britain's highest profile female entrepreneurs. At the age of 24 she created the market leading experiences brand Red Letter Days which went on to generate over £100million in turnover in the 16 years that she ran it. This earned her an Ernst & Young Entrepreneur of the Year award in 2002, as well as being short listed for the 2001 Veuve Clicquot Businesswoman of the Year award and the Growing Business Entrepreneur of the Year award in 2002. Then, in early 2005, Rachel was asked to became one of the original Dragons in BBCTV's business show Dragons' Den.
She has also been a member of the judging panel of the Grazia Businesswoman of the Year Awards 2006 as well as the Accountancy Age Awards 2006. Rachel acts as mentor and consultant to a number of small businesses and launched her own unique Entrepreneurial Profiling system at the Business StartUp Show at London's Excel in April 2007.
What made you want to run your own business?
My biggest influence was my parents and I think I always knew I would run my own business at some point. We lived above the electrical shop that my parents ran. This meant that I grew up around business, helping out, getting to know the customers, filing, and sending out invoices, so it was natural to me.
My mum was also a very busy person, running charity events, using her creativity, she was always making things – so I think they both created a certain level of natural energy and that’s what I learned to be like. From school I started in an accountancy practice as an office junior, and worked my way up to specialise in taxation planning for small business and entrepreneurs. This gave me fantastic experience working with entrepreneurs seeing what made them tick and made them successful.
What were you the challenges you faced when you started?
When I started Red Letter Days I worked from home – it was just me and a telephone. Things weren’t going well after 18 months hard slog and I was a little desolate. I was surrounded by negativity, even from some family and friends. They were saying things like ‘’it’s great that you tried it and it was a nice idea – but it’s time to give it up and get a job.’’
However, I had too much pride to do that and the turning point came when I actually asked for help. I was still doing some freelance work in tax and I confided in my old boss that I was having problems getting the idea off the ground. He introduced me to a marketing and designer friend who gave me some free advice. He helped me redesign the brand and focus on growing the Red Letters Days brand identity. He made me realise I needed the identity of the company in everything we did, from the logo to the red paperclips we used. This advice was crucial and that’s what kick-started Red Letter Days, it was having a consistent brand approach which made it memorable.
That’s why I’m such a great advocate of franchising. Franchising is all about brand and being a franchisee you are buying into a tried and tested brand, which can be priceless in business terms. With a good franchise, you get that integrity and track record from the start – it’s not something you have to build yourself. Franchisor and franchisee understand and believe in what the brand stands for; so all franchisees, and any staff need to maintain the standards of the brand.
How do you manage commitments of business / family / relationships?
Self-employment gives you huge flexibility. I could never have had four children and worked in the city. The corporate lifestyle is 8am – 8pm and I wouldn’t have got to see my children. Working from myself, I build work around my lifestyle. I don’t do a conventional 9 – 5, I might start early and work in the evenings.
It’s the value added time that I get and I work to my energy level. I’m currently pregnant with my fifth child, so I’m full of energy very early, but incredibly tired by the later afternoon – but awake again at 8pm, so my work time links to my energy levels. The best thing about self-employment is that technology allows us to work anywhere. I’m based in Derbyshire and I can work in my home office that overlooks my great garden – rather than having to commute into the city each day and look over a concrete square.
What brought you into Franchising?
I’ve only got involved directly in the franchising industry in the last couple of years, as I was asked to endorse a franchise company – ‘Your Home Page In…’. This was a franchise set up to attract franchisees with both women and men in mind who wanted a flexible lifestyle by building an online community website. I endorsed it because it was a low investment start and I think franchising can provide that confidence boost to people when they want to be self-employed.
How do you see franchising helping women into business?
One of the reasons I developed my Entrepreneurial Profiler was that after Dragon’s Den lots of people were contacting me to ask for business advice. I realised that a huge number of these people had never taken any advice when they started. They just started a business with a ‘half-baked’ idea, had done no self-analysis or market research. They had ploughed all their savings into the business and there was no option but to close it.
The Profiling tool I have developed helps people to see whether they are suited to running a business. Having completed and submitted the questions, a report gives guidance on whether they have the creativity, energy and drive to commit to business start up or whether they haven’t got the initial idea but may be suited to franchising.
Franchising suits people who are looking for more support and to build business confidence that might allow them to do something alone in future. Some people perceive franchising to be expensive, but people underestimate the cost of general business start up. In franchise, because there is a system to follow the start up costs are generally known so the franchisee can get the relevant funding if required.
Self-employment can be very lonely and being within a franchise network can be hugely beneficial to women in providing support and advice. There are also many different franchise opportunities coming into the UK market that are more home based and part time, rather than the conventional ‘retail’ type franchise.
Hints & Tips for women thinking of starting a franchise
- You need self-understanding and the ability to analyse yourself and how you work. Use a free service, like my Entrepreneur Profiler to see what type of self-employed person you might be.
- Be prepared to work. Taking the self-employed route isn’t all about lifestyle – it’s not giving up work, it’s just doing it in a different way.
- You have to stop being risk adverse and be prepared to give up the job and regular income. Discuss any decision with your family
- Starting a business may seem easy, but it is a test of your lifestyle and ambition and whether you can hack it alone.
- You need self-belief and to be able to trust your own judgement. You have to believe you are going to be successful.
- Try not to be too Alpha Male – like women in the 80’s with shoulders pads and pinstripe suits. You can be feminine and successful.
- Listen to the franchisor about the finance you need – don’t try to start something without the right level of funding.
- Listen to husband/partners but don’t let them hold you back. On the surface they can be supportive, but only if the business is a ‘’little hobby for the little woman’’.
- Have confidence – women can over-think and sabotage their own positivity.
- Try to have consistent energy levels – women do tend to lack consistency in energy levels, they are up & down. This is where customers / staff can sometimes get confused messages – is she into this business or not?
- Decide what’s really important to YOU for the future.
Tell us a little about your new profiling product:
My ‘Entrepreneurial Profiler’ looks at an individual’s basic skill set, their levels of self-belief, determination and drive, and assesses their attitude to risk, their lifestyle drivers and their level of ambition. It’s quite comprehensive!
The Profiler tests two separate areas: Alpha versus Zeta drivers (where Alpha Drivers = Money, Power and Ego and Zeta Drivers = Passion, People and Ethics) and Level of ambition/determination and appetite for risk / rewards. The resulting scores point to 9 different entrepreneurial types as shown in the diagram: For example the Execpreneur has experienced a safe corporate environment and needs structure to function. Often specialists, they find it hard to function as all-rounders and may work best in partnership with others. Then there are the Sociopreneurs who are driven by a cause and want to use their business to change the world. However they may lack drive and commercial skills.
The Entrepreneurial Profiler is free to complete online and is submitted to me so I can then make recommendations tailored to the individual - and guide them towards business opportunities where they are much more likely to be successful. I will enter into 1-2-1 discussion; it’s time-consuming and all absorbing – but this is my passion.
What do you see as the next trends in business?
The business of the future will have an inclusive approach. I did a presentation to the Aberdeen Business Women’s Network called ‘The Future is Female’. By this I don’t mean that women are taking over the world, but rather that businesses dominated by an Alpha male approach i.e. money, power and ego are not the future of business any longer. I foresee a Zeta Female approach, in that businesses will be run in a more socially conscious way.
It won’t just be about money, power and ego at any costs. The modern business will be ethically and environmentally aware, with a social conscience and treat its employees and customers in a much more transparent way. You can see it with businesses like Innocent Drinks. A lot of franchise businesses are still run in a very Alpha male style – where the franchisor is just taking money from unsuspecting franchisees. So I would advise anyone looking at a franchise to research the franchisor and find out why they are franchising and where they want to take the business. Ask yourself the question - do you want to be in business with this franchisor?
What next for Rachel Elnaugh?
I am due to have my fifth child in October, so a huge focus on that, but I hope to be speaking at the Business Start up Show in November 2007. I’m currently writing a book, commissioned by Crimson Publishing on the hard lessons learned in business. Contributors include many well-known entrepreneurs. It should be published in the spring. To complete the Entrepreneurial Profiler Test go to www.rachelelnaugh.com
