Leaving the corporate nest - corporate executives as self-employed; includes related articles

Nation's Business, March, 1987 by Harry Bacas

For a while they kept overhead low by operating from their home. But as business increased, neighbors began to complain about so many workers' cars arriving every morning (two people for each cleaning crew) to pick up their equipment and the day's assignments, and the business had to move.

They learned as they went along. "I lost my shirt on the first jobs,' Peterson says, "because I hadn't worked out a system of job bidding.' He also learned that his service should not include dishes, laundry or wall scrubbing.

Peterson refined his system, hired more workers and established a workable pricing system. Business soon was doubling every month, and after a year, he decided to franchise. He sold eight franchises the first year and 23 the next. Eventually franchise sales were coming in at two a week.

Now the 400 Merry Maid franchises in 42 states employ 4,000 people. Many franchisees do $250,000 in business a year and some do over $500,000. The company provides each with management seminars, exclusive software, marketing agreements, videotape training, operations manuals and supplies.

Peterson says more than half of his franchise owners have come out of corporate life, just as he did.

But it is rare, he says, that a person going from a corporate job into business will have had exposure to all facets of business operations. One surprise will be the discovery of the critical nature of cash flow.

"Cash flow,' he says, "means you meet the payroll on Friday and still can buy groceries on Saturday.'

He believes a franchise can be "a very important vehicle for success' because it gives a new business person both his independence and the assistance and support of a large business organization. (See "The Franchise Route,' page 20.)

"If I were doing it again, I'd become a franchisee,' he says. "You're not so lonely. You can talk with your peers, and they aren't your competition.'

Bob Phipps and his wife, Jane, are co-owners of Energy Sprouts in San Antonio, Tex. The firm supplies all of south Texas and much of Louisiana with fresh bean and alfalfa sprouts and other specialty produce. Their path to San Antonio was bumpy and, like Dallen Peterson's, included the failure of an earlier business.

Phipps, a native of Long Beach, Calif., graduated from the University of Colorado with a degree in business and finance. His first job after graduation was in the office of a Vancouver, Wash., industrial contractor who installed coal mine machinery. Phipps eventually became a field supervisor with assignments to mines from British Columbia to Florida.

He married and became a father during the course of that job, leaving it because the travel demands kept him from home. He took a job at a North American Coal Company mine near Bismarck, N.D., where he would supervise machinery operation.

"I knew six hours after I took that job that I wouldn't like it,' Phipps says. "I had lost my independence.'

In his previous job, he explains, "the corporate office sent you out to do a job and you got it done. You were on your own 80 percent of the time. But here in the mine you only filled a slot in the corporate flow chart.