PostNet Provides Office Support Function to Displaced Workers
By Mark Adkins, Business Opportunities Journal. February, 2009.
We’ve all seen the pictures: well-dressed professionals in cities across the U.S. waiting for job fairs with lines stretching out the door. With the worst unemployment conditions facing the country since 1992, one might expect postal centers and related businesses to be suffering greatly. One company, PostNet, a diversified business center with over 900 locations worldwide, is turning that presumption on its head, having found a niche serving as an office support center for dislocated professionals while they look for work or pursue entrepreneurial endeavors.
White collar professionals who now find themselves out-of-work, accustomed to relying on extensive office support systems, are finding a ready alternative by utilizing PostNet locations. Unlike the more narrow focus of traditional pack and ship stores, PostNet early in its development chose a strategy to offer a broad variety of services, from graphic design and computer rental to signs and banner production, in addition to pack and ship services.
“We’re generally less affected than a lot of the other companies that are out there right now,” said Steven J. Greenbaum, CEO and founder of PostNet International Franchise Corp. “I believe it is as a result of the fact that our products and services and our business model are geared to supporting these folks. So many professionals right now are looking at going into business for themselves as an alternative to corporate employment, or opening small consulting practices, or looking at franchising, for that matter, and we serve as their home office. It’s exciting.”
PostNet focuses on locating its centers on the interior of neighborhoods and similar locations in order to be closer to where small business people live and work. The average center is 1200 to 1400 sq. ft. The company sees big potential in small business customers.
“This surge of home based mobile workers, and small office/home office worker, these micro businesses popping up all over the country and around the world, this is the niche we chose strategically by changing our marketing from very consumer oriented to business-to-business focused,” said Greenbaum. “We remained consumer friendly, but wanted to differentiate ourselves with a unique identity for the brand and tap into this audience. We were able to do this quite successfully over this transition period, even as the economy just fell apart.”
The diversification of service offerings with an interest in servicing “micro businesses” was a strategy made in light of big shifts taking place in the marketplace.
“About seven or eight years ago, when we saw UPS considering the acquisition of Mail Boxes Etc, we could see that our biggest supplier might become our main competitor,” said Greenbaum. “And then down the road, Fed-Ex acquired Kinko’s. So we had a strong sense that we needed to differentiate our business and to target this small business community, the SoHo worker, the mobile worker, and then move away from reliance on any particular shipper, carrier, product or service, and strengthen the business model on what I call the ‘New Economy.’”
Dislocated professionals are having to be creative to earn income. Although many focus their efforts on finding new employment, some choose to seek alternatives by acquiring a franchise, buying a business, or to become self-employed to provide their expertise on an independent contractor basis. Oftentimes, the local PostNet becomes a hub of entrepreneurial activity.
“When things become unstable in the stock market, the economy and the environment, confident people turn to themselves,” said Greenbaum. “They rely on themselves for creating businesses, creating income, creating opportunity. Entrepreneurs emerge during these kinds of times.”
These entrepreneurs, of course, need a wide variety of services to get their vision off the ground.
“Our stores are doing pretty well given this economy,” said Greenbaum. “In part, this is because when somebody says ‘I want to start a small consulting practice at home, I want to incorporate, I’m going to need to create a business identity, I’m going to need business cards, stationary, letter head, I’m going to need support with my communication, transportation support if I have products to ship,’ we’re positioned perfectly as an organization to support that. That is what we do.”
At its core, the brand repositioned itself to be a printing and document services business.
“Rather than being a pack and ship that offers copying and business cards and the traditional secondary print services,” said Greenbaum, “fundamentally, we’re really more of a printing and document services business that offers pack and ship. The transition came not from de-emphasizing pack and ship, in fact our income from it has grown, but instead to grow these other categories because we were missing so much opportunity.”
Repositioning the brand also required changing the look and feel of the centers, and incorporating new wide-format printers and other advanced equipment.
“The store design is an open, clean, modern environment,” said Greenbaum. “We brought in a retail design firm to help us to retool the interior of the center to assist the consumer and quickly identify our core products and services.”
The fact that PostNet locations are run by franchise owner-operators who are entrepreneurs themselves, means that there is a friendly face in each location who understands what the small business owner or self employed professional goes through to earn a living.
“Our franchisees are open and inclusive with the customers because our franchisees are small business people in the local community who understand the challenges faced by a small business start up,” said Greenbaum. “So they have a unique view on the effectiveness of, for example, direct mail communication, or variable data printing, or customizing a direct mail piece. So it’s very consultative.”
The friendliness that PostNet customers come to expect is part of the franchise’s business identity.
“We’re in the neighborhood, we’re owner-operated, we’re part of the community and support the community as a community based business,” said Greenbaum. “The real strength in our ability to compete is that our owner operators are entrepreneurs who are part of the fabric of the community. The local franchisee is about customer experience. People are very supportive of local entrepreneurs.”
The franchise is having many inquiries from entrepreneurs interested in acquiring a new PostNet franchise. PostNet is looking for those with “personality plus.”
“An ideal franchisee welcomes with open-arms the ability to work with the public” said Greenbaum. “These dynamic people embrace the opportunity to be a part of the local community. They thrive on and are inspired by being the people that the consumer goes to get a project done.”
The economic times are having a big impact on franchise development for franchising in general.
“One would think that this is a great time for franchising, but it is tempered by the inability for people to obtain funding,” said Greenbaum. “Because of the challenges of the credit crisis, we’ve been bringing on more candidates that are using their own capital. In other words, they are not financing the business. They have the capital, they don’t feel comfortable with it in the stock market, they don’t feel good about it in their 401(k), so they are using their own cash to fund their business start up. We granted 5 franchises last month and none of them obtained financing. That is completely unusual for franchising in general and for our business.”
Self-financing may be part of a broader trend toward franchising candidates being responsible for a much greater share of the start up capital for a new business. Greenbaum notes that although PostNet has always looked for candidates to provide at least 30% of the required start up capital, other major franchise brands tended to allow a 90% financing to 10% owner capital requirement ratio. This relaxed ratio may be a thing of the past.
“The traditional way in which franchisors were getting franchisees financed is changing,” Greenbaum said. “And I think it may not necessarily be a bad thing for franchising. I think it’s OK for people to come in with a little more capital and to take on a little less debt. I think franchising will emerge with a different model, and I think it will be a better model.”
Greenbaum, who just completed serving as Chairman of the International Franchise Association (IFA), which represents 1300 franchises worldwide, is a staunch proponent of the concept of franchising. He believes that franchising will, in general, help the economy turn around as a whole.
“I am cautiously optimistic,” said Greenbaum. “I think credit will begin to loosen up and I think our government is taking what appears to be appropriate action – I hope it continues. This is the perfect environment for franchise growth. You have a lot of people who are looking for opportunities. And people who are looking for opportunities are very high caliber individuals. They are highly-educated, well compensated, management level and above people looking for opportunity. So you have a great talent pool right now. We could be looking at a pretty exciting bounce for franchising and small business.” | BOJ
