At the Key Bank for women-owned business event two weeks ago, I ran into a mother of two boys, who, working full —time as a consultant at Safeco, is starting an ice cream shop. Like many entrepreneurs, she took out a second mortgage on her home to finance her ambitions. But she´s also partnering smart to extend every dollar. Here´s how she:
1-partnered with the owner of upscale properties.
She lives in an affluent area and the mall owner doesn´t want franchises or commonplace retail shops. The entrepreneur I´ll call "Jill" modified a few details of her plans to fit the style and quality of the mall. Her subtle adjustments pleased the mall owner so much he partnered more deeply with her to:
2- integrate her into the DNA of his development plans
With the sophisticated and family oriented style of the shop, the owner and Jill worked out a deal to include her in all his future mall development plans. He has given her cut rate deals for the property, investment in the shops themselves and cut the term of the lease in half. All in order to:
3-participate in the revenue of the store.
This is the true upside of the arrangement. The owner is taking some risk in an unproven commodity and making a bet on Jill and her business by cutting up front (and very costly) build-out fees and guaranteed revenue. But he´s doing this because he understands that the real money is in the back-end revenue sharing. Because if Jill ever
4. takes the company to the next level, such as a franchise.
Then his participation will be significant. Further, the match is limited to a specific region of the country, but could expand much more broadly with the deep pockets of one developer/mall owner and a potentially robust and name-brand franchise system.
Now in a few more weeks, I´ll be able to reveal who "Jill" is, the owner of the mall, her grander ambitions and then follow her progress, particularly how the partnerships and business development efforts are turning out.