Tweet

Lesson #2: Grab a Partner and Go

Article Overview: Orfalea recalls the way in which he first came up with his idea for Kinko’s: “It was an easy business…My dad made women’s clothing, and he had all this inventory to worry about. So I thought, this inventory thing is bad news. I don’t want anything to do with it. With a Xerox machine, I can dial a button and what comes out the end I can sell. It’s actually a simple, dumb business really.”

Lesson #2: Grab a Partner and Go

Orfalea recalls the way in which he first came up with his idea for Kinko’s: “It was an easy business…My dad made women’s clothing, and he had all this inventory to worry about. So I thought, this inventory thing is bad news. I don’t want anything to do with it. With a Xerox machine, I can dial a button and what comes out the end I can sell. It’s actually a simple, dumb business really.”

Although he downplays the significance of the idea behind Kinko’s, he does admit to the importance of his decision when it came to looking for ways in which to expand. Kinko’s was experiencing much success and Orfalea knew there was still tremendous room for growth. But what route should he take, he wondered.

“We decided not to franchise because we like the idea of making money with someone on the bottom line rather than on the top line,” he says. “We thought that was a better way of doing business, sharing the profits. The franchisor takes money from the top, he takes a percentage of sales. I just like the idea of working with people.”

Orfalea decided that franchising was not the best plan for growth for Kinko’s. “It just seems like it would set up an adversarial relationship,” he says. “I think all organizations have difficulties with this. The franchisee has an expectation that the franchisor is going to make [it] successful. We wanted to have a good relationship with the field.”

For Orfalea, there lay greater value in establishing a partner relationship with someone versus a franchise one. “Imagine yourself if you were in business with someone, and you sold $100 worth of stuff, and they took $6 off the top. Or if you made $6 in profit, and you split...with the other guy,” he suggests. “What would you rather be, splitting the profit or having it taken from off the top? I'd rather have it on the bottom line where you split the profits. It is a little more equitable, and the other guy listens to you.”

Orfalea understands that it’s “different strokes for different strokes. In certain instances, it is a good deal, but generally I have drifted away from the traditional franchise.”

Over the years, Kinko’s had morphed into a compendium of 128 joint ventures, small companies and partnerships. That is until 1997, when a New York investment firm bought one-third of it for $214 million and helped reshape it into a single corporate structure. Then, in 1993, the company went public.

“I think we are blessed with one of the only recognized trademarks in a $100 billion-a-year business called printing, and all of that printing world is coming our direction,” says Orfalea. “It is all going digital, and we are perfectly positioned in the digital world.”

To other small business owners, Orfalea offers this advice: “Do it yourself or maybe go in as a partner with someone, 50-50 partner or 60-40 partner would be better.”

Related Articles
  THREE RING DISASTER
  What do You Deserve?
  Whats In It For Them
  Affiliate Marketing Any Good? Absolutely Learn Why!
  Key 2011 Hacker Prevention Lessons

Article Tags: adversarial relationship, bad news, bottom line, dad, different strokes, doing business, expectation, franchisee, franchisor, good relationship, kinkos, making money, partner relationship, profits, xerox, xerox machine



Related Forum Posts
Re: Harley Davidson Video - Questions! - Hi Andy - it was edited by one of my Mastermind Group members - Mark Drager from Phanta Media so I have no idea how to do it. I believe in the philosophy to Partner with the best and stick to what you're good at! Thanks for the question.
Re: Any Ebay Tips or Suggestions - Use eBay Pulse to find out what people are searching for in different categories. Partner with a website to push more traffic to your eBay auctions.
Hi from Adelaide Australia - Hi guys and gals my name is Dave Gilbert and i am a Sr Partner at Velocity Marketer a joint US and Australian company that runs Kooiii.com. I have been a Marketer, Web entrepreneur/developer and search technologist for the last 15 years specializing in SEO,SEM,SMO .
looking for partner in india - Hi, I am an international investor, looking for local partner in Bombai to open a new “frozen yogurt” chain Frozen Yogort – Has showed great success over the last 2 years in USA & Europe, many articles can be found on google. Partner must be local, with capability to work & manage the business as well as financially capable. thanks, ROY
Dan Kennedy Marketing Methods - We haven't sent out the physical letter yet as the person owning the list wanted to make modifications to the letter that we knew would work well but the List owner had a point - it didn't reflect her personality so her clients would know it didn't come from her. Lesson learned for me. We're back to the drawing board with the list owner more involved in the development of the letter and emails. I should have known better being a Business Analyst in my day job that you never leave the end-user out. So Evan we haven't had the opportunity to test any of it yet but it's been a fun process for me to stand back and look at.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Purchasing Real Estate using the SBA 504 Loan

Let's Skip the Offshore Horror Stories

Are You Listening?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.