The Profitability of Mobility
Eighteen months ago, as stockbroker Jonah Engler watched the market begin to slide, he wondered: "What am I leaving to my three children?" That's when he decided to invest in a brick-and-mortar business. After careful research, Engler decided on a Wireless Zone franchise, figuring mobile phones were recession-proof. Plus he had an ace up his sleeve: two childhood friends with experience in the business who could manage his stores. A little over a year later, Engler (still a full-time stockbroker) owns nine of the mobile phone retail franchises in New York City suburbs and dreams of expanding even more.
You're young, but c'mon--how can you manage three kids, a full-time job and a cell phone empire?
I'm a full-time stockbroker, and I dedicate one day out of the brokerage office to my wireless business. I'm not selling phones to customers, but I'm on the phone with managers, making sure they have the products they need and making sure the stores are run the way they should be. I know I can't be a hero, so I've hired people I trust, like my childhood friends from Brooklyn, Will Stout and Tamar Bundy. I basically gave them small equity ownership, and they each manage one of my stores. They already knew the tricks of the trade on how to sell phones; what I brought was financing and a vision of how to go from one to 10. I'm on the phone with them more often than I am with my wife.
The cell phone retail business seems saturated already. How can you grow so quickly?
I'm a financial guy and a math guy. I figured a town of about 15,000 people demands its own store, so we've opened stores in upscale neighborhoods of that size. I'll tell you this: I'm really, really proud of the fact that our business was up 41 percent at the end of our graduating year. I attribute that to great service and great referrals. Our direct competition is corporate stores, which are difficult to beat because they give stuff away. What we have is customer service. I want to make sure we're selling the right phone to the right person. I want to make sure everyone walking out of our store is talking about us at dinner that night.
Credit's tight. Where did you get the cash to open nine stores in one year?
When I went to my bank, they said, "Sorry, guy, you're a year and a half too late. We're not financing startups." So the financing came directly out of my pocket. But we've also taken advantage of these economic times. I'm renting spaces in these upscale towns for $75 per square foot that were going for $110 nine months ago. And I have 10-year leases on most of them, with big options.
Why did you franchise when you have friends with experience and enough cash to go solo?
Wireless Zone has done a rock-star job. They've mastered the art of the franchise and given us support all over the place. Are they worth the royalties they take? Yes, they're worth it. They have economies of scale; I don't think doing it alone would be as profitable. I think I'll be a franchisee forever. I figure if it ain't broke, don't fix it.