An interview with David T. Banfield, President of The Interface Financial Group.
1. David, can you describe what type of person tends to do well in this business?
"Perhaps the most important thing to remember is that this is a people business long before it is a money business. In order to make this business work, we have to deal with people. Therefore, we seek candidates who have the skills to deal with people at all levels. The one trait shared by anyone who is successful in this business is the ability to communicate. It is absolutely essential.
Second, because this business is financial in nature with a focus on small business, we seek people with good business acumen. The ability to say, 'been there, done that' is a very important asset. For example, having been a small business owner is very helpful because one can relate to clients based on real life experiences. However, being a corporate executive with small business interaction, such as a buyer of goods and services, would also be very beneficial.
Naturally, another compatible skill set comes from seasoned financial professionals. Bankers, lenders, accountants, financial brokers, consultants and financial advisors make good sense in this business, as they know from direct experience some of the difficulties faced by entrepreneurs and growing businesses in attracting working capital from conventional sources.
As you can see, these three scenarios encompass a tremendous range of professional experiences, but bear in mind that regardless of which of these backgrounds a person may have, I will again say people skills are paramount."
2. David, is this a risky business?
"If there was no risk there would be no reward. Every business has a degree of risk associated with it. What is important is how that risk is managed.
At Interface, we have a proven risk management system that has been honed to its present level for over 40 years. Without getting into great detail, as we would at franchisee/licensee training, our system relies on performing the appropriate due diligence before we ever complete a transaction. It sounds obvious, but is nonetheless a point to always remember.
Therefore, we have a very tightly-controlled risk management system that, coupled with the overall Interface system, enables franchisees to work in a well-controlled environment."
3. What happens if a customer just doesn't have the money to pay?
"This situation does happen, but it is the exception rather than the rule. Before we undertake any transaction, as I have stated, we always complete the appropriate due diligence.
Because we operate on a recourse basis with our clients, it becomes the responsibility of the client to take care of the payment. This will happen either by re-purchase of the unpaid invoice or through an exchange mechanism that we have developed. Either way franchisees/licensees will always earn their discount."
4. Where do I get my clients?
"We have a professional approach to marketing designed to solicit business from professionals. We have found, through surveys of our franchisees/licensees, that approximately 60%+ of all business is the result of referrals. Therefore, our number one (and the initial) marketing thrust is to have our franchisees develop a lead source referral group.
That group consists of professionals such as loan officers at the bank, non-bank lenders, brokers and accountants. As part of your initial training, we will work with you on a one-on-one basis to develop a block of referral sources, and we do this in your location as practical, hands-on marketing training. An Interface senior executive goes into the community with you and together you start to develop a lead source referral group."
5. How about repeat business?
"Feedback from franchisees/licensees indicates that a typical Interface client utilizes our service for a period of 12-18 months."
6. How much money do I need to get started in this business, and what will it be used for?
"We encourage all franchisees/licensees to start in a 'modest' way as this is a business where you benefit from learning as you go. Therefore, initial working capital of say 50K over and above the franchise/license fee is appropriate. You will then add to this as your comfort, experience, and client levels grow.
To get started, you will need a telephone; fax capability, and a computer. You will need to put gas/petrol in your car to visit clients as they DO NOT come to you - this facilitates a home-based business environment. Your other cash flow requirements will be a limited amount that you choose to invest in marketing - probably a maximum of 2,000 is a good annual budget figure."
7. I have read where Interface has been described as a 'lifestyle' venture. Please explain what that means, and help me understand what the pros and cons might be in a 'lifestyle' business.
"As we have stated, this can easily be a 'home-based' business. Another important feature of an Interface franchise/license is that, as it is capital driven, a typical franchise/license with say 250K of working capital will probably service only 4-6 clients, so only a limited time budget is required. The size of the portfolio will dictate time usage - we often say think bankers' hours
in this respect.
It is important to always remember that your 'working' environment is with professionals and business owners. Therefore, you will only work core business hours."
8. How quickly can I get started?
"Here is a basic chronology. Once you make the decision to go forward, you will sign the franchise/license agreement and pay your franchise/license fee. Approximately one week later you will receive your Operations Manual. This is a very comprehensive set of manuals covering the A to Z of Interface, and they cover every conceivable aspect of the business. As part of your self-directed training we require that you study, review and absorb some of this material. Formal Training at our Training Center is scheduled on a monthly basis, and then following that a senior IFG executive comes to your location for Field Training to make calls on local banks and other referral sources. At the end of that training period, you are ‘open for business’.
9. How do you assist me?
Total time from signing the agreement to being 'open' is in the rage of 4-8 weeks."
"From a ‘getting started’ point of view, there is the training and marketing assistance that we have already discussed. However, it is important to remember that training never ends. We provide a personalized coaching program, web-based training, transaction guidance and review, to name just a few areas. We strive to provide whatever assistance you need to make your franchise/license successful."
10. Do I get a territory?
"No - this is a non-territorial franchise/license, hence it is also portable. You are able to relocate and take you franchise/license with you."
11. Are there regular meetings or other forms of interaction for franchisees/licensees?
"We maintain contact via corporate telephone, emails, and newsletters. Our Annual Franchisee/Licensee Conference is designed to broaden industry and company knowledge and give franchisees/licensees the opportunity to meet and network with other IFG franchisees/licensees, as well as the IFG management team."
12. What do you mean by sense of community?
"This is a franchise/license that thrives on interaction between franchisees/licensees and the franchisor/licensor. Just because you happen to be a lone franchisee/licensee in a particular area, you should not think of yourself as operating in a vacuum. You, in fact, are part of a team that is interested in you, your ideas, your suggestions, and your needs."