The Lifestyle Benefits of Operating a B2B Franchise with Doug Bates, Pres. of CMIT Atlanta

Welcome to another episode of Atlanta Franchise Today with host Leslie Kuban, expert franchise consultant and owner of FranNet Atlanta. Atlanta Franchise Today is dedicated to bringing entrepreneurs and business owners the best practices and tips for their franchise goals.

Many people think it’s all about burgers and fries when we talk about franchising, but there is also a large world of business-to-business franchise opportunities as well. Today, Leslie is joined by Doug Bates, president of CMIT Solutions of the Atlanta Southern Crescent, a successful IT managed services franchise.

Transcription: 

Leslie Kuban:
It’s great to have you on the show, welcome, Doug.

Doug Bates:
Thank you. Good to be here, Leslie.

Leslie Kuban:
It’s great to see you again.

Doug Bates:
Yes, it has. We talked when I got here. It’s been a few minutes since we were able to get together. It’s been 13 years.

Leslie Kuban:
Yes, that you’ve owned your business. Well, tell us a little bit about your business for our viewers who are not familiar with CMIT Solutions what you do and for whom?

Doug Bates:
Well, CMIT Solutions is a full-service managed service provider in the IT space. And we service small and medium businesses and we are soup to nuts in IT services, data recovery, business continuity, managing and monitoring network, hardware, software installation. So basically what I tell people if it beeps or blinks, we can support it.

Leslie Kuban:
And some examples of who your customers are?

Doug Bates:
Probably a third of our business is small manufacturing, small to medium manufacturing. And then we have a lot in the professional services, space, attorneys, medical, we’re HIPAA compliant. We also financial planning. We’re FINRA compliant. Accounting, engineering firms, that makes up probably the bulk of our business. And then we have the studios. We do all the work for the studios that do The Walking Dead and have for a number of years now.

Leslie Kuban:
Well, how fun?

Doug Bates:
Yeah, that’s a lot of fun except for when my director of IT services was in a room looking for a rogue hotspot and they turned the light on and he was in the props room with all the entrails and everything, and almost lost him that day. He was a little scared from that.

Leslie Kuban:
Yeah, take a breath from that. And working with all the different business owners that you do. Many of our viewers are entrepreneurs or small business owners. What are you seeing the biggest issues in IT or security that small business owners really need to be thinking about today?

Doug Bates:
Well, right now, obviously there is a lot going on with cybersecurity and concerns about cybersecurity, all of the ransomware and what most small businesses fail to think about is backing up their data or backing up their networks. Somebody will talk to them about protecting and they’ll put in a firewall or they’ll put in the guards, but it’s not if, it’s a matter of when something’s going to happen. And having that business continuity in place and that backup in place so that you can recover because statistics show that from a data breach, 90% of small businesses will fail within two years if they’re not backed up.

Doug Bates:
And so when people are in small businesses, sometimes they look at IT as an expense versus an investment or an insurance policy and they try and cut corners or try and do it themselves. And it’s kind of like the lawyer. Those who have themself for a client is a fool, has a fool for a client or tries to do their law themselves. So that’s what typically we find is the biggest hurdle or the biggest weak spot in a company that we get invited into is where’s your backup and is it off-site, and is it duplicated and can you get it if something goes wrong?

Leslie Kuban:
And so for those business owners who are watching and thinking, “Oh boy, I have no idea if I have addressed these things.” What would be the first questions they should start asking internally?

Doug Bates:
Yeah. Where’s my backup? Do I have a backup? If it’s on an external hard drive sitting in the office right next to their server, that’s not a good thing. They need to have something off-site. We always talk about backups in triplicate for business continuity. So you have that redundancy built in and it doesn’t have to be super expensive. I mean, depending on what they need, there’s ways to get it off-site in cost-effective manners. But the real cost I always ask and one of my favorite and it happened with my first client, 12 or 13 years ago, he was a law firm and he didn’t have a backup. And I was talking to him about business continuity.

Doug Bates:
He’s like, “Well, Doug, I’ve never had a problem. Why should I pay you to back it up?” And I said, “I can’t answer that question.” He says, “Well, you’re the sales guy. Why can’t you give me an answer?” And I said, “Well, it’s your practice? What would it be worth if you got breached and you lost your practice?” And he said, “That’s the best sales pitch I never got” because I can’t answer that question. All I can do is give you the risk and give you the solution, but I can’t quantify it for you what happens if. Because big businesses have infrastructure and money and they can figure out a way or they have enough financial wherewithal sometimes to survive. Small businesses don’t.

Leslie Kuban:
Yep, they’re done.

Doug Bates:
They’re done.

Leslie Kuban:
Yep, yep. So speaking of being the sales guy, I love talking about your story. So you came into your business 13 years ago, but you sure didn’t come from an IT career, did you?

Doug Bates:
No, no I didn’t.

Leslie Kuban:
Tell us about your story.

Doug Bates:
So I was a corporate sales guy. I worked for great companies like Lego, GE Lighting, Tyco post-Kozlowski. So I was a six Sigma Lean process guy, sales, P&L, was a global vice president in a plastics business for Tyco cleaning up that mess and going through SOC certification. And what I appreciated about IT was how much it helped me in doing my job. When I was at Tyco, we sold in 51 countries and we manufactured in 28. And so when we had to rollout a new platform or a new sales program or new pricing, it had to get out everywhere. And when it didn’t, it cost me money. So I understood the pain of bad IT. And so that’s what led me to IT because I knew if I could provide that service and do it well, it would be a benefit for my clients.

Doug Bates:
And so I’m the P&L guy. I joke with my clients. “You don’t want me touching your computer, but I’ve got really smart guys that do that.” And my joke with my techs is, “You’ve got a 24-hour contract that renews at seven o’clock every morning and as long as I don’t get a nasty call from a client, you get to come back. Otherwise, I got to find somebody who can solve the problem.” But that attitude and that atmosphere in my background really helps because I look at their IT as if I was spending my own money and if it was my P&L. So I’m not always selling the fastest and the sexiest in bits and bites. It’s about what solves your problem most cost effectively and protects your business for you as the owner because I’m a small business owner myself.

Doug Bates:
So the stuff we have and we sell is the stuff that I have in place to protect my business, because I’ve got a son and a son-in-law talking about coming into the business and I want that to be stable and be able to pass it down to a second generation so I have to protect my business too and weigh those Costs.

Leslie Kuban:
Speaking of family and family in business, Angie, your wife has been a part of running the business with you from day one.

Doug Bates:
Yes. She handles the books. So my joke with her is because you hear all these stories in small businesses about people trusting people and they take money, and they don’t know until it’s too late or they’re not focused on collections. And Angie is certainly passionate about that. And so what I tell people is I said, “Well, if she steals from me, it’s going the same place it’s always gone. It’s either she’s spending on herself or she’s spending it on the kids.” So I don’t worry about it because it’s okay.

Leslie Kuban:
And I actually work with a lot of couples just like you guys. Looking at business ownership for the first time, you’re thinking about this together, what’s the best choice for our family. This was a whole new type of business. It was a whole new type of venture for you guys. I wonder can you remember back 13 years ago how did you guys around at having the confidence that you could do this when it was not the kind of role that you had been in before?

Leslie Kuban:
Actually, I shouldn’t say the role because you’ve been in sales and now you’re in sales in your business, but it was a whole new kind of industry.

Doug Bates:
Yeah. I think the thing that was funny, our COO was in town and one of the words he described me as the feature or the character quality that I have that has made me successful is fearless. And it’s not that I’m afraid of making mistakes because I’ve made mistakes. We all make mistakes, but I’m not afraid of trying again and being successful. I had my kids, as you remember, Angie was scared. She had been a stay-at-home mom for a while. And so we were stepping out of corporate, something that was very comfortable. I had another job opportunity, but the recession was right there. And to tell her I was going to go open a business at the beginning of the recession, she was scared. But I made a promise to my kids that we weren’t going to move again.

Doug Bates:
And staying in corporate was going to require a move and I just couldn’t look at them and do that. So what I used for my motivation was looking at them every day and saying, “I am not going to fail while they’re watching.” And I’ve got on my monitors in my office, I’ve got sticky notes that they have given me over the years. “Proud of you, dad. Love you, dad.” Those types of things just as a reminder of how much support that they gave me and how much confidence they had in me. I remember Kristen when she was 14-years-old running. I was out of my office, she ran down the hall because the phone was ringing and right then it was only two of us. And so she ran down the hall and answered the phone, “Hello, CMIT Solutions. This is Kristen. How can I help you?”

Doug Bates:
Because I always talked to them, “I can’t let the phone, I got to do live answer because it could be a potential client.” So just that whole thing. It’s been a blessing. I mean, to watch them and the support they’ve given me. Kristen worked in the business a little bit during college to help us out. Nathan’s doing marketing for me. He’s a minor league baseball player, but he’s doing some marketing for me in the off-seasons to help out, make a little money. But that was what motivated me. It’s the Randy Jackson from the old American Idol, I was in it to win it and I was not about to fail.

Leslie Kuban:
Well and you haven’t. I have to brag on you a little bit for our viewers that may not know this, but you are and have been the top franchisee at CMIT Solutions. Lots of trophies on your bookcase.

Doug Bates:
We’ve got a wall of fame we’re very proud of. We’ve won 16 franchise awards in 13 years, including franchise of the year. I think we’re the fourth or fifth largest franchise in the system. And we’ve kind of stayed there for the last couple years, because again, Nathan’s playing baseball and so we go to travel to watch him play. And so I’m kind of in the market right now to find new technicians that meet our standards. It’s a little difficult. So we’ve been maintaining, but looking forward. My son-in-law, my future son-in-law wants to come in the business, Nathan may come in the business so we could be blowing the doors off this thing soon.

Leslie Kuban:
And I know this is a little bit of a loaded question, but could you have gone to travel and seen all these baseball games if you had gone for back into the executive role that you were in?

Doug Bates:
Oh, absolutely. No, no, no. Well, and that was the conversation, Leslie, when you helped us guide us to CMIT was I wanted something that was community-based. I wanted to be off the road because my kids were in school and I wanted to be a dad, not a father was the exact term that I used with you. And this opportunity has provided me just that. So I only have to travel when I want to. I mean, we saw 60 baseball games live this year but Angie can do the billing and the HR stuff from a hotel room and I can do my sales from a hotel room.

Doug Bates:
And I got a great staff. My director of IT has been with me 12 years. And so he’s the technical yin to my sales yang. And we work great as a team and he has adopted my customer service standards and my priorities, and taken that to heart. So when I know I’m not in the office, I know he’s making decision as I would. So blessed, just truly blessed.

Leslie Kuban:
How many employees do you have now in your business?

Doug Bates:
We have eight, not counting Angie and I. We want to have another one. We’re looking for a tech, but right now we’re at 10 total employees.

Leslie Kuban:
Okay. So Doug, what advice would you give to folks who are kind of in your shoe … They’re now in the shoes that you are in and we’re in a pandemic now. I mean, it was a recession when you were looking and here we are 10 years later and a different type of trauma, but a trauma nonetheless. And they’re thinking about getting into their own business, doing something different than what they’ve done before. What would your words of advice be about how they would think about that or what they need to be honest with themselves about?

Doug Bates:
That comment is what matters and I used to always preach that to my kids. You can fool other people, but you have to be honest with yourself and what do you want? What are your goals? I do a lot of validation calls for CMIT. And the thing about CMIT that didn’t scare me was people and processes. I have found I’ve been in six different industries and I’ve been very blessed. I lived in Hong Kong for six months. I’ve done a lot of wonderful things, but people and process transfer amongst industries. So if you treat people well and if you have good process and follow good processes, you can be successful.

Doug Bates:
But you have to be honest with yourself. People will ask me, “Well, are you going to sell the business?” I said, “No, I didn’t get in the business to sell. I got in the business to be with my kids, be in the community and have a legacy business for my kids if they wanted to come into it.” And so that is still is my mantra today. And if my kids don’t want to come in the business, that’s great. I’ll just keep doing what I’m doing. Because I mean, we see our clients at the grocery store, at the movie theater. I think it’s a four-legged stool. I think you have insurance, financial, legal, and IT to have a firm foundation for a small business.

Doug Bates:
A lot of people say three, but as everybody knows three wheelers are not as stable as a four-wheel vehicle. So find something that you’re passionate about. From a conceptual standpoint, I love golf, but I didn’t open a golf store. I love solving problems and I love working with small businesses. And so that’s what drew me to this business and that’s what made me successful. And I’ve never wavered from that. Some people come in and say, “Oh, well, I just want to do this for three or five years and then flip it and get out.” Well, that’s not the reason to open your own business. I mean, you do this for a living. How many times have you seen that happen where people come out better? I mean, I’m sure it has happened, but that’s not what most people get into franchising for.

Leslie Kuban:
No, that people want to enjoy what they do every day. They want to make an income for their family. They want to build something for their future, which could be for their kids. It could be part of their retirement.

Doug Bates:
Right. And it could be a 10 or 15-year plan, but typically I had one guy call on a validation call. He’s like, “Hey, I’m going to do this for two or three years and if it doesn’t work out, I’ll just try something else.” Well, you’re signing a 10-year contract.” I mean, that’s not being honest with yourself. That’s not a good strategy. You’re going in with bad, bad planning.

Leslie Kuban:
I agree. And I tell people that this is a minimum of five to seven-year journey in order for it to really maximize what your opportunity could be.

Doug Bates:
Right. That’s right.

Leslie Kuban:
So I love that. I see my clients at the grocery store too and I’d love to hear just a success story. We like to wrap up with success stories. Just a client that comes to mind that you came in and were really able to have impact with.

Doug Bates:
Well, my favorite one is he’s a great friend of ours now. It was a law firm in Peachtree City. And we got introduced into him early on and went in and gave them the proposal. And his practice manager was like, “This is great, but he’s decided to give our current provider another chance.” So I said, “Okay, well, I’m not going anywhere.” A year later when their contract came up, they reached out to us again and they called us in and she said, “Well, do you want to come in and do another proposal?” I said, “Well, has anything changed?” She’s like, “No.” I said, “Then everything’s the same.” She said, “No price increase?” I said, “Nope, we’re good.”

Doug Bates:
“He’s going to hold on one more. He’s going to try it again. He’s hesitant to change.” I said, “I understand, but we’re not going anywhere.” So the next year they called us back in and I said, “Same thing. Nothing’s changed.” And they made the change. And so with that, there was about a $60,000. They needed to upgrade their servers and he was hesitant to do it. He trusted us to do it. But then I said, “You need to put extra monitors.” All his employees had single monitors. And I said, “I’m going to put second monitors for everybody on my dime. You don’t want them, I’ll pull them back out.” And after two weeks I went in to take them back out and the employees’ like, “No, no, no.” So I had all of his employees go with me to his office to tell him that I couldn’t take the monitors out and he needed to buy them and he did that.

Doug Bates:
And then a month later, he called me, he said, “I want to do a testimonial for you.” He said, “My whole staff used to get home at seven o’clock at night.” He said, “We now leave at 5:00.” He said, “We have gotten our family lives back.” And I mean, I’m getting emotional just thinking about it because that matters. When you talk about 25 people that I gave 10 hours a week back to their life because we did the right thing and he’s been with us 10 years. It warms my heart. And he says, he said, “I’m never going anywhere.” He said, “I wish I knew then what I knew now.” And I said, “That’s all right, you’re an attorney. Nobody expected you to make the right decision the first time.” So anyway.

Leslie Kuban:
That’s a huge story. I mean, two hours of your life every night, that’s dinner with your family.

Doug Bates:
That’s exactly he used that term. He said, “I get to have dinner with my family every night now.”

Leslie Kuban:
Yeah, yeah. Oh, congratulations. It’s been really fun to continue to stay in touch and be your client. I’m a small client, but I love being your client as well.

Doug Bates:
I would never let you go anywhere else.

Leslie Kuban:
Well, you do a great job for me.

Doug Bates:
Well, thank you.

Leslie Kuban:
And really it’s been great to see your kids grow up and you and Angie work together and blossom.

Doug Bates:
I tell everybody. One of the first questions people ask me when we do validations is, “Do you have any regrets?” And I say none.

Leslie Kuban:
Yeah, yeah.

Doug Bates:
A franchise consultant I worked for, I told her what I wanted, she found the fit and it’s been an awesome some ride and continues to be. And it’s great seeing you again as well.

Leslie Kuban:
You too, you too. Well, I’ll have you back in again and we’ll celebrate another anniversary.

Doug Bates:
Absolutely.

Leslie Kuban:
Thank you so much for coming. It’s so good to see you.

Doug Bates:
Leslie, great to see you too. Thank you.

Leslie Kuban:
And folks, I hope you’ve enjoyed this episode of Atlanta Franchise Today and I look forward to seeing you next week.

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