Safe and sound: why the safety sector can be rewarding

Sarah Stowe

Helping organisations to comply with legislation is a fast-growing industry – and it’s at the heart of a number of lucrative and rewarding franchise opportunities. In the financial year 2009-10, almost 650,000 Australians experienced at least one work-related injury or illness. This comes with an economic as well as a human cost; Safe Work Australia estimates work-related injuries cost Australia around $57 billion a year. Both federal and state governments are continuing to make a concerted effort to reduce the incidence of workplace injuries and fatalities. Under the current Occupational Health and Safety (OHS) regulation everyone who is in a position to control workplace risk has a duty of care to protect the people who work there.

Helping organisations to comply with legislation is a fast-growing industry – and it’s at the heart of a number of lucrative and rewarding franchise opportunities.

“When you’re involved in the Safety Services market you’re helping employees to reduce risk to their workers and so prevent workplace deaths, injuries and illnesses,” says Lionel Hedt, technical support and training manager at SafetyQuip. “As well as being personally satisfying, this brings recognition and respect within the community.”

SafetyQuip itself provides an extensive range of safety products and services to small-to-medium businesses (SMEs). While most franchisees start out with a single, fully-stocked van, known as a Mobile SafetyShop, there is plenty of room for expansion.

“Franchisees can add one or more Safety Centre stores and/or multiple sales vans without paying additional franchisee fees,” says Hedt.

While bricks and mortar retail sales are important, the Mobile SafetyShop enables franchisees to build a solid SME customer base.

“We can take safety directly to our customers, and that’s something they welcome,” Hedt continues. “It makes their purchasing process quick and easy with minimal disruption; within minutes, their employees can be back at work with the best footwear, clothing and other protection for the job. As each van has a sophisticated on-board computer system, we can also quote, order and invoice on the customer’s doorstep.”

Along with personal protection, SafetyQuip helps make the workplace environment safer with products such as first aid kits, fire extinguishers, traffic cones and lighting systems. Most importantly, franchisees and their employees are much more than salespeople; they work closely with their customers to help them identify and solve their safety issues.

“There are serious dangers associated with purchasing safety equipment from places such as local hardware stores where salespeople tend to be poorly trained,” says Hedt. “When you have people working in a high-risk environment, such as at a height or handling chemicals, you need to deal with someone you can trust to help you select the most appropriate products and demonstrate how to use them correctly.”

While few SafetyQuip franchisees have a safety industry background they are all qualified to provide legislated hazard control advice across more than 40 major market segments.

“Our intensive induction training and continuing training programs quickly bring the right people up to speed and make sure they stay on top of the game,” says Hedt. “All franchisees and staff must also undergo ongoing supplier training to ensure they maintain the market awareness and technical skill sets they need to be able to recommend and sell such a wide range of products.”

Franchisees are also trained in sales, marketing, merchandising and business management.

“We look for people with an outgoing personality who are self-motivated and organised and have an aptitude for learning and sales,” says Hedt. “While some choose to work alone, our typical franchisee has a permanent Safety Store with at least two staff and a mobile van with another trained sales person, so they need good management and team-leading skills. And, as we have a software program designed to manage all aspects of the business, they must also be comfortable with using a computer.”

SafetyQuip opened for business in 1992, was franchised in 2002 and now has 15 franchised outlets across Australia. The franchise fee of $59,850 includes training, equipment, marketing and technical support. Franchisees also need at least $100,000 in unencumbered venture capital with further access to between $230,000 and $290,000. The initial five-year term can be renewed for one or two further terms.

Helping to save lives

Each year, around 20 people in Australia die from unintentional electric shocks. Many more suffer serious injuries, including contact burns or damage to internal organs, as well as injuries sustained if the shock causes the victim to fall. Faulty electrical equipment and poor electrical installations can also cause fires, introducing a more widespread threat to both life and property.

According to this year’s report from the National Coroners Information System (NCIS), the majority of these accidents occur when the casualty is carrying out paid work – and most are preventable.

Every organisation in Australia is required to reduce the risk of electrical shock as far as practicable and one of the easiest ways to do that is with the system known as testing and tagging. As the name suggests, testing and tagging involves testing a client’s equipment then, if it is operating safely, fitting a non-re-usable tag to confirm that it is safe to use. Unsafe appliances must be either repaired or replaced.

“Once you have had all of your electrical appliances and power points tested and tagged, you have gone a long way towards minimising risk from electrical shock in your workplace,” says Neil Welsh, divisional franchisor of Jim’s Test & Tag (Australia and New Zealand).

Welsh believes that an office, nursing home or school can be more dangerous than the factory floor because people are less conscious of the risks.

“They don’t see what’s going on under the desk – that the power board is damaged or overloaded,” he says. “Or they don’t realise that a fault in the lead connecting their computer to the mains means that, even when it appears to be turned off, it’s actually still live. Even kettles and urns can be dangerous if the safety cut-out device isn’t working properly.”

On most days, a franchisee will find something with the potential to electrocute someone.

“That doesn’t mean accidents happen every day – but, when they do, they can cause serious injury or loss of life,” says Welsh.

Jim’s Test & Tag franchisees can provide an electrical risk assessment as well as basic fire prevention services such as testing safety switches and inspecting and maintaining fire extinguishers, fire blankets, fire hose reels and smoke alarms. They can also test microwave ovens to make sure they’re not leaking radiation.

“Our job is to help our clients to operate in a safe environment and to comply with the relevant legislation,” says Welsh.

Of more than 150 franchisees across Australia and New Zealand only a handful are qualified electricians.

“The technical side isn’t rocket science,” says Welsh. “As long as you’re willing and able to learn, our training will do the rest.”

More important is the ability to communicate and develop relationships.

“Ninety percent of a franchisee’s customers are the result of developing a network, so we also dedicate a lot of time to training in that area,” he says.

Jim’s Test & Tag is ISO 9001 accredited – that’s the internationally-recognised standard for the quality management of businesses. A prime objective is providing successful business opportunities and, as a result, their selection process is very rigorous.

Those who make it through the initial filtering process attend a two-day Prospect Information Workshop where, as well as undergoing further assessment, they receive everything they need to make an informed decision.

They also spend a day on the job with a franchisee.

“It sounds obvious, but you need to make sure you’re going to be doing something you enjoy,” says Welsh.

Prospects are then asked to create a business plan and a cash flow to demonstrate that their goals are achievable and that they have the resources to survive the critical first 12 month period when they’re building the business.

“We also urge them to do as much due diligence as possible – to get their partners and families involved and make sure it’s good for all of them.”

Welsh is keen to attract more females to the business, including mothers.

“On average, our guys earn $100 every hour they’re working,” he says. “Even if you’re only working during school hours you can generate a very good income.”

In Australia, a Jim’s Test & Tag franchise costs $45,000 + GST plus equipment. Add in training and a suitable van – that’s around $100,000 to get started. Fees are around $600 and the term is 10 years with a further 10 year option. While the Jim’s brand has been around for over 20 years, the Jim’s Test & Tag franchise started just eight years ago and now has over 150 outlets around Australia and New Zealand.

Building a powerful business

Appliance Tagging Services (ATS) provides electrical safety assessments and testing and reporting management systems across both metropolitan and regional Australia. Again, comprehensive on- and off-site training means franchisees don’t need to be electricians.

“Our franchisees are all registered electrical contractors,” says co-founder and business development manager Sarah Allen. “They are trained in the inspection and electrical safety testing and tagging of portable electrical equipment in accordance with AS/NZS 3760:2010 as well as the associated OHS regulations. The initial two weeks of induction training is followed by ongoing technical training and development, along with specialised sales training and support.”

ATS also focuses strongly on helping franchisees to run their business smoothly and easily.

“We have employed a dedicated team to handle all aspects of administration, from data processing and producing test reports through to invoicing and debt collection,” Allen continues.  “We pay our franchisees on a monthly basis whether or not the client has paid us. That means they have the peace of mind of knowing they can depend on a steady cash flow.”

The team also tenders for national work and manages the relationship with major clients, such as Australia Post and Telstra.

“ATS support office staff manage the entire sales, scheduling and reporting process for our national clients,” says Allen. “We are committed to helping our franchisees improve their service delivery and increase customer satisfaction on a continuing basis. As part of this, we actively seek out and pass on customer feedback.“

The sales team also sources local leads and handles all of the above-the-line advertising and marketing.

“Our aim is to leave our franchisees free to get on with the most important aspects of their business – servicing existing clients and growing their business at a local level,” says Allen.

Franchisees need to have good attention to detail, a methodical nature and a ‘can-do’ attitude, along with the desire and ability to grow their direct client base.

“We recently developed our own in-house sales training series to help franchisees hone their selling skills,” says Allen.

ATS started operating in 2002, opened its first franchise in 2006 and now has 36 franchisees across Australia. The initial investment is $43,500 + GST for a term of five years with a further five year option; franchisees also need their own vehicle. The only ongoing fee is a percentage-based administration fee. F