00:00:02another edition of modeling demasters
00:00:03today we’re going to look at how a
00:00:05former gym manager and how a dance
00:00:07instructor mortgaged their home the
00:00:10started business they felt was needed
00:00:11then moved everything to Australia and
00:00:13later how they sold their business for
00:00:15600 million dollars this is a story of
00:00:18Jenny Craig and the top three lessons
00:00:20that you can learn from her success
00:00:30Jenny Craig is an American weight-loss
00:00:33guru and founder of Jenny Craig
00:00:35incorporated Craig was raised in New
00:00:37Orleans and married Sidney Craig in 1979
00:00:39in 1983 she and her husband created a
00:00:42nutritional fitness and weight loss
00:00:44program in Australia they founded the
00:00:46company and began offering the program
00:00:48in the United States in 1985 the company
00:00:51became a part of Nestle nutrition in
00:00:522006 the story begins after Jenny had
00:00:56her second daughter she discovered that
00:00:58she couldn’t lose the weight she’d
00:00:59gained as easily as she had before she
00:01:01was 45 pounds overweight I knew she had
00:01:04to change something she mortgaged her
00:01:06house and used the money to open up her
00:01:08own gym and call it pathetic the gym
00:01:11became extremely popular and she soon
00:01:13sold and went on the hunt for a new
00:01:14venture that’s where she met Sid Craig a
00:01:17partner with body contour incorporated a
00:01:20chain of women’s fitness salons Sid
00:01:23Craig went to New Orleans to open up a
00:01:25body contour salon and hired Jenny as
00:01:27his first employee the rest is history
00:01:29they got married in 1979 and became
00:01:32frustrated with their business because
00:01:34they wanted to offer more nutritional
00:01:36guidance SIDS partners refused and the
00:01:39Craig sold the business to them as a
00:01:40result the deal carried a two-year
00:01:43non-compete clause in the United States
00:01:45so the Craig’s both in their 50s moved
00:01:48to Australia to start their nutritional
00:01:50company Jenny Craig incorporated they
00:01:53created 69 centers in Australia and then
00:01:55moved to the u.s. once a non-compete
00:01:57expired in 1991 the company would public
00:02:01and generated seventy three and a half
00:02:02million dollars in capital five years
00:02:05later after having expanded to the
00:02:07United States New Zealand Canada Puerto
00:02:10Rico and Guam the Craig’s decided to
00:02:12sell the company to Nestle
00:02:14600 million dollars
00:02:17so the next question becomes how can you
00:02:20model the success of Jenny Craig here
00:02:22are three action items and you could put
00:02:24the use into your business action item
00:02:27number one promote promote promote built
00:02:31in a better mousetrap is not enough
00:02:32anymore to get a company off the ground
00:02:34you need to aggressively promote your
00:02:36business to make sure your customers
00:02:38know that you exist from advertising and
00:02:41public relations to search engine
00:02:43optimization and social media you have
00:02:45many opportunities to spread the word
00:02:47about your company and he should never
00:02:48take your foot off the gas in the
00:02:51company’s early years Craig made sure
00:02:53that exactly 10% of sales was directed
00:02:55back into commercial advertising each
00:02:57and every year individual franchises
00:03:00were also expected to spend 10 percent
00:03:03of sales or at least $1,000 a week on
00:03:05local advertising for their own centers
00:03:08they used traditional advertising on
00:03:10television programs leverage celebrity
00:03:12endorsements and created direct mail
00:03:14campaigns but they also tried many
00:03:16offbeat approaches as one example Sid
00:03:20got the company a lot of publicity
00:03:21during one televised international
00:03:23cricket match where cameras picked up on
00:03:25a sign in the crown directed at the
00:03:27captain of the English team that that
00:03:29read see Jenny Craig quick
00:03:34Akshat I know number two offer products
00:03:37and services I believe the best way to
00:03:39build a business is to start a service
00:03:41it’s low cost and gets you close to your
00:03:43customers your chances of survival are
00:03:45much higher and you learn what future
00:03:47services and products your clients need
00:03:49once you’ve established a base of
00:03:51customers and know exactly what’s
00:03:52missing in the marketplace you can
00:03:54create your products you’ve got cash
00:03:56flow from your service business to keep
00:03:57the company running and you’ve got a
00:03:59loyal group of clients who are ready to
00:04:01buy Jenny Craig had the same philosophy
00:04:04her business started with Jenny Craig
00:04:06centers where they would help clients
00:04:07establish a workout program offer
00:04:09nutritional guidance and also give
00:04:11motivational services her business grew
00:04:14every year as she added more centers and
00:04:15people to her team it was a very
00:04:17successful service based business
00:04:19Jenny Craig’s big break came when she
00:04:22started offering prepared food products
00:04:24as a part of her offering she brought on
00:04:27board a highly qualified staff of
00:04:28dieticians psychologists and physicians
00:04:30to help her create a menu that was
00:04:32healthy and nutritional in doing so
00:04:35Jenny’s cuisine became a central
00:04:37component to her program all of her
00:04:39clients were required to purchase these
00:04:41portion and calorie controlled foods
00:04:43which included over 60 different
00:04:45breakfast lunch dinner dessert and snack
00:04:47options Jenny’s cuisine proved so
00:04:51popular that the company’s gross
00:04:52revenues from food sales increased to
00:04:5491% by 1993
00:04:58it’s important as an entrepreneur to
00:05:01never give up on your idea every
00:05:03business owner will face a moment of
00:05:05crisis which forces you to think whether
00:05:06it’s all worth it the long hours the
00:05:09mounting debt the personal sacrifices
00:05:11these moments will help define you as an
00:05:14entrepreneur it’s the founders who stare
00:05:16those home and square in the face and
00:05:17keep on building who go on to be the
00:05:20ultra successful entrepreneurs from
00:05:22losing weight to starting her own
00:05:24business to not being able to run her
00:05:25business in America
00:05:26Craig has proved that with perseverance
00:05:29anything is possible when the Craig’s
00:05:31first sold their chain of body contour
00:05:33gems they did so an agreement to a
00:05:35non-compete clause they were not allowed
00:05:37to set up shop again anywhere in the US
00:05:39for two years and so refusing to wait
00:05:43two years before they could make their
00:05:44next move the couple went on a search
00:05:46for their next destination where could
00:05:48they begin their new line of fitness
00:05:49centers what country was similar to the
00:05:51u.s. in terms of diet and fitness levels
00:05:53but presented no language barrier the
00:05:56crowds decide in Australia the friends
00:05:59thought they were nuts but the couple
00:06:01never gave up and turned their new
00:06:02business into a company that sold for
00:06:04six hundred million dollars
00:06:07so remember promote promote promote use
00:06:12products and services and never give up
00:06:15I wanted to end the video today by
00:06:17sharing one of my favorite true stories
00:06:19about Jenny Craig Jenny met Sid through
00:06:22an ad that Sid placed in a newspaper
00:06:24looking for a team to open up his New
00:06:26Orleans body contour salon according to
00:06:28Jenny Craig Sid run an ad in the paper
00:06:31I had just sold my business and I was
00:06:33looking for a franchise I thought it
00:06:35sounded interesting so I wouldn’t see
00:06:36what it was all about
00:06:38thank you for joining me for another
00:06:40edition of modeling the masters I hope
00:06:43you enjoyed I’d love to hear your
00:06:44thoughts and comments if you want to
00:06:45leave feedback below the video and stay
00:06:48tuned for the next episode
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