PostNet Franchise Has a New Focus Resulting in Recording Setting Numbers

What does digital printing and desktop publishing have in common with double lattes and iced café mochas? If you're talking about setting an industry standard, the commonalities are many, according to Steven J. Greenbaum, co-founder and CEO of PostNet. "We've done to our industry what Starbucks did to the coffee industry," Greenbaum says. "We've raised the bar and differentiated ourselves. There's nothing in the market like PostNet right now."

These are heady times for PostNet, which seems to be adding Franchises as fast as a Starbucks barista makes espressos. Headquartered in Denver, Colo., PostNet sold 66 U.S. franchises and opened 54 new locations in 2005. The goal is to have 1,500 franchises within five years. The company has grown to 900 locations, approximately 500 of which are domestic, since it was founded in 1993.

The meteoric growth is the direct result of a strategic plan launched four years ago. PostNet's future wasn't in offering copying, packing and shipping and postal services targeted at consumers alone.

Instead, Greenbaum and co-founder and COO Brian E. Spindel, implemented a new store design, added new technology, and created a more diverse product and service mix to appeal to small- and medium-sized businesses, and also everyone from entrepreneurs and telecommuters to home-based business owners.

The result is a dynamic retail concept that has significantly broadened PostNet's appeal in the lucrative business-to-business market, but that still offers convenient neighborhood locations and a place for consumers to ship Christmas gifts or make copies.

"We've positioned PostNet as a total small business solutions provider," Greenbaum said. "But we're still extremely consumer-friendly."

Today's PostNet has what Greenbaum likes to call a "digital backbone," made possible through electronic networking of the PostNet system. Customers can bring their laptop into PostNet to output to a printer or those going on business trips can e-mail files in advance of their arrival. The documents can be output, printed and even delivered. PostNet also offers a full gamut of other business-related services.

Numbers show the effect of PostNet's re-imaging. Business-to-business sales have increased 20 percent and now make up half of each store's revenue. Stores opening with the new design compared with those opening at the same time under the former format experienced monthly gross sales that were 17 to 25 percent higher.

But this is only the beginning. Greenbaum said PostNet can't be recognized as a global brand yet and wants to build the network to 3,000 to 4,000 stores.

Ultimately, Greenbaum sees PostNet evolving over the next three to five years into a "facilitator of small-business growth." He uses a simple example of a local plumber with a yen for a progressive way of running his plumbing business. PostNet would not only design his business logo and print business cards and stationery, but also provide direct mailing lists for targeted marketing campaigns, act as a business-hours answering service, and handle his shipping and receiving for materials and parts.

"We need to recognize that this business will always be in a constant state of evolution as a result of technology and the way people do business," Greenbaum said. "You can never sit back on your laurels and say the concept is perfect."

But the new look of PostNet stretches beyond signage and digital hardware. Many of the franchisees attracted to PostNet today have business backgrounds as mid-level managers or executives, many with experience in marketing and technology. Some are former FedEx and UPS employees. The total initial investment to become a single-unit PostNet owner ranges from $176,000 to $197,000, including working capital.

"The bar has been raised dramatically," Greenbaum said. "You're dealing with a more technology-savvy and business-savvy individual."

What makes people want to open a PostNet franchise? A big draw is the culture that pervades this founder-owned and operated company. Greenbaum and Spindel got their start in the industry in the early 1980s when they headed an independent development and consulting firm (COSERCO) that opened more than 450 independent mail and parcel centers in the United States, Canada, Puerto Rico and Guam.

Franchisees speak of Greenbaum and Spindel's accessibility and responsiveness. Store owners have their say through a national advisory council and seven sub-committees that focus on areas from education and marketing to technology and human resources. The end result is an agile company without the constraints and limitations of The UPS Store, PostNet's behemoth competitor.

"Our culture is a very powerful competitive advantage for this organization," Greenbaum said. "It's an organization where franchisee input drives and shapes our direction. We are very much built on trust and integrity. Brian and I are extremely hands-on and I think it has a powerful trickle-down effect to our franchisees."

Greenbaum and Spindel first met as teenagers in Nevada. Now, Greenbaum, 45, and Spindel, 44, oversee the growth of a company that has locations from Denville, N.J. to Botswana and posted systemwide revenues of $232 million in 2005.

Greenbaum describes their business relationship as "incredible." While Greenbaum says he is more strategic and more of a visionary, he says Spindel is extremely powerful operationally and is an excellent facilitator. When their talents are combined, the net result is a seamless operation.

"We share some very critical skills, but we both recognize and respect each other's individual strengths. So we are both very capable of supporting each other's role," Greenbaum said. "Brian and I both love what we do. We've helped people put their children through college and helped people retire. This isn't just about building a successful business model."