My name is Evan Carmichael and I believe that the fastest and most effective way to build a business is to model the strategies of people who have already done what you’re trying to do. I call it Modeling the Masters. My last post was: Top 3 Lessons from Ted Turner (CNN Founder).

Today we’re going to look at how a gym manager mortgaged her house to start a business because she saw a need, moved to Australia, and later sold her business for $600 million. This is the story of Jenny Craig and the top three lessons you can learn from her success.

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“[My husband] always tells me that I'm the most unrelenting person he's ever met, and it's true. If I make a commitment to something I will stick to it no matter what." - Jenny Craig

Jenny Craig (born Genevieve Guidroz on August 7, 1932 in Berwick, Louisiana) is an American weight loss guru and founder of Jenny Craig, Inc. Craig was raised in New Orleans and married Sidney Harvey Craig in 1979. In 1983, she and her husband created a nutrition, fitness, and weight loss program in Australia. They founded the company and began offering the program in the United States in 1985. The company became a part of Nestlé Nutrition in 2006.

The story begins after Jenny had her second daughter. She discovered that she could not lose the weight she had gained as easily as she had before. She was 45 pounds overweight and knew she had to change something. She mortgaged her house and used the money to open up her own gym and called it Healthetic. The gym became extremely popular and she soon sold and went on a hunt for a new venture.

That's when she met Sid Craig, a partner with Body Contour Inc., a chain of women’s fitness salons. Sid Craig went to New Orleans to open up a Body Contour salon and hired Jenny as his first employee. The rest is history. They got married in 1979 and became frustrated with their business because they wanted to offer more nutritional guidance. Sid's partners refused and the Craigs sold the business to them as a result.

The deal carried a two-year non-compete clause in the U.S.so the Craigs, both in their 50's, moved to Australia to start their nutritional company, Jenny Craig, Inc. They created 69 centres in Australia and then moved to the U.S. once the non-compete expired. In 1991, the company went public and generated $73.5 million in capital. Five years later, after having expanded into the U.S., New Zealand, Canada, Puerto Rico, and Guam, the Craig’s decided to sell their company to Nestle for $600 million.

Action Item #1: Promote, Promote, Promote!

Building a better mousetrap is not enough anymore to get a company off the ground. You need to aggressively promote your business to make sure your customers know that you exist. From advertising and public relations to search engine optimization and social media marketing, you have many opportunities to spread the word about your company and you should never take your foot off the gas!

In the company’s early years, Craig made sure that exactly ten percent of sales was directed back into commercial advertising each and every year. Individual franchises were also expected to spend ten percent of sales, or at least $1,000 a week, on local advertising for their own centres.

They used traditional advertising on television programs, leveraged celebrity endorsements, and created direct mail campaigns. But they also tried many offbeat approaches. As one example, Sid got the company a lot of publicity during one televised international cricket match, where cameras picked up on a sign in the crowd directed at the captain of the English team that read: “See Jenny Craig. Quick.”

Action Item #2: Offer Products and Services

I believe the best way to build a business is to start a service - it's low cost and gets you close to your customers. Your chances of survival are much higher and you learn what future services and products your clients need. Once you've established a base of customers and know exactly what's missing in the marketplace, you can create your products. You've got cashflow from your service business to keep the company running and you've got a loyal group of clients who are ready to buy!

Jenny Craig had the same philosophy. Her business started with Jenny Craig centres where they would help clients establish a workout program, offer nutritional guidance, and also give motivational services. Her business grew every year as she added more centres and people to her team. It was a very successful service based business.

Jenny Craig's big break came when she started offering prepared food products as a part of her offering. She brought on board a highly qualified staff of dieticians, psychologists, and physicians to help her create a menu that was healthy and nutritional. In doing so, Jenny’s Cuisine became a central component to her program. All of her clients were required to purchase these portion and calorie controlled foods, which included over sixty different breakfast, lunch, dinner, dessert and snack options. Jenny’s Cuisine proved so popular that the company’s gross revenues from food sales increased to 91 percent by 1993.

Action Item #3: Never Give Up!

Just like I discussed in my last post, it's important as an entrepreneur to never give up on your idea. Every business owner will face a moment of crisis which forces you to think whether it's all worth it - the long hours, the mounting debt, the personal sacrifices. These moments will help define you as an entrepreneur. It's the founders who stare those moments square in the face and keep on building who go on to be the ultra-successful entrepreneurs.

From losing weight, to starting her own business, to not being able to run her business in America, Craig has proven that with perseverance anything is possible. When the Craigs first sold their chain of Body Contour gyms, they did so in agreement to a non-compete clause. They were not allowed to set up shop again anywhere in the U.S. for two years.

And so, refusing to wait two years before they made their next move, the couple went on a search for their next destination. Where could they begin their new line of fitness centres? What country was similar to the U.S. in terms of diet and fitness levels but presented no language barrier? The Craigs decided on Australia. Their friends thought they were "nuts" but the couple never gave up and turned their new business into a company that sold for $600 million.

True Story

Jenny met Sid through an ad that Sid placed in a newspaper looking for a team to open up his New Orleans Body Contour salon. According to Jenny Craig: “Sid ran an ad in the paper. I had just sold my business, and I was looking for a franchise. I thought it sounded interesting so I went in to see what it was all about.”

How have you promoted your business in unique ways or pushed through barriers that seemed impossible to break? What part of Jenny Craig's message impacted you the most? As always, I’ve love to hear your thoughts if you leave a comment below!

Evan Carmichael

To learn more check out my list of Jenny Craig Articles or my website, EvanCarmichael.com.