It's the novice entrepreneur's mantra: "Don't be afraid to ask friends and family to invest in your business idea." But what if that seed money doesn't last past the seedling stage? Then you'll need to tap a wider circle of friends. At least that's what Robert Poole of Clayton, North Carolina, did. With $115,000 raised from friends in 1994, this postman-by-day financed the start-up of Rules of the Game, a Trivial Pursuit-like board game of obscure sporting rules guaranteed to stump sports nuts.
But before long, Poole realized he needed another $500,000 to drive the business. Confident the game would sell if only people knew about it, he hawked it to local radio talk shows where it was played on the air, attracting lots of attention. When Poole won an order from Kmart, more friends and family wanted in.
The lesson Poole shares: Don't underestimate public relations. Without soliciting a dime, Poole had 283 volunteer investors, mostly from his hometown of 8,000, contributing a total of $520,000. "I know 90 per-cent of them," Poole says. Nine investors even came from his mail route in nearby Raleigh, contributing about $25,000.
Last year, Poole sold about 100,000 games and made $750,000 in sales. And as the company goes public this year, Poole, who hasn't quit his day job yet, says big orders for his games are pending. His business, now called Game Technologies Inc., is also currently developing versions of Rules of the Game for the Web (http://www.rulesofthegame.net) and for CD-ROM.
Raising The Bar
New standards will keep investment advisors in check.
State regulators are making it harder for dubious investment advisors to close down in one state, just to open up shop in another. They also plan to raise the standards investment advisors will be held to by requiring new entrants to take a competency exam.
Expect the test to appear this fall, says Melanie Lubin, Maryland's Securities Commissioner and chair of the Investment Advisors Section for the North American Securities Administrators Association (NASAA), a government regulators group. Also in development is a Web database that will list license revocations and disciplinary actions taken against investment advisors nationwide, says Lubin. To be completed sometime next year, the database will allow the public to conduct its own background checks with information kept accurate by the regulators and registrants. "We had some safeguards already [in place]," Lubin says. "This strengthens them."
According to NASAA, the exam and database will affect about 100,000 advisors--a quarter of which represent firms with less than $25 million under management.
Hit The Brakes
Now that your 1998 taxes are out of the way, note that the deduction for mileage allowed by the IRS drops this year--from 32.5 cents to 31 cents per mile. If you put 5,000 deductible miles on your car in a year, that will cost you about the equivalent of a decent steak dinner.
Stephen B. Sherretta, a freelance business writer in Philadelphia, is a former writer and editor with The Economist Group and the Financial Times in London.