Alan Crancer, 45
Business:Paul Davis Restoration of Central Mississippi, a
home-restoration franchise in Ridgeland, Mississippi, for
structures hit by disaster
Founded: January 2003
Start-Up Costs: $100,000 from savings
Revenue So Far: $350,000
Crancer's Background: Alan Crancer spent about 10 years in telecommunications, much of it as an executive vice president, and some of it working at a start-up where he was briefly a millionaire "on paper" before the dotcom boom blew up in everybody's face.
Crancer's Top Three Tips for Start-Ups:
1. Do your homework. Says Crancer, "Make sure there's a need for the business, but more important, that that need is where you live or have established the business. You always see people saying, 'This is what they're doing in California and New York, so I'm going to do that here.' But great ideas don't always work [the same in a different] place." Crancer suggests interviewing people in businesses similar to yours. Pretend you're an everyday customer, strike up a conversation with somebody who works in the industry, and learn some of the nuts and bolts of the industry. Says Crancer, "It's amazing what salespeople will tell you."
2. Have confidence in yourself. And if you have a family, as in a spouse and children, you need their confidence, too. Whether or not the economy is uncertain, you can be pretty certain that you're going to be in for some tough times as you start the business, like "extremely long hours and financial adjustments in the monthly budget," says Crancer, who bought his business in January 2003 and then spent several income-free months learning his craft before opening the doors.
3. Surround yourself with the best people you can find. "I can't afford to go out and hire the best people; it just [wouldn't] work," says Crancer. "But I put together an informal advisory group of people I knew I could talk to-an accountant friend of mine, a banker, a friend who is an HR director. I tell them, 'I want to pick your brain; can I buy you lunch?' I get a lot of free advice for the price of a lunch."
Crancer's Final Two Cents: The best way to ride out economic ups and downs is to have a business that isn't affected by the economy. "I knew there would always be a need for what I do," says Crancer. "There will always be kitchen fires [and] tornadoes, and that has nothing to do with the economy."
- Do you have a market survey? In other words, do you know the customers are out there? Any idea how much they'll pay? How much you'll make? Charney, who owns the Charney Investment Group of Wachovia Securities in Harrisburg, Pennsylvania, says you can do your own market survey in theory, but it's better to find professional help. "Chambers of commerce will have lists of survey companies, and some colleges will do it using their students, and those prices are very reasonable," he says. "You can spend as little as several hundred to $10,000 to $20,000, although for a new business, you don't need anything like that. A few college marketing majors would be fine. You just need somebody who is neutral."
- Have you plagiarized a business? Relax, it's not as creepy as it sounds. Charney suggests visiting somebody who has a business in the same field you're in, but in a far-flung location. If it's clear that you will never compete, "most businesspeople will be happy to help," says Charney, who knows of one burrito entrepreneur who went to a more successful one, who "wanted to brag about his business and laid out everything."
- Have you tried what you're doing in the little leagues? When it's possible, Charney suggests conducting your business as an experiment in a small setting. "For instance, if you're going to make pies, sell them at the farmers' market, and see how they do. It can save you a lot of time before jumping in whole hog."
Geoff Williams is a writer in Loveland, Ohio.
Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.