Good Answers
This story appears in the May 1997 issue of Entrepreneur. Subscribe »
This month we spotlight questions we've received on the "Small Business Advisor" page of our Web site, where users get answers to small-business questions from Entrepreneur's editor in chief, Rieva Lesonsky. If you have a business question you'd like answered, visit (http://www.entrepreneurmag.com) and click on Small Business Advisor.
Q: Two years ago, my husband and I started an adult family-care home (like a nursing home in a private home). We have enjoyed much success and a great reputation. We have been considering expanding due to our waiting list and the need for this type of business in our community, but we had bad credit prior to starting the business. Now we're wondering where to obtain financing.
Name Withheld
A: How did you finance your business initially? Can you return to these sources?
Since you've been in business awhile and are obviously paying your bills, can you turn to current contacts? Who do you bank with now? Talk to your banker in person--explain your past problems, but be sure to show how you've been successful in business and are taking care of your finances.
You might consult with a financial advisor for future assistance and perhaps help in repairing your credit history.
What about people you do business with (vendors or suppliers)? Can you tap them for a loan? How about family and friends?
Q: For the past two years, I have been manufacturing a great product for the construction industry. I have gone through the BODY-marketing phase, and from all accounts, I have a winner. Here is my problem: I don't have the business knowledge to take the product to the mass market. Money is not really a problem as much as management. Where and how do I find someone to manage my business?
Steve Sorton
A: First, I'd recommend contacting a local Small Business Development Center or going to the Service Corps of Retired Executives, a counseling service offered by the Small Business Administration (SBA). You can find locations of both by calling your nearest SBA office.
I'm impressed that you realize you need management assistance. Most entrepreneurs come to this conclusion very late. Have you considered taking on a partner who has the expertise you lack? Or can you sell your idea to an existing company?
If it's really only management expertise you seek and you have the money to hire, contact a full-service employment agency or, even more helpful, an executive recruiting firm. They charge fees, but they can find the talent you are seeking.
Q: I am in the process of starting an online Web site development company. I am planning to do all the work from my apartment (at least in the beginning). Are there any legal issues I need to deal with? I called the chamber of commerce, and they said I need to get an occupational license. Do I really need that for an online business?
Ozette Brown
A: First, you need to find out what your local zoning laws are. Call your area's city hall or town hall, and find out if it's even legal to do what you want.
Licenses are generally regulated by local municipalities. Find out from them what is required. Often licenses are quite inexpensive, so don't panic until you find out.
Q: I am considering starting a Web site design company. How would I find new clients?
Michael Warren
A: Word of mouth. Attend events where small-business owners are likely to be, such as leads clubs or chamber of commerce meetings. If any of your local office supply stores have bulletin boards, hang fliers there. Tell people--and hopefully they'll tell others. Offer a free seminar explaining why small businesses need Web sites. Another good way to attract clients: Teach a course at a community college or another place where small-business owners go to get information.
Q: I have been offered a partnership with a small office supply store. What type of questions should I ask? What am I looking for that says "This is a good venture"?
Earl L. Jones
A: Ask yourself, "Why do they need me?" "Is the business in good shape?" "Does it have a good reputation in the community?" "How does the competition stack up?" Today, many small office supply stores are facing increasing heavy competition from the "big boys" (Office Depot, Staples and other superstores). What is this store's plan to fight this competition? How does it compete? What do you bring to the arrangement? Money? Marketing? What is your experience?
Q: I am trying to start my own business making and selling wedding favors and keepsakes. I have an acquaintance who has a cake shop and does a lot of wedding cakes and small-wedding catering. [Should] I approach her about letting me put some of my favors in her shop for display? If so, what should I offer her as compensation--a flat rate or a percentage of sales?
Name Withheld
A: It's absolutely a good idea! I'd suggest a percentage of sales, so she'll have a vested interest in pushing your products, instead of just letting them sit there. This way, the more she helps sell, the more money you both make.
Don't forget other shops, bakeries and caterers as well. Because you don't know them, you might have to strike a different deal, but pursue all opportunities available.
Q: I am trying to start a homebased Web site development and graphic design business. I am not at all a salesperson. I am not good at talking to or persuading people. What would be the best route for me to take for getting clients? I don't have any money to hire an agency or to mail out hundreds of mailers. I was throwing around the idea of trying to get a couple of college students to sell for me. I would only be able to pay them per client, however. How can I get the ball rolling?
Name Withheld
A: Hiring college students is a smart solution, or how about a sales representative who works on commission only? You can also barter your services with other small-business owners, perhaps people in sales. Brochures, fliers and notices about your company don't have to be mailed--you just need to know where to find potential clients and pass the information out or post it there (office supply stores, for example).
Network like crazy. Attend meetings of nearby chambers of commerce and other business-related groups, where it's likely you'll meet people in need of your services. Tell your friends you're seeking clients. With graphics, it's not so much telling people how good you are but showing them. It's less of a hard sell, but you have to be where they are.
