Take It And Run!
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Mark Terao, 38, and a friend were brainstorming business ideas when they thought of making college football calendars--an idea they concluded was so great, someone else must surely be doing it. But rather than just forget it, Terao, of Seattle, decided to do a little research. Checking with both the University of Washington in Seattle and Washington State University in Pullman, he found out that not only was no one making football calendars, but the schools were hungry for such a product. "That opened the door," he says.
Terao formed Pure Image Inc. in 1997 (of which his friend owns a small part), producing a 16-month wall calendar for both universities, including a photo of the stadiums, pictures of former players, statistics and a game schedule. The next year, he expanded to 10 schools. "This year, we're doing 23 schools," Terao says. "Next year, we're set to do 30 to 35." In addition to football, he also does basketball calendars for some schools.
The college calendar has sparked a number of other products, including promotional calendars for private companies and professional sports teams--and even a computer screensaver that plays schools' fight songs. Terao expects sales to top $500,000 this year--and to double in 2000. Not bad for an opportunity that seemed too obvious to be true.
For Love Or Money
Balancing the work you love with the nuts and bolts of running your business
Considering the driving force behind most new businesses is the entrepreneur's passion for his or her product or service, many new owners are taken by surprise when they realize just how little time they get to spend doing the work they love.
That's what happened to Joan Eisenstodt, 52, when she started her meetings management and consulting firm, Eisenstodt Associates, in Washington, DC, in 1981. Although she comes from an entrepreneurial family, Eisenstodt didn't realize how much time she would have to spend running the nuts and bolts of her company until she was actually in business.
No matter what industry you're in, being the owner means you must pay attention to a variety of administrative and management details, not to mention marketing and selling. So what can you do to maximize the amount of time you're doing what you love and still effectively run your business? Eisenstodt shares her tips:
- Know your strengths and weaknesses. Understand which parts of the management and marketing processes you can and want to do, and which parts you need help with.
- Set up a support team. Outsource the mundane tasks you'd prefer not to do, such as record-keeping, database management and other administrative chores. But avoid an "out of sight, out of mind" attitude, Eisenstodt cautions. It's still your business, and you need to pay attention to what's going on.
- Have the right tools. Eisenstodt started her business with an electric typewriter, but that was nearly two decades ago. Today, she says, it's essential to have the necessary technology, particularly in terms of computers and communications, and to know how to use it. Having the right tools lets you use your time efficiently.
'Tis The Season
Should you start your new business during the holidays?
A popular holiday song calls this "the most wonderful time of the year," but does that apply to starting a business? While it obviously depends on the type of business, starting up during the holidays usually involves considerations that don't apply at other times of the year. "If you're planning a business, retail or otherwise, you must know the seasonality of your product or service, be realistic about how much business you can expect to capture in the first [few] months and not have [unreasonable] expectations," says Ed Crow, president of E.L. Crow Inc., a market development consulting firm in Lafayette Hill, Pennsylvania.
Some issues to consider:
- Seasonal sales. Although many retail operations can take advantage of the holiday season to kick-start their businesses, be realistic about those sales and what they mean for the future. Don't let seasonal buying patterns mislead your revenue projections. If your business is subject to seasonal sales fluctuations, be sure your plan realistically reflects both early and long-term sales projections.
- Customer contact. Business-to-business operations may find it difficult to reach customers during the holiday season, especially during the last two weeks of the year. "It's a totally different world between December 15 and January 15," Crow says.
- Holiday distractions. You'll have to deal with distractions both on a personal level and with your employees. A new business requires tremendous energy and focus; be prepared to sacrifice some of your personal holiday fun. And plan to accommodate your employees' personal needs during this time of year.
- Weather. Winter storms can devastate even the best start-up plans. A severe snowstorm can take the "grand" out of your grand opening. Downed power and phone lines can halt regular operations, keep customers away and prevent suppliers from making deliveries. Have a weather contingency plan in place before you need it.
- Year-end issues. While you're dealing with start-up tasks, your customers and suppliers are dealing with year-end chores such as inventory, taxes, and a range of other internal and external issues with a December 31 deadline. Realize this can affect your operation in ways you may not have anticipated.
Using other people's money will lessen your chances of failure.
That receive financial support
That invested their own money
That saved money to invest
That prepared business plans
Timing Is Everything
If the business you're planning is specific to the season and you want to capture your share of holiday consumer sales, the clock is ticking. Don't wait until the Christmas shopping season is in full swing to open. "Traditional retail stores say you should open in [the fall] and do a shakedown, so you're ready for the Christmas season," says Ed Crow, president of Lafayette Hill, Pennsylvania, market development consulting firm E.L. Crow Inc.
Crow adds that smaller retailers, particularly those offering gift and other impulse-buy items, may be able to open in November and enjoy respectable revenues. However, if your store is one that needs time to establish a clientele--such as an art gallery or a high-end retailer--don't expect much from your first Christmas season; instead, use this time to build for the future.
The Winter Of Their Discontent
When Lynnette Stroebele, 33, and Loretta Bromlow, 29, of Oklahoma City decided to start a company that trains certified nursing assistants, they didn't really consider what time of year it was. They incorporated CNA PRO 2000 Inc. in November 1995, and immediately began offering classes. "We ran an ad in November for December classes, and I think we had two calls," Stroebele recalls.
So the partners delayed classes until January and instead spent those first two months concentrating on other start-up activities. They painted and furnished their building, purchased equipment, obtained all the necessary licenses and certifications, started marketing . . . and were able to hit the ground running when the holidays were over.
Beyond the lack of prospective students, Stroebele says one of their biggest seasonal problems was the weather. "It was so cold, we had to run the heat full-blast for an entire weekend so we could paint, because the paint wouldn't stick to the cold walls," she says. An ice storm shut down many local businesses, including their suppliers; for Stroebele and Bromlow, the storm also meant bursting water pipes, dead phones and even broken windows. "It was difficult," Stroebele says of their first holiday season.
On the plus side, Stroebele and Bromlow were able to buy equipment at very competitive prices because their suppliers were trying to clear out their inventories before the end of the year. And they were soon able to take the tax write-off for their start-up expenses.
But if she could do it again, Stroeble would start her company earlier in the year or wait until the holidays were over. "It's really best to start when the weather is good," she says. "That gives you the chance to deal with basic start-up issues before you have to deal with winter weather and holidays."
CNA Pro 2000 Inc., 330 S.W. 25th St., Oklahoma City, OK 73109, (405) 632-8262
E.L. Crow Inc., (215) 233-0762, email@example.com
Pure Image Inc., (800) 337-6057, http://www.pureimageinc.com