Sincerely
Michael H.

Askrecy:

Congratulations! I made that decision twenty years ago. It's not easy, but it can be done. Should you give up on your quest and desire to start your own business? No and hell no! Unfortunately, you didn't give me much information about ..."your well thought out idea." So I can't give you any specific ideas or suggestions on how to carry out your game plan, which leaves me to provide some general basic guidelines.

There is always more than one way to go forward. Obviously, the best scenario is that some generous banker or rich uncle or aunt that either loans or gives you a pot of money to get started. Since the banker wants the lien to your house and you can't give that to him since the mortgage company holds the title and the rich aunt you thought you had only has her pension and social security savings, you have another alternatives. Try an angel. Seriously! There are select venture capital firms that are willing to provide the necessary jump start capital. To get an idea of such firms go to "www.garage.com." It is said that Hewlett Packard and Compaq Computer started in a garage. Search the Internet, there are others. If you are not interested in that approach, then delay your decision for a year or so and raise your startup capital by working in several of the new market ideas that are now focusing on the Utility market. I know several people that made some quick money in the short run without any investment of capital - because the market is utilities - something we all have. Without much more from you, I cannot provide you any specific answers on how to get started with your particular idea.

Good luck!

Askrecy

Question: Michelle (via email)

Thanks, Michelle ...

Askrecy:

Michelle, you and your sister already have two of the key components needed to be successful in running a business. Desire and Experience. Most people are under the assumption that you always need a lot of money to start a business, and become discouraged when they are turned down for a new business loan - which in fact is hard to obtained even for a successful existing business.

Most banks or SBA lending agencies require individuals to be in business for several years, have a stable product or market niche and have inventories, assets or something of value to secure or protects the bank's investment.

However, don't let that discourage you and your sister from pursuing your dream of owning a business. There are a couple of things you can explore that may not require a large outlay of cash.

First, you indicated that your sister has experience in selling hair products. Some vendors welcome distributors and have several programs available to sell their products at substantially discounts to potential distributors. In one of my businesses, I started selling accounting software with no money down. I approached the customers after developing a business plan, which included a marketing approach and then made financial arrangements with the supplier to ship the software products. Over time I built up a sales history to ship the product and bill my company.

Second, develop a business plan. I am always surprised at the number of people with an excellent marketing idea that did not take the time to develop a business plan. There are many inexpensive software products on the market that guide even an inexperienced person through the process. Before anyone goes into business, he or she must know who are their competitors, where are they located, who are the potential customers, where are the customers, what is the marketing strategy and the answers to many more questions.

You can also visit your local library to find many books on business plans, just begging for someone to read, free of charge.

Finally, there is a paperback book written in 1991 by Rosie Milligan called "Starting a Business Made Simple". You should be able to find it in the library. It discusses a simplified approach on how to succeed in business.

Question: Tyrone - Dallas

Askrecy:

Networking! Networking! In the city of Houston, the Minority Business Council has monthly luncheons, featuring speakers from many companies in position to do business with MWBE's. Some of the people have buying authority that does not require a RFP.

You may be surprised at the dollar limit these individuals have when it comes to supporting their organizations. I personally know some whose limitation is under $25,000 and others under $15,000.00. You indicated a successful piggyback alliance.

Instead of trying to be the big fish by devouring the whole meal, why don't you create an alliance with several other MWBE's? There's more than one way to walk into the door.

Askrecy:

Before I answer your question, let me relay an actual business failure that had all of the criteria for success. Ten years ago when coming home from work, I pulled into a shopping center to pick up my clothes from a Pilgrim cleaner. Two doors down I noticed a handwritten sign that said "Fresh Fish. You Buy. We Fry." I went in and immediately noticed a large display of black painted art on a 20 X 30 feet wall. It was the type of artwork that sort of jumps out and shouts at you upon seeing it. I met the owner and we discussed how he selected this particular location. He explained how he did his research; there was not a single fish market in ten miles in either direction. The closest thing to fresh fish was a large supermarket chain in the same shopping center, however, their seafood was not always fresh. The owner bragged that Compaq Computer, less than four blocks away, had a clerical and blue-collar workforce of over several thousands. The owner had been in business for less than a week. When asked about a why he did not have a sign on the marquee, he complained that for $1,500.00 (the cost of the sign) he could buy a lot of fish. I like seafood and would occasionally travel on the weekend to Kemah to buy fresh fish and shrimp, so I welcomed and was pleased to have a minority business in the area. To make a long story short, the owner had only three kinds of fish – catfish, sheephead, sand trout. He did not have redfish, speckled trout, flounder or rainbow trout. He had only one size of shrimp and no oysters. The owner was in the right location, at the right time, and if he had just had the right product, the right display and right advertising, he would have succeeded. The owner closed his business six months later. Shortly thereafter, another business owner capitalized on that idea and succeeded. The owner was correct on the number of workers, however, since lunch was limited to 30 to 45 minutes, the workforce brought their lunches or went to the local deli on location. The owner did not realize that his real customer base was white collar, living in six subdivisions at the time totaling over 2,500 homeowners with an average home price of less than $100,000.00 and this type of customer wanted to take the fish home to either broil or bake it.

Now the answer to your question. You need to define your actual customer base. Determine whom are you trying to reach and sell your product too? Which companies will buy specialty black arts and collectibles? Perhaps the $10,000.00 you're spending in advertising is in the wrong media outlet. Create a survey on your own product. Make it a point to be very observant when visiting customers, friends, colleagues and acquaintances and the next time you see a competitors product or any black arts or specialty adverting, ask them where did they buy it?

Askrecy:

Unfortunately, I see this type of situation all the time. In fact, I was once victim to it.

I also had one single customer that was the bread and butter of my once DBA company. I also had four or five other small accounts but not enough monies coming in to support my family. Although my time was flexible, it was not truly flexible. The MIS director expected me in my "office" every day before 9:30 a.m., and although I did not punch a clock, I had the liberty of taking an extended lunch break, but I was expected back in the office that afternoon. I did not have the luxury of truly marketing my business or using the phone for business contacts. You could say that although I worked in the corporate environment for twenty years, in fact I never really left. The only difference, was that my check included the letters, "DBA." I realized that my business would not grow if I didn't market my services. So one day, I came in at noon, when asked why, I said, another customer also required my services. (Which wasn't true – but I had a point to prove.)

My advice to you is to do the same. You have little to lose and a lot to gain. Let your other small customers that you are available NOW for additional business. Ask them for contacts. Register your business with the city, state, and local school districts. Send flyers describing your services to local churches and small businesses. Advertise in the small suburban newspapers. Call other CPA firms to let them know that your services are available on a contract basis. Contact the local Chambers of Commerce for leads. Good luck.