Keeping the Lid on a Secret Recipe

Q: I have developed my own recipes for certain foods that I would like to market. Is there a patent for a recipe? If not, how can someone protect a recipe?

--Nestor C. Balila, Los Angeles

A: It is possible to obtain a patent on a recipe, provided that you have some unique combination of elements. However, a better--and cheaper--way to protect it is by considering it a trade secret.

Once you apply for a patent, pay for it and it is issued, your recipe is available to the world as part of the public record. And eventually it will pass into the public domain. But if you hold a trade secret, it is yours as long as you can keep the lid on it.

I use the example of an Armenian family that makes one of the world’s great cymbals. The particular combination of alloys that goes into each cymbal has been passed from father to son for generations. Even though they are mass-produced, no one outside the family knows exactly what the “recipe” is. When the time comes to mix up a new batch of product, the factory is emptied, the old man goes in alone for 15 minutes, makes up the secret mixture and then production resumes.

If you hold a trade secret but find you must disclose it to some of your employees, you should have them sign secrecy agreements requiring them not to disclose your trade secret and making them liable for damages if they do.

You can get more details on patents and how to protect an invention at the Los Angeles Central Library on Nov. 1, when I give a seminar on the topic from 1 to 4 p.m. The seminar will be held in the Mark Taper Auditorium. It is free and open to the public.

--Robert M. Sperry,

patent attorney and former U.S. patent examiner,

Woodland Hills

Q: A year ago, I started a cleaning service from my home. It has been a roller-coaster ride. How can I keep business steady? Do you have any suggestions on how to be unique and different?

--Mary Morrison,

Mary Morrison & Associates

A: I know a woman with a cleaning service who came up with a great way to stabilize her business and make it stand out from other cleaning companies. She got together with several other local cleaning services and independent housecleaners and formed a kind of consortium. She took over the jobs of drumming up business, placing ads, sending fliers, going to meetings to talk about the service and purchasing supplies for the entire group.

She also trained new cleaners, bought group liability insurance and handled all bookings on her 800 number. When requests came in for cleaners, she passed them on to other members of the group and took a fee on each of those bookings.

What she found is that she built up a rather large business quite quickly. Many of the other cleaners she teamed up with were reluctant to do or inefficient at marketing, planning and bookkeeping for their own business. They did not want to deal with bounced checks, unfriendly dogs and other problems that came with individual cleaning enterprises. Because she was willing to do that, many independent cleaners signed up with her consortium.

If you want to try something similar, start by inviting other cleaning people for coffee. Look in the telephone book, the PennySaver and other local circulars and on supermarket bulletin boards to find people who do cleaning. Then let them brainstorm about the challenges of the business, common problems and possible solutions. Propose your idea, stressing that with lower office support costs, bulk supplies and group advertising, it probably won’t cost the individuals anything extra to work together. If, as individuals, they can’t afford insurance, this way they can get group liability insurance they really should have.

Start with people in your community and, as revenue builds, you can expand by installing a more sophisticated phone system, subcontracting with a real answering service and having substitute cleaning people on call when a regular is sick.

Leery about getting together with your competitors? You shouldn’t be. Car dealers are very competitive, yet they get together and belong to an industry association. So do many, many other firms in extremely competitive fields.

--Barry Allen,

Consumer Business Network Inc.,

Newport Beach

Q: I was able to take early retirement two years ago at the age of 47. I’m now interested in sinking my teeth into something after two years of doing nothing. What kinds of things should I do before I start a small business or home business?

--Ely M. Enriquez, Ventura

A: First, decide what kind of business you want to start. Then organize and develop a business plan for your operation. Contact your nearest Small Business Development Center and attend their workshops for new business owners. They also provide one-on-one consultation you should take advantage of.

Before you develop your business plan, you should answer a few important questions: Will my business be a solo operation? Will I need employees? How many? What are the business licensing costs in my locality? Who is my competition and what customers do I serve? What is my geographical region for service delivery? What is a competitive rate to charge for services? What type of insurance coverage will I need, if any, and what is my company name?

Let’s assume you begin as a home-based business. You will want to list your business in the local Yellow Pages, develop a company logo and letterhead, contact your telephone service provider to discuss options for a business telephone, voicemail and/or pager and join your local chamber of commerce and start committing some time each month to that group so you can strengthen your connections with local business.

Establish a business bank account so that you can separate personal and business finances. Evaluate your equipment needs, including tools, machines, furnishings, inventory and administrative support such as computers, fax machines and cell phones.

Most important, be honest about your financial position when you are starting a new business. Plan to have enough savings to cover at least six months of basic expenses to allow for some time to build customer relationships and to generate revenue. The financial projections you write into your business plan should help to provide you with your break-even analysis.

--Frank Stokes, director,

Business & Entrepreneurial Success Training

El Camino College

If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to kklein6349@aol.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.