Business Wannabes: Do Your Homework
One of the first things a would-be entrepreneur must do is assess the competition.
A child-care provider or accountant might want to find out who provides similar services in the neighborhood and how to offer something unique. Computer consultants, software designers, graphic designers or other high-technology workers may have to assess the competition in Southern California and beyond.
Price, quality, service and variety of products offered by direct competitors should be checked, but don’t forget indirect competitors. Look at substitute products or services, related products or new items offered by companies expanding their product lines.
A fledgling pastry shop owner would check out direct competitors such as neighboring bakeries. Indirect competitors might include bakery counters in supermarkets, coffee bars that offer pastries or a corner newsstand equipped with a pastry and coffee cart.
In business terms, this gathering of information is called market research. For the small-business owner, market research can be as simple as a walk down the street, a trip to the library or a phone call.
The idea behind market research is to learn how your small-business idea fits into entire industries and economies, from the local to the national scene. Seeing this larger picture is necessary even for a one-person, home-based business.
“You have to be able to see and recognize trends because those are going to influence your business,” says Debra Esparza, director of USC’s Business Expansion Network. “Even though an event can happen halfway across the world, it can affect how you get your raw materials or how you export your product.”
You should also find out detailed information about each industry and the rules that govern your line of business. And you should be soliciting opinions about your business ideas outside your circle of friends and family members.
“Chances are, the knowledge and background you need for a successful small business won’t be around one dinner table,” Esparza says.
If you plunge ahead in business without preparation, you put yourself at greater risk of failing. You may be unprepared for circumstances that could sweep your company out of business or, conversely, sweep you into prosperity.
For example, multibillionaire H. Wayne Huizenga began with a single, $5,000 garbage truck and a half-day pickup route in South Florida. But he took advantage of the region’s 1962 real estate boom by making afternoon door-to-door calls through Pompano Beach’s new residential and commercial developments. Soon he expanded to 20 trucks and went on to create a $1-billion company, Waste Management.
Huizenga grew his business by acting on larger business trends. This gathering of information is vital even before venturing into business.
“The first investment that I recommend for an entrepreneur is a spiral notebook,” Esparza says. “It’s old-fashioned, but it will help you keep all your thoughts in one place.”
To help you sort through your notebook and organize your business ideas, The Times has devised an outline.
Fill in the specifics about each of the business ideas you are pursuing. Use a separate outline for each business idea and label them Idea 1, Idea 2 and so on. Use blank pages from your notebook if you need more space.
YOUR BUSINESS IDEAS:
1. Skills
Do I have the skills and knowledge to run the business?
Can I acquire the skills in time? How long? Cost?
Can I hire someone with the skills?
2. Who Are My Customers?
From my neighborhood, city, state, United States, the world?
What are their ages, income, gender, ethnic background?
How will I inform them about my business?
How much will it cost to reach them?
3. Distribution
How will my product reach customers?
What will it cost?
4. Daily Schedule
What are the business hours?
What kind of hours do I want to keep?
5. What’s Needed to Start?
Type and cost of equipment
Cost of licenses and permits
How many employees are needed and what will they be paid?
Where will the business be located and how much will it cost to rent or purchase space?
*
The USC Business Expansion Network is at 3375 S. Hoover Blvd., Suite A, Los Angeles, (213) 743-1726.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Entrepreneurship 101
Chapter 1::HOW TO CHOOSE A BUSINESS
* Open Your Eyes
* Explore Opportunity
* Examine Your Attitudes
* Add It All Up
Chapter 2: HOW TO START A BUSINESS
Chapter 3: HOW TO DEVELOP A BUSINESS PLAN
Chapter 4: HOW TO FINANCE YOUR BUSINESS
Chapter 5: HOW TO GROW YOUR BUSINESS
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Resources for Start-Ups
To find suppliers and partners, the Thomas Register of American Manufacturers lists products and materials by U.S manufacturers.
* The RMA, Robert Morris & Associates gives average financial statements for businesses in various industries.
* Success, Your Company, Inc., Entrepreneur, Hispanic Business, Black Enterprise and other magazines provide success stories, business tips and trends.
* Small Business Success, an annual self-help magazine, is published by Pacific Bell Directory and the federal Small Business Administration. Call (800) 848-8000.
* The Encyclopedia of Associations lists trade groups and organizations in different industries.
* The California Small Business Assn., National Small Business United, National Federation of Independent Business, National Assn. of Women Business Owners, Latin Business Assn. and others welcome new members and provide help. Consult The Times Small Business Web site: https://www.latimes.com/smallbiz
* The Los Angeles Area Chamber of Commerce, 350 S. Bixel St., Los Angeles, (213) 580-7500, provides small-business assistance.
* Citywide, neighborhood and ethnic chambers of commerce exist in Southern California’s 147 cities. Check the phone book or The Times’ small business website.
* The Economic Development Corp. of Los Angeles County publishes the Business Resource Guide, an extensive list of business help. Cost is $25. Contact the EDC, 515 S. Flower St., 32nd Floor, Arco Building, Arco Plaza, Los Angeles (213) 622-4300.
* Nonprofit development corporations affiliated with city government, such as the Atlantic Community Economic Development Corp. in Long Beach, provide special programs to encourage small business development in certain neighborhoods. Contact the city clerk or the city manager where you are considering running your business.
* Nonprofit corporations, such as Operation Hope and Women’s Enterprise Development Corp. (WED Corp.), also provide small business information and assistance. Check The Times’ website for a list.
* The Los Angeles Times runs Small Business pages every Wednesday. Other Southern California newspapers provide local business coverage.
* On-line information from government agencies and corporations provide links to more information and sites under “Resources,” “World Wide Web” or “Links.” A sampling includes:
Los Angeles Times - https://www.latimes.com/smallbiz
American Express Small Business Exchange - https://www.americanexpress.com/smallbusiness
California Chamber of Commerce - https://www.calchamber.com
CCH, Inc., Chicago-based small business publishers - https://www.toolkit.cch.com/
Federal Small Business Administration - https://www.sbaonline.sba.gov/
Service Corps of Retired Executives (SCORE) - https://www.score.org/
Small and Home-Based Business Links - https://www.bizoffice.com/homebased.html
The Small Business Advisor - https://www.isquare.com/
* The federal Small Business Administration has regional offices in Santa Ana, 200 W. Santa Ana Blvd., Suite 700, Santa Ana, (714)-550-7420 and Los Angeles, 330 N. Brand Blvd. Suite 1200, Glendale, (818) 552-3210.
* Small Business Development Centers (SBDCs) and the Service Corps of Retired Executives (SCORE) provide free or low-cost training classes. Contact the SBA or The Times’ on-line small business calendar.
* USC, UCLA, Pepperdine and other colleges provide entrepreneurial programs for college credit. Some provide noncredit help for small businesses, such as the USC Business Expansion Network, University Village Shopping Center, 3375 S. Hoover St., Suite A, Los Angeles, (213) 743-1726.
* Chats with business owners can give real-life insights and are possible mentors.
