Aspiring Entrepreneur Should Do Homework Before Taking the Plunge
Q: I have an extensive managerial background with a large national transportation company. I am confident that my skills can be applied beyond the industry I have worked in and feel I am well-suited to start up and manage a business.
I am an East Coast transplant, here in L.A. in the name of love for my fiancee, a native Angeleno. I think starting my own business will be the only way I can acquire the flexibility I need to maintain my relationships with friends and family in New England. Any ideas?
--David C. Giannelli, Los Angeles
A: Owning a business can be a great way to increase the control you have over your life, but if you do not have an entrepreneurial personality, it can be extremely stressful.
The first thing you should do is read up on what it takes to be an entrepreneur and talk to others to see if you are cut out for this type of work.
Next, you should brainstorm all possible solutions to your situation. Can you work for a firm that has offices in those cities in which you want to spend time? Can you hire yourself out as a consultant to firms in Los Angeles and New England in order to spend part of your time on each coast? If you could find this type of situation, would the travel schedule allow you enough time with your fiancee and for yourself?
If you do start your own business, think through all the details. Write a strategic plan that spells out the market for what you will be doing, as well as how much money you need to break even and earn a salary. How long will it take? Will you need funding?
To make sure your personal and family life do not suffer, include your top two priorities in the plan and use these as a guide against which you measure all opportunities. Modify or reject the opportunities that would force you to abandon these priorities.
Some resources that might help you: The FastTrac program offered at California Lutheran University and co-sponsored by Southern California Edison is a fantastic condensed program that helps participants take their idea from concept to business plan.
The Small Business Administration offers start-ups and small-business owners a variety of resources. There are also management coaches and career counselors who could meet with you and offer advice.
Many books and magazines offer information on small-business and career planning. I recommend “How to Write a Winning Business Plan” by Joseph Mancuso and the magazines Fast Company, Home Office Computing and Success.
--Leslie Godwin, MFCC
Career and life management coach
Q: I, along with two friends, would like to start a video rental business, not just a video store but more of an interactive store. We have never done anything like this before, but we have the money and the drive to keep it going. We’d like to have the store in Whittier, but we’re not sure where to start. Can you help?
--Joseph Sanchez, La Habra
A: Over the last five years, there has been a major consolidation in the video rental industry, with the two largest companies, Blockbuster and Hollywood Entertainment, now accounting for about 35% of the total rental market, estimated to be between $7 billion and $8 billion annually.
That said, plenty of independent storefronts are still in existence--an estimated 28,000 nationwide. Blockbuster has 4,000 stores and Hollywood Entertainment recently opened its thousandth store. A couple of smaller chains have more than 500 outlets each.
Many smaller rental businesses have found a niche by offering better service or a broader range of products--specializing, for example, in esoteric titles, older films or foreign films. Another category the larger chains generally do not offer is adult products, which can account for 15% to 20% of a smaller store’s revenue.
Video store owners generally purchase their stock wholesale from video distributors. If you can connect with a distributor in your area, you can probably get quite a bit of information on the local market from that company, which would have an interest in helping you get started. Used-tape brokers, who purchase last year’s big films for resale, often offer “store start-up” packages to new retailers. This can be a source through which you can buy an entire library of used products at a lower rate.
To find out more about the video industry, contact the Video Software Dealers Assn. in Los Angeles at (818) 385-1500. It can give you a list of video distributors and other helpful start-up information.
The group sponsors an annual home video convention featuring workshops, demonstrations and new technology. This year’s convention will be held July 8-11 in Las Vegas.
Also, check out our weekly trade publication, Video Business, which carries classified ads from used-tape brokers and information about the industry. You can request copies of Video Business by calling (213) 857-6600, Ext. 2.
Q: My partner and I recently launched a teen publication that is distributed nationally at high schools. We are putting our ad kit together and need to find a directory that lists consumer print media buyers for companies and ad agencies, specifically those oriented toward a teen demographic.
--Teresa Ensenat, Laguna Niguel
A: Start by checking out a couple of reference books at the library: “The Standard Directory of Advertisers” and “Thomas Register of American Manufacturers,” which lists companies by the product or service they offer and includes their name, address, phone number and a brief description of the firm. You can search the register online at its Web site (https://www.thomasregister.com).
Entrepreneurial trainer and author
of “Bootstrapper’s Success Secrets:
151 Tactics for Building Your
Business on a Shoestring Budget”
If you have a question about how to start or operate a small business, mail it to Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to firstname.lastname@example.org. 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.