When You’re Just Starting Out, It May Be Wise to Distribute Your Own Product

Question: I’m considering starting a greeting card company. I have a library of slides and a lithographer willing to print. I was hoping to start small by having the cards sold in coffeehouses and small stores. Unfortunately, I am completely clueless about distribution. How do I make business deals with distributors? And where can I get information on this?

--Jonathan Liljeblad,

South Pasadena

Answer: Speak with potential customers about how they want to buy the product. Volume may be slow to build, so it might be better for all concerned if you start out distributing your product line on your own. There are several advantages to using this approach:

First, it will allow your company to build a track record of quality and service, which is critical in a start-up.

Second, major distributors don’t often take chances on start-ups, so if there are production, quality or service “bugs,” it would be better to have them happen (and correct them) locally before going regional, national or international.

Third, you can keep track of sales and work on innovative merchandising, gaining a critical difference by being self-distributing.

This hands-on approach will be much appreciated by your retail customers.

You should consider investigating and perhaps joining the Greeting Card Assn. at 350 New York Ave. N.W., Suite 615, Washington DC 20005. You can call them at (202) 393-1778 or send a fax to (202) 393-0336.

--Ken Keller, marketing consultant, principal, Keller & Associates, Valencia

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Q: I am a photographer interested in selling postcards, greeting cards, prints and the like. If I take photographs of homes or storefronts, do I need to get permission from the owners to use those images? How do I copyright these images? I am just starting out and would appreciate any advice you can give me.

--Sandy Shum, San Diego

A: If you are photographing scenery, even if that includes houses or stores, you do not technically have to obtain legal releases from the property owners. However, it certainly would not hurt to tell people what you are doing and ask them to sign releases. Make sure you are not trespassing on their property while you are taking your photographs. And make sure you are not taking pictures of people without their permission.

As for copyrights, you can copyright works of art by simply putting a copyright notice on the bottom of the image. Use the lowercase “c” enclosed in a circle or the word “copyright” followed by your name and the year it was created. The rights to work you produce--whether it be images or words--belong to you. You can establish that copyright by use.

However, if you take the time and put out a little money to officially register your copyright, you will have a procedural advantage if you ever enter into litigation over your copyright-protected materials. You can find the forms to fill out for registering a copyright at a large library. They are fairly simple to complete and include instructions on them.

Once you fill the forms out, you mail them to the Registrar of Copyrights at the Library of Congress in Washington, D.C. The fee to register a copyright is $20.

--Robert Sperry, patent attorney, Woodland Hills

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Q: I have been an apparel designer for the last 12 years. I produced a small line of my own and made $30,000 in sales my first season out. Unfortunately, I wasn’t adequately funded and found myself unable to produce my first months’ shipping. I need to seek a backer and don’t know where to start. Any suggestions?

--Gordana Jovanovic, Monrovia

A: The apparel business is a perilous one, even when you are fully funded and you have something of a reputation. Every new season means you have to start over in your sales and marketing.

Successful apparel companies have a network of contacts and relationships with buyers and they stay on top of the niche they dominate, whether if be high-end women’s wear, sportswear or whatever line they specialize in.

It’s likely to be very difficult to start a business on a shoestring in an industry like this. First off, it’s difficult to get funding unless you have a stellar reputation.

If you do get start-up funding, cash flow is tough to manage because there is a long lag time between shipping product and getting paid for it.

Stores are notoriously slow to pay. And factors--companies that advance money on accounts receivable--are costly to do business with and tend to want to lend only on very large orders. In the garment industry, a company with $10 million in annual revenue is not considered a large company.

Many people think that if you’ve got the designs, you’ve got what you need to run a business. Unfortunately, this is not true. Your best bet may be to partner with a manufacturer, license your designs to that company, and spend time making key contacts within the industry.

Finding advisors, mentors and businesspeople who have built companies like you wish to do is crucial. If you can meet people who know this industry and like your designs enough to support you and back you, you may have a chance to start a business down the line. Otherwise, I think you will find it extremely difficult to raise capital and find partners in this industry.

--Peter Cowen, Peter Cowen &Associates;, an investment banking firm specializing in early-stage companies, Westwood

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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 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.