Company Should Look Fine With a Little Touch-Up

More than a decade of experience at Buckingham Palace, Windsor Castle and Parliament taught Sean Clarke a great deal about repairing and refinishing antique furniture. But it didn’t teach him much about marketing, finance or customer relations.

So after starting his own business a year ago, Clarke has received a crash course in entrepreneurship. Rather than spending all his time restoring desks, chairs and chests, Clarke has had to devote much of his attention to buying equipment, finding new clients and budgeting to pay rent and wages.

“We’ve done pretty well for our first year,” said the native Londoner, who founded Clarke Company Restoration & Refinishing with his wife, Angela, last June. They used $20,000 from savings and a credit card loan to open their Valencia facility. “But it’s obvious that we’ve got some weak areas that need improving.”

Clarke is right on both counts, said Barbara Lewis and Dan Otto of Centurion Consulting Group in Los Angeles. By already developing a small but steady base of customers that generates monthly sales of about $12,000, the Clarkes have made a good start. But there are several areas that need immediate attention.

Those range from managing accounts receivable--the company sometimes waits up to three months to get paid for jobs--to developing an aggressive marketing campaign. Outreach efforts are currently limited to a pair of Yellow Pages advertisements.

“Sean is an extremely talented craftsman who has some very rare talents,” Lewis said. “But he’s also got some problems that are very common to people who are just getting started running their own business.”

Sean Clarke started his career in 1983 at age 15 when he began a five-year apprenticeship in French polishing--the European specialty of antique restoration. Over the years, he worked at many of England’s most famous landmarks before meeting and marrying Angela, an American, and moving to California.

“It didn’t seem like a big deal to work at Buckingham Palace or in the Houses of Parliament,” Clarke said. “In my business it was pretty normal--like how someone from Los Angeles might work for clients in the movie industry.”

But Clarke’s impressive background can be the springboard to much greater success by helping him in everything from advertising to pricing, Lewis said.

“How many people in this area have spent almost 20 years working on the kind of jobs that Sean has?” Lewis asked. “His exquisite work gives his company a competitive advantage that he should capitalize on.”

Most notably, Clarke should become much more attentive to his marketing efforts. He relies on a former employer who subcontracts work to him in addition to a few clients he has found through his limited advertising.

Lewis characterizes this as a “passive” marketing approach and suggests several avenues for increasing the company’s visibility. A good start would be to arrange meetings with local moving companies. (Property damaged during moves represents a major portion of the Clarkes’ potential market.)

“I would expect that Sean’s impressive portfolio of projects would convince any moving company to engage his services,” Lewis said.

Another obvious group of clients is the region’s museums, Lewis said. “Many museums need restoration and refinishing work,” she said. In addition to providing business, collaborating with museums could raise the company’s profile and lead to opportunities with people and businesses connected to those museums, she said.

Sean and Angela agree that they should actively seek clients. “It’s true that we have been very passive with our sales efforts,” said Angela, who handles the company’s bookkeeping and helps part time with the office work. “We could be a lot more proactive about what we do.”

The company’s lack of marketing during its first year resulted from a focus on more immediate demands, such as finding an appropriate location, buying equipment and getting the business off the ground. “We’ve been so involved in the day-to-day things that we haven’t devoted much time yet to developing relationships and planning strategies to grow the business,” Angela said.

Tackling immediate needs at the expense of longer-range planning is a typical and understandable action for many new business owners, Lewis said. But with a year of success under their belt, the time has come for the Clarkes to devote more attention to the business’ future.

In addition to meeting with movers and museums, Lewis suggests some other marketing tactics.

“Having a Web site is becoming as necessary for many businesses as having a telephone or a fax,” Lewis said. “People no longer ask if you have one--they just ask for your [Web] address.”

The Clarkes need not spend a lot of money building an intricate site immediately. But they could easily put together a site that includes some information about the company’s services along with some photos of “before” and “after” restoration work. As the company grows, the site could be expanded.

Lewis also urged the Clarkes to build a database of their previous customers. They could then periodically send letters to those customers with the goal of developing repeat business.

“By staying in touch with people you can turn one-time customers into long-term clients,” Lewis said. “While a customer might generate a few hundred dollars for a business, a client could represent thousands of dollars over many years.”

On the subject of dollars, Lewis urged the Clarkes to consider raising some of their prices. As a new business owner, Sean was determined to make his bids extremely competitive. But this strategy has kept margins slim and might even backfire, Lewis said.

“In a field like this, people sometimes equate low prices with low quality,” she warned. “Sean should emphasize his quality rather than simply low prices. If someone has an antique worth thousands of dollars that needs restoring, they’re not likely to be worried about $100 or $200.”

In addition to considering raising prices, the Clarkes should ask for deposits of 50% of a job’s value, Lewis said. They currently receive a 25% deposit and get the remainder after the work is complete, although some clients delay payments for several weeks or even months.

By increasing deposits and making a more formal payment schedule, the Clarkes could solve some cash-flow problems. Buying supplies and paying their employee can be tricky if they have a large backlog of receivables.

Eventually, the Clarkes may even be able to hire more workers, Lewis said. This could be accomplished by finding a skilled craftsman or hiring someone willing to start an apprenticeship in the same way Sean started out.

“Adding employees will have to be a longer-term issue for us,” Sean said. Doubling the payroll would be a difficult proposition for the young business and training someone would further limit Sean’s cramped schedule. “It would be a big challenge for us right now.”

Lewis’ final suggestion was for the Clarkes to refinish the chipped and nicked desk in their small office. “You wouldn’t visit a cobbler who has broken-down shoes,” Lewis said.

Sean is much more likely to visit a client’s home than to have customers come to his shop, so he has paid little attention to the appearance of his office. But he agreed with Lewis’ observation.

Lewis and Otto’s review of their business will spur several changes, the Clarkes said. “Their recommendations are like a wake-up call for us,” Sean said.

“My mind has always been on doing the work we have in our shop, but it makes sense to do some of the planning that they are suggesting.”

When finances allow, the Clarkes intend to get into the business of purchasing antiques, refinishing them and then selling them. Many of Lewis’ suggestions, such as creating a Web site and developing enduring relationships with clients, will also contribute to that strategy.

“Our goals had been pretty vague during the first year but I think the recommendations will help us get more focused,” Angela said. “There’s a lot of satisfaction in having your own business and we’ve enjoyed it, despite some long hours.

“Now that we have some ideas to market more effectively and manage our business more effectively, I think we’ll do even better.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

This Week’s Company Make-Over * Company: Clarke Co. Restoration & Refinishing

* Location: Valencia

* Type of business: Antique and furniture repair and restoration

* Status: Sole proprietor

* Owners: Sean and Angela Clarke

* Founded: June 1999

* Start-up financing: $20,000 (personal savings and credit card loan)

* 1999 sales: $53,000 (six months)

* Employees: One

* Customers: Individuals

Main Business Problem: How to expand a young business and broaden customer base

Recommendations

* Increase marketing to moving companies and museums.

* Consider raising prices.

* Build a Web site.

* Get larger deposits to help cash flow.

* Turn customers into clients.

* Do more research on the competition.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Meet the Consultants

Barbara Lewis and Dan Otto are partners in Centurion Consulting in Los Angeles. Their clients are a wide range of businesses in marketing, finance and operations. They specialize in solving problems through the use of computer models.