Unusual Idea Requires Unconventional Outlets
Q: About a year ago I came up with a new design in underwear for men who’d rather wear nothing at all. I trademarked the name, “Nowear,” had some samples made and gave them to a number of male friends for a trial wear. The results were positive from young and old alike. How can I get this idea to potential buyers?
--Josef Anderson, Los Angeles
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A: You have several options. First, you can approach underwear manufacturers and see if you can get any of them interested in your design. I suggest that because the idea is unusual, you target non-mainstream companies and be persistent.
Another option, since you’ve got a one-product company, is to launch the product yourself. Your best bet is to locate a manufacturer and negotiate a deal whereby they would make the entire product--including packaging. It sounds as though this product might make a good direct-mail item that you could sell from a Web site, advertising it in men’s magazines and marketing it as a gift for men in women’s magazines.
You also could consider contacting lingerie companies that are interested in offering men’s products. Again, look toward companies outside of the mainstream.
To attract funding, you should develop a business plan and see how much capital you can get to develop the product and the packaging and pay for an initial production run. This money could also be used to purchase some magazine ads and pay for a fulfillment house that would handle your warehousing, shipping and billing processes.
Keep everything very simple to start and see what kind of response you get. I estimate that it would probably cost $50,000 to develop the product and do the initial production, and $50,000 for advertising. If the product sells well, you will have no problem raising more money for ads.
--Paul Ratoff, certified
management consultant,
Moss-Adams, Los Angeles
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Q: I recently dissolved my partnership in a general contracting firm and decided to start a construction consulting firm to help homeowners learn the ins and outs of the remodeling industry and manage projects as their liaison to contractors. Do you have any marketing suggestions for me?
--Reva Kussmaul, Pasadena
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A: My first suggestion is that you clarify how you are going to be paid. In other words, who are your clients? Most homeowners are not going to pay you to be educated about the remodeling industry because they don’t care about it, and if they did, they could read books or take classes. The average homeowner looking to remodel is most interested in referrals to honest, high-quality contractors who will do the job well, on time and for a reasonable price.
I’d say you have two avenues here: One is to write a book on the topic of remodeling and market yourself as a speaker and premiere consultant at home remodeling shows; and the other is to be a project manager and liaison between contractors and homeowners.
If you decide to go the first route, you could self-publish a book on remodeling, sell it cheaply and offer some kind of guarantee with it--say, that purchasers will get their money back if they don’t save $1,000 on their upcoming remodeling job by following your tips, perhaps. As a consultant/speaker at home remodeling shows, you could lead seminars giving practical advice on how to hire and work with a contractor, perhaps selling workbooks, cassette tapes and videotapes on the topic as well.
If you would rather work as a project manager and liaison, you’ll need to seek out high-dollar jobs for wealthy individuals or corporations, because middle-class homeowners adding a room or a bath will not need your services nor will they be able to afford them. In your marketing, you will want to focus on the value-added services that you can provide, such as detailed project planning that will save clients time, money and headaches. Your appeal to the home or business owner is that you will help them avoid poor workmanship and a bad experience with their job. You might find customers by creating an alliance with a local bank that does a lot of remodeling loans, or with a store such as Home Depot.
A third option might be for you to represent various contractors, who would pay you to secure jobs for them. Whichever way you go, you should first write a detailed business plan that lays out your strategy and make sure that there is a market for your idea.
--Jeffrey Ogan, vice president/
marketing, Business Improvement
Systems, Corona
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Q: I have owned a cookie and yogurt cafe in Marina del Rey for 12 years. I’m looking for a small-business loan to finance expansion and new equipment, consolidate my debt and bring in new products so I can try to keep up with the competition. How do I find lenders that will finance a small business?
--Mark Sukal, Marina del Rey
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A: It makes good sense to consolidate your debt. I recommend that you put together as much financial history (profit and loss statements and sales tax returns) on your business as possible. Include your current P&L;’s and a three- to five-year P&L; projection. Develop a simple business plan--one that shows the cafe’s history and potential, and indicate the amount of the loan you are seeking, the purpose of the loan (with some detail as to how the funds will be used), and, most important, how the funds will be repaid and when. Lenders will also want a personal financial statement from you and several years’ worth of personal and business tax returns.
Here’s the catch: All the banks you approach are going to be looking primarily for your ability to repay. You must be willing to provide a personal guarantee and have the assets, such as home equity, stocks, etc., to show that you will have the ability to repay the loan.
When you have your business plan and other documents together, put them in a three-ring binder, in a nice (but not necessarily expensive) presentation, and then start contacting local banks. Try small community banks as well as some of the big banks that have small-business departments. Get the names of the bank representatives who handle small-business loans, write them individual letters and drop off your packet in person. Then arrange for personal meetings with the representatives, possibly at your cafe. Be sure you have an “A” rating from the Health Department, and spruce up the business so that the store, your staff, and everything else is absolutely pristine before you begin this process, because a banker could drop by and take a look at any time--with or without notice.
How best to put together a package for the bank? If you don’t already have one, find a CPA that specializes in working with small businesses. If you have a CPA already, ask if he or she has experience in putting together loan packages and business plans for clients, and if so, get a couple of references so you can check and see whether the other clients felt that the CPA’s work helped get them the loan. I would estimate that a CPA could help you put together the package (assuming you have good records and documentation) for about $1,000 (10 to 12 hours’ work). The bank will be more respectful of data prepared by a CPA firm than if it is prepared by you personally.
--Art Manask, restaurant
consultant, Manask & Associates,
Burbank
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If you have a question about how to start or operate a small business, mail it to Karen E. Klein, 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. This column is designed to answer questions of general interest. It should not be construed as legal advice.
