Strategic audits spot problems
Dear Karen: My relatives own a business that has been operational for years but hasn’t grown. They’re seeking capital. What documents do they need for a small-business loan?
Answer: Before they seek out a loan, your family should figure out why their business is stagnating.
“Borrowing money to increase sales doesn’t make any sense until you know how you are going to use the money and have some assurance that it is what’s needed,” said Jack McSunas, a SCORE counselor in Orange County. “The real issue is why the business has not grown. It could be a problem with the product, the market, the way they are going to market or a number of other things.”
Suggest that your family get a strategic audit of their business. “There needs to be an emphasis on the financial health of the company, but the problem or key issue may be operational and not be directly related to spending,” he said.
Best way to meet CEOs is in person
Dear Karen: With today’s market making it increasingly difficult to secure bank loans, I’m looking for other avenues to expand my business. How can I meet CEOs who may be interested in becoming involved in my business?
Answer: With the current gap between banks and borrowers, entrepreneurs must get creative about expanding their companies. Although much business networking is now taking place online, face-to-face contact is still the most effective and efficient way to close deals, said Ronn Torossian, chief executive of 5W Public Relations in New York.
“Since time is extremely valuable to CEOs and senior-level executives, it is difficult for them to allot entire days or nights to some of the more-conventional networking congregations such as golf outings and high-profile events that have no promise of any sort of return,” he said. He hosts monthly networking luncheons, inviting guests from various backgrounds, including professional athletes and real estate executives. “I want my clients to form mutually beneficial relationships, and the results have been outstanding,” he said.
Attend a mix of small and high-profile events as often as possible. High-profile events allow you to network among a large group of accomplished professionals, Torossian said, and smaller events allow for in-depth discussion with entrepreneurs and other professionals who may be interested in a collaboration.
Tips on finding a graphic designer
Dear Karen: How can I choose a graphic designer to do a logo for my start-up company?
Answer: Assuming your funds are limited, look for a small design firm or a freelance designer with a four-year degree. Look over their portfolios and ask whether they designed the logos themselves or as part of a design team, said Charles Erickson of Charles Erickson Design in Long Beach.
He advises against hiring a relative or art student or choosing someone based on how they look. “There is tons of experience out there that can be had for pennies on the dollar when you consider you are casting a brand identity that may last for decades,” he said.
Ask a large design firm for referrals to quality freelance designers. “A good freelancer is going to charge around $100 per hour for top-notch work. A small company can expect to pay $2,500 to $5,000 for initial branding,” he said.
Got a question about running or starting a small enterprise? E-mail it to ke.klein@ latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.