Factoring the value of location

Dear Karen: I’d like to open a mini import goods store. How important is location?

Answer: Location is always important for retail, but it’s not the only way to attract customers, said George Whalin, president of Retail Management Consultants of Carlsbad.

If you’re serving a particular ethnic group, locate in its neighborhood. If you’re targeting upscale customers looking for unusual items, they’re more likely to shop wherever you locate, Whalin said.

The two biggest mistakes retailers make are undercapitalizing and over-investing in initial inventory, he said. Amass enough start-up capital to sustain your operations for two years. And stock products that will keep customers returning frequently, such as baked goods and fresh fruits and vegetables.


“Keys to success depend on offering a highly desirable selection of merchandise, communicating frequently with current and prospective customers and developing a friendly, personal relationship with your customers,” Whalin said. “The smaller the store, the more important it becomes to keep the selection interesting and turn the inventory frequently.”

Launching an apparel line

Dear Karen: I have an idea and a name for a clothing line. How do I find manufacturers?

Answer: Learn how the apparel industry works before you meet with fashion designers or manufacturers. The California Fashion Center ( and California Market Center ( are excellent starting places.

Next, query prospective customers about how likely they are to buy your fashions and what prices they’d be willing to pay. “Compare your expectations to actual responses and you’ll have an early indicator of the success or failure of your company’s value proposition,” said Bob Donnelly, a New York-based entrepreneurial coach.

Before you open for business, do a thorough break-even analysis for your first year and develop a business plan, setting strategies and quarterly milestones, Donnelly said.

Ways to find funds for start-up

Dear Karen: I lost my job after 29 years. Is there small-business financing assistance for unemployed people?


Answer: Start-up entrepreneurs generally fund their ventures by personal savings, loans from family and friends or credit card debt. Franchises with proven business models might be more likely to get commercial financing, said Maria Coyne, executive vice president at Key Bank in Cleveland.

“Some people today are getting severance packages, buyouts or early retirement funds and using those to start companies,” Coyne said. Once your business is operating profitably, after about two years, your chances of commercial credit improve.

Business owners who tightly manage cash flow are more likely to have productive conversations with bankers.

“Keep track of your company finances and know where the levers are on the expense and revenue side. Also keep costs as variable as possible, as opposed to having a lot of fixed costs,” Coyne said.



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