Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the March 5, 2003 edition of U.S. 1 Newspaper. All rights reserved.
Start-Up Survival: Pinch the Pennies
Working for a large corporation, a person tends to take
some things for granted. Things like color copiers, multi-line phones,
water coolers, flat-panel computer monitors — and toilet paper.
Gina Leggiere logged 20 years in corporate America. Now the
owner of two franchises, she recently accosted an employee who was
blithely heading home with a roll of toilet paper tucked under her
arm. The employee was shocked at being questioned. “`At Pepsi
everyone takes toilet paper home,’” the indignant worker told
Leggiere.
“They never stop to think of where the money comes from,”
she says. “I have to sit down and explain. They don’t realize
that salary and toilet paper come out of the same pocket.” That
would be her pocket. Cut loose from corporate luxe, Leggiere says
she watches every penny, and she advises other entrepreneurs to do
the same.
Leggiere speaks Monday, March 10, at 6 p.m at Middlesex NJAWBO at
the Edison Sheraton Hotel. Cost: $43. Call 908-753-5756 or visit www.njawbo.com
Leggiere, a graduate of Ramapo College (Class of 1976), studied urban
planning as an undergraduate but headed straight for a career in sales
and marketing. She worked for Phillips, Polaroid, and Pepsi before
striking out on her own. “I was making everybody but me wealthy,”
she says. To reverse that situation, she decided to open a business.
She was aware of the risks. “Ninety-five percent of all new businesses
fail within three years,” she says. On the other hand, her research
indicated that 95 percent of all new franchise businesses are still
around after 10 years. Liking those odds, she began researching franchises.
She decided to go with Sign-A-Rama, a Florida-based company whose
650 stores make all manner of signs for companies, municipalities,
and individuals. She expanded after four years, moving from Edison
to a larger store in Piscataway, and bought a second franchise, Post
Net, a mailing center. She expects to keep on growing at a rate that
will dictate another move before too long. Along the way, she has
learned some lessons, and is happy to pass along advice to others
with a hankering to start making money for themselves.
Research, research, research. Buying a company — whethera standalone operation or a franchise — is risky business. Thisis no time to take a blind leap of faith. Leggiere hired a franchiseattorney. Among other things, he went over every detail of her contract,ensuring that she could live with each of its terms. “He was expensive,”she says, “but I went in with my eyes 110 percent open.” Shealso used an accountant with knowledge of franchise agreements.Anyone contemplating the purchase of a business needs to realize,she says, that no one possesses all the skills necessary to thoroughlyevaluate the opportunity. “I was smart enough to know I didn’tknow how to start a business,” she says.Realize that businesses vary wildly. Leggiere owns twofranchises. “They couldn’t be more different,” she says. “They’reday and night.” She can not think of a single negative thing tosay about Sign-A-Rama. “Post Net is a different story,” shesays. She bought the franchise when it was owned by Sign-A-Rama, andit was later sold to another company. Both are franchises, and eachcourts similar customers, but management styles in the home officesvary markedly.Prepare to eat standing up. No matter how demanding aboss can be, the hours he expects are almost always less than thosenew entrepreneurs log. “I could work 24 hours a day,” saysLeggiere.After her first month in business, friends called to see how she wasdoing. A common question involved what she missed most from her daysas an employee. “Lunch with friends,” was her reply. As abusiness owner she took her lunch not in a restaurant chair oppositea co-worker, or even in the cafeteria with a gang of friends. “Ieat standing up in the production area,” she says. So accustomedis she to the arrangement that she gets nervous when she occasionallyshares lunch in a restaurant with a client. “I think I shouldbe standing up,” she says.Manage your schedule. Entrepreneurs have a tendency toturn into firemen, putting out little blazes as they erupt. “Yougo to input an order and the phone rings,” she says. “Youstop to answer it, and then remember an appointment. You spend 15minutes looking for your keys, and run out the door without inputtingthe order.”Slow down, is her advice. Prioritize. Make a plan and stick to it.She visits clients on the way in to work. Upon arriving, she settlesin to review orders, and make estimates. There is a routine for theday and a routine for the week. Sticking to it gives her focus.Make time for sales. Pressed to take care of clients andto complete projects on time, new entrepreneurs have a tendency tolet some things slide. The first casualty is sales and marketing.Doing so is a guarantee of trouble. “It’s a vicious cycle,”Leggiere says. “You’re trapped.”No matter what else an entrepreneur does, he has to “learn tolove sales and marketing,” she says, acknowledging that this ishard for many. “We’re used to thinking of sales in terms of goingwith our parents to buy a used car,” she says. “It was considereda less than reputable occupation.” This is a perception everybusiness owner needs to rethink.Spend wisely. Most entrepreneurs think it will take aboutsix months to get a company going. Wrong, says Leggiere, who has seenany number of under-capitalized businesses go under. Start with theexpectation that it could take three years to get to profitability,and in the meantime watch every penny.A common mistake, she says, is over-spending on a first office. Itis likely to be temporary, and the carpet will not be moving on toyour next location. Don’t spend a lot of money on it. Ditto the furniture,which may not fit well in a new space.As for the feature-filled phone system you used without a second thoughtat corporate headquarters, learn to do without. No one thinks aboutwhat seemingly-basic items like a phone system cost, says Leggiere.It is a shock find out that the price tag can easily be $40,000.Hire like your business depends on it. The headlines mayscream of rising unemployment, but Leggiere says every small business’biggest problem is finding and keeping good people. She finds manyapplicants simply unemployable, lacking basic job skills and/or thecharacter and personality to report to work every day and treat customersprofessionally.”If you’re Dell, it doesn’t matter if one salesperson is rude,”she says. One lost sale is of no great moment. For a small company,though, a single surly employee is enough to crater the whole operation.Not only do employees of a small business need to be savvy, pleasant,and reliable, but they also have to be more flexible and harder workingthan their corporate counterparts. There is often more work to do,and fewer people to do it.Spell out job descriptions carefully. Leggiere placedan ad for an employee on Monster.com, the online job board. “Igot thousands of responses,” she says. Applicants from as faraway as Las Vegas sent in resumes for a job that paid $10 an hour.Now, when she places an ad, she stipulates that candidates must livein Middlesex County. She refuses to speak to anyone who does not.Don’t overstaff. Business owners walk a thin line. Ifthey try to be too involved in day-to-day operations, they risk losingsight of big picture tasks like marketing and expansion planning.But if they hire too many people to help them out, they risk goingunder.Leggiere is a hiring mentor for other Sign-A-Rama owners. On any numberof occasions she has had to tell one of them that he his staff istoo large. “They say `but you have three employees,’” shereports, “and I say `Of course I have three employees! I’ve beenin business for eight years, I need three employees.’”In the early going, though, it is the boss who will have to tend tosales, customer service, and probably deliveries, computer repair,and janitorial duties as well.Filling dozens of roles, all without benefit of a proper lunchbreak, was hard for Leggiere at first. “Now it’s normal,”she says. As is hunting for bargains on bulk purchases of paper towelsand toilet paper for the office — and making sure they don’t walkout the dooPrevious StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
