Corrections or additions?
This article by Bart Jackson was prepared for the May 30, 2001
edition of U.S.
1 Newspaper. All rights reserved.
A Shop of Your Own? First, Try It Out
Launching your own new business is a lot like
sex: It’s a novel, exhilarating experience, drenched in guidelines
based on others’ mythical successes. "I went into the jungle as
a young man," quoth poor Willie Loman’s envied elder brother,
Ben, "and five years out later I came out rich." Alas, such
tales, true or not, proffer very little to the novice business person
struggling to get his new and better mousetrap before a skeptical
A better bet than listening to locker room, or board room, advice
is to make swift pilgrimage to the Mercer/Middlesex Small Business
Development Center, which is specifically designed to aid in
business startups. Located in the Chamber of Commerce building, 216
State Street, Trenton (609-989-5232; www.yourbizpartner.com), the
Center provides a wealth of workshops and literature on all aspects
of initiating commerce, from the basics of how to file government
papers, set up payroll, and borrow money on up. In addition, the
will unite novices with experienced veterans in person-to-person
On Monday, June 4, at 6 p.m., one of the Center’s primary and most
popular workshops, "How to Start Your Own Successful
will be held at the Trenton Public Library at no charge. Forty-year
business owner and corporate executive Martin Mosho will walk
prospective owners through start-up procedures for every type of
from a small restaurant to various franchises, to large store chains.
Call 609-392-7188. The workshop runs about three hours with another
hour to handle specific audience questions.
Mosho’s four-decade business experience is as wide as it is deep.
He has sold advertising space for newspapers and magazines ranging
from U.S. News & World Report (during the Watergate years) to
He has owned and run retail stores and franchises, including one of
the largest Snelling Personnel Franchises, and more. Mosho readily
admits that his has been a business career littered with mistakes.
Yet it is one from which he has emerged profitably and triumphant.
"The real problem," says Mosho, "is folks don’t know how
to jump-start their own business. Once they’ve filed their state
and received their federal E.I.N. (Employment Identification Number),
they don’t know which step to take first." In Mosho’s view,
the right steps in the right order often proves as important as doing
them thoroughly and well.
may seem an obvious point of common sense, but too many people who
love something, perhaps sports, come in waving a business plan drawn
up on the kitchen table outlining a sporting goods store. Mosho
counseling one woman desperate to buy a Subway Sandwich Franchise.
A month after he had finally persuaded her to take a job as an
at one, she returned. She hated the work, hated food handling, and
nixed the whole idea. Give yourself at least a few months on the front
lines, Mosho suggests.
partnership, corporation — each carries its own benefits and
To some extent, your choice may be curtailed by your sources of
but Mosho says each entrepreneur should avoid trends and examine his
or her firm individually. In the l980s, many small firms were swept
into the prestige of incorporating their companies, which added
set-up and bookkeeping fees, and in the end afforded little in the
way of practical tax or liability protection.
Administration makes loans. Not so, Mosho laughs. "They got too
badly burned on that years ago," he says, adding that the SBA
now only guarantees certain, select loans from banks. Banks loans,
carrying a lower rate of interest than many other types of financing,
are the first port of call for borrowers, but they want to see you
shoulder a major part of the risk. These institutions are very fond
of instilling commercial incentive by putting your stock portfolio,
house, or your parents’ savings on the line. If you haven’t got this
collateral, best lower your sights and move up the interest chain.
Your stock broker may be willing to margin your portfolio and thus
come up with more cash than a bank could allow. But beware the
rates and a labyrinth of Byzantine conditions.
Until recently, financial waters were brimming with venture
who abandoned traditional loan guidelines in a frenzied search for
investment profits. Unfortunately, the recent glut and fall of
firms dried up this financing source. Currently, Mosho notes, venture
capital firms are turning down about 98 percent of all applicants.
But if you can lure one in, venture capital funding remains a way
to get your needed funding with minimal collateral. The good news
is that frequently venture capital firms will allow you to launch
on a larger scale than first anticipated. However, Mosho warns,
interest will come higher and almost invariably, they want a
of your action."
<B>Consider a franchise. To those beginning to have
second thoughts at entering the lonely, chimera-strewn forest of sole
proprietorship, Mosho offers that popular and potentially profitable
middle ground — franchise. Purchasing a business franchise may
usher you into a very supportive club, "but the initiation
says Mosho, "will rival and exceed any bank loan inquiry."
Typically, franchisers are seeking stable candidates with business
experience. People with a strong managerial background are considered
ideal. Ironically, they seldom seek veterans of the same industry.
"Most franchises," says Mosho, "spend millions on training
their people expertly to run the business their way. My own past years
in the field, I was told, were not an asset, but baggage best
the six percent fee, plus two percent advertising cost franchises
typically take from the top of your profit each month. Do you really
need the mother company’s network and support? Is it worth eight
of your profits? If you are a personnel firm seeking cross-country
placement, yes, the network will help. However, if you want to start
an advertising firm, a franchise is probably not going to bring you
enough new business. If you want to sell pizza, go it alone. But if
you want to sell burgers, best not to face off against MacDonald’s
and the other Big Boys. Equipment rental, yes; cleaning service or
car detailing shop, probably not.
of the strongest points in favor of going with a franchise rather
than striking out on your own. They have the cash and the business
analysts to set you up in an ideal trading area, and don’t wince over
high rent if the traffic merits it. But this can be a two-edged sword.
All too frequently, Mosho says, "corporate egos push franchises
into very expensive malls where the rent and necessary furnishings
chain, and you will serve it their way, thank you. Carvel franchises
sell ice cream. They sell yogurt. They do not sell thick shakes. Mosho
suggested that this would be a natural and wanted to try it. They
forbade his straying from the product line. In any franchise, the
corporation, not you, is the monarch of what you survey. Be honest
with yourself before you sign that independence away.
out onto the open waters of commerce. More marketing considerations,
more new tools, and heaven knows, more legal entanglements mark the
horizon. Yet, we also hold an advantage. The Good Old Days never
helmsmen so expert and easily accessible as Mosho, nor safe harbors
like the Mercer/Middlesex Small Business Development Center. The
— Bart Jackson
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