1. Decide: Are You Ready?

Step 2. Find a Market

3. Do Your Research, Take Some Courses

4. Tap the SBDC

5. Write Your Business Plan

6. Find Your Space

Corrections or additions?

This article was prepared for the January 2, 2002 edition of U.S.

1 Newspaper. All rights reserved.

Building Your Business

Top Of Page
1. Decide: Are You Ready?

Decide if you are an entrepreneur and how independent you want to

be. If you need hand holding, consider buying a franchise.

Try working as an employee in your target business, says

40-year business owner and corporate executive Martin Mosho, who

teaches

some of the SBDC’s "How to Start Your Own Successful Business"

courses (U.S. 1, May 30, 2001). He remembers one woman who was

desperate

to buy a Subway Sandwich Franchise. A month after she took a job

there,

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.

Choose between independence or having a franchise.

Purchasing

a business franchise may usher you into a very supportive club,

"but

the initiation scrutiny," says Mosho, "will rival and exceed

any bank loan inquiry." Also consider 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 percent of your profits?

To get the lowdown on franchising, attend the New Jersey Economic

Development Authority’s conference for aspiring franchisees and

franchisors

on Wednesday, January 16, 8:30 a.m. to 1:30 p.m. in the Winfred Scott

Ballroom in Elizabeth. Cost: $35 at the door. Call Judy Wilkinson

at 609-341-2065.

Top Of Page
Step 2. Find a Market

Find out if you have a market for your idea. Just

because

you think it’s terrific doesn’t mean everyone does. Jim Lenskold of

the Morristown-based Lenskold Marketing Group, has five principles

for new companies with a critical need to win customers, but with

limited budgets:

Don’t underestimate barriers to market share. "A lot

of time, people say `Conservatively, we’ll get 10 percent of market

share’," Lenskold says. Start-ups get these numbers from benchmark

studies, but forget, he says, that the benchmarks are for established

companies. Start-ups are up against much greater odds. "As a new

venture, you don’t have credibility."

To minimize a perception of risk, start-ups may need to offer their

product for a very low cost. "Practically give it away to get

sales," Lenskold says. Strategies for making customers comfortable

enough to take a chance include entering into partnerships with

established

companies.

Understand the customer’s world. Entrepreneurs are all

convinced that all they have to do is open the door, wave the product,

and people will buy," Lenskold says. But it is not easy to cut

through the buzz. Think carefully about your prospects’ priorities.

"If it’s the top executive, he may look at profitability,"

Lenskold says. "If it’s someone lower down, he may worry about

what could go wrong." Tailor the pitch to customers’ concerns.

Go after smaller markets. Aim at being a big fish in a

little pond, or at most in two or three ponds. Target customers by

age, geography, interests, or perhaps industry. An ideal target would

be a group that spends money, requires little customer service, and

where competition is weak.

Once a target is selected, Lenskold says entrepreneurs’ strategy needs

to be: "Let me make sure this group hears my message over and

over." Once the message does get through, there will be word of

mouth. Soon, there will be momentum, and the new company has a shot

at being a leader in its group.

Budget smart. Especially with new products or in

technology,

the learning curve is steep. The more revolutionary the product, the

more customers have to be educated, the more trial and error will

have to go into marketing. "I’ve seen businesses run out of money

just as they’re moving up the learning curve," Lenskold says.

Try test marketing. The natural tendency, Lenskold says,

is for companies to go all out on one type of marketing, and then,

when that doesn’t work well, start all over in another direction.

This is not only expensive, but can be fatal to attempts to attract

further funding. If investors see a company is not getting results,

they hesitate to put more money into the venture.

Top Of Page
3. Do Your Research, Take Some Courses

Gather information, maybe by taking small business

courses.

"To overcome the fear of failure, potential entrepreneurs make

many milestones for themselves," says Al Spiewak, director of

the Trenton Business and Technology Center. Taking courses is one

way to decide if you are ready. "Once you are ready, it doesn’t

matter whether you have finished the courses or not," he advises.

"But education gives you a way that has worked. It is always a

less expensive way of learning than trial and error.

The Entrepreneurial Training Institute offers an

eight-week

training program sponsored by the New Jersey Development Authority

for Small Businesses, Minorities, and Women’s Enterprises. The program

covers such topics as goal setting, financing, and marketing. Students

develop a business plan for their businesses, which is necessary for

them to obtain financing. Once ETI classroom sessions are completed,

program participants submit their business plans to a panel of

banking,

accounting, law, marketing, and economic development professionals

for review.

The program is offered in 10 locations throughout the state at a cost

of $295. Classes are held one evening a week at 6 p.m., and class

size is limited to 20 students. The next session starts in March.

Locations will be announced in January, but general inquiries are

being accepted now through the NJ EDA’s website (www.njeda.com) or

at 609-292-9279.

The textbook, "Business Planning Guide," is by David H. Bangs

Jr. and covers such topics as business planning, financing, and

marketing.

To graduate, students must attend six of the eight classes and

complete

all written work, including a business plan. These plans will be

subjected

to a "panel review" by lawyers, bankers, and accountants on

the last night. Graduates are prime candidates to qualify for monies

from a revolving loan fund established by the NJEDA. More than 400

people have graduated from the training program in the past eight

years.

Mercer County Community College offers a certificate in

small business management, designed for small business owners as well

as for those planning to start a business. A series of four core

courses

and four electives, it takes entrepreneurs through the steps required

to create a business plan and get a business up and running. Core

skills the program works on include business finance, marketing,

planning

for growth, and using technology to advance the business.

Classes for this session begin on Thursday, January 24, at 6:30 p.m.

with Starting Your Own Business: A Business Plan ($90). This course

is held on two consecutive Thursdays, and will be held again on at

the same time on Wednesday, February 6 and Wednesday, February 13.

Choices in Legal Formation ($30) meets on Saturday, February 23, at

9:30 a.m.; the Marketing Plan ($30) meets on Wednesday, March 6, at

6:30 p.m.; Financial and Accounting Systems for Small Business ($30)

meets on Wednesday, March 13, at 6:30 p.m.; Creative Marketing and

Advertising Techniques ($30) meets on Thursday, April 4 at 6:30 p.m.;

Internet Marketing ($90) meets on Wednesday, April 24, and on

Wednesday,

May 8, at 6:30 p.m.

Call 609-890-6338 or register online at www.mccc.edu.

Are You an Entrepreneur? diagnostic workshops are

sponsored

by the Mercer chapter of the New Jersey Association of Women

Business

Owners (NJAWBO). The next free workshop is on Tuesday, January

15, at 7 p.m. at Borders Books in Nassau Park, led by Freda Howard,

president of Howard Lane Gift Baskets.

The workshop will help attendees decide if business ownership is right

for them. Through a practical exercise attendees will discover if

they have the personality characteristics crucial to handling the

obstacles a new owner can face. The exercise is designed to produce

a down-to-earth look at personal strengths and weaknesses.

Top Of Page
4. Tap the SBDC

For any standard, non technical business, get free

consulting

services from Mercer/Middlesex SBDC, located in the New Jersey Chamber

of Commerce building at 216 West State Street in Trenton

(609-989-5232;

fax, 609-989-7638. Home page: www.yourbizpartner.com).

Mari Galvez de Cerdas, the SBDC director, says that her network of

consultants "is in the knowledge business, tapping best practices

and business intelligence from the public and private sector to

counsel,

train and educate established and aspiring small business owners so

that they can compete more effectively in the domestic and global

economies."

She points out that SBDC consultants are not supposed to do the actual

work of, say, the accountant or the lawyer, but instead can provide

advice an overall perspective. "We make the determination on

services

based on what the clients need and what our scope of services can

provide," she says.

In other words, the consulting attorney can advise you on the legal

format for your business but will not file your papers. For that,

you need to pay your own attorney. "Someone embarking on

entrepreneurship

has to plan for those reasonable costs of doing business," says

de Cerdas.

For help with your high-tech business, go to Randy Harmon,

director

of the Technology Commercialization Center, part of the New Jersey

Small Business Development Center (NJSBDC) of Rutgers Graduate School

of Management.

TCC’s Technology Help Desk is a toll-free telephone

counseling

service. Call 800-432-1TEC (432-1832) to get one-stop access to

business

development information, guidance in commercializing new technologies,

information on grants and financing, and referrals to a statewide

and national resource network. "We help clients identify and

implement

the steps required to take a technology concept and develop it into

a sound business," says Harmon. "Help is available on an

ongoing

basis, at each step of the development process."

TCC’s Consulting Service helps entrepreneurs launch and

finance their technology-based businesses and establish themselves

in the marketplace. Needed services might be with market entry

strategy,

business plans and strategy, financing strategy and equity financing,

approaching equity investors, research and development grant

proposals,

financial projections, and strategic business partnering.

Top Of Page
5. Write Your Business Plan

Writing out a business plan is often a killer for

entrepreneurs,"

says Al Spiewak, director of the Trenton Business and Technology

Center.

Even if you write something informally, putting it on paper is an

exercise in self discipline. "A lot of business requires

paperwork,"

he says, "And if you can’t do that, you may not be ready for

business."

Almost every business applying to the Trenton Business and Technology

Incubator, Spiewak says, has an inadequate business plan. Consultants

at the SBDC can help. For starters, go to the Small Business

Administration

website. You will find a 50-page start-up kit with detailed

instructions

on the business plan.

Even better is "BizPlanner," a step by step fill-in-the blank

handbook for writing a business plan, available by sending a $20 check

to the Mercer Middlesex SBDC, 216 West State Street, Trenton 08608.

Then get an appointment with a consultant from the NJSBDC or SCORE

to review and critique your business plan, identify steps that you

can take to strengthen your plan, your strategies, and your business

model. A good plan helps make a strong first impression on prospective

investors.

James Smith, director of the Skylands Small Business Development

Center,

has strategy for writing business plans that will impress bankers

(March 28, 2001).

Get personal. When lenders make a decision on the chances

a new business has for survival, they are looking at more than the

prospects for pizza parlors in Princeton or hair salons in Hamilton.

They look at the woman behind the business. Be sure your credit report

and work history are in order, and try to get letters of

recommendation.

If personal finance is an issue, so is lifestyle. "If you’re a

single mom with two kids, that’s an immediate concern," Smith

says. In preparing a business plan, you have to state how much you

will have to draw out of the business to live.

Business owners with a working spouse whose job comes with benefits

have an edge. Small business owners without cushions like this need

to be prepared to explain to lenders how they will support themselves

while the business is getting started, and should put that information

into a business plan.

Anticipate objections. Some businesses are just harder

to fund. "Restaurants historically are very difficult," Smith

says. "A lot of people think a restaurant is an easy way to make

money. It isn’t. Margins are razor thin." Financing is also

difficult

for any business with environmental issues. Pool cleaners,

landscapers,

dry cleaners, photo processors, and anyone else who plans to work

with chemicals that are regulated under environmental protection laws

needs to be prepared for lenders’ concerns over liability.

Meet these concerns head on, Smith advises. Be prepared to show

lenders

how you plan to achieve above average margins in your restaurant or

how you will handle pesticides safely in your landscaping business.

Whatever the business, figure out the obstacles, then clearly state

how you will overcome them.

Top Of Page
6. Find Your Space

Who your customers are will determine where your space

should be.

The time-honored tradition is to start your business at your kitchen

table. Hiring the first employee often propels the young business

into commercial space, perhaps a shared office space or maybe an

incubator.

In an effort to encourage technology businesses, New Jersey has

sprinkled

technology incubators around the state, and the closest one is in

Trenton.

Al Spiewak, the director of Trenton Business and Technology Center,

has 16 tenants in more than 12,000 square feet at 32 South Broad

Street.

Rent is $235 for the smallest space, 10 feet by 10 feet. One

pharmaceutical

tenant has taken six offices and created a mini-suite, including a

wet lab.

"Now we have a fairly solid selection of technology companies,

whereas before we had mortgage companies and government agencies such

as the SBDC and the Trenton Arts Connection," says Spiewak.

"We

are looking for companies other than technology companies if they

are from Trenton. Economic development is much more likely to happen

if we have Trenton residents," says Spiewak. One Trenton-based

company that is finding this company helpful is Carol JeanPierre of

JeanPierre Computers, a consultant on Lotus Notes who wants to be

an Internet Service Provider.

Tenants have use of the conference rooms, fax, and copier. They get

100 free copies a month and beyond that, they pay five cents per

sheet.

They do their own secretarial work, provide their own phones, and

pay $35 a month if they want to use the incubator’s T-1 line. The

incubator’s location in an Urban Enterprise Zone location means that

tenants get certain exemptions on sales tax for their capital

expenditures.

The board evaluates applications for admission. The main reason for

rejection is that the business does not promise growth. "If you

come in with two people and plan to grow to three, that is not good

business for the incubator," says Spiewak.

Tenants get business mentoring from the board, which includes Joe

Montemarano of Princeton University, Greg Olson of Sensors Unlimited,

Mark Feffer of Tramp Steamer Media, and representatives from Mercer

County Community College, New Jersey Commission on Science and

Technology,

Capital City Redevelopment Corporation, and the City of Trenton.

Tenants

also benefit from collaborative relationships with PPPL, Princeton

University, and Sarnoff.

For companies that don’t qualify for admission, virtual tenancy is

available. Virtual tenants get a mailing address plus access to the

conference rooms, copier, fax, and a resource room with an Internet

access computer. Radiant Technology, for instance, is operating out

of a home in Jackson and patenting a new audio amplifier device.

"They

rely on us to help find their funding. If successful, they will create

a 10-person assembly plant here in Trenton," says Spiewak.

Tenants are invited to stay between a year and three years. "We

have a month-to-month lease if they need to leave sooner," says

Spiewak. "After three years we are wondering why they are here.

We are expecting them to find success by them."

NonProfit Incubators

Incubator space typically costs far below market rates. Tenants

usually

provide their own phone and Internet service but can use the copy

machine, a computer with an Internet connection, and the conference

rooms.

Burlington County College High Technology Small

Business

Incubator, 900 Briggs Road, Mount Laurel 08054. Frank S. Keith,

manager. 856-222-9311, extension 7906; fax, 856-439-0154. E-mail:

fkeith@bcc.edu. Home page: www.bcc.edu A regional incubator

with 23 physical tenants and 28 virtual tenants. A second incubator

is planned, and there is a computer-equipped technology library.

NJIT Enterprise Development Center, 240 Martin

Luther King Boulevard, Newark 07102. Stash Lisowski, director.

973-643-5740;

fax, 973-643-5839. E-mail: lisowski@admin.njit.edu. Home page:

www.njit-edc.org. Nonprofit technology oriented small business

incubator with 20 tenants, plus 10 tenants at a second location on

105 Lock Street, 973-643-4063; fax, 973-643-4502. E-mail:

lougabu@njit-edu.org.

Picatinny Innovation Center, 3159 Schrader Road,

Dover 07801. Patricia Milley, executive director. 973-442-6400; fax,

973-442-6492. E-mail: pmilley@ccm.edu. Incubator for technology firms

that can have access to federal laboratories, personnel, and critical

technology.

Stevens Technology Ventures Business Incubator,

Castle Point on Hudson, Hoboken 07030. Gina M. Boesch, director.

201-216-5366;

fax, 201-420-9568. Home page: tvi.stevens-tech.edu. A

non-profit incubator with 11 tenants.

Trenton Business and Technology Center Inc., 36

South Broad Street, Trenton 08608-2102. Al Spiewak, director.

609-396-8801;

fax, 609-396-8603. E-mail: TrentonBusiness@aol.com. Home page:

www.TrentonBusiness.org. Economic development program assisting

small businesses, providing office space and services, and free small

business counsel.

Technology Center of New Jersey, Route 1 South,

North Brunswick, c/o NJ EDA, CM 990, Trenton 08625. Michael B.

Francois,

NJEDA. 609-292-0369; fax, 609-292-5722. Home page:

www.njeda.com.

Laboratory and production facilities for emerging technology

companies.

Also, for start-ups, 800-square foot labs with benches and hoods.

Shared Offices

Carnegie Executive Center, 212 Carnegie Center,

Suite 206, Princeton 08540. 609-452-0160; fax, 609-520-8731.

D/J Business Service Inc., 475 Wall Street,

Princeton

08540. Diane Morrison, owner. 609-924-0905; fax, 609-683-9633. Shared

offices and support services.

Daily Plan It Executive Center, 707 Alexander Road,

Suite 208, Princeton 08540. 609-514-9494; fax, 609-243-0045. Office

space, conference space, copying facilities, and business ID,

sponsored

by Community Options to employ those with disabilities.

HQ Global Workplaces, 116 Village Boulevard,

Princeton

Forrestal Village, Suite 200, Princeton 08540. Jim Longon, chief

executive

officer. 609-520-2144; fax, 609-520-1702. E-mail:

princeton@hqoffice.com.

Home page: www.hqglobal.com Shared office center and support

services, global coverage.

Office Concierge Inc., 993 Lenox Drive, Building

Two, Suite 200, Lawrenceville 08648. Stephen Sproviero, president.

609-895-2999; fax, 609-895-2666. Office space with support services.

Princeton Office Gallery, 5 Independence Way, Suite

300, Third Floor, Princeton 08540. Gloria Bayes, vice president.

609-452-8311;

fax, 609-452-8464. E-mail: princeton@officegalleryinc.com. Home

page: www.officegalleryinc.com Furnished offices and business

support

services.

Regus (REGS), 100 Overlook Center, Second Floor,

Princeton 08540. Christopher Perez, sales manager. 610-727-3992; fax,

610-727-4005. E-mail: clperez@regususa.com. Home page:

www.regus.com.

Global provider of flexible office space.

Small Start-Up Space

Here are some of the office parks and buildings in which start-up

companies often find small and economical spaces:

Kent Management, 7 Deer Park Drive, Princeton

Corporate

Plaza, Monmouth Junction 08852. Harold Kent AIA, owner, architect.

732-329-3655; fax, 732-329-9697. Space for young technology companies.

Straube Center LLC, F-106 West Franklin Avenue,

Pennington 08534. Winn Thompson, leasing agent. 609-737-3322; fax,

609-737-6829. E-mail: mgmt@straube.com. Home page:

www.straube.com.

Total business service center, for companies to design, develop,

produce,

market, service, and export products and services.

Larken Associates, 249 Homestead Road, Building

5, Unit 11, Box 957, Belle Mead 08502-0957. Larry Gardner, president.

908-874-8686; fax, 908-874-5438. Small office and warehouse spaces

with short-term leases at 129 Stryker Lane, Hillsborough.

The Offices at Twin Rivers Ltd., Box 867, Freehold

07728. Charles P. Kaempffer, president. 732-625-1055; fax,

732-625-1060.

120 Jersey Avenue Business Complex, 120 Jersey

Avenue, New Brunswick 08901. Sandy Newman, owner. 732-246-0015; fax,

732-246-4942. E-mail: rarcon@aol.com.

Research Park, 351 Wall Street, Princeton 08540.

Mark Hill, leasing agent. 609-924-6551; fax, 609-924-6559.

Rujim Inc., 3490 Route 1, Princeton Service Center,

Building 14, Box 2242, Princeton 08543-2242. Dorothea S. Potts,

secretary-treasurer.

609-452-8008; fax, 609-452-8008.

Twenty Nassau Professional Buildings, 20 Nassau

Street, Suite 309, Princeton 08540. Fred Miller. 609-924-7027; fax,

609-924-8075.


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