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Start-Up on the Edge

This article by Barbara Fox was published in U.S. 1 Newspaper on

November 18, 1998. All rights reserved.

Now is the make it or break it point, says Christopher

Handy, an entrepreneur who seems to have done everything right yet

still is on the verge of failure. Handy has been in business for six

months, and he has enough cash to hold out only for another couple

of months. "I can tell long-term that if I can stick to it, my

business would be a successful operation, but I can’t keep going

unless

I get some serious cash flow," he says.

Handy was "downsized" once too often, so after a successful

career as a chemical technician, he decided to go out on his own to

open a blind-cleaning business, Handi’s Ultrakleen. He managed to

get into the state’s special program for unemployed people who could

be future entrepreneurs, and he took all the classes. By his account

he followed all, or almost all, the directions.

First, he had an idea that fitted his talents. A Vineland native,

he was the first in his family to go to college, and he enrolled in

the pre-med program at Howard University. But in 1972, after three

years and 90 credits, he ran out of money and began working as a

chemical

technician, moving from job to job for such firms as Western Electric

and Engelhard. After 10 years at Engelhard, he was "downsized"

from his job as a petroleum catalyst test technician.

That would be the last time, Handy decided, that he would be the

victim

of corporate restructuring. "The one thing my father told me,"

he remembers, "is that `You’ll never make any money working for

somebody else.’"

He received his last paycheck in December, and then enrolled in the

entrepreneurial training program run by the Department of Labor for

those who are unemployed. Those classes started in April, 1998. He

officially opened his business on April 28, while the classes were

still in progress.

"I was doing all the groundwork without benefit of the class,

going from one state agency to another and reading — I have tons

of business books here on how to run a small business. You basically

have to take it and modify it for it for your own use."

"I wanted a service business because supposedly there is so much

growth there, and I wanted something that no one else was doing, so

I could corner the market. I had used ultrasound at Engelhard, so

I knew how effective it was."

"It’s the most thorough cleaning you can have," says Handy.

"Generation of sound waves through a liquid media causes bubbles

to form, travel at high velocity, and implode on themselves, and that

strips the dirt from whatever you are cleaning. It reduces the amount

of electric charge and gathers dust less quickly."

When the class started, he already had cards printed up and had his

tank, an eight-foot stainless steel ultrasonic tank that sells for

$16,000 from the biggest company, Michigan-based Shine a Blind of

America. For him to clean standard blinds costs $6 each, and vertical

blinds are $1 a slat. "I take them down and usually have them

back the next day."

He assembled $30,000 of his own money plus $5,000 from his brother.

Using a software program, he drafted a business plan and took it to

various banks. All the bankers turned him down for a business loan.

"They liked the business plan but they didn’t feel the market

could be properly tapped with the amount of funding that I have."

He spent $20,000 for equipment and $5,000 for advertising —

business

cards and direct mail expenses. His income so far, from 20 clients,

has been $5,000. He used that plus the remaining $5,000 from his nest

egg for living expenses and to help pay the $1,400 monthly mortgage

on his house, where he lives with three cats; he has no family

responsibilities.

Where did Handy go wrong? You decide.

Not waiting until he had enough cash. "That it is

one thing I definitely fell short on. I underestimated the amount

of personal advertising budget that I needed. I overestimated my

ability

to draw in business," says Handy.

Other start-ups in his field, he later discovered, required two years

to get out of the red and had a budget for advertising that was twice

as big as his. He might have taken a silent investment partner or

taken a full-time or part-time job during the early stages of his

business. Or he could have kept on trying to get a bank loan.

"I have heard that banks are supposed to be helpful, but I have

no faith in banks," says Handy. "I have had zero help from

anyone. The only source of help has been my family." Of his seven

siblings, one brother was able to loan him $5,000.

Not hiring an attorney. Handy did the incorporations and

certifications himself, but an attorney might have steered him to

a less expensive alternative and also represented him in financing

requests.

Not hiring a business-friendly accountant. Handy used

the storefront accounting service that had been doing his income tax.

A corporate accountant might have made a better case to the bankers

or suggested financing alternatives.

Not doing enough research on marketing. He took some

advice

from a volunteer with S.C.O.R.E. who suggested that he make the name

of the business (Handi’s Ultrakleen) different from his own name,

and that he spell clean differently from the usual spelling.

Essentially, he planned his own marketing campaign and spent his

budget

on direct mail without doing the crucial first step — a test,

to see if he was targeting the right people.

"I did direct mail and targeted cleaning services, and out of

300 or 400 that I sent out I had a one-percent response. They said

if someone calls we will keep you on file. Janitorial services are

just not receptive. It’s almost like they think you are going to take

their business," says Handy.

He also contacted and faxed 60 property managers but has not heard

from anyone. "The property managers all think that the janitorial

services are taking care of the blinds, but the services don’t touch

the blinds," says Handy. But they don’t want to add extra services

and fees to their bills.

"The message that people need is that dust and grime that builds

up on the venetian blind is what causes a major number of

allergies."

To say nothing of the harm that it could cause in a lab. "I have

attempted to sell to scientific R&D environments, but just getting

in those places is almost impossible. They say we already have a

janitorial

service that handles it. I have not figured out a way to get around

that."

"At least I know what doesn’t work." His current move is to

have 1,000 brochures printed up.

Not being a good salesperson. Handy admits he doesn’t

like to "bug" potential clients by calling them repeatedly,

when actually the experienced sales people know that that’s what

works.

"I have limited sales ability," says Handy. "Quite

frankly,

I don’t like sales. I am an operations-oriented person. I have

developed

basic methods for getting a set of blinds done and for keeping

everything

in order. But I have difficulty `bugging’ a person. Trying to convince

them to use me. I sort of don’t like doing that."

The upside: "I’ve had some really satisfied customers, who make

me realize there is a market, and that when you do good work people

will push your business. Now it is a matter of making enough people

connect to the service."

What was helpful advice? "Keep your customers satisfied and try

to persevere, because one day things will get better."

What was useless advice? "All the places people directed me for

financing. Basically, small start-up businesses do not have any

financial

support. I was turned down by PNC and CoreStates."

"Other ultrasound businesses in other areas, if they are honest,

will tell you that the first two or three years are really a struggle.

I am not meeting my bills. I’m looking at another month or two."

His fallback plan: to install and sell blinds. "Actually there

is money to be made in that. I am diverse enough to see there are

other areas to go into. It is not like a lost hope, but the bottom

line is I am not supporting myself. I am slowly coming around to the

fact that I am going to have to like to sell."

— Barbara Fox

Handi’s Ultrakleen, 1012 Greenwood Avenue, Trenton 08609.

Christopher Handy, owner. 609-394-1832.


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