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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 — whether

a standalone operation or a franchise — is risky business. This

is no time to take a blind leap of faith. Leggiere hired a franchise

attorney. 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." She

also 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 thoroughly

evaluate the opportunity. "I was smart enough to know I didn’t

know how to start a business," she says.

Realize that businesses vary wildly. Leggiere owns two

franchises. "They couldn’t be more different," she says. "They’re

day and night." She can not think of a single negative thing to

say about Sign-A-Rama. "Post Net is a different story," she

says. She bought the franchise when it was owned by Sign-A-Rama, and

it was later sold to another company. Both are franchises, and each

courts similar customers, but management styles in the home offices

vary markedly.

Prepare to eat standing up. No matter how demanding a

boss can be, the hours he expects are almost always less than those

new entrepreneurs log. "I could work 24 hours a day," says

Leggiere.

After her first month in business, friends called to see how she was

doing. A common question involved what she missed most from her days

as an employee. "Lunch with friends," was her reply. As a

business owner she took her lunch not in a restaurant chair opposite

a co-worker, or even in the cafeteria with a gang of friends. "I

eat standing up in the production area," she says. So accustomed

is she to the arrangement that she gets nervous when she occasionally

shares lunch in a restaurant with a client. "I think I should

be standing up," she says.

Manage your schedule. Entrepreneurs have a tendency to

turn into firemen, putting out little blazes as they erupt. "You

go to input an order and the phone rings," she says. "You

stop to answer it, and then remember an appointment. You spend 15

minutes looking for your keys, and run out the door without inputting

the 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 settles

in to review orders, and make estimates. There is a routine for the

day and a routine for the week. Sticking to it gives her focus.

Make time for sales. Pressed to take care of clients and

to complete projects on time, new entrepreneurs have a tendency to

let 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 to

love sales and marketing," she says, acknowledging that this is

hard for many. "We’re used to thinking of sales in terms of going

with our parents to buy a used car," she says. "It was considered

a less than reputable occupation." This is a perception every

business owner needs to rethink.

Spend wisely. Most entrepreneurs think it will take about

six months to get a company going. Wrong, says Leggiere, who has seen

any number of under-capitalized businesses go under. Start with the

expectation 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. It

is likely to be temporary, and the carpet will not be moving on to

your 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 thought

at corporate headquarters, learn to do without. No one thinks about

what 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 may

scream of rising unemployment, but Leggiere says every small business’

biggest problem is finding and keeping good people. She finds many

applicants simply unemployable, lacking basic job skills and/or the

character and personality to report to work every day and treat customers

professionally.

"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 working

than their corporate counterparts. There is often more work to do,

and fewer people to do it.

Spell out job descriptions carefully. Leggiere placed

an ad for an employee on Monster.com, the online job board. "I

got thousands of responses," she says. Applicants from as far

away 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 live

in Middlesex County. She refuses to speak to anyone who does not.

Don’t overstaff. Business owners walk a thin line. If

they try to be too involved in day-to-day operations, they risk losing

sight of big picture tasks like marketing and expansion planning.

But if they hire too many people to help them out, they risk going

under.

Leggiere is a hiring mentor for other Sign-A-Rama owners. On any number

of occasions she has had to tell one of them that he his staff is

too large. "They say `but you have three employees,’" she

reports, "and I say `Of course I have three employees! I’ve been

in business for eight years, I need three employees.’"

In the early going, though, it is the boss who will have to tend to

sales, customer service, and probably deliveries, computer repair,

and janitorial duties as well.

Filling dozens of roles, all without benefit of a proper lunch

break, was hard for Leggiere at first. "Now it’s normal,"

she says. As is hunting for bargains on bulk purchases of paper towels

and toilet paper for the office — and making sure they don’t walk

out the doo


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