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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.
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
"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
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.
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.
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
boss can be, the hours he expects are almost always less than those
new entrepreneurs log. "I could work 24 hours a day," says
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.
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
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.
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.
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.
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
"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.
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.
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
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.
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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