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SMALL BUSINESS | SMALL TALK / KAREN E. KLEIN

Giving This Mouse a Higher Profile

March 25, 1997|KAREN E. KLEIN

Q Tracer is a computer mouse manufacturer based in Taiwan. In January, we opened an office in Tustin and tried to introduce our new high-resolution computer mouse to the market. Since we are not a big brand-name company, it has been very difficult for us to find the right channel. Would you please advise us on where to start marketing a computer mouse in the States? Should we locate sales representatives and ask them to help us? If not, what would be a better idea?

--Jerry Yang, Tracer Co., Tustin

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A What you want to do is raise the profile of your product in a very crowded and competitive market. You will have to build marketplace awareness slowly. A small manufacturer cannot possibly do a major blitz, because it would require an enormous amount of money and an already-established position in the marketplace. Even then, the competition would be likely to slay you.

You will have to choose alternative, niche ways to market your product. For one thing, you should invest in a couple of receptions and use them to demonstrate the power of your mouse. Send your products out to computer companies and users in your area and to people who manufacture peripheral devices of all kinds. In this way, you will be getting your product out to users and you might even find a strategic partner. To find these companies, try contacting the American Electronics Assn. ([619] 560-4427) and the Orange County Business Council ([714] 476-2242).

Make sure you get coverage in publications that test and review new products, including the Orange County Business Journal and some of the PC magazines.

Then, take your show on the road. You don't necessarily need salesmen if you are willing to visit the various large computer retailers in your region yourself. Take your products with you and talk to store managers.

This way you will start to build some excitement about your product and some pressure on retailers to carry it. Of course, it is de rigueur to attend the large computer conventions and shows, although it is also very expensive.

Another very liberating way to build excitement for your product is through the Internet. If you can identify a unique sales point and find an idiosyncratic, even humorous way to demonstrate the product with animation and graphics, you can build an extremely interested following.

Make sure you can take credit card orders securely over the Web and that you can fulfill those orders. Also, get on computer chat lines and into newsgroups. A lot of people visit them who are interested in and critical of new products.

--Rohit Shukla

President, Los Angeles Regional Technology Alliance

a nonprofit advocacy and assistance organization

for technology companies

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Q I have an invention and a process that could lead to the formation of a small business. Could you please tell me how to proceed in finding venture capital?

The rate of return I will offer is 30% and I will need between $500,000 and $700,000 to get started. My documentation is complete and detailed.

--Louis Pygin, Northridge

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A Before you even start looking for financers, I strongly recommend that you take your documentation to an expert and have it evaluated. Most small-business development centers have experts who will look at your business plan and evaluate it for a small fee or for free, or they'll advise you on how to draw up a plan if you do not yet have one. You can find the center closest to you by calling the Los Angeles Small Business Administration's public information office at (818) 552-3201. There are also for-profit consultants who will look at and evaluate your plan.

Getting an objective evaluation from an expert is an absolute imperative because the funding community--and especially the venture capital community--is quite small. If you approach a funding source with a plan that does not look like a good investment, word will spread quickly. You really only get one chance to make a good impression, so you must ensure that your first impression is the best one possible.

That said, you may also want to reevaluate the type of funding you are seeking. Typically, the formal venture capital community looks for a rate of return of 50% and above. Private investors (typically wealthy individuals) may look for lower rates of return if they see some sort of social or community value in the business. Private investors usually invest in businesses that are in their local community, say within an hour's drive from their home or business.

There are several ways to locate investors. First, ask your attorney, accountant, certified financial planner and business acquaintances if they know any investors.

There are a couple of computerized networks that match up the applications of entrepreneurs with inquiries from private investors. In our office, we have access to one of those networks, Pacnet (the Pacific Venture Capital Network). It costs $250 to have your application listed on the system for six months.

You can ask your local business development center where to find Pacnet.

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