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Weathering a Slump

Survival Tips for a Seasonal Business

September 03, 1997|KAREN E. KLEIN | SPECIAL TO THE TIMES

Q: We have been in business doing restoration and maintenance of natural stone floors since 1986 but have found that winter brings a massive slowdown to the business. How can I learn to alleviate that seasonal roller coaster ride?

--Al Spaet, Ground Floor, West Hills

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A: It sounds like you might want to start a second business that would take up the slack during the winter months, possibly something equally seasonal that will not interfere with your busy time in the flooring business.

Since employment is up, I have found a lot of people have more cash but less time. Why not capitalize on that with some kind of service you could provide your existing customers? Maybe you could set up a small storage business, where you would pick up summer furniture, clean it and store it for people for the winter months, then deliver it again in the spring. If you are handy, you could offer to paint or repair the pieces while they are in storage.

You might also look into some kind of work that would revolve around the December holidays, such as helping your clients plan and set up their home decorations. If the business is successful it might expand to other holidays throughout the year. Be creative.

Look for a service-oriented business that would appeal to your existing customers. That way you already have a database of potential clients who will be more disposed to hiring you since they know your work and know they can trust you.

--Barry Allen, executive director, Consumer Business Network Inc., Newport Beach

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Q: I am an African American woman who has recently started a home-based referral agency that helps working mothers exchange child-care services. I have exhausted all avenues looking for a loan of $2,500 for television commercial advertising from banking institutions, family and friends. Do you know where I can find financial backing or aid?

--Gretchen McDonald, Working Mothers United, Murrieta

A: If you do not have resources, collateral or a track record of past success in this business, it is not likely that anyone will be willing to give you a loan--except your family and friends. And if they will not give you the money, I doubt you will get a secured--or unsecured--loan from any source.

But do not let that stop you. You do not need TV if you believe in this business and have a passion for it. It would be nice to have the extra money, but don't let the lack of it become an obstacle for you.

Make sure you know and can clearly articulate the value of this business and what makes it truly unique. Then get out and sell it. Knock on doors. Start cold-calling--and be prepared for plenty of rejection. Network with other business owners, particularly women who would use your service. Attend breakfast meetings and lunch meetings and dinner meetings. Talk to everyone you meet about this business and why you believe in it so strongly.

This process will be much more difficult than paying for a TV ad and letting it do the work. But if you are willing to go through it, no one will be able to stop you. And if your idea has true value and benefit to your customers, it will sell itself.

--Michael Russo, CPA and entrepreneurial consultant, Michael Russo & Co., Beverly Hills

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Q: Recently, my wife and I set up a home business carrying one product, a collectible decorative item. We don't have big money up front to hire people to market for us and we would like to find companies or sales reps to help us. We can pay based on commission. Can you provide some information to us?

--Peter Lo, Lake Forest

A: I have found that the most effective and easy way to find sales reps is simply to take out an ad in the "help wanted" section of the newspaper. State clearly that you want to hire salespeople to rep your product, what kind of experience they should have and specify whether you will pay salary plus commission or commission only.

In my experience, people who work on commission only are not always the best quality. I always pay a good salary because I want salespeople who are real go-getters. How much you can pay depends on the price of your item and the profit margins you are working with.

One caution: Make sure you talk with an accountant who has a good understanding of small business and/or home business tax laws before you contract with any independent contractors. Several small business owners that I know have recently been audited by the Internal Revenue Service and the issue of whether independent contractors are actually employees can get very sticky. So make sure you get advice from a professional familiar with current tax laws.

--Catherine Hughes, president, Dollar Power

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If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia 91016, or e-mail it to Kklein6349@aol.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.

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