IO: ASK THE EXPERTS

I have wanted to start a singles-introduction service but have not been able to find reliable information. Perhaps you can help me. I've been reading your magazine for years and think you do a great service to the many people who wish to own their own businesses.

Philip L. Noon
Jacksonville, Fla.

The basic concept of dating services is to use a combination of questionnaires and interviews to assemble a database of applicants' personal characteristics, such as hobbies, likes and dislikes, etc., using that information to make a match. Some services use computers and video interviews to keep records of clients, and to make it easy for singles to "preview" one another before agreeing to be introduced.

How you structure this kind of business will affect how you budget your capital, depending on whether you need video equipment, computers or the like. But whatever structure you choose, you need to inspire confidence in prospective clients. You could run this business from home if you set up screening interviews or introductions via telephone or in a public setting. But you may need to compensate for this less-professional-sounding structure with a strong promotional image to win clients' trust. If you want to videotape interviews or if your customer base gets too large, you will need a commercial setting where clients can come to film their interviews and look through your video library for people they want to meet. Many services use personalized direct-mail applications to prospect for singles, and a well-designed package can run into four figures pretty quickly.

As you can imagine, high ethical standards and a good public reputation are a must for operating a successful dating service. Get information along these lines from the Together Development Corp. 161 Worcester Road, Framingham, Mass. 01701.

I want to start a new business offering an analysis of a company's energy usage. We will design any equipment or modifications necessary to reduce its costs, at an expense less than the sum we project to save for the company. This way, there's no actual outlay for the company. If we don't save it anything, there's no charge. My challenges are to reach the right person in the company and to present this idea effectively. Should I give energy-saving examples or explain all the areas we evaluate or both?

Edward Howarth
Siler City, N.C.

Many energy auditors, like computer consultants who do high-tech analyses for client companies, also become involved in the design and implementation of energy-saving equipment. The fee-for-savings structure you mention is undoubtedly one option for generating an income stream, but it's not unusual for energy auditors to offer a fee-for-service structure. The fee-for-savings structure, which means you finance all modifications based on the company's projected savings, can be risky. If, in fact, you spend more on modifications than it saves with them, you're in the hole.

Identifying who to contact in a company is often a challenge for consultants of any kind. Why not start at the top? Send a one-page letter to the company president that introduces and briefly describes your service, plus a top-notch brochure listing examples of how you would evaluate a company's needs and modify its operations. Here you should go into a bit more detail about the savings and other bottom-line benefits an energy audit can help the client achieve. Follow up by phone to schedule an appointment during which you can go into even more detail about savings. Targeting the president makes sense because if you can sell the boss on the idea, he or she can delegate the energy project to managers down the line. Selling such a project to the boss from the bottom up is often a lot more complicated.

It's always best to send business correspondence to a real person and not a title. One way of getting the names of chief executives is to get out the Yellow Pages and start dialing. Of course, it makes even more sense to collect names from such sources as the local business news or at elbow-rubbing, business-organization luncheons and similar networking events. Another option: Dun & Bradstreet Million Dollar Directory, located in the reference section of most public libraries, lists executive rosters for thousands of publicly and privately held companies around the country. You can also gain insight into the industry from the outreach programs and publications of the National Association of Energy Service Companies, 1615 M St. N.W., #800, Washington, D.C. 20036; Association of Energy Engineers, 4025 Pleasantdale Road, #420, Atlanta, Ga. 30340; Passive Solar Industries Council, 1511 K St. N.W., #600, Washington, D.C. 20005; and Solar Energy Industries Association, 122 C St. N.W., 4th Floor, Washington, D.C. 20001.

I was pleased to read your article on toy inventors ("Toy Stories," page 26, December 1996). I have invented a toy and now suffer the same problems you mentioned: lack of adequate funding, little interest by banks and other financial institutions, and little access to toy companies. I have called almost all of the manufacturers of stuffed toys, only to hear them say they are not interested in my idea. Where can I find manufacturers who will make small production runs of stuffed animals? Also, I am not sure that investing in a business plan at this point is worthwhile, since that money could be put toward small production runs of the doll to test the marketplace.

Tyson Gibbs
Via e-mail

You might try the National Association of Doll and Stuffed Toy Manufacturers, c/o Putney Tumbly, 521 Fifth Ave., New York, N.Y. 10175; and Toy Manufacturers of America, 200 Fifth Ave., Room 740, New York, N.Y. 10010. Be aware that you may have to attend several trade fairs or conventions to develop and nurture the kinds of contacts that can put you in touch with the small-run manufacturers you are seeking.

But first things first. Make sure you're presenting your product to your best advantage. Prototypes and four-color catalog sheets (photograph on one side, product specifications on the other) are standard equipment for most inventors. Then there's the business plan. If you do the work yourself (libraries and bookstores have planning guides), you can save money, since it's not unusual for management consultants to charge $2,000 to $3,000 for a thoroughly researched document. The point of such a plan is to explain what a product is, why it's worthy of consideration and why it's better than the competition, thus promoting your case to potential investors and manufacturers.

You don't have to reveal every technical trade secret, but the hard truth is that an inventor with no business plan can't expect a single dime of financing. By the same token, inventors who sign a manufacturing contract without having anticipated production problems and solutions can expect to spend more money and encounter more frustration in development, packaging, assembly, marketing and distribution than inventors who have done their homework.

I am a Tai Chi instructor who operates as a subcontractor to YMCAs, retirement homes, and health clubs in my area. I am currently swamped with business. I have also begun to diversify and now offer videos and T-shirts to students. My problem is that I am feeling burned out and overworked. I am concerned that my love for what I do, as well as my reputation, could be at stake if I keep up the current pace. Any suggestions?

David Lundgren
Via e-mail

Growing pains are a wonderful problem to have! How do you maintain all your profit centers without running yourself ragged? It comes down to time management.

First of all, you need to take some time to organize your time. Make a project of documenting two full weeks of your daily schedule in 15-minute intervals, on a calendar designed for that purpose. There is no absolute law about this, but a rule of thumb for one-person shops is that if the owner is spending more than 30 percent of the workday on administrative duties (e.g., bookkeeping, order processing, telephone work), it's time to hire support staff.

Second, decide what kind of support will help you most. Do you need a twice-a-month bookkeeper to type letters or invoices, or someone who screens your calls and enters T-shirt and video orders on the computer? Keep in mind that several hiring options, such as using a temporary-help service or part-timers from high school or college-employment programs stop short of getting full-time help.

Next, run some cash-management numbers with your accountant to judge the impact an employee will have on your budget (including such expenses as payroll taxes and workers' compensation). Be aware, too, that you will need to budget time for interviewing and training, but a planned investment of time in your staffing needs can mean the difference between controlling (and profiting from) business growth or letting the growth control you.

NEED HELP?

Want to start a business, but
don't know where to start?
Need a solution for your
small business problem,but
don't know where to turn?
Write to:

ASK THE EXPERTS
INCOME OPPORTUNITIES
1500 Broadway, Suite 600
New York, N.Y. 10036
E-mail address:
editorial@incomeops.com

INCOME OPPORTUNITIES
reserves the right to edit correspondence
for space and clarity.