Best Advice May Come From the Competition

Question: We produce multimedia sales and marketing presentations and are currently negotiating with some angel investors for funding. Where can I find a source that lists sales and marketing agencies that might be interested in promoting our product? Also, how do I go about getting print, radio or TV publicity for our company?

--Stan Jamieson, Planetal

Technologies Corp., Los Angeles

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Answer: You can find listings of sales- and marketing-related associations, including advertising, public relations and marketing organizations, on the Internet at https://www.ocama.org/salesandmarketing.html. Contact some of these organizations and see whether they will provide referrals to specific marketing companies in your area.

The truth is, even though it sounds counterintuitive, the best source of advice for start-up companies usually comes from competitors. In an association setting, you probably will find people who have been where you are and found ways to get through some of the hassles you will be facing. And within an association context, particularly in a new media area like you are in, you often will find people who are pretty open to sharing information.

Once you choose a few groups that sound promising, you should check out their Web sites, e-mail them questions about their benefits and structure and find out how you can join. Local chapters typically have reasonable annual dues and they provide things such as monthly publications, local newsletters, networking meetings and sometimes even workshops or seminars.

As for getting publicity for your product, you need to first determine who your target audience is and how to reach it. If you’re selling to auto dealerships, you want to attract attention in the automotive publications. If you’re in a niche to reach packaged goods companies or winemakers, there’s a whole different set of publications to aim for.

Seek some help from groups like the Public Relations Society of America or the International Assn. of Business Communicators. They may offer workshops or services geared toward start-ups. They also may refer you to advertising and marketing firms that take a particular interest in working with new companies.

Since you probably don’t have extra money to hire an ad agency, you may need to simply scramble around and rough out some publicity yourself. A basic book on publicity and media exposure will teach you how to compile lists of publications that you want to be featured in and how to write a news release that will get you some attention.

--Cathie Glenn Sturdevant,

president, LightSpheres Consulting,

Seal Beach

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Q: I am interested in starting a business to care for kids who have to miss a day or two from school because of simple illness. How can I find out if there is a business of this nature already operating? I would like to visit one to get some ideas or training.

--Jean Beauchamp, Los Angeles

A: Statistics show that parents spend more than $10 billion annually on child-care services. The average family spends up to 20% of its income on child care. So you’re targeting an audience that may be very willing to pay for the convenience of such a service.

Researching the child-care industry more closely will help you determine how to position your niche idea in the marketplace. You can begin your research by requesting a business start-up packet from an industry organization such as the National Assn. for Family Child Care: (800) 359-3817.

To evaluate what’s available in your community, start with your local yellow pages and look under child-care centers or services. You may find opportunities to volunteer or work part time, which will enable you to gain some experience or training. You also can ask these facilities about their policies on caring for sick children and what options or referrals they give to parents whose children are sick.

Check with your local community college or adult education department for courses on child care.

Although your credentials and training will be important with this type of service business, word-of-mouth referrals can increase your chances for success. Begin to strategize about how you can team up with, and get referrals from, child-care-related businesses, such as children’s taxi/transportation services, clothing shops, homework tutors and child-care centers that do not take sick children.

Go to the library and track down some books on how to start a child-care business. These books will coach you through the process of getting licensing, permits, equipment and other things you’ll need to know.

--Kimberly Stansell,

entrepreneurial trainer and author, “Bootstrapper’s Success Secrets,”

Los Angeles

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Q: I’ve been wanting to start my own business for over a year, and have a business plan and some money saved. I need more than the amount of the loan I can qualify for and I’m thinking about venture capital. The problem is I don’t know anything about this type of financing. What do I need to do and where can I find venture capitalists?

--Lisa Santiago, Torrance

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A: Venture capital funds are institutional entities usually formed as limited partnerships. The investors, typically institutions like pension and insurance funds, get 80% to 90% of the profits generated by the fund and the corporation or partnership that acts as the fund manager gets about 20% compensation for managing the fund.

There are about 15 to 20 venture capital funds in Los Angeles and they have widely different investment policies. Because the funds have gotten so large in recent years, many of them tend to want to invest in later-stage companies rather than start-ups. Most of them invest in high-technology, high-growth areas rather than manufacturing or service businesses. And because they take on high-risk investments, they usually ask for a substantial chunk of the company.

For excellent information on venture capital and how to obtain it, I’d recommend that you look in a reference library for “Pratt’s Guide to Venture Capital Sources,” published by Venture Economics Inc.; “Financing and Investing in Private Companies,” by Arthur Lipper III, published by Probus Publishing Co.; and “Finding Private Venture Capital for Your Firm,” by Robert J. Gaston, published by John Wiley & Sons.

There is a directory of California-based venture capital funds published annually that you should also get if you want to know everything you can about local venture funds and how to get funding from them. It’s called the Directory of Members of the Western Assn. of Venture Capitalists and it lists 130 or 140 funds with details about how much they invest, what kinds of companies they invest in and how to contact the managers. You can order the directory for $100 from the association: 3000 Sand Hill Road, Building 1, Suite 190, Menlo Park CA 94025. Or call (650) 854-1322. The new edition of the directory will be released in February.

--Lee Petillon, attorney specializing in early-stage companies,

Petillon & Hansen, Torrance

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If you have a question about how to start or operate a small business, mail it to Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to [email protected]. 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.