The Year of Living Dangerously: Stories of Survival

The Year of Living Dangerously: Stories of Survival

If you’re thinking about going into business for yourself, take heed: That first year is a killer.






While it’s hard to get a handle on the diverse range of enterprises known as start-up businesses, the U.S. Small Business Administration estimates that somewhere around 60 percent don’t make it to their fifth year.






The reasons are well known: lack of sufficient capital, lack of a good business plan, sometimes just simply not enough sales.






Still, every day more brave souls are going into business for themselves and making a success of it.






Here are a few stories from the owners and founders of successful San Fernando Valley small businesses about that treacherous first year, and how they survived it.



















Conscience and the Cats






Topanga Oil Products






Sylmar












The turning point for Henry Spitzer might have been the cats, a couple of hundred of them in a kennel in Topanga Canyon.






“We didn’t understand we were in a service business,” Spitzer said.






Today he runs his $16 million wholesale oil products business with 35 employees from a warehouse complex in Sylmar. But it started out when the then-salesman for educational films and his wife decided in 1973 they wanted a little sideline, “a business we could have some control over.”






So, they paid $6,500 for Topanga Oil Products, a business distributing heating oil to residents in Topanga Canyon. At first, it meant his wife would drive a truck around the canyon one day a week, delivering heating oil 30 or 50 gallons at a time.






A few years later, a man with a similar company in Van Nuys asked Spitzer to buy him out. That company came with something Spitzer did not realize at the time was that significant: a Valvoline distributorship, the value of which became more obvious as time went on.






But in that first year, the rudest awakening was “understanding what kind of business we were in,” Spitzer said. It was the service that was important, not the product.






“If we had a customer up in Topanga and it was a cold night,” Spitzer said, “we had an unhappy customer.”






Like the woman with the cat kennel.






“The last thing I wanted on my conscience was a bunch of dead cats.”






Michael Hart


















The Fine Print






All Phase Electrical Systems






Van Nuys












Red tape.






That’s pretty much all James Cordaro remembers from 1984, his first year in business as owner of All Phase Electrical Systems. According to him, navigating the city’s policies on business permits, its tax structure and operational regulations for electricians was the most difficult part of that first year.






“I would have to say that not knowing all the rules and regulations that the city places on everyone before you can actually pull a permit was the toughest part for me,” said Cordaro. “The city never really had anything spelled out for me and I had to go to so many different departments to get answers. There was no one easy way to get information, so it was a real learning curve getting the business off the ground.”






“Then, some of the pitfalls of day-to-day operations on top of those had to do with managing people for the first time in my life,” said Cordaro. “Many think it’s great to work for yourself, and it is. But then you get an employee and insurance, and other issues kick in. It’s a whole new world, and I think there should be a one-stop shop for people to go to that has classes that are reasonably priced to teach business owners how to keep doing all these things correctly and efficiently. Even now, 12 years later, every day there is a new law and a new regulation trying to squeeze you out of business.”






Jacqueline Fox


















Get Your Footage in the Door






The Footage Store






Burbank












Matthew Cramer had been in the entertainment industry for some time when he decided to open The Footage Store in Burbank three years ago.






He knew the ropes, where to go and how to get it done.






Still, he says, “There’s things I wish I could have done. I wish I had more money for actual advertisements.”






Cramer’s business, leasing stock film footage to entertainment and production companies, as well as advertising agencies and corporate marketers, relies on getting the phone to ring.






“The hardest part was getting the name out there,” says Cramer. “Just letting people know.”






Cramer built a Web site and got his company listed in what he calls “the right directories and trade publications.” He also spent time making sure that The Footage Store appeared on popular search engines and, when potential clients did find the site, that it conveyed the right image.






But in a business where competition is fierce, and many of his rivals are far larger operations, some with multi-national locations, more conventional advertising vehicles can be a tremendous help.






“Getting a Web presence is relatively inexpensive compared to taking out ads in the backs of publications,” said Cramer. “At the same time, when every dollar that comes in goes to paying rent and putting food on the table, you have to sacrifice some things for others. You go for what is the most cost-effective way to get your name out there.”






The Footage Store began with what was primarily a wildlife footage library because, Cramer said, “it seems to be something people are always looking for.” Later he branched out into other areas.






In the first years, he said, “you really have highs and lows.”






“There’s that excitement factor in starting up your business for the first time,” Cramer said. “When you finally see your name in print, when you start to get lots of phone calls, and somebody says, ‘Hi. I’m looking for such and such,’ and you know you reached them. It’s a good feeling to know your hard work paid off.”






Each year since opening, he has done better than the last, although business has slowed considerably this year as the entertainment industry has cut back.






Still, Cramer says he is doing what he set out to do be his own boss.






“Anybody who starts their own business,” he said, “doesn’t expect to get rich overnight.”






Shelly Garcia


















Give the Guy Credit






Cyber F/X Inc.






Glendale












Dick Cavdek thought he had the right idea about using computer scanners for something different. So he started Cyber F/X Inc. in 1992, using high-end scanners and other sophisticated machining equipment to create something nobody else had.






“I thought a lot of people would want to have sculptures of themselves, but it didn’t happen,” said Cavdek, who at the time was a computer programmer and head of research and development at a camera firm in Los Angeles. “I got $60,000 from my father to get things going, but nothing was happening for the first six months.”






Then when things did start cooking, he found the companies he wanted to lease equipment from skeptical of his prospects.






“I had my own credit record but no background in business, so for the longest time I couldn’t get anyone to lease me equipment,” he said. “I had to wait a couple of years in some cases.”






Cavdek’s plan was to scan people’s bodies and then use the digitized information and specially designed machining equipment to recreate a three-dimensional version out of plastic or metal.






Finally, thanks to some friends in the entertainment business, Cavdek’s name came to the attention of the Academy of Television Arts and Sciences in North Hollywood which was interested in commissioning a bust of Emmy-winning television producer David L. Wolper.






“That was our break, and we’ve been working with Hollywood ever since,” said Cavdek, whose firm makes statues for films along with full-bodied models of celebrities for costume fittings.






“It’s expensive to a studio to have celebrities spend hours at a costume fitting when they could have a celebrity come in for a few minutes and get their body scanned,” he said.






Carlos Martinez


















Feeding the Fund






Adams Monaci Consulting






Sherman Oaks












Sheri Adams has started four companies so far. And the latest, a consulting firm that helps companies evaluate their technology and their operations that took form in 1989, began not very differently from the others in its earliest conception.






The biggest concern, Adams said, is “the threat to your capital.”






The obvious challenge is, well, obvious. “You’re wearing so many hats,” she said. “You have to market, you have to sell, you have to keep accounts, service clients, do billable hours.”






And when you begin to experience a little success, it only gets worse.






“You’re selling more work than you have the resources to perform,” Adams said.






Once she began to get commitments on a few projects, it became clear that the little consulting business she thought she could run out of her home for a few years just wasn’t going to work.






“The budget I had anticipated for two people suddenly is five people,” she said.






Turning work down at that stage wasn’t an option either. “Projects that are due to start don’t always start, so you always have to have your pipeline full.”






Cash, consequently, to fund this success, to move her firm out of her living room and into a real office, was the challenge.






“First, I funded it from deposits I got from projects,” Adams said. “From a $5,000 deposit, I took $2,500 for equipment and furniture.”






She dipped into her savings.






“And when all else failed, I went into the credit cards,” she said.






“In the end it all worked out. I’m still here. But it’s very frightening because at the time you don’t know how it’s going to work out.”






Michael Hart


















On Your Own Really






Promotionally Minded






Encino












Hank Yuloff went into business for himself in 1987 in competition with the boss he’d just said goodbye to.






As a result, Yuloff, owner of Promotionally Minded in Encino, which sells promotional products for trade shows and corporate clients, has some simple advice: leave much of what you learned behind when you go.






“Obviously, a big challenge my first year was generating cash flow,” said Yuloff, who started his company in 1997. “But in order to do that successfully, I had to rethink the way I worked. Before I had worked for our competitor and I had a difficult time getting it through my mind that this was my own business. I had to convince myself that I could set up my own rules and policies. It took me a while to figure out how to do that and effectively work with clients.”






“I had worked for someone else for a little more than 10 years, and I was subject to their whims and sometimes seemingly emotional decisions,” said Yuloff. “I just continually had to remind myself and catch myself in old patterns and ask myself if something I was doing was an old habit or something I created and wanted to hang on to.”






Jacqueline Fox












It’s Who You Know






Alfaro