Have 2 firms? Make sure they relate

For some entrepreneurs, opportunity knocks again and again. While practicing corporate real estate law at Jenner & Block, Jennifer Sara Levin saw an opportunity to make a difference in the lives of other professionals by sharing what she had learned about building a client base. So she launched a business-relationship consulting firm, NateandDot.com, in January 2006 and left the law firm seven months later to focus on it. Last year, the self-described multitasker launched a concurrent business, Legal Intelligence, an online platform connecting law school students with top-tier firms, in part by applying what she had learned about recruiting at major law firms.
Many people have asked Levin how she juggles both start-ups. "I'm one of those people who is significantly more efficient when I'm busy," she said. "I try to stack my days for efficiency." She schedules several downtown meetings on the same day, works nights as needed and relies heavily on communicating via her BlackBerry, Levin said. While unusual, it's not unheard of for business owners to run two enterprises simultaneously, experts said. The phenomenon occurs most often when entrepreneurs see an opening in the marketplace that is somehow related to their first business and go for it. They are more likely to succeed when the second business is strategic and not just opportunistic, said Linda Darragh, director of entrepreneurship programs at the University of Chicago. "Look for a strategic link and a reason they fit together," she said. For example, Darragh said, a holding company with three separate enterprises all supporting the restaurant industry, offering management, financing and data-processing services, could be effective. "They link together in terms of cross-selling and some systems," she said. But with no synergy, managing two enterprises at the same time could be a recipe for disaster, Darragh said, because most entrepreneurs are limited in time and money. "If you're dividing your resources between two companies, you may be jeopardizing both at the same time," she said. Levin's two companies have target markets with some overlap and share many core competencies, she said. She researched emotional intelligence and hired an industrial psychologist and cognitive behaviorist to learn the best way to teach networking and communication skills, which apply to both businesses, she said. (cont.)
Client Sherwin Brook of Chicago accounting firm BrookWeiner said Levin did a stellar job developing a seminar for its young professionals on developing contacts and client relationships. The niche Levin has carved out has great potential, he said, because it is largely overlooked. Pilot at Northwestern Levin is just gearing up a pilot program for Legal Intelligence LLC, involving three law firms and her alma mater, Northwestern University School of Law, that will run online at http://www.legalintelllc.com from May 15 to Oct. 15. The idea is to help students find the law firm that fits them best, partly through online video conferences. "It's like a Match.com for law students," Levin said of her second start-up. Law firms pay to participate, Levin said, because they want to find law school graduates who aren't just qualified but who also share their firm's values. Often, Levin said, top-tier law firms end up with graduates who don't fit their culture. "There's no way to do it in a 20-minute interview. You can't get enough information to know if this person is the right cultural fit," she said.
Still, growing two companies at once can be difficult, especially if investors react with skepticism, said Scott Meadow, professor at the University of Chicago Graduate School of Business. "Unless I had Steve Jobs for both companies, I doubt I would consider backing someone who was working on two different deals," Meadow said. So what should entrepreneurs do when they are enticed by a new opportunity? Before launching a new business, Meadow said, "you ought to sell that first one, get that off your mind. Then turn to something else." If you make money on the first enterprise, the second one will be that much easier to fund, he said.
Jay Goltz, president of the $15 million-plus Goltz Group, runs three separate operations, with design as the common thread. He started Artists' Frame Service in 1978, then opened Jayson Home & Garden, a combined home and garden furnishings store, in 1996, in part to give Artists' Frame Service customers a place to shop while their art was being framed. Meantime, his 15-year-old Chicago Art Source aims to tap the corporate market. "It always started from seeing an unfulfilled need in the marketplace and thinking I could do that better," he said. Goltz said each time he came up with the new business concept, he thought it would be easy to make it work. "I tend to jump into the deep end and figure it out later," he said. (cont.)
Leaps sometimes painful The process is sometimes painful. He faced several learning curves before he began to identify important differences among the three operations and adapt accordingly, he said. "The same thing that can be a great asset also can be a liability," Goltz said. Jayson Home & Garden has seasonal inventory challenges that Artists' Frame Service doesn't have. And Chicago Art Source requires a different type of sales representative than the two retail operations need. "It has to be someone who understands the corporate market," said Goltz, who employs 115 workers. Goltz also made some mistakes. For example, he tried opening another business that sold wholesale frames to large department stores, but differences in the market, receivables and inventory proved too great. He closed it six months after its launch, he said. Still, Goltz embraces the concept of leveraging core competencies to pursue new business. "Some people say to stick to the knitting, but if you just stick to the knitting, that would leave enormous opportunities," he said. Today, Goltz's three operations are successful, he said, because he has the right people in place to manage them. "It's about finding talent and developing it," he said. "I have less stress today than I've ever had because I have hired key people to run these businesses, and they are doing a good job."

how to spend money to make money

For many, being a business owner is part of the American dream. They find the resources, location, and invest the money to open the doors … and yet not many customers walk through them. For a lot of business owners, this is baffling. But this “build it and they will come” business philosophy only works in the movies. What is often forgotten is that business success is built through awareness. Simply put, people do business with whom they know. That’s why companies such as McDonalds, Burger King, Coke, Pepsi, etc. enjoy continued growth and business success. These companies don’t necessarily offer superior products or services, they excel because people know who they are and what they do. Many failed companies made hamburgers far better than McDonalds ever dreamed of. But unless your potential customers know you exist, they’ll remain “potential” and not become real customers.
To be successful in business it’s important to understand the basics of marketing:
•
Marketing is what brings customers to you
•
Your product and/or service is what brings them back
Having the best product or service is an important piece of the puzzle. But if you don’t invest in marketing to bring the first wave of customers to you, chances are your business may not see its first year anniversary.
Why invest in marketing? Because marketing creates top of mind awareness. Top of mind awareness results in action or market share which is what a successful business needs to have. Remember, when you start a business, it’s not all about how good you are, it’s also about how many people know you exist that gets them to the door the first time.
Advertising is an investment that many business owners don’t understand. They think that “word of mouth” and a superior product will be enough. Word of mouth is slow and most businesses can’t afford a slow build. Many small businesses don’t realize this until it’s usually too late. Many successful business owners have failed before finally finding success, and what most of them have learned is that it would have been far better and less expensive had they invested in some well targeted networking and advertising that would have gotten their message out to the masses from the start.
Do all forms of advertising work? No. Not all methods of advertising work for all types of businesses. A common mistake made by business owners is to select certain advertising avenues based on price versus what is effective. Marketing is not about cost, it’s about knowing your customer and learning how to best reach them utilizing the budget you have. That is the first step in successful marketing.
It’s extremely important that all business owners (aspiring or existing) take the time to learn who the customer is and how to reach them. Create a marketing mix utilizing several different forms of advertising from radio or newspaper to direct mail, signage, and networking. Whatever your marketing budget is, it needs to be spent wisely based on outlets that reach your target market and not based on price alone.