Entrepreneurs Startups - Spring 2013

Entrepreneur s startups spring 2013

Entrepreneur

kumon Iranch

„=CONTENTS

FEATURES

3ã 227 opportunities 64 Power tools

for less than $50,000 We've taken five different business types

When it comes to franchising, limited and picked the best computers, displays, funds don't have to mean limited options tablets and tech accessories for each to

By Tracy Stapp get the job done

By Jonathan Blum and Alex Dalenberg

50 Hot chicks

Egg-ceptional: A husband-and-wife team 70 Ex panded horizons

taps into the urban-farmer trend and builds A doggy daycare and a diaper service

My Pet Chicken into a $2 million operation unlock their key to growth: franchising

CONTENTS ‹

DEPARTMENTS

6 Opportunity

Riding high: Childhood pals

find profits in fixie bikes

12 Location

Oklahoma City is no

Silicon Valley, but it

may be the next

Determine the right time to

kiss your day job goodbye

and become your own boss

We're in this together:

How to build your first advisory board

20 Tech

A reseller of excess

and overstock inventory

moves its data and services to the cloud

24 Shout out

Garner a following for your business with content marketing

29 Month one

Eastern Collective's cables

put a new spin on a tech necessity and find success

in just weeks

74 Franchise 101

Before you start diving into franchising, make sure you understand the terminology

76 Franchise

success

An all-American coffee-

house concept brewed

from Soviet roots

80 Back page

So you've got an idea

What are you waiting for?

I make the crust by hand

I make the filling by hand

But to build my business,

I need a hand

SMALL BUSINESS: YOU'RE NOT ALONE OUT THERE Sandy, owner of The Right Slice, makes pies Amazing pies And when tourists

asked to ship pies from her Hawaiian island shop in Kauai to the mainland, she went to The UPS Store” in her neighborhood Because while Sandy

knows all about flaky crust and fruit filling, The UPS Store experts know all about packing and shipping And they can even put together

professionally printed flyers, business cards and menus, easy as Mango Passion Fruit Pie

Locally owned and ready to help At The UPS Store, we love small businesses We love logistics TT TU

WE@ LOGISTICS

Check out Sandy’s video and learn how The UPS Store can help your business at

theupsstore.com/smallbiz

Copyright © 2013 The UPS Store, Inc

ART & DESIGN DESIGN DIRECTOR Richard R, Olson ART DIRECTORS Evelyn Good, Nancy Roy PRODUCTION ASSISTANT Monica Im CONTRIBUTING PHOTO DIRECTOR Samantha Cassidy

CONTRIBUTING WRITERS Jonathan Blum, Alex Dalenberg, Jason Daley, Marty Jerome,

Logan Kugler, David Port, John Patrick Pullen

ENTREPRENEUR.COM

VP, DIGITAL David Pomije EXECUTIVE EDITOR Laura Lorber DEPUTY EDITOR Teri Evans SPECIAL PROJECTS DIRECTOR Colleen DeBaise CONTRIBUTING EDITOR Diana Ransom TECHNOLOGY EDITOR Jason Fell ASSOCIATE EDITOR Kathleen Davis STAPE WRITER Catherine Clifford ASSISTANT EDITOR Brian Eha

IP DIRECTOR Patrick Freeman SYSTEMS AND NETWORKS ADMINISTRATOR Christina Andonov

IT SUPPORT SPECIALIST David Bozanic

AD OPERATIONS DIRECTOR Michael Frazier TRAFFIC COORDINATOR Jose Paolo Dy ONLINE SYNDICATION EDITOR Petya Yordanova DIRECTOR, SITE OPERATIONS Jake Hudson INTERNET PRODUCTION MANAGER Kevin Murray DIGITAL MEDIA DESIGN SPECIALIST Austin Allsbrook SENIOR WEB DESIGNER Veronica DeLuca DIGITAL VISUAL DESIGNER, ONLINE Amy Maude DIGITAL MEDIA PRODUCER Don Lee )DUCTION ASSOCIATE Nicholas Jennes SENIOR SOFTWARE MANAGER Joseph Norris AGER, APPLICATION DEVELOPMENT Mahendran Arullendran MANAGER, DIGITAL AUDIENCE DEVELOPMENT Jack Nguyen MARKETING

Paul Fishback ACCOUNT EXECUTIVES Tim Evans, Brent Davis, Simran Toor,

(949) 261-2325, fax: (949) 752-1180 CLASSIFIED ADVERTISING RPI Classifieds (727) 507-7505,

fax: (727) 507-7506 PRODUCTS AND SERVICES ADVERTISING

Direct Action Media,

‘Tom Emerson (800) 938-4660 ADVERTISING COORDINATOR Mona Rifkin ONLINE ADVERTISING COORDINATOR Monica Santana

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Vol 28, No 1, Entrepreneur's Startups (ISSN 1533-7435) is published by Entrepreneur Media Inc., 2445 McCabe Wy Ste, 400, Irvine, California 92614 Entrepreneur Media Inc (“Entrepreneur”) considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk Each business opportunity and/or investment inherently contains certain risks, and its suggested that the prospective investors consult their attorneys and/or accountants, Entrepreneur's Startups is distributed with the understanding that the publisher is not rendering legal services or financial advice, Although persons and companies mentioned herein are believed to be reputable, neither Entrepreneur, nor any of its employees accept any responsibility whatsoever for their activities Entrepreneur's Startups s printed in the USA, and all rights are reserved ©2013 by Entrepreneur No part of this magazine may be reproduced or transmitted in any form or by any means without written permission

of the publisher Unsolicited manuscripts and photographs will be returned only if accompanied by a stamped, self addressed envelope All letters sent to Entrepreneur willbe treated as unconditionally assigned for publication, copyright purposes and use in any publication or brochure, and are subject to Entrepreneurs unrestricted right to edit and comment

4 Startups [Spring 2013]

verizon

stripped-down

bicycles

yclists are an

exceedingly loyal crowd:

Hard-core riders

make blood oaths

to brands like Trek, Cannondale, Giant and Specialized,

while casual pedal- ers rarely break

up with childhood

sweethearts like Schwinn and Raleigh Still inter- ested in making

a dent in the

$6 billion bike industry? You're

just as likely to find

yourself on the

podium at the Tour

de France >>

6 Startups [Spring 2013]

xí ng vs

Coun take ‘von a Town

Near You -Soom

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OPPORTUNITY

“Because

we’re smaller, we’re able to innovate faster.”

—Zach Schau,

Pure Fix Cycles

But Pure Fix Cycles, which brought

in nearly $4 million in 2012, has posi-

tioned itself to become a big wheel

in the bike biz in just two short years

The company, founded by four child- hood friends, sells roughly 2,000 of its

no-frills bikes each month both online

and through a nationwide network of

300 bike shops Incredibly, the team got

their start while designing bike frames between college classes

In 2010 Austin Stoffers and Michael

Fishman were seniors at the University

of Wisconsin, Madison, when they de-

cided to go bike shopping Madison has

one of the largest cycling communities in the country, but they still couldn’t find

what they were looking for—a simple, functional, good-looking set of wheels

for under $1,000 “We found a void,”

Stoffers says “So we did our research on

why bikes are so expensive, and we found

it was because of the gears Adding eight

or 30 gears to a bike is costly.”

The solution: fixed-gear, single-speed

bikes, or “fixies,” which have been trendy among city riders for almost a decade

Instead of having a complex multi- sprocket gear shifter mounted on the

back wheel, fixies are rigged like most children’s bikes, with one gear Sure, single-gear bikes require a little more mustard to propel up hills, but they’re cheaper, more reliable and, if kids and urban hipsters are any indication, more fun than their multigear counterparts

That's why the Pure Fix boys set out

to design the ultimate, budget-friendly fixie, Adding college friend Zach Schau

and his computer-whiz brother Jordan

to the posse, they mocked up designs for

their dream rig, and Stoffers, whose fam-

ily has import-export experience, worked

on finding an overseas manufacturer to

make it a reality For their first batch,

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OPPORTUNITY

>a store they built 165 bikes priced at $325 each,

expecting to slowly sell them over the heir eyes course of the next year Instead, they

sold out over winter break “It blew our

e bike, minds,” Zach Schau says

They entered their company in a uni-

› never a versity business-plan competition and

bikes sold out in two weeks “We kept doubling our order, and we'd sell out

Pur re Fi ix Cycles even before we received the bikes,” Schau

says “We had no grasp of the demand,

and never had enough bikes.”

After graduation the guys moved Pure

Fix to Burbank, Calif They hired Andy

Abowitz, a former senior executive at

Priceline.com, as president and began selling their bikes nationwide, using

their own distribution system, which

kept costs remarkably low “Usually

with bicycles there’s a distribution chain, with large companies purchasing from manufacturers and selling to distribu-

FrancniSe Opportunity! * “=1 F NHÀ INdependencel _

tors,” Schau explains “By acting as our

own distributor and supplier, we're able to have an affordable product right

off the bat.”

‘The system also enables Pure Fix to

provide superior customer service to its

bike-shop dealers “Early on, if someone

had a situation, we'd throw a replacement

bike in the car and drive 40 minutes to

bring it to them,” says Schau, who notes

that unlike larger bike companies, Pure

Fix has no minimum order, which allows

smaller shops to take a chance on them

“We'll do anything to keep business, and that's gone a long way for us.”

But the reason behind the company’s

hot streak isn’t necessarily cost or cus- tomer service, it’s the stylish product

To wit: The same simple fixie comes in

more than 15 color combinations, like

a gray frame with orange wheels, or a

green frame with white wheels Some even have glow-in-the-dark rims

“Once a store gets their eyes on the

bike, it’s never a difficult sell,” Fishman

says “It’s a great-looking product that hits all the margins they want to hit It’s turned out to be the fastest-selling line for a lot of them.”

The guys cite their small stature and super-lean operation as prime advan-

tages “Because we're smaller, we're able

to innovate faster We can switch our manufacturing process and come out with something new almost immedi- ately,” Schau says, pointing to recent

innovations like frames for kids and a fixed-gear “trick” bike

But perhaps their ultimate secret weapon is their youth The twentysome- things want what their young custom- ers want—that’s why they got into the business in the first place “At Trek, they need to get past 100 gatekeepers, all

with different agendas, to have someone

say yes to a new idea,” Schau says “With

us, it’s just five, and we're already on the

same page.” —JASON DALEY

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LOCATION

SNAPSHOT:

OKLAHOMA C

Pop.: 591,967

Pop with college degree: 27.9 percent

Median home value: $129,300

Median household income: $44,973

Easy does it

klahoma City may not receive the

O buzz generated by the startup

communities in California and

on the East Coast, but its low cost of liv-

ing and labor, central location in middle

America, good schools and low taxes and

regulations have turned it into what looks

like an entrepreneurial paradise

“There’s strong access to capital here and an aggressive financial attitude

among the banking community to fund

new businesses,” says Roy Williams,

president and CEO of the Oklahoma

City Chamber “And there’s a core of

entrepreneurs here to help new busi-

nesses get off the ground, because they

got help back when they started.”

12 Startups [Spring 2013]

If that sounds like a description for

any healthy startup community, it is But Williams points out a subtle difference:

“We attract businesses that'd rather be

a bigger fish in a smaller pond instead

of competing against everyone fighting for attention on the coasts.”

The choice, then, is yours: Do you set

up shop in a city where rent, taxes and payroll costs exert significant pressure

to succeed quickly or run out of cash, or

do you move to a place like Oklahoma

City (or to one of the other metro areas

listed here), where you can buy more time to figure out your strategy and build

a sustainable company? Whatever the case, know that you have options

Reason: Google’s wiring the city

(on both the Kansas and Missouri

sides) with the fastest internet connection in the country

LAS VEGAS

Reason: Zappos CEO Tony Hsieh

is spending hundreds of millions

of dollars to create a startup

culture from scratch

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LEARNING CURVE

Keep it in focus

Too many passions can derail you Find one that sticks

tartups fail all the time But why?

S In many cases, a new venture falters

for obvious reasons—not enough

capital; before its time; founder fatigue

the list goes on Yet other instances of fail-

ure seem inexplicable Take Loosecubes,

for example In November, after two and

a half years in business, the New York

City-based office-sharing community that

had attracted 25,000 “loosecubers” in

employees who get laid off often look for

a new job in the same field, entrepreneurs can consider something entirely differ- ent They can break new ground, explore undiscovered territories While fraught with uncertainty, it’s also exciting It’s the thrill of the launch I suspect this is what happened to McKellar

If you can identify with these flights

of fancy—and you're aware that they've

Make sure that there’s something

in your entrepreneurial passion that will hold your focus well after

your initial idea has matured

more than 60 countries called it quits

To me, the idea seemed primed to take

off—and, in fact, was already taking off

‘The 16-person company had reeled in

$9 million in venture capital funding dur-

ing its run It even spawned copycats such

as Desktime in Chicago Plus, Loosecubes

founder Campbell McKellar is one of the

most poised and articulate young entre-

preneurs I've ever interviewed

So why did Loosecubes close up shop?

‘That's still unknown McKellar isn’t

talking to the media My suspicion is

her reasons had to do with passion—

precisely, too many passions

Like novelists who write several books,

entrepreneurs often harbor multiple

business ideas, and they love all of them

‘This is where problems arise; rather than

building and running one business for de-

cades, they’re itching to give the next idea

a try In fact, selling or shutting down a

business can serve as a form of catharsis

Naturally, there’s a financial loss asso-

ciated with failure, but there’s also a sense

of closure that people in the career world

don’t really ever get to feel That busi-

ness (aka your baby) is gone And while

14 Startups [Spring 2013]

become an impediment to your business trajectory—let me offer a suggestion:

Instead of seeking your bliss by creating

specific products or services, fall for some-

thing that can work across any business

Exhibit A: Tony Hsieh It’s well known

that the serial entrepreneur and CEO

of Zappos has a major crush on customer service That’s his thing no matter what business he’s in His long-held belief that quality customer service will make

or break consumer companies helped

him create a beloved online retailer,

which Amazon.com acquired in 2009 for

an estimated $1.2 billion

Now, customer service may be Hsieh’s cup of tea, but yours may differ And

that’s OK Just make sure there’s some-

thing in your entrepreneurial passion that will hold your focus well after your initial idea has matured Your eventual success

depends on it —DIANA RANSOM

Home in on your

ideas, advi Diana Ransom

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MONEY

Kiss your day job goodbye

How to determine if you can afford to work on your startup full-time

hen Katie Finnegan and Erica

Bell quit their day jobs at a

New York-based consulting

firm in May 2012 to work on their online

fashion startup, Hukkster, they hadn't

raised a single cent of funding The com-

pany wasn’t even earning any revenue

when the twentysomethings decided to

jettison their steady paychecks for the

promise of startup stardom

“We were bootstrapping with our own

savings to build out the first version of

the website,” Finnegan says “It was not

the safest leap of faith.”

Ballsy? Yes Impetuous? Perhaps

Recommended? Not always Dumping a

paying job to launch an unproven busi-

ness concept with no profits is a big risk

But some founders do it anyway, and for

entrepreneurs who are looking to secure

investors, it may be a must “Investors

are going to want you in there full-time,”

says Chris Carey of Brooklyn's Chris Carey

Advisors “They want to know that you're

working 100 hours a week on your idea.”

For entrepreneurs who plan to boot-

strap their way to profitability, keeping

cash flowing in from a day job when their

companies aren’t earning much is a mat-

ter of necessity If you take a realistic look

beforehand at what you'll need to do to

get your startup going, you should have

a better idea of when—or if—it’ll be safe

to quit your day job What you uncover

by following the four steps below may be

the spark you need to stay committed to

your dream—or it may be an indicator

that you should go back to square one

You'll need to create at least three

financial documents for your

business: a profit-and-loss statement,

a balance sheet and a statement of

cash flow “The [profit-and-loss state-

ment] shows you whether you're making

or losing money The balance sheet

shows you how much money you have,

and cash flow shows you the sources

†1 Gather financial statements

16 Startups [Spring 2015]

of cash,” Carey says Together, the three

will provide you with an accurate snap-

shot of your business

Forecast business

2 performance With the docu-

ments above, piece together a realistic forecast of how your business

will perform each month You'll need to

know how much cash you can expect

to generate today and down the road

As you build the business, you'll need

to factor in sales growth along with

added expenses, according to Carey

Steer clear of rosy estimates; be brutally conservative “Typically, entrepreneurs will be overly optimistic about revenue and over-optimistic about containing

costs,” he says

Factor in your personal

3 costs When you quit your day

job, you'll want to keep your

business afloat, but don’t forget about

personal expenses like rent or mortgage

List business costs such as salaries, travel

fees, benefits and auto expenses for you and any employees Leave out costs as- sociated with certain niceties you'd like

in the future, such as healthcare benefits

or new equipment—they’re irrelevant to your goal: quitting your day job As for

assigning yourself a salary, “Just make

it whatever you need to get by, nothing

more,” Carey says

Get a second opinion

4 Even the most level-headed

entrepreneurs should ask for a second opinion before moving forward,

says Kevin Spain, a general partner with Emergence Capital Partners, a venture

firm in San Mateo, Calif While an ac-

countant is likely worth his or her weight

in gold during this process, you might also tap a trusted colleague or friend for

an opinion Says Spain, “Have some-

one who you trust take a look at your financial projections to ensure you're not being overly optimistic.” —D.R

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TEAM

Boarding school

Build an advisory team alongside your business plan

hink you're too small or too new to need a board? Not if it’s

I an advisory board populated

by pros with specific expertise regard-

ing the ins and outs of your company

Startups of all types can benefit from

teaming with the kind of people who can

help them grow to become established

businesses—at little to no expense For

advice on how to get started, we spoke

with Boston-based business coach Susan

Hammond, author of the Advisory Board

Kit —KATHERINE DUNCAN

What is the advantage of having

an advisory board?

Many times entrepreneurs and business

owners get myopic They're just trying

to get their business off the ground, and

they forget to look at the big picture Your

advisors won’t, and they also become your

advocates and network on your behalf

“You want people

who want to give back.”

—Susan Hammond, business coach

What types of experts should I look

for when assembling the board?

Start by conducting an honest skills

assessment of yourself and your senior

management team (if you have one), and figure out where the holes are If you

know what your goals are and you know

what your skills assessment looks like,

there will be a gap somewhere—those are the expert advisors you're looking for

18 Startups [Spring 2013]

Where do I find the right people? Anywhere: chamber of commerce, your kid’s PTA, your church, Rotary

Club—it’s basic business networking You might read about someone in the newspaper and cold-call them I recom- mend that you approach any [potential advisor] with a letter or e-mail—be very specific about what you're looking

for—and then interview them Gener-

ally when you get a critical mass of three people onboard, you'll find that they have connections that can help you find

those other advisors A total of seven is

as large as you want to get

Any potential advisors to avoid?

My cardinal rule is do not invite family or friends, because they become yes people Plus, they’re going to give you advice whether you want it or not, so why put

them on your advisory board? I also don’t

believe in putting people such as your accountant, attorney or marketing con- sultant on your board; you already pay those people to advise you You're looking for people external to your company, who are going to challenge you, who may have gone through the same issues you have and will bring a different perspective

How do advisors benefit from helping me?

In companies that might ultimately raise venture capital, advisors will probably get some type of stock option Ina non-venture capital type environment, it’s really going to depend on what the

organization can bear; it could be $100

a meeting plus a great meal, or it could

be $1,500 However, if an advisor makes

it a priority that they get paid or get op- tions, they're the wrong kind of person

for you You want people who want to

give back Maybe they had help when they started their company, or they think your idea is wild and want to be a part of it—or maybe they just like to give advice

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mong the many deci- sions faced by new

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20 Startups [Spring 2013]

PROFIT WITH PIRTEK

Addictive Mobile Hose Service

“If | invest, will | make money?”

That was the bottom-line question when

Jim Lager began his search for a new

franchise investment opportunity As

current owner of five mobile tool

franchises and previous owner of a

hotel franchise, Lager is no newcomer

to franchised-based businesses The

savvy, 48-year-old businessman

was hunting for long-term financial

security that would enable him to live

comfortably in his retirement years

“Lwas looking for a brick and mortar

business opportunity that offered real

customer value, which would translate

into attractive profit margins,” Lager

says “After investigating several

franchises from hair salons to exercise

facilities, | found PIRTEK It's a truly

exciting and profitable business-to-

business opportunity!"

Lager purchased a PIRTEK franchise in

Dallas, Texas, in October 2010, and he

has been pulling in Texas-sized profits

ever since The mobile-based hose and

fitting replacement business specializes

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in minimizing equipment downtime

by “manufacturing” replacement hydraulic hose assemblies at customer Jobsites Although all PIRTEK franchises start out with three mobile service vans

which are based out of a PIRTEK Hose

Service & Supply Center location, Lager has increased his fleet to eleven vans and has opened his second

location all within 2 years

“It's awesome to see customers

become ‘addicted! to our onsite

service when they realize how much

we minimize their equipment downtime

andi its associated costs We quickly

size up needs, remove failed hose

assemblies, manufacture replacement

assemblies on location and install

them, and make sure the equipment

is back up and running again before leaving the jobsite Hydraulic hose is

everywhere—even undemeath your

barber's chair!"

Although Dallas is home to what he calls “a ton of hose shops," Lager doesn't fear the so-called competition

2%

`

“Most hose shops are not geared up

for or are interested in mobile service,

so they often refer their customers

excellent care of my customers and

my employees, and my staff takes

care of the rest This structure allows

me to focus on growing my business

and the freedom to go on vacation,

since the nitty-gritty operations don't revolve around me being at the shop

every day."

It's awesome to see customers become

‘addicted’ to our onsite service when

they realize how much

we minimize their equipment downtime and its associated

costs

“PIRTEK's business model, as well as

its training and ongoing support, is phenomenal Don't get me wrong

It's not a get-tich-quick formula, and

keeping our customers’ equipment

moving, twisting or turning is certainly not a glamorous business; however, it

affords me the lifestyle | was looking for

as a business owner.”

PIRTEK

fluid transfer solutions

OLD SCHOOL

‘The company once had its own servers

and IT department, but recently it

moved everything to the cloud “If

we were starting all over again, we'd

never consider investing in all that

hardware,” says vice president of op-

erations Nathalie Manecchia

But when DV&A first started, it

had no choice In the early 1990s the

company ran with an off-the-shelf

accounting package, but its growth

demanded something more capable

With the help of external funding, it

invested in complex and expensive

enterprise resource planning (ERP)

software designed to handle inven-

tory, billing and the other tasks the

growing company required To run

the software, however, DV&A had

to invest in a stack of Dell servers “I

think we had a total of eight serv-

ers that we purchased between 1998

and 2001 while we were ramping up,”

A CLOUDY FUTURE \ y

Now that she’s utiliz~

ing the cloud, Nathalie

Manecchia, vice presi- dent of operations for

Distribution Video &

Audio, says she wouldn’t have it any other way

But she encourages companies to find the

package that best suits their business model

and requires the least

amount of modification out of the box

“It’s when you start

modifying existing

software—that opens

the door to expensive

coding, engineers, consultants and so on,”

Manecchia says “Once

you start down that road,

you can never leave.”

Another bit of advice:

Don't fall under the spell

of all-in-one solutions

Manecchia suggests breaking up your ser-

vices among different providers—one for e- mail, another for CRM—

so that if one suffers

an outage (which does

happen), you're not

completely out of busi-

ness “They’re separate

applications that don’t

WY

need to talk to each other,” she says “For

example, your e-mail

doesn't need to interface with your ERP program.”

Lastly, find a balance between the reliability

of well-known compa- nies and the opportu-

nity to negotiate with

younger, hungrier suppli- ers “Everybody knows 8 Microsoft Exchange,”

Manecchia points out

“Why go with someone

who hasn't learned the ropes yet? At the

same time, the bigger

they come, the less-to-

no wiggle room there

is on price.”

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Manecchia recalls The hardware cost

roughly $50,000 to $60,000, she says,

but it also required the hiring of a full-

time IT person and pricey consultants

to do custom programming

By 2001 the company was disenchant-

ed with the whole setup “The licensing

fees were horrible, and upgrades were a

nightmare,” she says “Plus, you needed

consultants to maintain it and a data-

base administrator to run it and keep

everything backed up.”

DV&A switched to lower-end soft-

ware, making do with QuickBooks,

spreadsheets and an off-the-shelf

mail-order management program, which

eliminated the need for most of the

infrastructure But since the company

already owned the servers, it carried on

with its in-house setup for file sharing

“Tt wasn’t neat, it wasn’t pretty, but it

worked,” Manecchia says

As 2007 approached, the servers

began to break down “We started

Manecchia says, “and it finally got down

to where we had maybe one working file

server At that point we asked ourselves

if we really wanted to invest another

$15,000 to $20,000 in hardware.” Also

at issue: the $70,000 a year DV&A was

paying for IT services

Cloud-based services were just gaining

traction at that time, and DV&A took

a look “Between 2007 and 2009, we

moved more and more of our application-

based software to the cloud,” Manecchia

says “Now we have no servers, and no

critical data is stored in the building.”

The company’s first move was to turn its ERP systems over to NetSuite, a full inventory, general ledger, customer-

relationship management (CRM) and e- commerce package “We'd actually looked

at NetSuite in 1998,” she says, “but it

just wasn’t there yet Nine years later,

they were where we needed them to be.”

‘The relatively seamless transition

to NetSuite gave the DV&A team the confidence to move other operations to

the cloud Now it uses Box (formerly Box

net) asa file server, an outside Microsoft

Exchange provider for e-mail and Yammer

social networking software for employee collaboration All told, implementing

the switch cost about $30,000—more,

perhaps, than new hardware would have

cost—but annual licensing fees are less

than $50,000, about half what DV&A

was spending on its in-house IT staff and

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Study your prospective audience to

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pull in even more followers

MAKE A PLAN

2 Content marketing requires you

to sustain whatever momentum

you build through regular postings (daily

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detailed editorial calendar of topics for

the next few months Then make sure to

share the calendar with the rest of your team, doling out assignments where pos- sible and asking the staff to contribute ideas for new content going forward

“Those who

produce keyword-rich

online content,

including YouTube videos,

blog posts, articles and so

on, consistently show up on the first page of search results for their targeted keywords.”

—Ann Handley, marketing expert

ANDARDS

Apply the same standards to your online content as you do to the rest of your business While effective

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poorly executed content can have the

reverse effect and actually damage your

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business Play to your strengths: For

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focus your content on teaching people

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Bear in mind that the tone you use

in a company blog or white paper (more

formal) should be different from how

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conversational) If you don’t consider

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provide your writers with detailed edito-

rial standards to follow

Don’t limit your online content

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studies Consider offering product com-

parisons, a resource gallery or a direc-

tory of helpful information about your

industry Rethink common elements of

your website For example, perhaps you

can use your FAQ page to address dif-

ficult questions related to your industry, not just your company

§@™ SHARE WIS

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Ạ: í \ Toe Matt Benedetto

: An xà has been selling things since

; he was 13, when his mother

taught him to crochet and he started

making winter beanie hats for skiers

in the Northeast But when he graduat-

ed from college last year, the young entre-

preneur decided it was time to think bigger

His idea? A line of fabric-covered iPhone cables

and a new business called Eastern Collective

J Startups [Spring 2013] 29 Ad

MONTH ONE

“One day I was listening to music

through a pair of headphones that had

a black shoelace-like cord rather than

plastic,” Benedetto recalls “My iPhone

was sitting on my desk and plugged into

my computer with the stock white cable

I wondered to myself why there weren’t

more unique cables for iPhones the way

there are for headphones.”

Benedetto embarked on his market

research in earnest “I looked both online

and in-store at major electronics retailers

with no luck I honestly couldn’t find any-

one producing a similar product,” he says

So he decided to make something

himself Relying on his design experience

from knitting hats, plus his familiarity

with sailing-rope weaves and color pair-

ings (he’s an avid sailor), he drew up a

line of four distinctive cable covers: three

in bright color combinations and a sleek

black-and-green cord

At the same time, Benedetto had to

find a manufacturer who could turn his

sketches into an actual product He talked

to 10 overseas manufacturers about

creating samples and gradually winnowed

them down by eliminating the ones that

couldn’t handle the job or just didn’t get

the concept Once he found his manu-

facturer, he had several samples made

up and gave them to friends to field-test

After seeing that his designs could stand

up to daily use (and abuse), he gave the

go-ahead for initial production

Next came the question of pricing

Apple sells its 30-pin dock-to-USB

connector for $19, but it’s easy to find

cheaper third-party alternatives Bene-

detto wanted to attract customers

who saw the value in his product, but

he also wanted his price point to be

low enough that they would consider

buying more than one He settled on an

introductory price of $14.95, available

only on the Eastern Collective website

(easterncollective.com)

By August 2012 Benedetto was ready

to market his first batch of 1,200 cables

After he promoted the product to gadget

and lifestyle publications to generate

buzz, Benedetto’s entire first run sold

out within two weeks To his surprise,

some people bought all four colors

30 Startups [Spring 2013]

“| honestly couldn’t find anyone producing

a similar product.”

—Matt Benedetto,

Eastern Collective

Over the next several months he ex-

perienced rapid growth By September a

second batch of 7,200 Eastern Collective

cables hit the market, this time priced at

$17.95 for the standard size and $22.95

for a new 6-foot version By January Benedetto had placed a third, larger

order for nearly 10,000 units

Benedetto credits much of his initial

success to the early press buzz that

resulted from his own hard work “Dur-

ing the week of the launch, I spent late

nights reaching out to major blogs and

publications,” he says “The next morning

a few websites would feature the prod-

ucts, and I could watch the domino effect

as the story was slowly being picked up

across the internet.” The cables have

been featured by the Gizmodo tech blog

and on the websites for Wired and Lucky

magazines, among other outlets

Success brings its own challenges for

a one-man operation, and chief among them for Benedetto is ensuring he has enough product to sell “I formed a great relationship in a very short amount of

time with our manufacturer,” he says

“They have been amazing keeping up with demand as we expand into more

units as well as new products in 2013.”

Some of those new products include cables for the iPhone 5’s new Lightning

connector, as well as Mini USB, Micro

USB and standard headphone jack cables

“My plan is to make sure you'll be able to find an Eastern Collective cable for your device whether you’re an Apple user,

have an Android phone, read on a Kindle, watch video from a GoPro camera or

listen to music in your car.” —L

doing what you

plan to do, how

they do it and how

you'll do it better

In addition to

discovering that

there was no com-

petition for Eastern

for iPhone cables

than Apple, one

that allowed him

to undercut the

company and

make value a part

of his sales pitch

if what you're of- fering will meet your customers’

standards is to find

people who rep-

resent your target

market and let them

test your product

Benedetto’s young,

active friends re-

ported back to him

on how his samples held up across a variety of uses

The bonus: Finding people who utilize your product in

Figure out how,

when and where to

sell your product,

and stick with it A

trade show may be the quickest way

to grab retail-store buyers, while the

e-commerce route

requires a website and the building of product awareness through blogs and

media outlets Quick

tip: Add two weeks

to your expected product delivery

date from a manu- facturer “You don’t

want to guarantee a product to your first

customers and not

GOING If the initial

product launch was

successful, turn it into a successful

monthlong launch, even if you’re out of stock The products

are still fresh and desirable at this

point, and people will be willing to

wait for their order

“There are always untapped avenues

to explore to keep the buzz going,”

Benedetto says

And those first cus- tomers? Give them

a reason to come back with the prom- ise of new product

releases in the

coming months

Startups

Thinking about franchising?

Think Franchise.org

Franchise.org— %1) Franchising

the most comprehensive IFA Building tocal businesses,

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Whether you are considering buying a franchise or franchising

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information source You'll find:

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all members of the International Franchise Association (IFA), representing most of the world’s best-known brands

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IFA: We know franchising

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Startups [Spring 2013] 33

tion for various franchises

with costs that start under $50,000

but may exceed that amount We've

listed a range of startup costs where

one was provided Use this informa-

tion as a first step if you’re consider-

ing investing in a franchise or other

business opportunity

This directory is not intended to

endorse, advertise or recommend

any particular company All informa-

tion was obtained from the compa-

nies themselves and has not been

verified for accuracy We simply

present this information as a service

to our readers

We strongly recommend that you

perform a thorough investigation and

analysis of any franchise or business

opportunity you are considering in-

vesting in before signing any papers

or putting up any money A good

first move: Contact the Better Busi-

ness Bureau Also, ask the franchisor

you're interested in for the names

and contact information of franchi-

sees, licensees or dealers who are

already in business with them, and

speak to as many as you can for their

input The message bears repeating:

Never invest without doing due dili-

gence; always proceed with caution

For more information on

buying a franchise, visit

Entrepreneur's Franchise page

(407) 240-1920

Techna Glass International

Windshield repair & replacement

Startup cost: $34.8K-550.9K

Total franchises/co.-owned: 29/19 technaglass.com

(801) 676-3390

MISCELLANEOUS AUTO PRODUCTS & SERVICES

(305) 592-9229

Interior Magic International

Auto appearance reconditioning

Startup cost: $33.1K-100.1K

Total franchises/co.-owned: 40/0 myinteriormagic.com

(336) 249-9976

Attractions Dining and Value Guide

Fundraising coupon books

Izon Global Media & Billboard Connection

Ad agency specializing in outdoor media

(888) 333-4966

MyLoopCard

Advertising on golf scorecards

Startup cost: $31K-42K Total franchises/co.-owned: 10/1

myloopcard.com (888) 569-5667

Sports Image

Sports marketing for high schools

& organizations Startup cost: $12K-42.7K Total franchises/co.-owned: 18/1 sportsimageinc.com

(937) 704-9670

SuperCoups

Co-op direct-mail advertising Startup cost: $26.8K-44.5K Total franchises/co.-owned: 31/0

Town Money Saver

Direct-mail advertising Startup cost: $35.6K-44.4K Total franchises/co.-owned: 38/0 townmoneysaver.com

(800) 481-8696

The Waiting Game

Free monthly waiting-room publication

(404) 841-2226

Startups [Spring 2013] 35

FRANCHISES

BUSINESS BROKERAGES

Murphy Business & Financial

Business & franchise brokerage/

commercial real estate

Mergers & Acquisitions

Business brokerage; mergers

& acquisitions intermediation

Peer consulting groups

for small-business owners

Startup cost: $41.5K-63K

Total franchises/co.-owned: 24/6

ceofocus.com

(317) 805-4924

International Franchise Solutions

Franchise consulting & sales

MISCELLANEOUS BUSINESS SERVICES

Bevintel

Liquor inventory-control services

Startup cost: $36.9K-50.6K

Total franchises/co.-owned: 307/2 bevintel.com

(888) 238-4626

Dale Carnegie Training

Workplace training & development

Startup cost: $40K-164.95K

Total franchises/co.-owned: 202/2 dalecarnegie.com

(631) 415-9300

Hello Eco

Eco-friendly business products & services

Startup cost: $28.8K-37.6K

Total franchises/co.-owned: 28/0 helloeco.com

(877) 880-4465

TEAM Referral Network Franchise

Professional networking referral groups

CHILDREN’S ENRICHMENT PROGRAMS

Abrakadoodle

Art-education programs for children

Startup cost: $35.8K-74.5K

Total franchises/co.-owned: 103/2 abrakadoodle.com

(703) 860-6570

Baby Sensory USA

Baby sensory-development program

Drama Kids International

After-school drama classes

& summer camps Startup cost: $33.6K-38.95K

(604) 263-4321 KidzArt

Art-education programs, products & services Startup cost: $16.9K-38.3K Total franchises/co.-owned: 70/1 kidzart.com

(S17) 784-5000 The Mad Science Group Children's science education

& entertainment Startup cost: $49.4K-80.2K Total franchises/co.-owned: 159/0 madscience.org

(800) 586-5231 Young Rembrandts Franchise Art classes for children ages 3 to 12 Startup cost: $40.4K-48.6K

Total franchises/co.-owned: 96/0 youngrembrandts.com

amazingathletes.com

(949) 291-3147

Athletic Revolution Youth fitness & athletic training Startup cost: $19.9K-116.95K Total franchises/co.-owned: 61/0 myathleticrevolution.com

(888) 335-6297 HappyFeet Legends International Soccer programs for children ages 2 to 18

Startup cost: $18.3K-23.2K Total franchises/co.-owned: 98/5 happysoccerfeet.com

(800) 877-3790 i9 Sports

Youth sports leagues, camps & clinics Startup cost: $44.9K-72.9K

Total franchises/co.-owned: 115/1 i9sportsfranchise.com

(800) 975-2937

Kidokinetics Mobile sports-fitness program for children

Startup cost: $42.9K-57K

Total franchises/co.-owned: 5/1

kidokinetics.com (954) 385-8511

Kinderdance international Children’s movement/

educational program Startup cost: $14.95K-46.1k Total franchises/co.-owned: 130/2 kinderdance.com

(800) 554-2334

My Gym Children’s Fitness Center Children’s early-learning/fitness program Startup cost: $34.3K-236.3K

Total franchises/co.-owned: 263/0 mygym.com

(800) 469-4967

Startups [Spring 2 37

FRANCHISES

NZone Sports of America

Sports leagues & camps for ages 3 to 18

Startup cost: $33.2K-46.6K

Total franchises/co.-owned: 10/0

nzonesports.com

(888) 557-2459

Soccer Shots Franchising

Soccer programs for children ages 2 to 8

TGA Premier Junior Golf

Youth golf programs

Startup cost: $13.2K-62.2K

Total franchises/co.-owned: 48/2

playtga.com

(510) 555-0622

TGA Premier Youth Tennis

Youth tennis programs

(732) 851-4445

Club Z! In-Home Tutoring Services

In-home tutoring services

Startup cost: $27.7K-56.6K

Total franchises/co.-owned: 404/0 clubztutoring.com

(800) 434-2582

JE! Learning Centers

Individualized supplemental- education program

Startup cost: $40.5K-68.5K

Total franchises/co.-owned: 124/330 jeilearning.com

(323) 936-3300

Summit Learning Services

Tutoring/learning services

Startup cost: $32.99K-46.99K Total franchises/co.-owned: 20/13

summitlearning.net (866) 570-6801

Tutoring Club

Individualized instruction

for K-12 students Startup cost: $26.3K-127.3K

Alliance Cost Containment

INSURANCE SERVICES

Estrella Insurance

Auto, home & business insurance

Startup cost: $49.95K-84K

Total franchises/co.-owned: 51/0 estrellainsurance.com a

(888) 511-7722

Fiesta Auto Insurance and Tax

Insurance & tax-preparation services

Startup cost: $49.1K-104.9K ñ

Total franchises/co.-owned: 90/0 fiestafranchise.com

(714) 842-5420