Thursday, June 12, 1997

Business owners described the best opportunities their companies have had

By JAN NORMAN / The Orange County Register

SAN CLEMENTE, Calif. - A nondescript man walked into Peter Shikli's office and asked how much a Web site would cost to design and put up.

"He wasn't referred, and I didn't take him seriously, but I worked up a bid because I liked him as a person," recalls Shikli, president of BusinessWare.

The man eventually ordered six of the best Web sites Shikli has done.

What an opportunity. And it was one Shikli could easily have overlooked.

Companies are born, grow and die on opportunities that entrepreneurs encounter every day. Some are disguised as problems. Some just can't be seized.

That's how business owners described the best opportunities their companies have had.

The best opportunity is the one that makes the whole business possible for some entrepreneurs.

Jerry Neitlich was working for Marcus & Millichap Corporate Real Estate Services in the early '90s. The company focused on being the real estate adviser for large tenants instead of landlords, as many in the industry were.

Neitlich thought a niche existed with small companies that lacked the tools to understand and manage their real estate needs. But small deals weren't worth enough to a large real estate brokerage company.

Neitlich's opportunity came in the form of a study by the University of California, Irvine, Graduate School of Management that verified and gave credibility to Neitlich's hunch about an unfilled market niche.

"Recognizing this, I spent the next year or so developing my plan for IN/House Corporate Real Estate Advisors," Neitlich says of his Irvine practice. "I focused on relationships with closely held companies, not concerning myself with the size of the transaction but rather the quality and scope of the services I could provide."

The best opportunity for Lisa Handy was also one that launched her financial consulting firm, Handy Business Management in Huntington Harbour, Calif.

Her brother asked Handy's help with the financial side of a company he owned.

"Having him as my first customer gave me the opportunity to start my business," she says. "It took me a few months to realize that this could be my own business and not just a temporary situation."

Thomas Pray thought his company, Better Home Systems of Lake Forest, Calif., was facing a problem. The firm, which installs low-voltage systems such as whole-house vacuums and intercoms in new homes, was forced to move because its lease had expired.

"We didn't recognize the opportunity at the time, but since have seen that we didn't need nearly the amount of space we were renting," Pray says.

"When we moved, we were able to work out a shared-space situation with some friends who own a business and needed additional warehouse space," he says. "We share a warehouse with them and we occupy the attached offices 100 percent. This cut our rent in half and our commute from 45 minutes to 10 minutes."

Pray has since renegotiated the lease on the new space and got new carpet, paint and other amenities for signing a two-year lease.

He admits that he used to think of opportunities only in terms of increased revenue, but now he recognizes that decreased cost is equally valuable to profitability.

A. Doug Swain also sees what most people would consider a problem as the best opportunity he ever had.

He had open-heart surgery, which forced him to close a business that provided a wide range of consulting and computer-training services.

"During the time I was waiting for surgery, I wondered what I was going to do for the rest of my life," he says. "It was an opportunity to sit back and analyze what I should do."

After Swain recovered, he opened Momentum Marketing in La Habra, Calif.

"I focus on one thing, marketing, and don't have the pressures and stresses of trying to run three mini-companies," he says.

Often, the business owner recognizes a terrific business opportunity but must pass it up.

The Fullerton law firm of Wheatley, Osaki & Associates, which specializes in real estate, correctly foresaw a huge construction boom in Arizona and Nevada, says partner Kerry Osaki.

But the firm decided not to open offices in those markets, he says. Two attorneys would have had to devote time and effort to taking the bar exams in those states in order to practice there.

"We were undercapitalized; we could not afford to lose their billings during that time," Osaki says.

"Look at those markets now. A lot of our clients have moved that way, but we can't represent them. (The expansion) would have increased our revenue 20 percent to 30 percent," he estimates.

However, it might have undermined or weakened the home practice, an important factor for all entrepreneurs to weigh when facing even the best opportunity.

The entrepreneur also must be careful that a scheme presented as an opportunity isn't merely exploitation.

Barry Allen has built Consumer Business Network into networking groups throughout Southern California with more than 2,000 participants.

Another entrepreneur recently wanted Allen to be part of a program to train new business owners, who would receive start-up capital if they followed the training precisely. However, each student would have to pay $3,500 and bring in 18 other people, each of whom would pay $3,500.

This promoter just wanted to tap into Consumer Business Network's database and exploit its reputation for a questionable scheme, Allen determined.

He declined.

"We must be selective, using our knowledge and instinct," he says. "A due-diligence study of opportunity should be done."

In many cases, a company's best opportunity develops from a chance meeting or contract that grows beyond the owner's expectation.

Edmond Hoy, who represents companies in union negotiations and arbitrations, thought his practice would be confined to Southern California when he started in 1965.

One of his local clients was bought by a Colorado company, and Hoy's conversation with the CEO led to a referral to another company in the Rocky Mountain state.

Hoy decided to take advantage of the chance to bid for that work, which changed the scope - and subsequent success - of his business.

"It was the first time I even thought of providing my services nationally," he says. "I have clients in Wisconsin, Arizona, Rhode Island and, of course, Colorado.

"Whenever people ask me how a sole proprietor can get business nationwide, I say, 'Ask for it,' " he adds.

A major opportunity for Rich Mar Transfers of Costa Mesa, Calif., started with a chance question, says Dick Seaholm, owner of the firm that decorates T-shirts and other products.

A woman approached Seaholm at a Business Network International meeting and asked if he could put player names on baseball jerseys. She was a team mom in the Fountain Valley Little League.

"She gave me three teams to do," Seaholm says. "She also gave my name to Sport Chalet in Huntington Beach, which then referred three other teams to me."

Seaholm took a chance that the Sport Chalet in Irvine near his company might also need numbers and letters put on baseball uniforms.

"Our timing was perfect," he says. "The team sales manager was totally overloaded with uniform orders. Two days after we introduced ourselves, he called us in to pick up our first order of 10 teams. We ended up applying names and numbers to more than 700 uniforms."

Seaholm says he may not have recognized fully the opportunity presented by his networking buddy, but was able and available to deliver when the chance came his way.