Jeff: Welcome to Deal Talk brought to you by Morgan & Westfield, I'm Jeff Allen. If you're an business owner, entrepreneur, or investor this is the place to be. Our mission is to educate and inform you through real conversations we like to have with real small business experts including fellow small business owners like you to help you build a highly successful business that you can one day sell at a price that truly reflects your commitment and accomplishments.
Even for the most successful businesses getting started may have been the biggest challenge that their owners faced. And the fact is that the decisions you make in the early going could have a tremendous impact on the value of your business down the line. Joining me today to talk about this is someone who knows a little something about working directly with small business owners and civic leaders. His name is Mr. Frank Aguirre. He is the business development specialist in the Office of the Mayor Eric Garcetti of the City of Los Angeles. He has 14 years of experience in business development and education. We're proud to have him on our program today. Mr. Frank Aguirre welcome to Deal Talk, it's good to have you.
Frank: Thank you. I appreciate this opportunity to share some insights.
Jeff: We appreciate having you and we've been looking forward to it. If I can call you Frank I'd like to start by talking a little bit about your own background, kind of your early goings as having been someone who got some real perspective on starting a business. You've got kind of a personal story that you can share talking a little bit about your family's business, is that right?
Frank: That's correct. Growing up I heard my parents talk about atthe dinner table about their dream of one day opening a restaurant. It was shortly after graduating high school that I took a course on how to write a business plan. I'd taken a course in accounting so I got my intro to business courses taking care of and I was able to approach those classes with the idea in mind of opening a restaurant. It was the year right after taking that course that my parents actually took the leap into opening a restaurant. I was able to apply what I learned, put it into plan. Started the first restaurant and got it off the ground. We actually went on to do that the second time which was an excellent experience early on almost 20 years ago.
I was able to apply what I learned, put it into plan. Started the first restaurant and got it off the ground. We actually went on to do that the second time which was an excellent experience early on almost 20 years ago.
Jeff: Did you find there were certain things that you ran into, either challenges or roadblocks, or small hurdles that you could not have necessarily prepared 100percent forwith your education alone. The school of hard knocks, the real-life education that one gets when they actually go out and do it in the real working world, were there some things that you came across that you had to face and kind of learn from?
Frank: It definitely was. At the time I may not have realized it, mostly it was due to my parents picking up wherever I left off, or figuring out wherever I may have fallen short. But I certainly realized that throughout the years and even up until today's life I realized there was always anopportunity to keep learning, tokeep developing, to continuing to get more education on how andwhat it means to own and operate a business.
Jeff: You know Frank, the thing that we like to try to do on our program here for our listeners is give them ideas on ways that they can use and implement processes, maybe some solutions to problems that they have to help them increase the value of their business right from the get-go. Because we know that a lot of people are concerned in the very beginning withsimply operating their business, generating revenue and cash flow, getting the business up and running. But really we all kind of want to have that vision where we look ahead into the future and look back and see that all the work that we put in really did create some value in it, contributed to a business of real worth that we can later on down the line sell and have other people operate it perhaps in our group, but maybe eventually sell and realize that real reward that we've been looking for down the line. From the perspective of someone there working in the mayor's office, someone who's also started a couple of businesses as an educator, how important is it Frank that people get the right answers in the beginning by utilizing some of the resources that are available to them in their community to help them actually start their business?
Frank: It's extremely important to understand and spend some time knowing where there's assistance, support, and continued education on what it means to ownand operate a business. One of the key mistakes that many entrepreneurs is make is that they feel that the skill set and there a certain type of business, for example a cook owning a restaurant or a mechanic owning a auto repair shop, that that skill set is the key to running the business, and unfortunately it's not. There's a lot of other skill sets you need to develop in creating and running the business.
One of the key mistakes that many entrepreneurs is make is that they feel that the skill set and there a certain type of business, for example a cook owning a restaurant or a mechanic owning a auto repair shop, that that skill set is the key to running the business, and unfortunately it's not. There's a lot of other skill sets you need to develop in creating and running the business.
Jeff: And one of those things would you not agree is the accounting, being able to keep the books and making sure that those are right from the start.
Frank: Yes. Definitely.You want to be able to understand your commerce and use your numbers to help you make decisions on your business. They say you can't manage what you can't measure. And it comes down to really identifying some key numbers in your business that you will live and die by. For example in the restaurant business we used to measure labor to sales twice a day, once after lunch, once after dinner. We used to measure every night our sales to food costs ratio because cost of food was such a big measurement in the food industry. Something that we would have to fine tune in order to keep a good running business.
Jeff: That's really important Frank, all businesses are different and you did that twice a day and maybe another business in a different industry may do it once a day, or once a week, or maybe once a month. But I think the thing to take away here is just the importance of knowing how those numbers work, knowing how theyimpact your business, to be consistent in checking them and auditing them on a regular basis to make sure that you're staying on track and that you're not missing a tremendous loss in inventory levels, or shrinkage, or whatever business you're in, that will affect the bottom line, and get to a point where it's going to be difficult to overcome those losses, those shrinkages, the cost that you end up having difficulties with. In Los Angeles I know that you obviously can speak from the perspective of someone who works in a big city that is very business friendly and always looking to attract businesses, and expand and grow the businesses that are already there and established. What are some examples, Frank, of some organizations that people could look to to help them get answers to their questions early on? And if you don't want to give specific names of organizations because people listening to this program are located all across the country, certainly give us the types of organizations and agencies that people can look to in order to help them overcome certain challenges and get the answers to their questions that they need.
Frank: Great question, and often times it's not easy or it comes naturally to look for assistance or know where to find it. Within Los Angeles we have many great resources. One of the resources that you want to search out for are what theycall, they go by many different names but they're small business assistance centers. They also refer to them as technical assistance centers. The city of Los Angeles operates nine of these centers that go under the branding of business source. But the other name, and they're very similar to put things in context for you, are local Los Angeles SBA Office also runs different centers that are similar. They have about 14that cover the whole region and they go by Small Business Development Centers, or they're called Women Development Centers. The key there is know that there are a lot of centers. Some cities, some areas, have more than others but there are centers out there that are happy to assist you. I've only referenced the government-funded centers. Now, you have a whole host of chambers of commerce. You have now more and more over the last several years, several decades, different non-profits that have come up to fill in needs as well. You have non-profit lenders, basically these are lenders who are a little more flexible than your regular bank.
And I mentioned that because many of these non-profit lenders in organizations are not based on region. They're actually lending nationally but they just happen to be focused on certain regions, but it's just a matter of seeking them out. And then nowadays you're having more and more support for the early stages in your micro-business effort. There’s a lot of organizations that are out there, they might be non-profits, mostly non-profit, but they're out there working more specifically with those new entrepreneurs who are just starting off, say in the creative field. And maybe there's something that they're coining the maker movement lets people who are making certain profits, creating certain products, and so on, in batches of ones and twos, still very great businesses, on their way to grow. The key there is to find out whetherthere's extraassistance so that they can keep developing, keep growing, and go from a small business to a medium business, and a large business.
The key there is to find out whetherthere's extraassistance so that they can keep developing, keep growing, and go from a small business to a medium business, and a large business.
Jeff: Great points that you're making. I think it's true for many people. I say many people and that doesn't mean most, but I think it's true for many people as they're getting started, and this might even include business folks who have been at it for a while. They may not always be able to anticipate their needs. And I think, again, that things happen, things come up and all of a sudden you get up in the morning and then you have your cup of coffee, or you head off to the office and you think, "I've got that call today. What if this doesn't go right. I didn't anticipate this and how I should handle it." These types of organizations are such that they offer advisors and counselors who can help you to anticipate some of these types of things. Most of these companies and these agencies are staffed with people who have been at it for many years. They have themselves run businesses and they've seen a number of things come up in their own business lives that they're able to share and pass along this expertise.
Wouldn't you agree, Frank Aguirre, that the best thing to do probably for any business owner would be to sit down with that legal pad for the course of maybe a week or two and take a break from some of the other things that you're doing and start writing down the types of things that you don't think that you know or don't have enough knowledge of, such as accounting, keeping of financial records, suppliers, where can you find out about suppliers, transportation issues, logistics, and things of this nature, real estate. These types of things to kind of give yourself a head start and finding answers to questions that maybe you don't necessarily have yet, but these are the types of issues andplaces where you can see that you may have questions or challenges down the line. Would you not agree that that might be a good idea?
Frank: Absolutely. I used to be able to spend more time talking to business owners one-on-one about their business. One of the phrases Iused to use, what Ialways try to get across to people is that you don't know what you don't know. We can't sit down and talk about what you don't know you're not doing. I can't talk to you and advise you about whatI don't know what you're not doing. Simply you have to go through a process whether it's a course, a cohort, whether it's just going through a plan, the more you do that the more you'll uncover and you'll realize where you're falling short, where you can improve. And the key is thus being open and understanding that you need to do that and you need to take that step back. You need to take that step away from the day-to-day working in your business, take time to work on your business. And some people are fortunate enough to hire consultants to do that for them, some people will bring on different partners who bringthat knowledge. But itwould serve any entrepreneur well to seek out these courses and workshops, these trainings. It's not only to learn from thes ubject matter, you may know most of the subject matter but you will gain some valuable insight but also partly you'll continue to surround yourself around like-minded entrepreneurs and keep your building your network so you feel more comfortable asking questions amongst yourselves.
Jeff: Getting it right from the start is important particularly when you are interested in and you should be in increasing the value of your business and getting maximum value for it later on when it comes time to transfer your business over to new ownership, sell that business, whatever the case may be it's in your best interest. I'm Jeff Allen and I'll be back with Mr. Frank Aguirre, business development specialist, Office of the Mayor in Los Angeles, when Deal Talk returns after this.
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Jeff: Welcome back to Deal Talk. I'm Jeff Allen with Mr. Frank Aguirre, business development specialist, Office of the Mayor in the City of Los Angeles. Frank, it's good to have you here and nice to talk to somebody who has the perspective of someone who works for a very large city, one of the major cities of course in the United States that is really welcoming new businesses, businesses of all types that are in business for a while. The city is so big and so spread out and it seemed that there are plenty of opportunities and nobody is turned away. But what I was kind of wondering is you probably talk to hundreds of business owners in a span of maybe a month's time or a little bit longer than that, whatever the number might be. What are some of the common questions or concerns that business owners have when they come to you interested in the idea of moving their business or growing it certainly within the City of Los Angeles. Tell us about some of the interactions that you have and some of those common issues or problems that business owners are looking to get answers to about moving there.
Frank: Some of the biggest questions, some of the biggest insights people are looking for really have to deal with some of the technicalities of officially setting up or establishing the business. There are certain steps for any new business starting or coming into the city you’ll need to go through, which will be simply registering with the Los Angeles Office of Finance. In the City of Los Angeles the county and the city are separate entities so you have to also register with the County of Los Angeles.
I give that example because it gets a little tricky,because there’s a city and just note that within the county of Los Angeles there's 88 other cities. So it gets a little confusing sometimes for somebody new starting this process, and then there’ssome registration process in the state andsomewhat then the federal government. And unfortunately they're not tied together but our goal has been to help people through that process. The other important question of concern, of interest to many new and startup businesses is where’s there additional assistance and support, and this is usually where I go into more detail and discuss the different centers that the city funds, the different partnerships we have with different chambers, our federal and state counterparts because they also run centers throughout the city and throughout the regions that are able to help. But we also have different departments that offer incentives to business. Now I say incentives that way because they're very specific. Some might only qualify for a new business, some might only be if they locate in a certain area, some might only be if you're doing some kind of remodel. But nonetheless just knowing where you can access some of this information to sort through and see which ones are the best fit if any for you, your new business and situation. Those are some of the keys.
It's not only to learn from the subject matter, you may know most of the subject matter but you will gain some valuable insight but also partly you'll continue to surround yourself around like-minded entrepreneurs and keep your building your network so you feel more comfortable asking questions amongst yourselves.
Jeff: Thank you Frank, I appreciate that. What are some of the industries right now? We're going to shift gears just a bit and talk about the city of Los Angeles and kind of what you're thinking right now, what the mayor is thinking in terms of business in the city and bringing that business in, industries and sectors that you're looking at right now trying to kind ofattractor is it kind of just wide open to a wide variety of industries in sectors and business types?
Frank: Los Angeles is a great place to start and grow a business. While I mainly focus on the small business sector in general, I know just from speaking to my colleagues, friends and being in theenvironment that Los Angeles is becoming, and it is, the region is, and the city's specifically becoming more and more so a great technology hub. More people are moving closer to downtown. Right now our technology basis has been centered along the beach communities. It's something that they've called Silicon Beach but more and more businesses, more and more talent is moving to downtown Los Angeles. We have some of the world's best universities in the areas as well thatattract engineers and computer programmers.
The other key in Los Angeles, while it's not necessarily my expertise but I work with some excellent colleagues that focus on these topics. Another key has to do with some of our heritage businesses, our heritage industry segments in Los Angeles such as fashion. We have some great designers and clothing labels. It's also a great place to start small because if you’re starting small you have access to all the creativity, you have access to all the different manufacturers. You have access to all the intrincities, the smaller details you need to actually create a prototype to actually launch a product.
Jeff: And you got that little thing down there called the garment district too where you can go and get all the fabrics and stuff like that, and raw materials that you’d need wouldn't you?
Frank: Absolutely. We see the same idea up within ourentertainment industry. If you're going into an entertainment or a creative type industry you have a whole host of talent, services, and support to pull from, so that you can focus on developing thatbusiness model and your resources are close by.
if you’re starting small you have access to all the creativity, you have access to all the different manufacturers. You have access to all the intrincities, the smaller details you need to actually create a prototype to actually launch a product.
Jeff: Frank Aguirre from the City of Los Angeles is on with us today on Deal Talk and we're talking about helping those companies right from the start get answers to questions, the types of resources that are available to them. And now, talking a little bit about the City of Los Angeles, what it has to offer, and kind of the businesses that it looks to attract. It's kind of fair game, it's all across the board. No matter what kind of industry you're in, the City of Los Angeles is very welcoming to bringing business in and helping it grow. Are there any programs right now, Frank, that you are involved with there at the Mayor's Office that the programs maybe designed for businesses in mind, or with startups in mind certainly to help bring business in, any kind of programs that mayoffer incentives, or advantages, or benefits to those businesses that are looking to setup shop there?
Frank: Yes. We currently have a new business tax holding. So if it's a new business starting and moving into the city, if you register on time and in appropriate fashion you'll have threeyears where you do not have to pay that, gross receipts tax. If you're a small business, under a $100,000 you don't have to pay that either, it's a small business taxbreak. We have those in general. For any business we'd like to highlight that. The other support comes in the form of the free technical assistance. There's nine centers that we fundthroughout in the city. These are programs that we find host companies or host organizations to operate these centers throughout LA. One of the unique things about LA is it’s very spread out. So you have certain neighborhoods that have a mixandtypes of businesses that are unique to their area and completely different from another area. So we bring in these host organizations who are experts in their area so they can bring relevant resources and information to the business owner. Chances are wherever you're going to open up your business, we have a business source center there close to you, or we have other partners close to you that are willing and looking forward to helping you plan and start your business. These are all free, bring one-on-one consultants. We also bring free workshops and seminars.
Jeff: Very important stuff Frank, and of course, many of those you said are free and free is always good. People like that, and I don't care how much money you have. When people know that they can get something of use, something that will really help them and provide some benefits down the line, it's always good and always welcome, particularly for businesses though that are operating on a shoe string or just getting started.
Any last takeaways as we get ready to wrap up here. I've got about 90 seconds left Frank. If you were on an elevator with somebody riding up downtown Los Angeles, there in a metropolitan area, and you're going up to the 86th floor, something like that, and you had just a few seconds to talk about some key advice that you'd like to impart on someone who's trying to open up and start a business of their own, what would that advice be?
Frank: Speaking as a person who works in business development on a government level,have worked in non-profits, and have owned my own business, speaking just as an educator I always like to tell entrepreneurs and small business to start with the end in mind. Because you're starting and planning your business really think about your eventual exit of your business, whether it's retirement, whether it's being a serial entrepreneur, building a business, selling and starting another one. Think with the end in mind because you want to create something of value. It's got to make sense for you that operate without you. You're really creating a business model because you want to have that exit plan one day, whether it's selling it, transferring it over to a family member, whether it's incorporating it into a larger business model, whatever it is. It's really about continued education, it's about an overall plan, and continued development. So seek the resources that are out there available to you and understand that entrepreneurship is about continued education. Entrepreneurship is about creating partnerships, understanding your limitations, but also having access those experts that are going to help fill in those pieces where you may have fallen short.
Entrepreneurship is about creating partnerships, understanding your limitations, but also having access those experts that are going to help fill in those pieces where you may have fallen short
Jeff: Great words to wrap up the segment Frank Aguirre. We appreciate your time. We thank you so much for giving us just a slice of today, and we hope that we can have you back on again another time. Frank Aguirre, thank you.
Frank: Thank you.
Jeff: Frank Aguirre, business development specialist, Office of the Mayor Eric Garcetti, City of Los Angeles has been our guest.
Deal Talk is presented by Morgan & Westfield, a nationwide leader in business sales and appraisals. If you'd like more information about buying or selling a business call Morgan & Westfield at 888-693-7834 or visit morganandwestfield.com. And make it a point to check in with us again soon for valuable information and insight from our growing list of small business experts on Deal Talk. My name is Jeff Allen. I look forward to talking with you again.