Business

Startups SCORE success tips

LYNN ? You could say Peter Colarusso has been there, done it.The former business executive from Saugus admittedly has made plenty of mistakes during his career, but they were balanced by many more smart moves.These days, he is among the ranks of retired executives willing to share their expertise with fledgling entrepreneurs as part of the Service Corps of Retired Executives (SCORE).SCORE last year formed a partnership with the U.S. Small Business Administration (SBA) that resulted in the formal opening of a resource center at the Lynn Area Chamber of Commerce (LACC) at 100 Oxford St.”We’re all volunteers and we have 10 SCORE offices in our chapter, which is Essex and Middlesex counties. SCORE gives us total of $6,000 per year for all those offices, so we have to beg, borrow and steal,” Colarusso said.Last week, he and SCORE volunteer Chuck Bluestein of Rockport, a former senior buyer for Lechmere sales, met for the third time with Mario Barrera of Lynn, who hopes to purchase and import processed ethnic food products from El Salvador and market them to specialty stores throughout the metropolitan area.”We wanted him to get an idea of the market size so that he could justify his inventory within a two-week lead time,” said Colarusso, who once ran a research-and-development lab before switching careers to growing small companies with $2 million annual revenues into $20-million enterprises, and then selling them off at a profit. “He was going to check the census and get a better feeling for the Latino population within a 20-mile radius of Lynn.”The SCORE counselors advised Barrera to surf the Internet and research where competitive products are being sold in the area.”As it turned out, he found about 1,500 specialty stores, so we suggested he go to these stores to check their pricing, volume and other details. We also suggested he meet one-on-one with these storeowners because it all comes down to personal relationships. He needs to see whether it’s feasible to bring these goods into the country. After all, he can’t sell just on price. The big boys will undercut him until he’s out of business. You can’t win on price. So you’ve go to offer a unique product or a unique service, or maybe offer to do the inventorying for the customers,” Colarusso said.Such free advice is invaluable, particularly to those attempting a start-up venture. Like most new entrepreneurs, Barrera will come to the LACC for weekly SCORE counseling until his business is running and fully operational. At that point, the visits will taper off to bi-monthly, then monthly, quarterly, and eventually every six months.”We don’t just counsel startups. We work with existing businesses as well,” Colarusso explained. “If an existing business comes to us with a problem, perhaps revenues are down and health costs are up, and they’re having trouble with the balance, we try to analyze the situation to see if there is a way to make them more efficient without sacrificing quality or service.”Due to the current national fiasco wrought by unscrupulous sub-prime mortgage lenders, loans are more difficult to obtain as bankers tighten their hold.”Money is harder to get, both as a startup and an existing business, which might want a bridge loan or an extension of credit,” Colarusso said. “The typical credit line for a small business is $10,000 to $20,000. So we work with the SBA to help the businesses get the loans they need. You don’t want to cut services or personnel because when the economy turns around you’re not gaining and you will be left behind. That’s why you don’t want to downsize or lay off.”Colarusso and Bluestein are helping Barrera negotiate a deal with a manufacturer in El Salvador that would leave the foreign food producer and packager with responsibility for obtaining all the necessary FDA (U.S. Food and Drug Administration) approvals.”It makes sense because Mario isn’t the one packaging the products. He’s simply importing and selling a variety of 10 to 15 ethnic food

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