New E-Commerce Firms Need Strategic Alliances

Q:I am helping a friend with his Web site and would like to find an example of a business plan for a vertical Internet portal.

--John Webb, Seattle

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A:There are many sources for sample business plans: books, Web sites, workbooks, seminars. The Small Business Administration has comprehensive and easy-to-follow guidelines for writing a business plan on its Web site: https://www.sba.gov. Finding something specifically tailored to a vertical Internet portal may not be quite as easy, however.

One of the major areas that is unique and needs to be addressed in the business plan of any e-commerce company is strategic alliances. Because it is so expensive to get an e-commerce site up and running, investors want to see that you have other companies, such as accounting firms and distribution sources, teaming up with you to get your Web business going. If you can demonstrate that you have good companies backing you--such as having a large delivery service on board to be the distribution channel of choice for your product delivery--your potential investors will be suitably impressed. Even if you can get into negotiations with some companies in regard to strategic alliances, you should mention that in your business plan as a way of lending credence to your efforts.

Also, you will need to have a working model of your Web site to show potential investors what your site design looks like and how the e-commerce portion operates. Define exactly how your business will work and where revenue is going to come from. Don’t forget to include an exit strategy.

A good example for you to follow would be VerticalNet Inc. (https://www.verticalnet.com), one of the first movers to set up a major vertical Internet portal and a company with lots of strategic alliances. They are a public company, so you should be able to get a good deal of information on their finances, management and operations at the EDGAR database of the Securities and Exchange Commission (https://www.sec.gov/edgarhp.htm).

--Barbara Lewis, business plan consultant, Centurion Consulting, Westwood

Good Consultants Don’t Come Cheap Q: I have a health and beauty catalog company that I am trying to expand and I would like to hire a consultant experienced in all facets of the catalog business. Where could I find such a person?

--Jim Baciano, Santa Monica

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A: The Direct Marketing Assn. (https://www.the-dma.org) provides good catalog information on its Web site and also lists some member consulting firms that might be worth contacting.

A couple of industry trade magazines, Catalog Age (https://www.catalogagemag.com) and Catalog Success (https://www.napco.com/cs/cs1.html), are good resources and might help you with your search for a consultant. A nationally known consulting firm that specializes in your industry is Nykamp Consulting Group (https://www.nykamp.com). It is among the best when it comes to doing the work you’re looking for. They’re not cheap, but they are good.

--Meg Goodman, vice president,

group account director,

Rapp Collins, Chicago

Licensing, Inspection Rules Guide Taxi Sales Q: I would like to buy some used American cars, recondition them, paint them yellow and rent them to taxicab drivers. What are the first steps to take regarding laws and regulations for this business?

--Hai Ngan Tran, Cerritos

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A: Taxi companies typically purchase used California Highway Patrol and other police vehicles at government or dealership auctions, refurbish and recondition them, and then have them licensed and inspected before putting them into their vehicle fleets. These black-and-white vehicles have extra-large engines and are specially made for heavy usage. The police agencies usually retire them when they have 100,000 miles on them, and they are either auctioned directly or bought back by the original dealerships and auctioned through them.

We have 1,060 vehicles on the streets in L.A. and Orange counties, so we usually purchase new vehicles in lots of no fewer than 16. We do all the refitting, repairs and painting ourselves, because our vehicles must pass rigorous inspections and comply with licensing procedures.

If you want to try your hand at this business, you need to investigate becoming an automobile broker. Only licensed brokers can gain entry to and bid at most of the specialized private auctions where these police vehicles are sold. The California Department of Motor Vehicles has an occupational licensing branch that does licensing, monitoring and controlling of motor vehicle-related businesses and individuals. For information on the process, start with the occupational licensing Web site at: https://www.dmv.ca.gov/vehindustry/dmvbuss/olbranch_top.htm.

You should also contact some established auto dealers and see whether they will give you advice on getting started, and do an Internet search or go to your local library and do the research needed to familiarize yourself with this aspect of the auto industry.

--Anthony Palmeri, president,

L.A. Taxi Co-Op, Gardena

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If you have a question about how to start or operate a small business, mail it to Karen E. Klein, Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to [email protected]. Include your name, address and telephone number. This column is designed to answer questions of general interest. It should not be construed as legal advice.