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Question: I have designed a company that is ready to deliver educational software programs. I’ve invested about $1.5 million mostly from savings, but I did borrow some money from my parents.

I have lined up a distributor and believe we are well-positioned to launch, but we need another $1 million. I read your column about bank financing for small business and was encouraged. But I would like to know if there are any other alternatives.

Answer: I’m not trying to be glib, but you might want to find an angel. Not necessarily one from heaven, but an angel investor, a quasi-venture capitalist who will fill your funding gaps so your business has a fighting chance.

Unlike banks, angels can be operating partners who will give you advice and introductions to new clients that will open doors and get you new business. They will have a vested interest in your success, so choosing one is like finding the right partner.

Angels come in varied personalities, styles and backgrounds. Some are entrepreneurial, those that manage their own successful companies. They will take more initial risks and as the company progresses, might even invest more money over time. They usually are looking for businesses that fall into their general area of expertise.

Managers who have recently left Fortune 1000 companies for various reasons are also potential corporate angels. While they’re looking at ways to invest their money, they’re also looking for a new management position. So if you’re not ready to give up the helm, you might want to think twice before accepting them as investors.

Retired and independently wealthy business people are enthusiastic angels. But they’re really looking for businesses that they will enjoy working with, more like a hobby than a career path.

Then there are the professionals doctors, lawyers, accountants who would like to invest in young companies that they have some experience in, like doctors who like to invest in medical instruments and generic testing, etc.

Whatever investor suits your needs, make sure you choose wisely. Be careful of the micro-managers who have a lot of money, have built successful businesses in the past, and would like to take over your company.

Make sure there is a good chemistry between you and the investor. That’s almost as important as raising the money.

If you don’t find a right angel investor, instead of having a deal that was made in Heaven, you’ll find yourself in entrepreneur’s hell.

Question: I own a hardware franchise and like a lot of small businesses, face a lot of competition from the chains. My business is a good one and I make a decent living, but I really would like to ensure a bigger market niche. What do you suggest?

Answer: Coming up with ways to compete with a national chain is not a new problem for any small retailer. The answer is simple: Customer Intimacy.

I worked with a consultant, Fred Wiersema, who wrote a book with that title. The concept is something I have always practiced myself, both in investment banking and in my communications business, but I never gave it a label.

When you’re competing against the big boys, you already know it’s impossible to beat them on price or selection. The only way you can win new business is on quality of service. To become a customer-intimate retailer, you must constantly be thinking about your clients assuming responsibility to initiate change to meet their needs and wants.

It calls for an openness and confidence combined with skill. In other words, you may need to go the extra nine yards to service customers so they’ll keep coming back to your store even if it costs a little bit more and takes longer to get what they want.

Let’s look at one of the largest and most respected companies in your field Home Depot. It hires professionally trained, experienced salespeople in every department plumbing, carpentry, gardening, etc. And it offers patient, comprehensive counsel to do-it-yourselfers eager to get the most out of their purchases.

So when customers come into Home Depot, not only can salepeople help them find the right tool or fixture, they can also give advice on how to use it. In some cases, they even make house calls to help the customer install a fixture. That’s what makes them stand out from the rest.

So while you might not be able to afford experts in every home improvement category because you’re a smaller retailer, you might want to have your salespeople at least understand the products and services they are offering, so that your customers will get more personalized service.

Question: I am a sole proprietor and could use some business advice. I can’t afford a consulting firm; is there any other way to get good advice inexpensively?

Answer: There are a number of ways to get help almost free. Here are a few places to go:

– Service Corps of Retired Executives (SCORE). The group was launched in 1964 by the Small Business Administration and consists of retired executives who provide free advice to small-business owners. With approximately 389 chapters across the country, SCORE has about 12,600 volunteers.

Of course, while these well-meaning volunteers have work experience, they might not know anything at all about the business you’re in. So the quality of help might be inconsistent.

Some entrepreneurs find SCORE’s service to be exceptional and others are disappointed, but it might be worth checking it out for yourself. To find the chapter nearest you, call SCORE headquarters at (202) 653-6958/6279 or (800) 8ASK-SBA. Your local chamber of commerce might be helpful in locating a SCORE office.

– Small Business Development Centers. They offer training and counseling services. They get their funding mostly from the SBA but also from local colleges, businesses, and individual donations. They have about 1,000 centers located at local community colleges or universities.

There is usually a small fee for training courses that can range from $20 to $75, and counseling is almost always free. To find out more call the SBA Hotline (800) 8ASK-SBA or the Association of Small Business Development Centers, (703) 448-6124.

Lorraine Spurge is a personal finance advisor, author and business news commentator. She can be reached at (818) 705-3740 or by e-mail at lspurge@spurgeink.com.

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