Want to start a business? Celebrated Modesto entrepreneur gives tips on how to succeed
.JPG "In March 2013, Modesto business entrepreneur Dan Costa acts as a salesman for one of his newest businesses, Your Chefs of America, dishing up hot samples for shoppers at O’Brien’s Market. The make-at-home meals boasted fresh local ingredients with recipes inspired by some of the region’s top chefs from restaurants like Dewz, Bistro234, Surla’s and Toscana’s.")
People interested in starting a business should have their own Dan Costa to advise them.
Because most of us don’t, he shared with The Bee five tips on launching a business. Before we get to them, here’s the back story on Costa, for those who don’t know:
He is the Modesto entrepreneur who has started or had a major role in more than a dozen businesses since 1976, including Royal Robbins, 5.11 Tactical, Kevin’s Natural Foods and the Velvet Grill & Creamery.
Costa, 70, is passionate about business and speaks before groups at least a half dozen times a year about what he has learned. He said high school students are his favorite audience and high schools are where he speaks most, but he’s also spoken at colleges and the FBI National Academy.
Here is Costa’s recipe for success:
Step One
Ask yourself whether you are completely committed to the business and will invest the time needed for it to succeed. If you’re not, then don’t go into business. That commitment means you may miss family gatherings or have to travel. “Make positively sure that you are passionate about that business,” Costa said. “You need to be 110% in.” You still can have a work-family balance, he said, but it just won’t be the same as someone who works a 9-to-5 job.
Step Two
It doesn’t matter that your mom and your best friend think your have a great idea for a business. You need honest feedback from strangers. Costa said that could be from a focus group or you could do your own version of one by talking with 20 people you don’t know, like a friend of a friend or the cousin of a co-worker.
Costa said you’ll know if you have a successful idea if at least 80% of those 20 strangers say “yes” when asked whether they would buy your product or service and at least 20% say “yes” when asked whether they would invest in your business.
Step Three
Make absolutely sure your business provides a value and service that people need. Costa said that can be summed up in this mission statement: “Are we creating products or services that deliver to our customers functional innovation and quality at a reasonable price?”
He said an example of that is Davis-Lay Produce which he started in 1981 and sold in 1997. The company (which was named after the two men Costa hired to run it) delivered cut produce to school districts, restaurants and even Harrah’s Lake Tahoe.
Costa said Davis-Lay had about 2,000 customers throughout Northern California. He said the business succeeded because it delivered fresh, pre-cut produce at a cost that its customers could not replicate.
Step Four
Surround yourself with people who are better than you at getting the job done and just as enthusiastic. And everyone is a part owner and gets shares in the company.
“We sold Kevin’s Natural Foods last year and we distributed millions to our employees, down to our janitor. Everyone had a stake in the company,” Costa said. “It’s important to give them part of the business.” Employees can only cash out if they are with the company when it is sold.
Step Five
Build a business you can easily sell. “I want to make it excellent, make money and sell it,” Costa said. He said don’t ignore this step even if you plan to own your business for your lifetime. Your circumstances may change and you may need to sell your business. So if you are the chef and doing all the cooking in your restaurant, then Costa advises going back to step four.
