NFIB

Be Flexible or Fold
06/ 04/ 2002

by Karen E. Klein

Too many entrepreneurs fail to cash in on their brilliant ideas because they don’t do enough planning. Martha C. de la Torre, owner of the Los Angeles-area Spanish-language weekly, El Clasificado (www.elclasificado.com) had the opposite problem: The former accounting manager and CFO stuck so closely to her business plan during the start-up phase, she didn’t change gears when it became clear her distribution model was flawed. De la Torre, named 2000 Hispanic Business Woman of the Year by the U.S. Hispanic Chamber of Commerce, talked to MyBusiness about how success finally came when she learned to be flexible and creative in her business approach.

"When I started El Clasificado, I wanted to do a home-delivered weekly shopper for Spanish-speaking immigrants. I wrote an extensive business plan and projected the numbers to a T, but my weakness was that I stuck to it too closely, for too long. I initially got a lot of clients, and they loved the unique home delivery, but sending it by mail and later distributing it door-to-door was just too costly.

"I also had very bad timing. The 1980s were a time of aggressive growth and we started in business right before the recession of the early 1990s and almost went bankrupt. Had I realized a recession was coming, I would have expanded the publication more slowly and cautiously. But I hung on to those business plan goals despite the fact that they weren’t working.

"Eventually, I had to sell my home, refinance my car and run up all credit available to me. It took a lot of self-sacrifice and tenacity to not give up, especially when my family wanted me to. It was 10 years before I could take a salary. I would have given the company away, but most of our investors were friends and associates. I couldn’t look them in the face if I gave up. I was shamed into making a go of it.

"The struggle finally began to end when I gave up on my original plans and we changed our distribution method to a much cheaper bulk drop system. Around 1994, we formalized our distribution list, created a complete database and began to audit our locations and returns. We broadened our circulation by placing El Clasificado in major supermarkets and chains, such as 7-Eleven. Expansion into major outlets gave us a significant amount of credibility.

"But our real success against our competitors came when we decided to place street racks throughout the city. We started with 10 street racks in 1996 and now we have more than 800 street racks that not only make the publication more accessible to our readers but give us great exposure to passersby. Since 1995, our revenues have gone from $572,000 to more than $3 million.

"After the recession lifted by the mid-90s, we had raised enough money to pay off most of our debt and very quietly we had become the strongest free publication in Los Angeles.

"I’ve learned that you need to be flexible and creative and find the right formula that turns your great idea into a success. When you achieve that successful formula, you need to charge ahead and plan for growth and maintenance.

"Just be aware that without the proper infrastructure, your growth could kill your business. When our publication finally started growing, our employees put in too much overtime and started making too many mistakes.

"Now, I dedicate most of my time to planning and preparing for the future. That includes planning for growth into nearby counties next year, as well as preparing to deal with dips in the economy, or advancing competitors. Our motto is, ‘Let’s keep doing what we do right and let’s keep making El Clasificado better.’ "

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This article originally appeared in the June/July issue of MyBUSINESS magazine.

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