Serving Up the Right Restaurant Concept By SHELLY GARCIA Senior Reporter Recently a couple that has long been eating at Art’s Deli celebrated their 46th wedding anniversary by having lunch at the Studio City restaurant. Owner Art Ginsburg sent over a brownie with a candle and then he picked up the tab for lunch. It’s something Ginsburg has done throughout the nearly five decades he has owned Art’s, and it strikes at the very heart of what Ginsburg says has kept him in business all these years. “It’s just treating them with respect and understanding and also keeping the quality of the food as consistent as you can,” said Ginsburg, whose restaurant is celebrating its own anniversary, 47 years in business, on June 22. At a time when impersonal, homogenous chains have taken over the restaurant landscape, the independents that have survived and thrived have done so largely by making their business a very personal affair. They greet customers by name and offer up the food they’ve grown comfortable with in surroundings that are familiar. The formula may sound easy, but it isn’t, say these restaurateurs. An astonishing 50 percent of restaurants go out of business within the first three years of operation, according to the California Restaurant Association. Many other of the independents about 70 percent of the restaurants in California are small businesses totter along, barely making ends meet. “It’s one of the toughest industries,” said Selwyn Yosslowitz, a partner at Marmalade Caf & #233; and Catering Co. and the president of the Los Angeles Chapter of CRA. “We’re labor intensive. We’re capital intensive, and we deal with the public. Often very talented people go into the restaurant business and do a great job with the food, but don’t execute the business.” A myriad of things can go wrong for a restaurant operator the initial financing may be insufficient; the location may be too expensive, or inaccessible; the menu may be ill-suited to the clientele or they simply may be outpriced by the chains that now dot every corner. “I had a little black book,” recalled Ginsburg, “that you were supposed to have so much worth of business, rent was so much I never figured in workers’ comp or payroll taxes. I never figured in the air conditioning might go out, so you learn.” Back when Ginsburg started his deli, though, the environment was much more forgiving of the learning curve. He paid only $3,500 to start his restaurant. If an unexpected expense hit, or if business took a nosedive, it was much easier to absorb the additional cost. Added expenses Today, a typical restaurant startup might be paying thousands a month in rent alone. Add to that the cost of equipment and payroll expenses, especially worker’s comp, and its not unusual for an operator to be swimming in debt even before the doors open. Few can afford to carry those costs for the two years many say it takes before there is enough traffic to cover the bills. “If you check other businesses, whether they be tire shops or cleaners, I don’t think it was as competitive,” said Bob Wilson, who opened the first of his three Cisco’s Mexican restaurants in Conejo Valley in 1971. “You didn’t have the big chains. They can come in and wipe you out in terms of they can buy better and sell it cheaper. Even us, with three restaurants, we still can’t buy at the same level that a chain can buy.” What allows these independents to compete is providing what the chains cannot a place where, as the theme from “Cheers” once said, everyone knows your name. “I spend 90 percent of my time on the floor,” said Norman Green, president of Flooky’s, a local eatery in Woodland Hills that was floundering until Green bought it two years ago. “I know every customer by name. I know what they eat. I’ve always got a line here (at lunch time) and as they walk in the door, I’m yelling to my cooks what they want.” Small business restaurant operators estimate that about 80 percent of their business is made up of repeat customers. Those that have survived decades have often marked the milestones in their customers’ lives right along with them. “We have (married couples) here where this was their first date,” said Rafael “Ray” Vega, who first opened his family-owned Mexican restaurant, Casa Vega in Sherman Oaks, in 1958. “I get people who come back and say, ‘I started coming here when I was six years old. So it’s tradition, and people like to see that.” Sticking with tradition Keeping that tradition alive while keeping up with the times can sometimes be tricky, as Ginsburg learned after the Northridge Earthquake when Art’s burned down. “My biggest fear when we went to the architect was they were going to change the look,” he said. “We wanted to upgrade but keep the same look.” The Jewish delicatessens on which Art’s is modeled, were originally designed to be meeting places, and they came with a rigid set of guidelines covering everything from kitchens that opened to the dining area to layouts that would allow a visitor to see who else was in the deli at a single glance. “A deli is supposed to be very comfortable, very plain formica table tops, vinyl floors, no high back booths, so that when you stand in the deli you can see the whole deli,” Ginsburg said. “You can have the best food and the best service, but if the customer is not comfortable when he walks in, he won’t come back.” It isn’t just deli customers that demand a certain look and ambiance where their favorite restaurant is concerned. Vega remembers once when he decided to put more lights in the restaurant. “The regular, old customers complained,” he said. “You don’t want to change too much because they’re used to it. People feel when they come here it’s their restaurant, and they’re the ones that bring you the most business.” Old timers particularly have had to adjust their menus to changing times. Art’s Deli now has vegetarian dishes. You can have a low-carb margarita at Casa Vega. At Cisco’s, dieting diners can order their fajitas with lettuce wraps instead of tortillas. But the food, operators say, has to meet the tastes of the customer, not the cook. “If you go into the restaurant business designing a business based on what you think the customer should be eating, your chances of succeeding are pretty low,” said Yosslowitz. “If you go in understanding who your customer is and what they want, you’re way ahead of the game.” Case in point: Marmalade took over a Malibu location where two restaurants had previously failed. It was off the Pacific Coast Highway in a small, unattractive strip mall. But where the other operators tried to appeal to the glitzy, tourist-y image of Malibu, Marmalade catered to the families that actually live in the community. “It’s become an institution in Malibu,” said Yosslowitz. “It’s been there for 10 years.” Even when they modify offerings and add new things, restaurateurs say they are acutely aware of who their customers are and what they expect when they walk through the door. They say it’s their job to meet those expectations each time, every time. “Most guys, when they get in they’ll use the best of everything and be pleasant with everybody, and once they get to where they think they want to be things start changing,” said Green at Flooky’s. “They start cutting corners and people realize it and they stop coming.”

Young Businessman Bangs Out Problems in Body Shop Most Improved Performance by a Small Business – McAlister’s Body Shops By JEFF WEISS Contributing Reporter The cars weren’t the only wrecks at McAlister’s Body Shop when McAlister’s Chief Financial Officer Stephen Siegel purchased the business in 2000. The shop was run down, the equipment was ancient and dilapidated, the place lacked professionalism, and the finances were in disarray. Enter Andy Rapport. With Siegel running a property management company, he lacked the time to manage McAlister’s. So within a year after buying the shop, he brought in his acquaintance Andy Rapport, who was fresh out of USC’s Entrepreneurial School at the time. Rapport lacked extensive knowledge of the body shop industry, yet arrived equipped with enough business acumen to help transform the business. Only three years later, at the tender age of 25, President Rapport’s skills have allowed the company to grow from doing $100,000 a month in 2000, to this year’s sales projections of nearly $10 million. Additionally, the number of McAlister’s locations has increased to three stores, with ground having recently been broken for a fourth. The exteriors and interiors of the typically grungy body shop have been replaced by granite table tops, employees in shirts and ties, fresh coats of paint, and brand new equipment. “The main thing we tried to do is find a niche. We’ve concentrated on being the best in the dealer body shop business. We now specialize in doing dealer work. We go out and provide a financial and service product, which is tough to match for other people. We have set up partnerships with dealerships for them to send us business,” Rapport said. “We provide a good financial and customer service package. We carry extra personnel. We pick up the cars from people’s houses. We have on-site Enterprise Rent-A-Car stores. We try to emulate the service side of a dealership. If you go into a business, you see shirts and ties. That’s what you see here.” Decline in reputation As profits dwindled at a pre-Siegel/Rapport McAlister’s, its reputation suffered along with them. Few dealerships wanted to work with a company in decline. “It’s a completely different business compared to how it used to be. We had quit using the prior McAlister’s,” Garry Webb, general manager of Miller Nissan, said. “It was because of Andy’s job that we decided to resume doing business with them after a 5-year hiatus. Their work is top quality and the customer service is outstanding.” It has become increasingly difficult to turn a profit in the body shop industry, which makes Rapport’s achievement more notable. Many body shop owners lament the rise of insurance companies that attempt to goad them into doing increasingly swift work for a lower profit margin. “It’s hard to make money because the insurance companies control the business. They steer their clients to wherever they can get the best deal and some shops are willing to provide them with quick service at practically no cost,” Charlie Cehrelli, owner of Canoga Park’s Car Craft Auto Body Shop said. “It’s hard to be honest in this industry. The companies always try to give you less money than you need to make a profit. Consequently, there are two or three big companies that make a living and hundreds of small auto body shops struggle. We are cut out of it.” Yet McAlister’s now sterling reputation, bolstered by the immaculate condition of their stores and the clean-cut appearances of employees, has allowed them to attract business from these insurance companies. “This industry doesn’t have a great reputation, dealership involvement and insurance company involvement helps to add credibility,” Rapport said. “We now have insurance company relations with 21st Century, Hartford, and Western General. We’re really trying to focus on that over then next few years and trying to establish more direct repair partnerships.”

INTERVIEW: No Small Task Alberto Alvarado leads the local district office of the small business administration as the government agency caters to a renewed boost in entrepreneurism By JEFF WEISS Contributing Reporter Perched in his 12th floor Glendale office, overlooking panoramas of the San Gabriel Mountains on one side and the skyscrapers of downtown Los Angeles on the other, it’s easy to imagine that Alberto Alvarado, the Small Business Administration’s district director for Los Angeles, Ventura, and Santa Barbara counties, can survey all the small businesses within his jurisdiction from his corner office. Framed plaques attesting to Alvarado’s impressive academic achievements hang side by side with a sign that reads “Parking for Mexicans Only others will be towed.” Clearly, proud of both his heritage and his family, photos of Alvarado with his wife and children adorn the space. Raised in East Los Angeles, in a family where no one had ever advanced past the second grade, Alvarado’s earliest dreams didn’t involve business. Instead, Alvarado was going to be a smooth fielding second baseman playing professional baseball. But dreams evolve, and through a combination of perseverance, intelligence, and dedication, Alvarado has risen to a prominent position in the Small Business Administration. Question: How long have you been at the SBA? Answer: I’ve been with the SBA for 24 years. I’m an attorney by trade. I’m a local homeboy. I grew up in East Los Angeles and went to college at Yale University and Stanford Law School. I joined the SBA as an attorney and became district counsel where I was the head attorney for about 12 years. Then about 10 years ago, I lost my mind and decided I wanted to become the director, and someone who hated me granted me my wish. Q: Why did you want to switch from law to the business world? A: When I came to the agency, I had in mind to open up a practice with some of my friends. The idea was that each of us could pursue some aspect of business law. There were three of us and we went in different directions to see what was available and to develop expertise in business law. I was going to come to the SBA and learn a little about banking and how businesses function and before you knew it, opportunities came my way and we sort of drifted into different directions. Subsequent to that, I became the head attorney of this office and became involved with reviewing the different loan applications and applications for contracting. That was very interesting. Q: Specifically, what does the SBA do and how did you come to be the District Director? A: The SBA was created about 50 years ago by the Small Business Act. The SBA provides service to small business in three areas. We provide financial assistance, we provide technical assistance to someone who has a business but needs help with their marketing plan or their accounting etc. A lot of people in business know about their product, but don’t know about the business side of it. Then we help with federal government procurement. The federal government, like any good consumer, buys a lot of products and services. By law, a certain percent of those contracts have to be awarded to small businesses. We oversee that process. As I got involved, and spent a number of years as the chief attorney, I enjoyed the work and saw a real value in it. I’ve always seen the tremendous impact that this agency could have on small businesses and minority businesses and other businesses just getting started. Q: What does the SBA branch in Glendale do? A: We provide the standard three types of SBA service of financial assistance, technical assistance, and assistance in contract procurement. By volume, we are the largest SBA office in the entire country. We’ve won numerous awards over the years. Last year, we financed 4,600 businesses in our tri-county area for about $1 billion. We lead the country in financing minority women-owned businesses and also procured about $750 million in government contracts for small businesses. In terms of training, counseling and technical assistance, we served about 41,000 businesses last year. We feel like we have contributed to thousands of jobs over the years in our service territory. Q: How has the SBA’s role changed over the years? A: We have become kind of a facilitator of collaborative efforts to help small businesses. In the lending program, we used to provide direct funding to businesses with federal money. Now, ultimately we direct the businesses if they are credit ready. We send them to a bank and the SBA guarantees the loan. Rather than providing the service directly, we manage a process that facilitates that credit. In all of our program areas, we’re managing the different resources, and the network of services that are available, whether it’s banks, different city or county agencies, or chambers of commerce, we assist in overseeing and managing those collaborations. We work with different chambers of commerce to help ensure that business stays in the city. The biggest challenge in every state is to retain businesses. We’ve transformed the agency from a direct provider of money to being a manager and an overseer of the various available resources. Q: How do you see the future of the SBA? A: I think the future is very positive. It’s exciting because we know the tremendous contribution that small businesses create for the economy. They create the majority of new jobs and make it possible for the innovations and the workforce in the industry. It’s no longer the case that the big corporations dominate industry. It’s becoming true nationally and globally. Entrepreneurship is really spreading throughout the globe. Ultimately, by supporting small businesses you provide jobs which help the economy grow. We’re trying to get our staff into the community on a daily basis. It’s no longer the case that we sit in an ivory tower, we’re out there. We do this constantly. We host small business recognition events and they’re very important. This is the way that people can see the impact of small businesses who can ultimately aspire to owning their own small business. Q: What do you think of the optimistic economic figures being forecast for the San Fernando Valley? A: I believe that those projections are likely to be realized. We know that the Valley is a high growth area and has been for some time. We also think that ourselves, banks, economic development organizations, and the people themselves, need to get involved and support that growth. Just because we have people moving into the area and having business growth doesn’t mean it’s going to be sustained. It doesn’t mean it’s going to be the kind of business growth that we want to see. There are types of jobs you want to see. I think that the projections are very realistic. Certainly, the influx of more people into the Valley will help. Where there are more people, history has shown us that there’s more business development. Q: What are your career goals? A: My career goals have always been focused on providing service to the community. I’ve dedicated my life to that effort. As I look out on the horizon, I plan to continue to do that. On a daily basis, I’m excited to collaborate with the VEDC and the different chambers of commerce, ethnic business groups, women’s business groups, and industry trade groups. There is a tremendous vitality with those organizations. Having had some longevity in this job, I’ve been able to have good working relationships with many people. I want to take our services into different places in the community. It’s also important to me personally to work with minority communities that need jobs. Q: What do you see for yourself in the future? A: I have a lovely wife and a wonderful son who will be 13 this August. I’m a family man and I spend a lot of time at the office. It requires a lot of effort, but I see myself being involved with my family and enjoying their presence. SNAPSHOT: Alberto G. Alvarado Title: District Director, Los Angeles office of the Small Business Administration Born: 1952, Los Angeles Education: Salesian High School, East Los Angeles, Yale University, major political science, Stanford Law School Career Turning Point: Realizing his scholastic aptitude his first semester of high school when he received a report card with mostly A’s and few B’s. After that, he never got another B. Most Admired People: Cesar Chavez, Mahatma Gandhi, Robert F. Kennedy Family: Married for 18 years, son 13 years old Hobbies: Playing basketball

Tireless Leader Grows Firm Rapidly in Peripherals Field Best Small Business Executive – Marx Acosta-Rubio By SLAV KANDYBA Staff Reporter The voice greeting on Marx Acosta-Rubio’s office line at Chatsworth’s One Stop Shop says a lot about the man his endless energy, to be exact. The president of the computer peripherals firm is an aficionado of personal growth and motivation tapes, and has applied the teachings to his job. The return has been pretty good. The 6-year-old company clocked in $6 million in sales of printer toner cartridges and other supplies and Acosta-Rubio estimates the firm will sell $12 million worth this year. Sales have jumped 50 percent since the beginning of the year, compared with the same time period last year. Acosta-Rubio, 34, came to U.S. from Venezuela in 1974 and graduated from UCLA in 1992. He went to law school, but dropped out, opting to become an entrepreneur. He used $70,000 from his mother’s life savings and started One Stop, where he has applied the skills acquired from the personal growth CDs and tapes. He has instilled the company with his energy, and employees and clients alike have responded well. “What would make us unique is the culture of personal growth we have in our company,” Acosta-Rubio said. “We encourage our employees to listen to tapes and books on personal growth.” Acosta-Rubio also treats his employees well. So well, in fact, that some employees recommend their kin to work at One Stop. Acosta-Rubio said his reason for being successful is “developing people first, strategy second.” He further described himself as a “good boss because I help people see themselves.” Employee gifts It’s also not uncommon for One Stop employees to be treated to trips to Vegas and other tokens of appreciation for a job well done. One of Acosta-Rubio’s 18 employees, Jenni Hurley, had just begun working for One Stop and was working extra hours to learn the job, she said. One day, Acosta-Rubio gave her a gift certificate for $50 to Marmalade Caf & #233; and two movie tickets, along with a handwritten note of appreciation. “Those little things surprise you and make you feel special,” Hurley said. “It was something nice and he (shows) that he appreciates his employees. Soon, Hurley’s husband applied and got a job in sales at One Stop. He came from Costco, where he had spent nine years. “I was coming home every night happy and he saw that I changed my whole attitude and he wasn’t very happy at the time,” Hurley said of her husband. “(Now) he’s just loving it.” Hurley has also picked up on Acosta-Rubio’s recommendation to read and listen to motivational and personal growth books and tapes. “I’ve been picking up a couple of books, things like affirmation and positive thinking and always believing that you can achieve anything,” Hurley said. “And that’s what Marx believes and it shows.” Mark Bishara, a manager at Woodland Hills-based Venbrook Insurance, is a client of Acosta-Rubio. “He’s a superb guy, as good as it gets,” Bishara said. “He’s got unbelievable passion and drive to succeed and surrounds himself with really top people. As far as the reason we repeat with him is (that) he delivers on his commitment.” Business relationships Part of Acosta-Rubio’s growth is attributed to business-referral partnerships with several companies in the Valley, formed in the past year. Among the firms that partnered with One Stop is On-Site Lasermedic in Chatsworth, also a computer peripherals company, and Faye-Pollack & Associates, an IT company in Encino. The success of One Stop Shop has allowed Acosta-Rubio and his wife to establish a charity. Through the Acosta-Rubio Family Foundation, Acosta-Rubio and his wife contribute to a number of charities, including Heal the Children. “We understand that our company is nothing more than the collective common purpose of the people that work there,” Acosta-Rubio said. “If you take care of them, you are feeding your company the energy it needs to provide value to our clients as well as each other.”

No Long-Term Threat Seen in Soaring Consumer Prices By SHELLY GARCIA Senior Reporter So far in 2004 gas is hovering around $2.40 a gallon; the price of milk has jumped to four bucks a gallon, and you could probably feed a small third world country for what it costs to buy a pound of beef. Surging food and gas prices have spiked the consumer price index to the tune of 0.6 percent in May. And while that increase has Wall Street spooked, it has hardly registered with economists, or for that matter, area business owners. “I think we all think it’s a temporary kind of thing,” said Ellis Herz, owner of Maxson’s Drugs in Sherman Oaks. “If I had a trucking business or something directly affected by it (it might be different), but our delivery service is not that much as far as how it affects my business. So we kind of go on with business as usual and don’t pay too much attention to it.” For business operators, the rising cost of workers’ comp and health insurance have the potential to do far more damage. And while businesses, as well as consumers, have felt the pinch of soaring gas prices, the increases appear to have subsided in recent weeks, and many believe gas prices are on their way down. The rising cost of food too is seen as a temporary aberration, even by those who operate groceries. “The only thing that’s going to affect whether this goes into an inflationery spiral is the material that makes the food go,” said Pat McQuaid, the owner of Jim’s Fallbrook Market in Woodland Hills, referring to expenses such as transportation and the kinds of disasters that shut down growers, like a freeze or a drought. “All this stuff goes up and down, but the moment something gets extremely popular, everyone wants to grow it as quickly as they can.” Consumer prices soar All told the consumer price index in May rose 0.6 percent in May, the highest spike in years, and many food items have topped the list of price increases in recent months. Butter and margarine was up a whopping 47.2 percent in April compared to December, 2003, according to a recent report at MSN Money based on Bureau of Labor Statistics data. The price of apples rose 16.6 percent; eggs jumped 8.7 percent and cheese and related products were up by 8.1 percent. The beef price index rose 2.8 percent in April and another 1.6 percent in May compared to the same periods last year, the department data revealed. And the price index for pork and poultry rose 2.0 percent and 2.6 percent respectively in May. Food was not the only category rocketing the CPI skyward. Besides gas, which increased 58.1 percent, airline fares rose 13 percent, audio discs and tapes increased 11.5 percent and boy’s apparel rose by 10.5 percent, according to the MSN report. The price hikes sent the Dow Jones Industrial Average and Nasdaq Composite Index into a tailspin early last week. On June 14, the Dow closed down 75.37 points or 0.7 percent at 10,334.73 and Nasdaq plummeted 29.88 points or 1.5 percent to 1,969.99. There was little improvement as the week wore on and by Thursday, the Dow stood at 10,377.52 and Nasdaq was at 1,983.67. But Wall Street’s reaction was a measure of investor’s displeasure at the prospect that the Fed will likely raise interest rates when it meets later this month. Higher interest rates raise the cost of borrowing and eat into profit margins. But even with the projected Fed rate hikes interest rates are still at their lowest levels in years and not likely to have a long term effect on economic growth. Stocks will rebound Even the Street’s pessimism, economists say, is temporary. “Once they raise rates you may see the market rally,” said Mark Schneipp, director of the California Economic Forecast, a research and consulting group. “I look for the market to rally and treasury bond yields to go down. They’ve already run up significantly in anticipation so once they announce (the rate increases) they will probably fall.” Schniepp notes that stock prices represent future expectations. And while a rise in interest rates is generally considered bad for business, the increase anticipated, one-quarter or perhaps one-half of one percent, would not be enough to stymie business activity. Besides, economists argue, the recent run up in consumer goods does not indicate that an inflationary spiral is close at hand. When gas and food is taken out of the equation, the core inflation index rose by only two-tenths of a percent. The price of a number of consumer items, including fresh fruits and vegetables, mortgage rates and the price of cars, has dropped significantly in recent months. And consumers typically substitute other food items for those that become more expensive. At the same time, food prices are expected to slide back down as soon as production falls back in line with demand. “Generally the way the food business works, if you have a great demand for something other people start to grow it,” said McQuaid. “Beef is at an all time high, everyone who owns a cow is growing them as fast as they can. All the beef will show up on the market, and the price will go down again.” The price of gas has had a greater impact, particularly on small businesses that rely on transportation. “Anytime that there’s any kind of rise in prices, it definitely does affect our business,” said Sarah McCullough, office manager at World’s Greatest T-Shirts & Promotional Stuff, a tee-shirt silk screening and marketing company in Tarzana. “Even if it’s for a couple of weeks, it definitely does affect everybody.” But experts say the price of gas is expected to fall, and the effects of the hikes are short term. Schniepp pointed out that already, oil has declined to $37 a barrel last week from a peak of $42 a barrel in May, and, with oil producers once again beginning to increase production, the price should go back down to $27 or $28 a barrel in the long term. “If you look closer at the numbers, the core rate of inflation was low,” Schniepp said. “That core rate is very, very contained, so as an economist, inflation is not an issue.”

Hotels Look Like the Next New Thing for Developers REAL ESTATE By Shelly Garcia Bob Selleck probably doesn’t consider himself a trendy guy, but the real estate developer seems to have landed right on the cusp of the next new thing in the industry. Selleck Properties is about to begin work on a 10-acre parcel in Newbury Park that will house two new hotels along with a restaurant and a retail complex, a project that reflects a rekindling of interest in hotel development and, just as important, a general sense that the number of hotel rooms in the area has lagged well behind the need for such properties. “Most hotel owners believe that we are on the cusp of the next wave of expansion,” reads the opening line in the Marcus & Millichap Hospitality Report for Spring, 2004, noting that last year, for the first time since 2000, the demand for hotel rooms moved into positive territory. Two hotels, an ExtendedStay America and a Courtyard by Marriott, are underway in Simi Valley. Another is in planning stages in Valencia. And J.H. Snyder is considering replacing a planned office building with a hotel at the company’s Agoura Hills development, Oak Creek. Selleck Properties will grade the Newbury Park site, called The Terrace, and turn it over to owner operators who will build a Courtyard by Marriott with 120 rooms and a Marriott Town Place Suites with 93 rooms on the property located on the south side of the Ventura (101) Freeway at Giant Oak Avenue and Newbury Road. “What’s really acting as the catalyst for the new hotel commitment is Amgen and its ever-expanding employment base,” said Selleck. “It’s having a huge impact on the community in terms of demand for housing and hotels.” The events of Sept. 11 may have brought the hotel industry to a screeching halt, but it did not stop corporate headquarters like Amgen from expanding. Hotel operators have never been especially active in this region, and as a result, the number of hotel rooms has not kept pace with the needs to house visiting executives for temporary stays. The Valley as a whole “is underserved,” in the hospitality area said Robert J. Feist, vice president of Atlas Hospitality Group in Costa Mesa, noting that many hotel developers for years regarded the area as a bedroom community not particularly desirable as a hotel location. “Now everyone’s kind of catching up to try to figure out how can we piece this together to make it work better.” Today, with significant corporate headquarters addresses in Burbank, Conejo Valley and Simi Valley, the operators are turning their attention to the region. While hotel occupancy rates are still depressed from their pre-Sept. 11 levels, they have begun to rise significantly. According to PKF Consulting, the hotel occupancy rate year-to-date through April in the Valley region has reached an average of 71.71 percent, a 6.1 percent increase compared to the same period last year, when occupancies averaged 67.58 percent. Rates too are climbing. As of April, the average daily rate for a hotel room in the Valley region was $103.71, compared to $98.66 for the comparable period last year, PKF reports. Selleck bought the Newbury Park site about four years ago without entitlements and has been working with the community and city officials to design the development since then. “They liked the idea of something between their homes and the freeway to act as a buffer for the noise, and they didn’t want to see (a lot of) retail there,” said Selleck. “Instead we decided to go with business hotels. People felt the patrons would be sleeping while they were sleeping, so it turned out to be a real good cooperative effort with the neighbors, ourselves and the city.” Marriott, Selleck said, particularly liked the opportunity to construct two types of properties at the site. The Courtyard concept caters to shorter stays and the Town Place, with kitchenettes, attracts those who average a six-day stay, ideal for executives who are attending training programs at their corporate headquarters. Work on the parcel, which will also include a 32,000-square-foot retail building and a Chili’s restaurant, is expected to begin in 30 days, Selleck said. Affordable Development AMCAL Multi-Housing Inc., a Westlake Village-based developer that specializes in affordable housing, is breaking ground this week on the second phase of a Lincoln Heights housing project. The project, located next to a Gold Line station, will eventually include 523 units with 64 percent of that total devoted to affordable housing. The first phase of the project, which began construction in January, includes 101 units of senior housing, 121 units of affordable family housing and 165 condominium units that will be available for sale. The second phase will include 146 units of affordable family housing and a childcare component. The project is located east of the Golden State and Pasadena freeways interchange. Meyers Group Sold Hanley Wood LLC, a $200 million housing and construction media company, that operates magazines, Web sites and trade shows, has acquired Meyers Group, a Costa Mesa based firm that tracks residential real estate data and provides consulting services. Terms of the deal were not disclosed. Jeff Meyers, founder and CEO of Meyers Group, and the company’s management team, will remain with the new company, officials said. “We have been talking to the Meyers Group for five years and are very excited to finally close the deal,” said Michael Wood, CEO of Hanley, which is based in Washington, D.C. Noteworthy The Sherman Oaks office of Lee & Associates celebrated its 10th anniversary on June 10. Senior reporter Shelly Garcia can be reached at (818) 316-3123 .

Executive Helps Firms Improve Communication Skills Small Business Executive Rising Star – Joe Jotkowitz, Communication Development Associates By SHELLY GARCIA Senior Reporter The big idea has always been among the most revered notions driving American business. But as the dotcom boom and bust showed, recent history is littered with brilliant ideas that failed because those who conceived them could not lead, execute or communicate what was needed to bring the concepts to fruition. Enter Joe Jotkowitz, the 33-year-old managing partner at Woodland Hills- based Communication Development Associates, whose practice is geared to bridging the gap between vision and execution. “We went through a ramp-up of big ideas and now it’s a matter of what’s going to make money,” Jotkowitz said. “We took our small area of the world and said, we have to be practical to clients. We have to show them how to produce results, and we’ve got to deliver metrics that are going to be able to prove that.” It’s an approach touted by any number of human resources consultants, but it is the way Jotkowitz delivers it, clients say, that makes the difference. “My clients, the IT people, it’s so easy to lose credibility with them in a heart beat, and once you lose it, they’re not coming back,” said Dawn Stancarone, training and development manager at NBC Universal’s Universal Studios unit. “Joe’s classes, it doesn’t happen, and I get feedback like ‘I just can’t believe how much things have improved for me’ and ‘I got my boss to see me as a different person.’ I usually don’t get that from other classes.” Jotkowitz, who was raised in Simi Valley, received a bachelor of science degree from Bradley University in Illinois and a masters in communication studies with a specialty in organizational communication and interpersonal relations at Ball State University in Indiana. After briefly running his own consulting practice in Indiana, he decided to return to his hometown and about eight years ago, joined Communication Development Associates in Woodland Hills. Human resource management was going through a sea change, and companies were demanding the same productivity improvements from their personnel investments that they had come to expect from their other operations. “There’s a whole movement toward measurement,” said Tom Henschel, a past president of the American Society for Training & Development whose Sherman Oaks-based consulting firm Essential Communications competes with CDA. “It started in the manufacturing field where people said if we can measure this we can make it better, and what people began to realize is you can measure human performance too.” Real-time assessments At CDA, Jotkowitz developed a new unit, e-ssessnet, focused on measuring performance, including a 360 feedback program that uses the Internet to log assessments in real time. The responses, which can be used to evaluate specific functions like presentations at the time they are made, or for ongoing activities like management skills, open the door to work on specific skills in ways that traditional performance appraisals cannot. “The feature I like is it will take anecdotal feedback,” said Henschel. “Most assessments turn up as statistical data. “Yes or no gives us some trends, but if I get to say, ‘she’s really great about this,’ then the feedback is really powerful.” Consider the case of a manufacturing vice president who was earmarked to take over the president’s job but for one potentially deadly shortcoming he could not communicate his often brilliant ideas. “He rarely interjected (his point of view), and second, when he did offer up his opinion it was disorganized and long winded,” recalled Jotkowitz. “At the end of the meeting, just about everybody didn’t remember him offering his perspective.” Armed with the feedback from e-ssessnet, Jotkowitz worked with the executive showing him specific tactics for making presentations. “We got him to start his entire presentation with, this is what we know; this is what we’re expecting to know; and this is what we’re doing about it,” said Jotkowitz, “as opposed to there’s a bunch of things we’re looking at and here’s a bunch of things we can do. That bores the heck out of people.” Changing an approach It wasn’t long before the VP got a chance to use his new skills to argue against another company executive who was campaigning to close down a manufacturing plant. “He presented a compelling argument to keep it going,” said Jotkowitz. “He had been presenting the same data for six months, but his expertise got trivialized because it was complicated and convoluted.” Being the guy charged with telling a senior executive to change his or her behavior isn’t easy. More than a few consultants either end up telling executives what they want to hear or putting their feedback in terms so theoretical and academic their point is lost. But those who have worked with Jotkowitz say that he is able to win the ear of the executives he works with because of a style that is both informational and down to earth. “He’s got this thing where he makes you feel like he’s one of the team,” said Stancarone. “And all of a sudden he has this leader head that happens, and he’ll coach you through it and you don’t even know what’s happened.”

Firms Thrive While Defying Daunting Odds By JEFF WEISS Contributing Reporter Statistics show that 80-85 percent of all small businesses fail within the first five years, a daunting figure that could intimidate almost anyone considering starting their own enterprise. In many ways, running a small business is like bungee jumping. Those who succeed receive a visceral rush indescribable to the uninitiated. But if you fail, you fall , hard. But the 75 companies nominated for the Business Journal’s Small Business Awards highlighted in this issue have not fallen. Rather, they have transcended the numerous perils involved and achieved great success in their fields. From a Swedish Vodka company to accounting firms, from television and film production companies to delicatessens, the owners of these businesses are united in their passion, perseverance, and savvy business sense, that has allowed them to win when so many before them have lost. How do the successful small businesses do it? How do they beat that daunting 80-85 percent figure? Jonathan Goldhill, CEO of Los Angeles’ The Growth Coach, a small business coaching and consulting firm dedicated to helping entrepreneurs get more out of their business and personal lives, feels extraordinary businesspeople are typically highly motivated and creative. “Many people start their businesses because they wanted to be more self-directed. They want to control their own destiny. They often don’t want to work for someone else and they think they can provide a service that meets the need of buyers better,” Goldhill said. “They might be more innovative in the way a product can be designed or delivered. The extraordinary entrepreneur does out of the box thinking and finds a way to reinvent the delivery of a product or the marketing of a product. He sees that the product can be delivered direct to the customer, or reformulate it in a way that’s totally different and better.” Companies like Studio City-based Traffic101.com embody Goldhill’s sentiments. While traffic schools have been around since people began running red lights and creating havoc on the road, Traffic101.com’s President and CEO Armen GeoSimonian was one of the first to realize the potential for traffic school to be conducted online. An onerous burden transformed into a relatively painless process, thanks to GeoSimonian’s innovation in reinventing the delivery of a product. The passion Goldhill emphasized the importance of passion in ensuring a business’ success. If one doesn’t love what they do when they arrive to work each morning, people’s dissatisfaction often reflects itself in dwindling profits. “There are people who are so passionate and dedicated about their own personal loves that they figure out how to make a business around their creative interests,” Goldhill said. “I think of Hot Gears. Mehran Salamati combined his love and interest in flying with his love of photography and his background as director of photography. By mounting a camera onto a plane, he mixed his two loves into a successful business. I think that passion is a common theme of why people become entrepreneurs.” But all the passion and perseverance in the world cannot do very much without one cruel reality: money. Every business needs substantial capital, not just to start the company, but to pump funds in to facilitate growth. Vladimir Victorio, director of lending at the Valley Economic Development Center, hammered home cold hard cash’s importance in business success. “The most common denominator is proper capitalization of the business. Having the finances to start the business and to expand the business as it grows is very important. A key component of that needs to be planned out in advance. Successful businesses establish a business plan which enables them to think about the horizon and anticipate the necessary financing,” Victorio said. There are 70,000 businesses in the Valley, with 90 percent of them classified as small businesses. In spite of the numerous obstacles, thousands of people decide each year to follow their passions, regardless of the high likelihood of failure. The small businesses signaled out for their achievements not only have defied the odds, but in the process have carved out for themselves their own piece of the great American Dream.

Firm Makes It Easier to Control Valuable Resource Most Creative Small Business Product – Rain Master Irrigation Systems By SLAV KANDYBA Staff Reporter You won’t find Rain Master Irrigation Systems products on the shelves at Home Depot, but it is at the Home Depot Center in Carson, the sporting events venue home to Los Angeles’ soccer franchise L.A. Galaxy. The Simi Valley company’s irrigation control systems help control how much water is dispensed over more than 1 million square feet of ground. A computer controls how fast the water is sprinkled and when. Then there are some other places where Rain Master systems can be found. “Some of the richest people in the world have our systems,” said Jim Sieminski, the company’s president and CEO. Rain Master, established in 1981 by three renegade engineers who left the aerospace industry, sells the computerized systems for $30,000 to $500,000, depending on the size of a given property. Its sales have improved steadily since 1997 at a rate of 15 percent per year, Sieminski said. So far this year, sales have jumped 25 percent compared to the same time last year. The reason: water is a costly commodity and people want to save money. “I think the demand is coming from the price of water going through the roof,” Sieminski said. “The population keeps increasing, so scarcity of water is hitting many parts of the country and that’s driving the sales of these systems.” Many Rain Master clients are municipalities, which use the company’s systems to control the hundreds of water sprinklers at parks, streets and other places. The City of Newport Beach in Orange County has been a satisfied client. “We’re saving up to 30 percent on our water bill,” said Tom Diaz, an irrigation specialist with the city. Newport Beach has been in the process of computerizing its irrigation systems over the past 30 years, but it first ordered a Rain Master product 10 years ago. About two years ago, the city upgraded its systems to be accessible through the Internet using one of Rain Master’s newest products. And it’s still continuing to spend, investing about $50,000 per year to upgrade the systems with the latest technology Rain Master has to offer, Diaz said. Rain Master in fact prides itself on technological innovation. It was the first to design and sell a remote control for irrigation systems. The company was born when three aerospace engineers employed at Litton Guidance and Control figured they could apply emerging microprocessor technology to irrigation. “When they started, they were pioneers in the applying microprocessors to the irrigation industry,” Sieminski said. “Most irrigation was mechanical” in 1981, Sieminski said, and wasn’t exactly efficient. Water sprinkles had to be turned on by flipping a switch, and if there were many sprinklers, there were many switches. Water was wasted because there was nothing such as flow control. “You could remove all mechanical problems by using microprocessors,” Sieminski said. The company is essentially a technology firm, because its products which range from command control systems to power sprinklers to weather stations that change irrigation schedules are computer-based. “It’s nothing more than a desktop (computer) with some software that controls irrigators in the field,” Sieminski said. The company has 30 employees at its facility in Simi Valley, most of which are engineers that perform final assembly and test devices before their shipped out for sale. Most of the systems’ initial assembly is done overseas. Large market share Rain Master has 15 sales representatives throughout the nation, and its systems are sold throughout the country. Most of its sales are in California, where the company has approximately 50 percent market share in irrigation controls, not including golf ranges, Sieminski said. Rain Master has competition in the form of three or four large companies that manufacture similar products, Sieminski said. There are also smaller companies in the market. Overall, it doesn’t faze Rain Master because it is a pioneer in the industry. “I think the thing that makes us unique is we have to maintain a technological edge, whereas the other guys can use their marketing clout,” Sieminski said. “We’ve always been on the innovative side.” Rain Master has also focused on customer support, employing “sophisticated sales people” who can offer product maintenance advice as well as market the products, Sieminski said. “They’ve become an integral part to an end user,” he said. “They’re invaluable in so many ways.”

Simi Valley Prepares Itself for Reagan-Related Business By SHELLY GARCIA Senior Reporter Within two hours of the news that Ronald Reagan, the 40th president of the United States, had died, Holiday Inn Express in Simi Valley had sold out its rooms for the week. “We normally run 75 percent to 80 percent occupancy, but we have definitely seen a remarkable interest in the library,” said Kit Gamble, general manager of the hotel. Most of the additional visitors may have come for the viewing and the sunset funeral for the former president, but the thousands who came to Simi Valley to pay tribute to the president in death, may be just a drop in the bucket compared to the numbers expected to be drawn to the Ronald Reagan Presidential Library and Museum to celebrate Reagan’s life. In just the first two days of last week, even after the close of the memorial services, the Reagan Library, which typically gets about 200,000 visitors a year, received 8,700 visitors. And while it is too soon to know with certainty, most agree that the small Ventura County city will likely see an unprecedented increase in tourism well into the future. “It’s a great opportunity for the city of Simi Valley,” said Marshall Shrago, operations officer at the Simi Valley Chamber of Commerce. “And it’s not going to be short term. It’s a tremendous long term opportunity for people to visit the city.” Already the chamber has begun fielding questions about lodging, rental cars and restaurants. So have the local hotels. “Grand Vista Hotel is noticing an increased number of telephone inquiries and reservations as a direct result of last week’s event,” said Verica Weikal, an assistant manager at the hotel. “I’m from Europe, and no one back home knew where Simi Valley is. Now my friends say, ‘Oh, I know where Simi Valley is.’ It’s an unfortunate incident, but a fortunate outcome.” In this city, to date best known as the place of the trial of the police who beat Rodney King that set off the Los Angeles riots of 1992, many residents have long felt a kinship with the Reagans. Before his illness forced him into seclusion, Ronald Reagan with his wife Nancy made numerous trips to the area. They dined in local restaurants and were honored at many an event in the area’s hotels. Period of mourning “Some of the staff members had the opportunity to meet him personally,” said Miller Vargas, general manager of Posada Royale Hotel & Suites, an independent hotel in Simi Valley. “We did events at the library when they first opened. We always enjoyed a close relationship with the Reagan Foundation. You have to pay your respects and then you can think about business.” It wasn’t until last week that the senior staff of Posada Royale met to discuss the business opportunities that might open to the hotel in the wake of Reagan’s death. “It’s a plan we put in place to get our fair share of the increased tourism,” said Vargas, declining to discuss specifics for competitive reasons. “Hopefully, it will work out fine for us and the community.” It is not just Reagan’s passing that is fueling enthusiasm for Simi Valley’s future. Locals have long known that the museum, with exhibits as diverse as World War II and Lewis & Clark, has had much to offer. It includes a replica of the Oval Office and interactive exhibits about the presidency. “You can go up there every three months and have a whole new learning experience,” said Mike Sedell, Simi Valley’s city manager. But until now, even locals have not always taken advantage of the area’s attractions. Other sites The Strathearn Historical Park & Museum, a six-acre complex with its replicas of a Chumash village and artifacts, homes and barns of those who later settled in the area, receives only about 6,000 visitors a year. Last year, the museum drew 45 school tours. “It would be wonderful if we did get more visitors to the park,” said Caryl Barefoot, the president of the Simi Valley Historical Society. “We have people who live here for years and don’t know about it.” Not only has more attention focused on the library, the library itself is set to expand. Many of the presidential documents that were formerly sealed will open to the public and next year the Air Force One Pavilion will open. The pavilion will house a full scale replica that can be toured, including all of the rooms exactly as they are in the presidential plane, along with the other air and ground travel vehicles that are part of the presidential transportation fleet. The new pavilion, along with the rekindled interest in the library, is expected to attract visitors from all over the country, if not the world. “With the completion of all the plans, that will hopefully keep the people at the library longer, so it will in a way force them to spend the night in town, which we don’t have right now,” said Vargas. Most of the library visitors to date have been day trippers from Santa Barbara or Los Angeles. Weekday guests at the hotels are mostly corporate clients and on weekends there are families in town for visits or soccer matches. But two new hotels are currently under construction in Simi Valley, and current events have made the operators enthusiastic about the prospects for added tourism.