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Small business makeover: Manny's Auto Sound

For the past 25 years Manny Diaz and his wife, Barbara, have run Manny's Auto Sound, but the recent downturn has forced them to find new ways to generate business.

Special to The Miami Herald

Twenty-five years ago when Manny and Barbara Diaz started their car-stereo installation business, the automobile industry seemed immortal: AMC had just introduced America's first SUV; Ford's new souped-up Mustang, with its V-8 engine was sweeping showrooms; Japanese cars were beginning their ascension; and the country's favorite action hero was a 1982 Pontiac Firebird named KITT.

Jobs were so abundant that Manny Diaz had to hire help for his mobile installation business, traveling from Miami-Dade to Palm Beach counties and across South Florida to install the latest sound systems.

``I used to go to Naples four or five times a month. In one day, I could do four or five jobs there,'' Manny said.

Business took off. Eventually the couple was depositing $15,000, sometimes $20,000 a month in sales.

Today, as the industry flounders from one crisis to another, Manny's Auto Sound is lucky to pull in $4,000 a month.

``It's just dead. I went from doing 35 or 40 jobs a month to now one a month. That's how bad it is,'' Manny said. ``I go out and go out and go out and spend gas and nothing.''

The Diazes are desperate to keep the business afloat, particularly since Barbara struggles with her health. She has been diabetic since she was 17 and had a liver transplant seven years ago.

Despite what may seem like dire circumstances, the Diazes have a good chance at weathering a recession that has hit their industry hard, said Jerry Selevan, a retired CPA and volunteer counselor at SCORE, a Washington-based nonprofit that offers free advice to small businesses.

Selevan took a close look at Manny's Auto Sound and found some promising aspects: Because Manny operates the mobile business out of his van, there are few overhead costs. And since he has been in business so long, he has a large client base.

The business is also eligible for a five-year, interest free loan under the America's Recovery Loan program.

Perhaps most important is the tech industry upon which Manny relies. The boom in gadgetry has produced a constant flow of new products for vehicles, from navigational devices to iPods to digital satellite TVs.

Manny started out as a car detailer, but quickly realized his future was in installing electronic devices. And as entertainment systems became more complicated, his business grew. He attended trade shows, showing off custom work on his own cars. And he began getting referrals from car dealerships. At its peak several years ago, he said, he had 20 to 22 dealerships calling him for installations.

``Let's say you buy a car, an SUV, and you want a DVD. The dealer says, `Yeah, we can do it here,' and they call a certified installer and I walk in and do the job for $800,'' Manny explained. ``Then they turn around and sell it for $900.''

But with dealerships closing, fewer sales at the ones remaining and more buyers happy to use the factory-installed equipment, business has dropped off precipitously. Only four or five dealerships continue calling, he said.

His biggest competition for installations is big-box stores like BrandsMart USA, which do their own installation.

SPREADING THE WORD

Since business isn't coming to him anymore, Selevan says the Diazes must go to them. That means finding a market and targeting it.

``If you had a more generally accepted product, say cars, everyone buys one,'' Selevan said. Now, ``you have to create a need.''

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