I was inspired to write this after a conversation with my friend, the founder of Precious Touch during the first phases of her hair and beauty salon. She was thinking about funding and raising money to run her business and I thought of practical ways to raise money.
Many times you read articles that tell you to go for it, or invest in this and that, but invest with what? How do you actually start, if all you have is 100 dollars in your bank account. I hope that these tips actually help or inspire you to come up with a useful method.
One thing entrepreneurs tend to do is that they formulate a plan in their head and they feel determined to achieve that particular plan. They know there are obstacles on the way there but some don’t know how to use the obstacles to their advantage.
A friend of mine earned her bachelor’s degree in business from a top university in Germany but couldn’t find a job for almost a year. When she would complain to me about it, I’d tell her to try looking for temporary work in a smaller company. ‘Get your hands on something, anything!’ I’d tell her. ‘You can work as a cashier for Kiko Milano Cosmetics, you love make-up don’t you? So work there for a month and get something doing!’ Then she’d give me the death stare. Miri, if you’re reading this, confirm it. Nine months later she still didn’t have a job with a bank or an auditing firm. She became desperate and submitted her C.V in response to a fashion store’s announcement. This was two years ago.
Last week, she bought an office space to start her own marketing company. If you were hoping for tips like, go to the bank or write to Richard Branson about your genius idea you’re on the wrong blog.
I’m telling you all this to say that if you want to open a mall in your city one day and you don’t have enough capital, maybe you should start working in one, shining shoes, decorating, sales, greeting people… whatever. Just create a situation where you’re doing something to make enough money to start something else. Get a job. Money is not going to magically drop from the sky.
Networking is another thing you absolutely need to do if you want to run a successful start-up and that was Miri’s key. I don’t necessarily mean the kind of networking Robert Kiyosaki talks about. Miri Met People. You don’t have the luxury of being too shy or too introverted to talk to people. Miri flew to Basel eleven times in one year to attend company parties or meetings at the headquarters. She was making just above 1000 euros while working there but she wanted to become a familiar face there after the first company party she attended. By the sixth time she went to Basel, she was given a VIP pass for the company parties. It was no surprise that when she applied after a year and a half, for a transfer to the headquarters she was welcomed with open arms. They already knew her as the girl that always ran around stealthily at events in an attempt to make the special guests and sponsors comfortable.
Spending money is inevitable. They say if you don’t invest in yourself no one will invest in you and that holds a lot of truth. This is one reason why you need a job working for someone else. When Miri returned from Switzerland in March, she told me she’d seen a lot of the fashion world but she wanted to venture out and do her own thing. She believed she was bad at taking orders and waking up at six everyday to take the train to work. She had just started her master’s degree too and she felt she had worked too hard to live the life of corporate slavery. So we sat in a café and brainstormed. No, she brainstormed. I’d already told her what to do.
‘We are going to throw a party. An event where you invite all the people you know. By people, I don’t mean random people you used to know back in college or women who would be offended if you don’t invite them. Make it an elegant event. Tell your parents you are starting your own business. Book an all included party venue for the night with whatever contribution they give you. (£1500) Don’t worry, you don’t have to invite them besides you already have too many mouths to feed. Send a nice handwritten invitation to all the sponsors you knew from your job, the VIP guests you had, your rich uncles, your friend whose dad works for the Turkish embassy (LOL). Call them up and tell them to make sure they are there.
If you want a more fun thing, invite a guest speaker to make an appearance. I don’t know, Tamu McPherson does appearances – or get a Youtuber. Carli Bybel or Dulce Candy. Maybe a rising singer too. Then advertise. It’s cheaper these days. Post it on social media, pay people to talk about it. Let regular people like us pay money to go meet them and get your money back from that.’
At first she was sceptical. She was worried that people wouldn’t show up, she could lose her job, she would end up homeless, shame, failure etc etc… you know, that moment when you forget who you really are. But she hard to be smart about it.
‘Don’t jump into it,’ I told her on Viber one evening in May when she shared the final party plan with me. ‘Wait till September or October.’ She was convinced she had waited enough but she agreed when she remembered that the whole world would be right where she wants them and no one would have to fly out. Two days after Fashion Week she hosted 34 people for a private event and an additional 117 in the after party. She made 3000 from ticket sales alone.
Sell it. People don’t want to invest in a dream. They want to see your paperwork. They want proof that they are assisting something that’s bigger than them. If you don’t make them feel that way they would always believe you owe them something for how they helped you. Create your merchandise, make your brochure, have a website for goodness sake, anything that’s not on the internet is only barely legit. Have something in hand when you’re speaking to potential investors. It’s not Wall Street, it’s everyday life and you’re speaking to everyday people. You need OPM (Other People’s Money) to get you where you want and many times it’s good to have them all in a room at the same time after you have approached them in privacy. In a chat with Precious Touch, we considered selling ‘shares’ of her start-up to people who contributed money on a small scale. That doesn’t mean going to the Stock Exchange for rights, but convincing ten trusted people to invest in you and assure them that they’ll get their money back. If ten people five you a 100 pounds each you’ll have a 1000 pounds.In one year, you might be able to give them their money with a bit of interest or get them to keep it within the business for another year.
Return the OPM. You’re going to have to give them back their money so let that motivate you to run your business right. Of course they know they ran a risk when contributing to your business but if you want to create a trustworthy business then you’ll need to minimize the disappointment. In many industries it takes a phone call from an important guru to lead to a boycott of your activity. Those early hours Miri was running away from – that was just practise for the next five years at least.
From Twitter: 5 Days of Imperfections Challenge
‘I have slightly asymmetric eyes. I had an accident a while back and the top of my right eye got slashed. But it’s not so obvious.’