Go ‘Fund’ Yourself (Step 5)

Idea one- A Gym

One of the soon to be founders I spoke with yesterday wants to start a cool, gritty, cross fit gym. Think urban, raw, get work done kind of vibe. The equipment startup costs are around 100k. 100k just to start is a lot of money. We discussed that the average members all in represents about $200 in revenue per month. They live in a tier 3 city, so the population is large enough to support this concept but not so large that they would be 1 of 500 places.

Even if that is the case, I advised going for it because quality and passion will always attract who you are looking for. The founders passion is to have direction over the content but also scale to where they are not the ONLY instructor.

Here is the concept on how to launch:

Step 1: Incorporate and locate a space that would work for the gym.

Step 2: Figure out your membership goal. Lets say the gym is $2000 a month. You plan on hiring at least one person to run the actual gym, and you will start training for the time being to get it going. Your staffer may require $1600 a month, and you would like to replace your current salary of $4500 a month. That creates a burn rate of $8100. You should also factor in things for the gym to keep it nice. So let’s call the burn rate an even $10k a month.

$10k / $200 = 50 clients.

But you also need $100k for a total build out and to make your vision come to life.

Here is what to do next. You have not incorporated (figure $1000 tops) and you found the gym.

Next step would be to launch a site about what you want to build. Pour your heart into the content. Create videos, blogs, social media posts about what you are making and how people can sign up and get involved. Focus on your local demographic as much as you can. Try to get press, open a Kickstarter campaign, etc.

Now, here is the important part. Do a “you built this house dinner”… invite as many people as you can find in the area. Host it at your gym. If you have not leased the gym yet, ask if you can rent it just for an event. Most likely it won’t be an issue. If it is, find another venue…do not let it stop you.

Have the dinner and event catered by friends and potential vendors of your gym. Tell them you will cover their costs but to give you a high price and chalk it up for marketing.

At each table is a brick. The concept is each person buys a brick for $500. This brick will be etched with their name and will be a part of the actual wall.

400 bricks = $100k. The brick could be a brand partner, a vitamin brand, or a member.

IDEA 2, a Second Income play.

The founder loves Pinterest. Specifically, she loves creating custom and creative birthday parties for kids. The problem is most parents just do not have time to create pirate treasure out of cookies or build a pho formal tea area. This is where this founder comes in. After talking, we learned that her income goal was about $1000 a month. What could you do with an extra $1000 a month? That’s $12k a year.

A secondary issue is the desire not to work EVERY weekend. This is a matter for a party planning company, but it also creates an interesting marketing angle…scarcity.

The way to launch is simple:

1. Incorporate and build a Squarespace page with all of her existing birthday parties that she threw for her kids.
2. Create Pinterest with how to guides on how to do it yourself.
3. Put the word out to all of her friends within the area that if they refer someone they know is having a birthday that they would get a special discount when their child’s birthday rolls around.
4. There are tons of marketing ideas she can do, but the most powerful will be through earned marketing. This will come with her always taking photos of what she is doing, each custom item, each new creative thing she creates for her portfolio to draw from. Couple that with referrals and only having 3 Saturdays a month available. Selling out for the month will be a breeze.

How does she achieve the $1000 a month? By charging materials + $345 per party. This puts her parties within the $4-$800 range which is fairly standard for planned birthday parties once you factor in the bounce house.