Fundraising
Name:
Institution:
The goal
Starting a business is one of the most fulfilling yet challenging things that a person can do. A business allows a person to be self-employed, meaning they are more in control of their lives than they would be when employed. However, many people get into business with the idea that they will devote a few hours to their business and have the rest of their time free. This should not be the case at all. Businesses are perhaps even more demanding than being employed. During the early stages, especially, business owners will find that they have to devote a lot of time and effort into launching operations (Aronson 2019). Some businesses may not be quite as profitable during the first few weeks or months, but this is mainly due to the costs of setting up a business. With all these in mind, a team of two colleagues and I have come up with the idea of starting a cleaning business.
Finances lie at the core of any business. We plan to start a small cleaning company with three employees, then get more as the business grows. Before settling on the cleaning business, we explored a variety of other businesses but settled on this one because it is quite cheap to set up. We estimated our starting costs at $5000 for the first year. This is the amount that we need to raise to cover the first three months of operation before our company begins to make a profit. This is, therefore, the goal of our first fundraising that will cover basic things such as permits, purchasing equipment, insurance, and labor costs. Over the next four years, we project significant growth in our business; therefore we shall need a lot more money. For example, in the second year of business, we estimate costs of $20000, but the revenues from the business will cover these and leave us with some profit.
The mission
The mission of our organization is to make homes and commercial spaces as hygienic as possible for their occupant. In the case of homes, most working people have very little time in their schedules to thoroughly clean their homes as frequently as they would like. This is why our cleaning company comes in to make the lives of such people easier. Everyone dreams of a clean and organized home, but some may not have the time to make this dream a reality on their own.
To begin, we will register a limited liability company to reduce liability on the owners of the company. Another reason why we chose an LLC is that there are several partners in the business, and that puts a sole proprietorship out of the question. The first cost is the registration of the company and getting the necessary permits (Hofreiter & Huemer 2005). The average cost of licenses and permits is roughly $400. Insurance is also an essential part of any business, considering there might be damages to property during the cleaning exercise. Monthly insurance costs amount to$400, given the small number of employees as well. Cleaning products are the core of the cleaning company, and these include mops, dusting supplies, brooms, cleaning solutions, gloves, cleaning uniforms, disinfectants, paper towels, among others, these will be purchased from a local janitorial store at an estimated monthly cost of $1000. Estimating average weekly hours at fifteen for each employee, labor costs amount to $1500 per month using hourly wages of $12.Advertising is another crucial area, and we will devote $400 monthly towards advertising using posters, flyers, and online ads. Estimated monthly revenues for the first three months are $5000, leaving the company with a profit of $1300. With an increase in the number of working hours, profit margins will increase as revenues grow more as costs rise marginally.
The Tactics
The main ways that we will use to raise funds for our business are personal savings, as well as donations from family and friends. My two partners and I have been saving up for the cleaning business for six months, and each of us has managed to come up with $500. This leaves us with a $3500 deficit to finance our business plan. Saving money to start a business is vital for various reasons. The first reason is that the business owners take their business seriously, knowing that they devoted their own money to start the venture. It also shows potential investors that we believe in our own idea, and we are willing to put our own money into it.
Participatory fundraisings will be our primary means of getting our friends and family to contribute towards our business idea (Ley & Weaven 2011). To do this, we plan to hold a cook-off at one of my partner’s homes. Everyone loves food, and most people believe that they are the best cooks ever. A chili cook-off is sure to attract a sizeable crowd, and we will have an entry fee for each of the contestants. One of our friends who owns a restaurant offered a reward of a dinner for two for the winner of the contest. This prize will be a motivator, although everyone knows that the main purpose of the whole exercise is to raise money for our business. Other attendants can also drop off their donations during the cook-off. We also spoke to our parents and other people we consider to be major donors to our efforts, and they agreed to make up for what remains after the chili cook-off. An advantage of the cook-off is that it does not require much resources.
The Timeline
We plan to launch our business in the fall, on the first of September 2020. This gives us ample time to plan and get everything in order. The cook-out will happen on the fifteenth of June; therefore, we will need to inform people about it a month before that. Because most of the attendees will be friends and family, spreading the word will be quite easy. We will send out texts to each person we want to invite, tell them about the exercise and ask them to bring other people who might be interested in supporting us as well.
The venue for the cook-off will be one of our business partner’s homes, and he already spoke to his family, who gave the okay. We will need some chairs and tents for the event, and these will be hired from a local company. We already set up a tentative date with the company, and we will make the final confirmation two weeks to the events on the first of June. For entertainment, one of our friends, who is a DJ, agreed to render his services for free as part of his donation towards our business idea. The music will keep the crowd entertained during the cook-off. Entrants to the cooking competition will register with one of the partners by the end of May. With the goals, mission, tactics, and timelines covered, the fundraising is well-organized, and we can keep up to speed with all developments.
ReferencesAronson, R. L. (2019). Self employment: A labor market perspective. Cornell University Press.
Hofreiter, B., & Huemer, C. (2005, October). Registering a business collaboration model in multiple business environments. In OTM Confederated International Conferences” On the Move to Meaningful Internet Systems” (pp. 408-420). Springer, Berlin, Heidelberg.
Ley, A., & Weaven, S. (2011). Exploring agency dynamics of crowdfunding in start-up capital financing. Academy of Entrepreneurship Journal, 17(1), 85.
