My brother and I want to open a hookah lounge this fall near the college campus I just graduated from and where he's currently enrolled. There is no direct competition, it would be positioned on a main street, and the university has approximately 6,000 students. I have my business plan and financial projections developed. I've researched legal licenses, wholesalers, etc. I have a location I'm looking at and will be contacting the owner soon.
The main problem I face is funding. I likely won't be able to take out a loan myself, though it's possible that between myself and my partner we can raise $5000 in personal/business/micro loans. Startup costs are between $20,000 and $30,000 depending on cost of rent and how many months of rent we decide we need upfront (9-12). If we really wanted to push it we might be able to get buy with around $17,500 to launch.
I'm considering a local crowdfunding campaign and was looking for feedback on feasibility, strategies, resources, and any general insight you guys can offer.
Crowdfunding the business will be especially challenging since service-based businesses don't perform well, and local campaigns immensely reduce the number of potential contributors. There also isn't much of a crowdfunding scene in my city. And I'm targeting college students. That said, crowdfunding is the only financing option that I consider feasible at this point, though I'm open to other options. I plan on marketing the crowdfunding campaign directly to students.
Thoughts? Right now we're considering putting together a startup team of friends still enrolled at the university to help promote the crowdfunding campaign directly to students at the start of the school year. It would be heavy on social media, flyers, speaking to student organizations, and directly talking to students. Contributor prizes would vary, but would largely include semester-long membership passes, private parties, pre-purchases of discounted smoke sessions, naming the in-house flavor, being entered into a raffle for various awards, and so on. My concern is that this approach will be insufficient. What approaches/strategies do you have for marketing something like this to college students? How much of a long shot is it really? I believe the key here would be to develop strong word of mouth and to truly hype the campaign/lounge.
Due to the challenges of a local crowdfunding campaign, I was considering offering items our business will be able to get at a wholesale price to contributors from outside my city. This would be to grow our potential contributor base. This would be things like electronic cigarettes, e-cig juice, hookahs, and shisha, which would be marketed to e-cig and hookah smokers online, in topical blogs, forums, and social media pages and groups, and would be sold near the market price (slightly below, at, or slightly above?). This of course would increase the needed goal amount as there would be overhead costs for these pre-purchases. Is this a good/bad approach to overcoming the local issue? What other ideas do you have?
Overall I guess I'm just looking for your perspective and advice on funding this venture through crowdfunding. I'm looking for strategies to successful raise at least 75% of the startup costs via crowdfunding or through alternative funding options. I'm looking for crowdfunding strategies for a small business that's local and service-based. I believe there's unmet demand and I'm confident that if we can find a way to raise our startup costs and launch it that it'll be successful. My projections have us breaking even in 3-4 months, and that's from hookah session sales alone, not including selling drinks, snacks, electronic cigarettes, e-cig refills, other tobacco.
Any insights, strategies, or resources specifically on crowdfunding a service-based business at a local level would be especially appreciate. Constructive criticism is also welcome.
For your time:
Thanks Guys
The main problem I face is funding. I likely won't be able to take out a loan myself, though it's possible that between myself and my partner we can raise $5000 in personal/business/micro loans. Startup costs are between $20,000 and $30,000 depending on cost of rent and how many months of rent we decide we need upfront (9-12). If we really wanted to push it we might be able to get buy with around $17,500 to launch.
I'm considering a local crowdfunding campaign and was looking for feedback on feasibility, strategies, resources, and any general insight you guys can offer.
Crowdfunding the business will be especially challenging since service-based businesses don't perform well, and local campaigns immensely reduce the number of potential contributors. There also isn't much of a crowdfunding scene in my city. And I'm targeting college students. That said, crowdfunding is the only financing option that I consider feasible at this point, though I'm open to other options. I plan on marketing the crowdfunding campaign directly to students.
Thoughts? Right now we're considering putting together a startup team of friends still enrolled at the university to help promote the crowdfunding campaign directly to students at the start of the school year. It would be heavy on social media, flyers, speaking to student organizations, and directly talking to students. Contributor prizes would vary, but would largely include semester-long membership passes, private parties, pre-purchases of discounted smoke sessions, naming the in-house flavor, being entered into a raffle for various awards, and so on. My concern is that this approach will be insufficient. What approaches/strategies do you have for marketing something like this to college students? How much of a long shot is it really? I believe the key here would be to develop strong word of mouth and to truly hype the campaign/lounge.
Due to the challenges of a local crowdfunding campaign, I was considering offering items our business will be able to get at a wholesale price to contributors from outside my city. This would be to grow our potential contributor base. This would be things like electronic cigarettes, e-cig juice, hookahs, and shisha, which would be marketed to e-cig and hookah smokers online, in topical blogs, forums, and social media pages and groups, and would be sold near the market price (slightly below, at, or slightly above?). This of course would increase the needed goal amount as there would be overhead costs for these pre-purchases. Is this a good/bad approach to overcoming the local issue? What other ideas do you have?
Overall I guess I'm just looking for your perspective and advice on funding this venture through crowdfunding. I'm looking for strategies to successful raise at least 75% of the startup costs via crowdfunding or through alternative funding options. I'm looking for crowdfunding strategies for a small business that's local and service-based. I believe there's unmet demand and I'm confident that if we can find a way to raise our startup costs and launch it that it'll be successful. My projections have us breaking even in 3-4 months, and that's from hookah session sales alone, not including selling drinks, snacks, electronic cigarettes, e-cig refills, other tobacco.
Any insights, strategies, or resources specifically on crowdfunding a service-based business at a local level would be especially appreciate. Constructive criticism is also welcome.
For your time:
Thanks Guys
