Money from nothing, a commercial test on a shoestring

From traditional sources of fundraising, making money from nothing is extremely difficult.

Community fundraising is possible with committed volunteers.  High value fundraising often requires technical expertise which more often than not, has to be paid for.  Events are great for kicking off long term relationships with new supporters (but generate a low ROI in the short term).  Corporate budgets are squeezes and are looking for relationships which will help them to build their own brands and attract new customers of their own.

Across the board, fundraising is becoming more competitive.

Commercial ventures for charities traditional focus on retail (charity shops), and catering / ticketing for tourism / museum / heritage charities.  Typical costs involved as premises, stock, utilities and staff.

However, I believe that in some circumstances money from nothing IS achievable and with enough tenacity and charm (aka on a wing and a prayer) many things are possible.

Here’s an example of how a little creativity led to a successful venture (plus a couple of ideas you can try for yourselves).

Caffeine fuelled trials

As part of one of my previous roles I was responsible for exploring new commercial ventures.  This was a very exciting prospect but came with a slight drawback; I wasn’t given a budget for it.

I was working for a large national charity at the time with part of its strategy being to decrease its environmental impact.  With a light seasoning of serendipity, I stumbled across a company called Velopresso.

To the untrained eye their product looks like pedal powered trikes with a coffee machine on top.  But I would challenge the person with the least interest in engineering to not get excited by what happens under the cover.

Previous incarnations of a pedal powered coffee shop would be pointless in a country as hilly as ours so the chaps who developed this trike went to work to make something special (and in my mind they completely succeeded).

You cycle it to where you need to be, flick one lever to swap the gears from the bike to the coffee grinder, then pedal to grind the coffee.  No electricity needed!

  • Can it make money – Yes!!
  • Does it have a near carbon neutral footprint? – Yes!!
  • Can I rent it? – officially not (no budget, remember)

I contacted the company and asked for a little more information. I explained that I had no budget, but my thoughts were to allow various sites to use it (for free) with the hope that those in charge are so impressed they buy it and it stays there.

A new unit could then be sent to the next trial site.  Best case scenario they sell some of their trikes.  Worst case scenario they get customer insight and marketing.

I left the call with that suggestion and arranged a meeting.  Face to face is a must for me when developing new relationships.

I was humbled by how quickly they agreed to everything when we met.  I identified trial sites where there was an opportunity for commercial growth, a commitment to effectively trial it and a budget available to purchase a trike should they want it (managing logistics and stakeholder engagement is an area which doesn’t evoke huge excitement in me but is essential to achieve success).

Training, trials and general excitement ensued.

Once operational, the initial nervousness from staff working this new equipment in front of customers quickly diminished, much like an actor once on stage.  Customers loved it and Velopresso gained useful market insight.

Showcasing something different and innovative, as well as building new relationships is always going to be a win.  It shows:

  • we’re listening to our customers’ calls for improved facilities
  • we’re demonstrating our commitment to reducing energy
  • we’re having a little fun along the way

If you build it…

Another request came my way.  A ‘space’ was available next to a busy cycle path and they wanted a kiosk (or similar) from which they could sell refreshments.  Can I make something happen?

My experience told me that the space on offer wasn’t big enough to maintain a stand-alone business but had potential as a satellite for an existing enterprise.

The charity didn’t want to manage a new, small business themselves and approached me thinking that as their regional expert “surely you have a list of external people waiting for such an opportunity?!!”

My proverbial little black book has never (and will never) have a list of people just waiting for me to call them with a money-making proposition.  I’m sure that as fundraisers, you’ll relate.  But I was open to the idea of building new connections with people who might be interested.

Located less than a mile from a moderately busy seaside town, I took a stroll and started walking into cafes and bistros which, from the outside, had a similar ethos to the charity.  I explained the situation and asked whether it was something they would consider, or whether they knew someone who might.  I was amazed at how keen people were  to engage.

Within one afternoon I had 3 people eager to explore the opportunity further.  By the end of that week I was up to 7 from people who’d had my details passed on.

I arranged a day viewing the site which was followed up with expressions of interest.

From nothing more than a space, we had a tenant paying rent on a piece of land within a couple of months.

So, what are the steps?

  • You don’t need to know the answer, just talk to people about the situation. Options will grow.
  • I usually open with “Hi, I’m Tony and I’m hoping you might be able to help me with a little problem”.  I’m sure there are sales gurus out there who will tell you to talk about the opportunity you’re offering the other party, but that’s never going to be my style.  If a potential collaborator ‘gets’ the opportunity then great, that’s for them to see, not for me to tell them.
  • Show an air of conservatism around the outcome.  Collaborators will naturally have this, so by demonstrating it yourself you will give them the confidence that you’re pragmatic and professional.
  • Show flexibility.  All new ventures require this so stay malleable throughout
  • Think about additional support you can offer.  I had access to suppliers with preferable rates and they were willing to share those with our collaborators.  I also offered my time to do a business review to support them with their whole business.
  • Start with a win-win attitude.  If you believe in a shared outcome people will see this and will be more likely to buy into a collaboration.

Sanity check – things to keep in mind

  • If you’re creating something new be open to your initial outcome becoming just a step to something bigger/different.
  • It’s not all about time.  These projects were initially completed through a few phone calls and a couple days out of the office.
  • Now you’ve created something don’t let it go.  You’ve spent time building a relationship so maintain it.   A quarterly phone call will go a long way.
  • Try to find the fun in this; it can be joyfully creative. Thousands of years of fearing strangers is built into our DNA so walking up to people you don’t know is not natural.  Practice will make you better!
  • Keep your eye on the bottom line.  This is about making money for your cause, don’t get too carried away with the creativity.
  • As always, don’t make perfect the enemy of good enough.

Thanks for reading!

Tony

 

Tony is LarkOwl’s Commercial Development expert.  He can help you to set up new commercial enterprises or to make existing income streams more profitable. 

Email him tony@larkowl.uk if you’d like to discuss opportunities for your charity. 

 

 

Posted in Commercial fundraising.