If you examine the contents of this blog, you will see that I have been spending a fair amount of time during the past year, taking a look at the option of starting a business in which I plan to offer mobile media promotional services to businesses which want to get the maximum benefits from their advertising expenditures. The more I discover, the more I conclude that such a business is a very good idea.
My main problem has been that I have not had the funds with which to purchase even the minimal equipment with which to get adequately started. I've therefore spent a fair amount of time researching possible sources of funding, including microloans, crowdfunding and more.
Along those lines, I got some extremely good news yesterday when I was in the Haggen grocery store which often serves as my "office away from home" here in Bellingham.
Starbucks, it seems, is teaming up with an organization known as the Opportunity Finance Network, to help provide financing to community businesses that need help. In fact, Starbucks has invested five million dollars in order to furnish that network with "seed money" and in order to get the ball rolling so that they can raise a lot of additional money from a variety of sources.
Five million dollars is some pretty serious money, and given the public visibility of Starbucks, I strongly suspect that that's just the tip of the iceberg in terms of what they are going to be able to raise.
To read a news article about this latest development in business funding, visit http://www.bizjournals.com/philadelphia/news/2011/10/03/starbucks-funding-organizing-small.html?s=print.
That article says the following:
“Based on conservative forecasting models developed by OFN with input from independent economists, one new job will be created or retained for approximately every $21,000 in loans — or approximately every $3,000 in donations,” OFN said in the statement.
Those figures are probably averages. But it depends, really, on the nature of the job. Or so it seems to me.
In some cases, to create a new job, one may need to build a new store or factory. That's a pretty expensive proposition. But there are ways to reduce the cost of creating jobs, depending of course on the nature of the work.
For example, consider the type of business I'm creating here. In order to create a job involving a service which advertises businesses or products via "walking billboards", one merely needs to purchase the proper equipment, in order to be able to provide the specified service to the client.
If you want to mow folks lawns for a living, then you need (at the bare minimum) a lawn mower. If you want to cut hair for a living, then you need clippers, and a chair where they can sit while you're cutting their hair. Duh!
Usually, there are certain expectations on the part of customers, exceeding the bare minimum of expenses. (Yeah, you can cut folks hair while they're sitting at your kitchen table, but that business isn't likely to last very long.)
For a walking billboard business, one can start with "sandwich boards" (non-backlit) or digitally printed banners. In most cases, clients would pay to make those prints, so the main expense related to starting such a business is the cost of making mobile signage with which to advertise the mobile media service itself, so that potential clients can visualize the benefits their own businesses would receive by hiring one's company to walk around in strategic locations, carrying their ads.
I've seen backpack-like units for displaying digitally printed banners, being sold very inexpensively online.
In order to compete with the bigger media companies, one may correctly feel that more or better equipment is needed.
For instance, purchasing backlit backpack billboards would offer a competitive advantage, especially if one wants to be able to offer campaigns which extend late into the hours when the sun goes down. I'm seriously considering the purchase of one or more units from http://www.bpbillboards.com/. Some of those units cost less than $400 each, and even if I were to go with the unit which includes a bicycle, that would still cost less than $1,000. (See http://www.bpbillboards.com/bp_billboard/Products.html.) The benefits do not merely include the possibility of extending the hours of a campaign. There's also an undeniable increase in the memorability of ads displayed in that manner.
Very likely, I'd need a storage unit in which to put such equipment, but at least here in Bellingham, WA, I could procure an adequate 5ft. by 10ft. storage shed for about $52 a month, in other words, $104 x 6, or $624 or so per year. (If I start with the backpack version or the "rolling" version, that storage room will still be needed.)
The printing for the units is an expense, of course, but that can be done from the client's file for $75 or less, depending on which type of unit one plans to use.
So let's say that I get one backpack-based display unit ($349) plus the printing for that unit ($60) plus storage for that unit for about a year ($624, which would probably cover storage of enough units for several people at the very least); that's a tiny pittance, on a per-person basis.
Of course, there's the expense of putting related information on the web, but that can be done very, very affordably, especially if one uses a free template-based blog (as I am doing here) rather than having to pay for web hosting services. There are other expenses, too, but again, my point is that this is the kind of business which can be started very affordably.
To equip an entire street team with adequate equipment, one would obviously need to purchase multiple units, so that each team member would have equipment with which to do his or her job. But the expense of adding each additional team member would be calculated into the price charged to the client. The prices paid by clients would of course be calculated largely on the basis of what would be needed in order to pay employees a fair wage, and also on the basis of anticipated administrative costs and other related expenses, such as business cards. It isn't rocket science.
If any profits were needed beyond what was needed to pay employees reasonable living wages, they would most likely be needed for the purpose of expanding the number of services offered to clients (and in some cases making purchases of expensive products, such as trucks designed to display outdoor billboards). In some cases, there would also be periodic expenses for equipment in terms of replacement costs and/or repair costs, and probably depreciation expenses, in cases where loans were necessary in order to pay those expenses of repair and replacement.
Visit www.EMCOutdoor.com to get a better idea of the types of advertising which are often offered by such companies. One does have to face realities pertaining to what is necessary in order to stay reasonably competitive. But my point is that it seems to take less of an investment to create a new job than OFN seems to think, at least in certain industries and types of businesses.
So how do the aforementioned figures compare with the figures cited by the Opportunity Finance Network? $1,100 or $1,200 is a tiny amount, compared with the $21,000 cited by the OFN.
Notice that the folks at the OFN don't say whether that theoretical job being created with that $21,000 investment is full-time or part-time.
I personally think that the trend towards hiring two part-time people to do what a single full-time employee could do is horrible, since the primary motivation seems to be to save money on employee benefits (and that would be a moot point if the person was paid as an independent contractor in any event), but the fact remains that a part-time job is still a job, and it's certainly better than no job at all. To create a job is not necessarily to insure that the job will bring in enough of an income to pay all of one's expenses. Just ask anyone who's ever worked at a sales job where remuneration comes in the form of commissions only.
Some big things have small beginnings. I intend to seek the maximum of funding when I seek funding from OFN, because the point of that project seems to be to significantly make an impact on the goal of reducing unemployment in America, and it's obvious that a large investment will make more of an impact than a small one. But even if their investment in my business reduces the number of unemployed by one or two people, that in my opinion would be easy to justify, as long as the investment is proportional to the benefits derived from that investment.
