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How to start a business for good—on a really tight budget
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How to start a business for good—on a really tight budget
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How to start a business for good—on a really tight budget
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Articles
29 July 2015

How to start a business for good—on a really tight budget

An unconventional business can’t be built by conventional means.

Written by Jane Marx

Behind extraordinary ideas, there are extraordinary people. Dumbo Feather is a magazine about these people.

Three years ago, my husband Francois and I decided to start a social enterprise café, Long Street Coffee. Our dream was to help young, newly-arrived asylum seekers and refugees find their feet in Australia by offering them paid training and employment opportunities in the hospitality industry.

Although it seemed to us a pretty straightforward, simple solution to a social problem—especially since we have 20 years’ hospitality experience between us—the road to getting the doors open has been anything but.

At the time of writing, we’ve only been open for five weeks, but thinking about the three years it took to get to this point, I feel like I’ve learned a lot about building something from nothing with almost no money!

An eternal optimist, when we started working on Long Street, I was determined that we would open within six months. Instead, by this time we had no more savings left—and we were far from opening our doors. After a few months spent running in all the wrong directions, we took some time out to make two decisions that would be vital to our overall success. They became our first big lessons.

Lesson one: Get the business model right

We ended up changing the business registration for Long Street from a not-for-profit to a traditional business model. In terms of securing funding, we found nothing advantageous about being a not-for-profit. We originally registered Long Street in this way, hoping it would make our intentions clear, however without a trading history or support from a well-established charity, we were not eligible for most grants.

Lesson two: It’s easier to pitch a reality than an idea

We found it difficult to sell Long Street to potential supporters when it was simply an idea. Repeatedly, people wanted to see what we were talking about. So we decided that Long Street would have to be built in stages. Stage one would be a pop-up, where we could take photos and video footage of the café in action and then attempt to get support based on something more tangible.

Thanks to a grant from The Australian Women’s Weekly, the only people to support Long Street as an idea, we were able to run a pop-up café at St Jerome’s Laneway Festival in Melbourne in 2014. From that point things began to take shape. But we still needed a permanent home.

Lesson three: If you’re trying to achieve something unconventional, chances are you will need to think beyond the conventional path to get things done

The 18 months after the pop-up were gruelling and frenetic. Searching for a café location via real estate agencies, it became obvious that we couldn’t afford anything, let alone something suitable.

It wasn’t until we started looking at studio spaces and sub-letting under existing businesses that we began to find potentially great places. We ultimately secured our dream location in a garage, down a laneway in the inner-city Melbourne suburb of Richmond.

Once we signed the lease, financing the fit-out of the café was the most difficult yet also the most rewarding stage of the start-up process. We spent months fruitlessly trying to secure capital and support from councils, not-for-profits and well-known philanthropic foundations.

So we changed tack and identified three possible ways of getting funding: increasing our working hours and investing as much of our own money as possible, entering competitions aimed at start-ups, and crowdfunding.

Lesson four: If you don’t have money, time is your biggest asset

We signed a lease and so began successive months of working 60 hours a week in our café jobs to cover rent on the place while we cleaned and painted at night and searched for more money to fit out Long Street.

We started by determining what we would need to pay for, what we thought we’d be able to ask people to contribute (be it a product or their time), and what we would be able to do ourselves. Initially, we budgeted for a cabinet maker to create our furniture, but we soon realised that was out of reach and we would have to learn to build everything ourselves.

While this saved us a significant amount of money, it cost us lots of time. So what we wrote for each category in the list changed dramatically, but it nonetheless helped us form an idea of how much money we might need and what kind of timeline we should aim for.

Lesson five: Ask for help from people who “get” what you’re doing (and stop trying to convince those who don’t)

The best revelation to come out of those months was that people we never expected to support us, did. A stonemason donated $8,000 worth of stone for our bench tops, a local fire safety company gave us fire hydrants and we met an architect who spent what would have amounted to weeks drawing our furniture designs and floor plans.

We have had paint donated, worked with a community-minded plumber who we are greatly indebted to and received free legal advice on multiple occasions. A serious lack of funding meant we had to always be open-minded about who we approached for help. The beauty of that now is that Long Street was only made possible by everyday people who lent a hand (or many).

It was in the hope of gaining more of this kind of support that we launched our crowdfunding campaign, Brewing For Change. It was pretty much the antithesis of our other (unsuccessful) funding attempts. When we were trying to secure funding from traditional sources, not only did we walk away from a lot of meetings and lengthy grant applications empty-handed, we also faced a lot of people who were either outright critical of the idea or simply doubtful that we could pull it off. Our age, inexperience, lack of connections and finances, and, worst of all, the possibility that people would not want to be served by asylum seekers, were all flagged as potential weaknesses in our business plan.

Essentially, the crowdfunding campaign was always going to be our best option, because the only time the message of what we were doing was easily understood and supported was when we talked to people outside of not-for-profit and government realms.

Brewing for Change was a success—we raised $18,746 dollars, largely from people we had never met. We prepared for the campaign for nearly six months in advance and were only successful because we pulled together the hardest working, most committed, generous and talented people we could find.

Customers of ours have since marvelled at how “we” pulled it off, the implication being that it was just Francois and myself. However, the campaign was worked on tirelessly by a professional photographer, a filmmaker, an illustrator, a business analyst and a marketing strategist, none of whom we knew beforehand, all of whom volunteered their time.

Lesson six: It’s worth it when the doors are open

The doors are now open, our first two employees are happy and learning at a good pace, and we have more support than ever. However, we are still running on the tightest of budgets and the nature of our business means that we will always need to find ordinary people to help us achieve the extraordinary.

Reflecting on the past three years, the most vital lessons we learned were that that an unconventional business could not be built by conventional means and, most importantly, that a lack of funds can be substituted for by an abundance of good people.

Jane Marx

Jane Marx is the co-founder of Long Street Coffee. It’s open for business Tuesday to Sunday, 8am to 4pm in Richmond, Melbourne. Stay up-to-date by following Long Street on Facebook and Instagram.

Feature image by Andreas Weiss

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