Replies to This Discussion

Permalink Reply by Laurence Finn on April 26, 2010 at 18:21

Had a big bite from a UK investor, referred to me via a US Investor - who saw our blog on Silicon Cape.

• ▶ Reply

Permalink Reply by Justin Stanford on April 28, 2010 at 17:27

Great to see the Silicon Cape website facilitating stuff like this :)

• ▶ Reply

Permalink Reply by Rory Magee on April 28, 2010 at 23:44

Hey Laurence,

I like the idea that you have, great offering (luxury products) and great target market (women with money to spend! :) ).

I have a few questions that I'd be interested in knowing the answers to:

1. How do you plan to earn money with this business? Apart from the yearly membership fee, advertising on your website and potential referral money from local businesses on the special deals offered, franchising, how would the business be monetised?
2. Hosting the events looks like a costly endeavour, how would you make money from hosting these events?
3. How large does your userbase need to be to for the business to break-even?
4. What will you have to offer to ladies that are non-paying members?
5. How do you plan on gaining the attention of and selecting your franchisees?
6. How do you plan on advertising and promoting countrywide, online and offline?

The franchising part looks to me like it would probably be one of the more significant hurdles to overcome. To offer something to franchisees, you'd need to have a proven business model with predictable revenues for the franchisee. People wouldn't be likely to take the chance on an unproven idea. Also, it seems as though this idea is going to require very careful selection of franchisees due to the amount of personal involvement that the franchisee will have with the customers and the wide variety of skills and attributes that they'd need in order to run a franchise like this successfully. This isn't like a MacDonalds where there's an easy-to-duplicate method and the franchisee can have lots of employees doing the brunt of the work. Essentially, in my mind it seems as though the franchisee is buying in, only to become what essentially amounts to a one-woman business?

The other question of importance is the equity stake that you'd be willing to offer for R600,000. But I won't ask that to you, since that's for you to discuss with potential investors.

I like your idea and think that it's great that you're offering this to women. I wish you the best of luck!

BTW: Anybody asking for money to be transferred via Western Union is 99% of the time likely to be a scammer.

Cheers!

• ▶ Reply

Permalink Reply by Laurence Finn on April 29, 2010 at 19:56

Rory, thanks for the message. Yes, we are on a very exciting road trip and the interest in the business is growing rapidly.

To answer your questions:
1. Income from members is earned via an initial sign-up fee (R120), then R100 per month (the membership fee). Most importantly this is a re-occurring income, earned monthly. We also have revenue opportunities from advertising and sponsorships.
2.Our ten year event experience pays dividends in this area. We host events at a zero rated cost to the company. The chosen venue benefits from exposure, food & drink sale. We do have to pay for our prizes, but who minds giving away R10K prizes if you are generating R50K in return - its a no brainer !
3.For an area to break even we need a minimum of 100-members.
4.Non-members can attend our events as guest, they till pay R100 - but they get to taste the "Fun Factor", & win prizes.
5.We will gain franchise exposure at franchise exhibitions & other hand picked exhibitions. We have a professional communications company on-board who will assist me, when targeting specific areas. Selection of the franchisee is of major importance, that is why I am head hunting a M.D from a current franchise operation.
6. Advertising & marketing will be both online & offline - however, in South Africa offline has more success, we are taking advice from other Franchise operations who are not competitors. I also have excellent relationship with two major national magazines, who have massive footprints within my target market.

I take your point on franchising. What is exciting is that we can show the growth - yes, we are not recognised as a proven business model however one of my colleagues has just grown his franchise operation from a start-up company to 67 franchises in fourteen months. He sold his franchises at R48,000 & the average franchise owner is earning R14000 per month.

With his permission I have just researched all 67 franchises, directly to their thought process behind investing into a non-proven franchise & why did they do it ? The response was very interesting & logical.

Thanks
Laurence

• ▶ Reply

Permalink Reply by Vuyolwethu Bokwe (Vuvu) on June 25, 2010 at 14:21

Hi Lawrence,

I am interested in helping. Send me an email if you still need help.
www.lgccapital.co.za

Rgards,
Vuvu

• ▶ Reply

Permalink Reply by Laurence Finn on June 25, 2010 at 14:34

Thanks Vuvu,
Very interested to have a chat.
I have sent you a email to vuyo.bokwe@lgccapital.co.za

Thanks
Laurence


Vuyolwethu Bokwe (Vuvu) said:

Hi Lawrence,

I am interested in helping. Send me an email if you still need help.
www.lgccapital.co.za

Rgards,
Vuvu

• ▶ Reply