Business today is all about Angel Investors and Crowd Funding to raise capital for your start-up. I think those are great options for some businesses but not all of them. In 2008, at the start of the recession, I began a cleaning company, for two good reasons. They were to create a semi-recession proof job, which it was, and for the cleaning company to create other businesses.
As of today my cleaning company has helped create two other companies. The first was a cookie company, which seems random but it makes sense. Holiday gifts we’re a big deal to me and I wanted to give a nice, edible gift to all my cleaning clients. So my business partner and I made an awesome recipe and packaged them in Mason Jars. It was such a hit, it became it’s own company due to the demand that those gifts created.
That is where the incubator part comes in, my cleaning company purchased cookies for clients and thank you gifts. So right away, the cookie company had some volume of sales and advertising exposure. The most important part was the cleaning company then provided micro-loans to my cookie company. With the small profits we had doing cleaning we could afford to invest that money, structured as a short team loan.
So when you’re thinking of how to raise funds for your business, maybe there is another business you can start to get you started down the entrepreneurial path. Cleaning wasn’t always the glamorous job I wanted it to be but it was the first step to take in order to build other companies. Plus the experience you have along the way just helps to make your future companies stronger. You can learn from mistakes you made with one company and prevent problems from happening in others.
Other things to consider when creating this incubator company are that the business model must have low overhead and minimal barriers to entry. For example, a cleaning company really takes only a bucket of supplies, insurance, and a couple of clients to make money. Start with the idea that can generate enough cash-flow in a short period of time. Then all you have to do is hustle, provide great service and soon you'll be able to start another company with that cash flow.
Today, the cookie company and the cleaning company have strong sales and both are better off because of this set-up. Self-funding an idea isn’t always easy but if successful it can help you create multiple sources of income along with a multitude of different experiences.