How to fund a great innovative idea?

Easytisement

Hi you all. So glad that I found this forum. Hopefully I can get some ideas or advice here. I am a business owner based in Dublin (I write radio ads) but I have developed a great business idea which has no competition so far but it has a huge demand. I have researched and developed it over years and would now like to follow through. I just don't know how to get it funded. It is a rather small investment (around €10,000) since I already have purchased most of the equipment already. Most investors I contacted like the idea, but it wouldn't have enough profit for them to invest in it. Now I came across the website indiegogo and would like to hear some thoughts, if you think websites like that can work for gaining business funding. There you can also see the idea I have (just search for "holiday recording studio"). Hope to hear from you guys!

Cheers!

riveratom

Easytisement wrote: »

Hi you all. So glad that I found this forum. Hopefully I can get some ideas or advice here. I am a business owner based in Dublin (I write radio ads) but I have developed a great business idea which has no competition so far but it has a huge demand. I have researched and developed it over years and would now like to follow through. I just don't know how to get it funded. It is a rather small investment (around €10,000) since I already have purchased most of the equipment already. Most investors I contacted like the idea, but it wouldn't have enough profit for them to invest in it. Now I came across the website indiegogo and would like to hear some thoughts, if you think websites like that can work for gaining business funding. There you can also see the idea I have (just search for "holiday recording studio"). Hope to hear from you guys!

Cheers!

-So you're saying the idea has huge demand but no competition?

-And even though there will be huge demand, there isn't enough profit in it to attract investment from people who actually like the idea.

-And the investment is actually relatively small? (which it is)

Kind of begs the question, why is nobody doing this already in light of the above three points....?

Easytisement

Hi Riveratom:
-The reason I know that this has huge demand is, that I have done researched it for at least 2 years. Started when I lived in Germany and continued after I got here. I asked people on several forums and found out that this would be something they are interested in. They just don't want to take care of everything and that's why I offer it as a package.
Investors are usually looking for the next "Google" or "Ebay" which this most certainly won't be. It's is just me running it and basically there is no expansion to expect. I can only handle so many artists in a week.
The investment would be a lot higher if all the equipment has to be purchased. The reason why I am only looking at a small investment is, that I already have most of the equipment. I have a recording studio in my home. Enough for my current needs, but not enough to record bands (right now it's basically just a digital vocal studio).
Well, why is nobody doing it already. I don't know! I know there is something like that in Jamaica shooting for US artists. And I think I have seen it on the Canary Islands, but they are priced well above the quotes I have calculated so far. Why is no one doing it in Ireland. Well, for this you have to be multilingual, be a musician, gotta have know how in recording, mixing and mastering and you definitely need to have personal relationships in Germany (since that's where the bulk of customers are coming from for this business).

If you have any advice for me please do let me know. You can of course PM me if you prefer.

amen

I asked people on several forums and found out that this would be something they are interested in.

Sorry but thats not research. Research is looking at any current competitors and if none figuring out why not. Determining how many people will purchase based on a proper random sample of the population. Figuring out repeat business, how you are going to distribute etc

Easytisement

As I said, I did not find any competitors in the UK or Ireland and the reason for it is pretty clear to me. Why would a German speaking sound engineer open a studio in Dublin for German speaking clients if he can probably do more money if he opens it in Germany. He would not have to relocate and people in Germany will use his studio anyways because they have no choice. I also tried to find out, why musicians in Germany don't go to Ireland or the UK for recordings (and I am talking about the musicians that are on amateur level, the pros do go somewhere else) and the main concern is that they cant express what exactly they want in the studio since English isn't their first language.
I am looking at several distribution channels. First of all I need advertisement space on all relevant music forums in Germany. That will probably be the most successful way. But also plain SEO. Since there is nothing like it on offer right now, it shouldn't be too hard to get a good ranking on google.

riveratom

Easytisement wrote: »

Hi Riveratom:
-The reason I know that this has huge demand is, that I have done researched it for at least 2 years. Started when I lived in Germany and continued after I got here. I asked people on several forums and found out that this would be something they are interested in. They just don't want to take care of everything and that's why I offer it as a package.
Investors are usually looking for the next "Google" or "Ebay" which this most certainly won't be. It's is just me running it and basically there is no expansion to expect. I can only handle so many artists in a week.
The investment would be a lot higher if all the equipment has to be purchased. The reason why I am only looking at a small investment is, that I already have most of the equipment. I have a recording studio in my home. Enough for my current needs, but not enough to record bands (right now it's basically just a digital vocal studio).
Well, why is nobody doing it already. I don't know! I know there is something like that in Jamaica shooting for US artists. And I think I have seen it on the Canary Islands, but they are priced well above the quotes I have calculated so far. Why is no one doing it in Ireland. Well, for this you have to be multilingual, be a musician, gotta have know how in recording, mixing and mastering and you definitely need to have personal relationships in Germany (since that's where the bulk of customers are coming from for this business).

If you have any advice for me please do let me know. You can of course PM me if you prefer.

Hey OP,

Would it be the case then that there is demand in Germany but not here? Alarm bells ring when you say 'there is no competition but huge demand'. If you were saying 'there is no competition, but based on talking to people who would actually pay for my product, there is a demand', then that would be hugely different. You could ask anyone anything on a forum and they will probably tell you they would be interested, because they might want to just be nice and support or encourage you.

That's not market research, that's a mini-conversation.

Not all investors are looking for the next Google or ebay, they are looking for a return on their investment. If your idea is showing promise in the form of solid market research, a customer or two, or some revenue flowing in already, then you will have a much greater chance of securing investment.

Have you spoken to many people who have said they would use your service / product? That would be the first step for you I think.

Investors arent really looking for the next google, they are really looking for an exit strategy and how fast they are going to get their money back and how much profit. If you can clearly demonstrate this as a profitable opportunity then you will get some preliminary interest. It doesnt have to making people billions. 25% a year on their investment might be enough.
If your product or service is unique or protected in someway that you can't be copied easily then that is a further tick for an investor.
Mostly with an idea at this stage and no patent/sales an investor will be investing in you personally. If you are believable and your pitch is good enough 10K should be easy enough for you to get if the profits are there

Easytisement

Thank you all so much for participating in this so much. One thing I love so much about Ireland. People really try to help each other over here.
@riveratom: yes, of course there is demand for this in germany. for german customers that would do a trip to dublin. irish artists wouldnt need a packaged trip to ireland to record their music. They can book the studio themselves and sleep at home :-)
People in Germany generally don't try to encourage you in forums (kind of a rude country, doesnt apply to me though... have lived out of Germany for long enough ;-) ). Its not only that I asked on forums people if there is a demand. i asked local artists i wrote songs for why they dont record it in the uk or ireland and they said the same thing... the language. and i didnt tell anybody about the business idea on forums. i just generally asked why they dont go abroad for recordings. so there would be no reason for them to be "nice" or encourage me to do something...

@elrifle: I know there are investors that would invest 5000-10000 euro but I just havent found one yet. here is a quote from an investor i did find:
..."the idea is very interesting, as you seem to know both markets well. Some thoughts which spring to mind:..."..."Best regards and let me know how you get on. (By the way, we tend to invest in companies that are larger and, typically, older)..."

to me it seems that most companies invest in it, and this is definitely not it related.

yeah you see you are looking for a very small amount essentially, so typical professional investors might not be bothered with it. For that amount it might be better approaching friends or family or you might want to try crowdfunding on sites like www.symbid.com. Or if you have the stones get multiple credit cards and put the money together somehow. If your young and it fails, 10g's isnt the end of the world for you, you'll always be able to bounce back!

Easytisement

Thank you El Rifle! I know that it is a rather small amount. Friends and Family are helping as much as they can. I know that 10g is not difficult to bounce back from and I will keep that option with the Credit Cards and Loans open as a last resort. Now, talking about the crowdfunding. That was my original question. Do you believe something like that works? Has anyone tried it yet? If so, what was your experience. I am on indiegogo (just search for "Holiday Recording Studio") but I really don't know if something like this would actually work...

If you check out that site you'll see the ones that have received funding and of course many have not. All depends on the idea and what your offering in return!

Peterdalkey

Do you have a worked business plan with numbers, if so I might be interested. I have a sales office in Germany for over 20 years and am well aware of the attractions of Ireland for German people, especially when it comes to music and nature.

Cheers

Peter

Sacksian

Hi easytisement,

Unless I've misunderstood your entire offer - are you basically just offering a residential recording studio?? In which case, there are many, many residential studios in Ireland, the UK and throughout Europe.

So, it's not at all an innovative idea. Most good studios, and many budget ones, offer accommodation or can organise accommodation locally for musicians.

Not only that, but, for any serious bands/musicians, you will be competing against other places in terms of what you can offer them as a studio, not as a travel agent. You will struggle to compete on reputation, equipment and cost. Many years ago, I was in a band that travelled to France to record in a residential studio for two weeks (the reverse of what you're suggesting).

For an equivalent residential studio in Ireland (which there wasn't really), it would have cost at least twice what we paid. In addition, we had an engineer/producer who had actually recorded some records that we knew and liked.

So, we got a high-end studio for two weeks, including engineer, accommodation and food, for about half the price we would have paid for its equivalent in Ireland.

Three things were important to us: reputation, equipment (this studio had very expensive bespoke analogue equipment) and cost.

I find it hard to believe that a studio based in Ireland can undercut a studio in Germany where daily rates and the cost of living are cheaper than Ireland. Secondly, to attract musicians, you will need, above all else, a reputation and you will need the equipment.

For the cost of travelling to Ireland and staying here, a band could get a studio with a better reputation and equipment locally for the same cost - have you produced any records that have been released commercially?

Considering a lot of Germans speak some English, I would imagine that the language would be of secondary importance for most bands.

Maybe I'm missing something? Best of luck anyway.

Easytisement

Hi and thanks for your feedback. In regards to the business plan, I will pm you tomorrow if that's ok with you.

Now, I think the main advantage is that i am multi lingual. From what I understood when I talked to musicians in Germany was that they don't want to use foreign studios because of the language barriers. Yes, many Germans do speak English but by far not fluent. How did you do it in France? Do you speak French?
Trust me, recording costs are in Germany very very high compared to over here. Especially in the bigger cities like Berlin, Frankfurt, cologne and hamburg.
In regards to equipment, yeah, I think I can compete with any studio out there, but I would not be a competition to local Dublin studios at all since I have a different target group. I would only use that studio for my target group and of course to record my radio ads.
I did have a few commercial releases and I am involved with the Eurovision in some countries this year, but I don't really want to get into that here at the moment because it doesn't have much to do with that. Might get more active on the music threads in future :-)

antoinolachtnai

So ...

You have found a market.

The problem is you don't have the complete product, ie you have skills but you lack a complete, suitable studio to rent out.

If you can get the customers, I think you might be able to work with someone who can supply what you need from existing resources.

My suggestion is that you make a partnership with an existing studio and agree a marketing plan, with you getting good fees and commission on sales.

EIREHotspur

Easytisement wrote: »

..... I just don't know how to get it funded. It is a rather small investment (around €10,000) since I already have purchased most of the equipment already. ...

Join a Credit Union.

I am in a similar situation.

Watched another company do my idea the following year I had it and they have since made about 5k per job.
That was 12 years ago.

Since then I have redone my idea and am going to do it in a different way to them and will need around 10k to do it.

Mickk

Hi,

honestly I'd say the fact that you describe yourself as a business owner but yet you can't get 10k together to launch a new business isn't inspiring confidence in potential investors... If you can show what you've done with your own money or why it's tied up then investors would be much more likely to invest, if they know you can manage your own they will be more trusting of you managing theirs.

Easytisement

Thanks for all your advice. Really appreciate it!
@Mickk: Well, a business owner is someone who owns a business. I never knew that being a business owner means automatically having 10k handy anytime.
I am just starting out, which means I also work jobs besides doing my own business to pay for all my expenses. I think I am not the only one doing that. Many start up businesses probably work besides their own business in order to make a living.