Raising funds for your side hustle
It takes a lot to start a small business, and often, individuals face many barriers along the way. Today, we are diving deep into a common barrier many entrepreneurs face when jumpstarting their small business: a lack of funds. Through interviewing three individuals who have successfully raised money to launch their businesses, we will answer the following questions: How can I raise money for my small business? What tools are out there to help with my money-raising goals? What challenges might I face while doing so?
Episode 35 – Raising funds for your side hustle
[00:00:00] Sanjay Parekh: Welcome to the Side Hustle to Small Business podcast brought to you by Hiscox. I'm your host, Sanjay Parekh. As a serial entrepreneur, I'm passionate about sharing the stories of other entrepreneurs. On this show, we share perspectives on all sides of the side hustle to small business journey, the challenges, triumphs and everything in between. This season, we've met countless entrepreneurs who have gone above and beyond in their respective fields, marking themselves as leaders. And while each entrepreneur's journey is different, they all have one thing in common that they need to launch their businesses. Funds.
Starting a business typically isn't free, and many entrepreneurs find that the more you put into a business, the more you get out of it. But of course, not everyone has capital lying around waiting to be spent. For some folks, raising money to launch their side hustle into a small business is a necessary side in the process to owning a successful business. And there isn't just one way to do this. Going into this episode, we were curious about the different ways in which entrepreneurs can raise funds for their businesses. To get the answers we want, we spoke to three different entrepreneurs with very different backgrounds to understand how they raise funds to launch their small businesses. We spoke to the founder of an agenda and planning business, an author and sexual assault crisis advocate, and a magician. We will meet each entrepreneur one by one and hear their stories on how they got it all started. Let's get into it.
To start off I want to introduce you to Sarah Light. In 2017, Sarah founded her company Sol Planners, an agenda and planner company aimed at helping women better organize their days. As a mom of five, Sarah understands how hectic every day can be and with Sol Planners, Sarah hopes to help women make their days a little easier. Sarah is based in Ohio.
[00:02:02] Sarah Light: I was in direct sales for about 10 years. Off of that season of my life is my current business grew from that. I have a paper planner business and it primarily serves women entrepreneurs that are working from home and also running a home.
[00:02:20] Sanjay Parekh: Sarah found that she was good in direct sales, but after she started having children, the job just didn't fit into her life, making her wonder if she was in the right place. She found herself making her own planners to help organize her day-to-day. And found that designing these planners left her feeling energized and excited.
[00:02:39] Sarah Light: So, when I was in direct sales, I'm actually a very introverted person. So, to be in sales, I was able to master the skills I needed, but after I started having kids too, and realizing I'm working so hard in the sales business, that's actually probably not the best fit for my strengths. I would come home really tired and drained, but I loved running a business and I loved everything about being an entrepreneur. And in that season, I would just, while my kids were napping or sleeping, I would start making my own planner for myself and my own business. And I would walk away from those little snippets of time, just so energized and jazzed and excited. And I started realizing with these two things side by side, one was life-taking in that season and one was life-giving. And it gave me the courage to pursue the planners, knowing that was more of my strengths. And I had so many connections in the entrepreneur world, and I knew there was a need for a planner that was really functional. But I also really loved beautiful stationery and stickers and markers and all of that. And I couldn't find a planner that was like really cute and pretty, but also really functional for someone that needed to really hold a lot of appointments and phone calls and track my goals. So, that's where it came from.
[00:04:00] Sanjay Parekh: It was when Sarah had her third baby that she started to realize that she needed a change.
[00:04:05] Sarah Light: I had just had my third baby and it was a rough season to be honest. It was like a low point. I wasn't sure if I should pivot careers. Financially, I wasn't keeping up with the volume I needed to, and it was just a season that I don't want to repeat, but I'm thankful for. One of those kinds of seasons. And I really wanted to start this new planner business, but I had no funding for it.
[00:04:31] Sanjay Parekh: And there it is. A common issue for entrepreneurs looking to launch their business, a lack of funds. And yet Sarah was determined. She knew she needed a change. She knew that she loved designing these planners and she knew that this product would benefit women greatly.
[00:04:46] Sarah Light: I had no way to start it and no personal funds to put towards it. So, I decided I really feel like this is going to serve a lot of women. So, I'm just going to put it out there first, like a Kickstarter idea, but without actual Kickstarter. And I had a little sample made and I told everyone, all my friends and all my other entrepreneurs that I think this planner will be awesome for you. Do you want to order one? If I get a hundred and fifty orders, I can actually place my order with the printer because they have minimums. But if not, and if I don't reach my goal, I'll give you all your money back. And that's how I launched it, just to social media and took up orders. And I had three days to get 150 people to order. And I only really knew five friends that would actually order. So, it was a really big leap of faith.
[00:05:39] Sanjay Parekh: Sarah took her leap of faith. It was a daunting goal, especially on such a short timeline. And although she knew failure was an option, she was determined to make this work. And the results?
[00:05:49] Sarah Light: I put it out there and by the end of the three days, we had 189 people that had ordered a planner, and we were able to place that first printer order.
[00:05:58] Sanjay Parekh: That's right. In three days, Sarah managed to not only reach her 150-order goal but exceeded it by almost 40 orders.
[00:06:06] Sarah Light: I'm so proud of myself that even before I had the perfect plan, I just, I did it. I put it out there and it was very inspiring to realize, okay, there's enough people out there that do need this product.
[00:06:19] Sanjay Parekh: Sarah chose to do this without the help of an online fundraising platform. We asked her why she took this approach.
[00:06:25] Sarah Light: I was considering Kickstarter, and I had asked a friend who had gone that route. And I could have, I think it would have been successful there too because the market would have been bigger that I was reaching. But she was like, I felt like I could have done it without them too, because they took a portion of the sales. And so, I just decided to try it without them first. And it ended up working out. But I did consider them.
[00:06:51] Sanjay Parekh: And while Sarah was successful in her attempt to raise the necessary funds for Sol Planners, she did face some challenges along the way. The biggest one? The feeling of self-doubt that is so common when launching your first business.
[00:07:04] Sarah Light: My own self was one of the challenges because I wanted to keep waiting and waiting until it's just a little bit more perfect or a little bit better. It wasn't exactly how I wanted it yet. But I also realized it's now or never. If I don't do it now, I'm just going to keep perfecting it and never put it out there. So, I had to get over my own fear and my own just wanting it to be more perfect and just put it out there. That was one obstacle. And then honestly, I was, my printer was in China, and I had never worked with anyone overseas before. And I was just really nervous about that for the first time. I'm about to wire them all these people's money. What if this is not legit? I was so nervous. I was sweating in the bank when I sent them that money.
[00:07:46] Sanjay Parekh: While Sarah faced challenges within her own confidence while raising the money, we wondered what challenges she faced when making the jump to entrepreneurship.
[00:07:55] Sarah Light: I was surprised at how lonely it can be as an entrepreneur sometimes, because you are working for yourself, which has its benefits. But also, when you're like, should I buy more inventory or not? Or should I wait? Or should I do this marketing opportunity? Like you don't have anyone to ask at first. I just didn't have that mentor in the beginning and I was asking my husband who is not entrepreneurial, and he did his best to answer my questions, but I had to seek out some mentors and just some accountability at first because I didn't realize how lonely it would be. I would have found a mentor earlier. As soon as I did it made a world of a difference just to have a sounding board. Really, that was the biggest benefit was having a sounding board and just someone to say, keep going.
[00:08:46] Sanjay Parekh: Finally, we asked Sarah to give the entrepreneurs or potential entrepreneurs listening some advice on raising funds and on making the jump to entrepreneurship in general.
[00:08:56] Sarah Light: I love entrepreneurs. They're just my people because there's something scrappy about an entrepreneur. And so, if you're an entrepreneur listening, I just encourage you that you probably have a unique set of skills and talents and it's worth investing in them. I would say, like we said earlier, you probably have some scrappy skills. So, asking yourself, what else? What other options do I have? Even just asking yourself that question and letting yourself sit on it for a couple days, your brain starts just looking for options. You'll be surprised at what ideas might come up. You need a soft heart, but thick skin, and to just keep going. Keep going. Because persevering is one of the qualities that's going to carry you through.
[00:09:51] Sanjay Parekh: Our next entrepreneur is Melissa B. Lombardo. Melissa founded her business after writing a book about her experience with sexual assault. We'll let Melissa tell you more about it.
[00:10:02] Melissa B Lombardo: It's an LLC that I formed in January of 2023 as an imprint for a book that I recently published in addition to titles that are on their way. And ever since I was a young girl, I've loved to read and write. And I've been a very creative person. I remember reading a book titled, Who am I Anyway? It was geared toward adolescent girls. And at that point in time, that question just stayed with me. Who am I anyway? And I think I went through a lot of my life being able to reflect on that.
[00:10:36] Sanjay Parekh: Like all the entrepreneurs on this episode, Melissa had to raise funds to launch Write, Heal, Thrive, her organization that focuses on helping sexual assault survivors through creative workshops. speaking and performance events, and participation in local events to promote advocacy and social change. Unlike Sarah, Melissa decided to go the GoFundMe route. She needed funds to help publish her book, Hurt, Healing, and Hope: Thriving Beyond Sexual Assault, as well as to launch Write, Heal, Thrive.
[00:11:10] Melissa B Lombardo: I was sexually assaulted, and I wrote a book about it titled Hurt, Healing, and Hope: Thriving Beyond Sexual Assault. And as I, wrote the book and I went through my own healing. I created a GoFundMe campaign to be able to fundraise for that project, to be able to have that book come out into the light, and to add it to the array of voices about the topic, speaking out about sexual assault, and my GoFundMe campaign was titled, Write to Heal and Thrive. And as I started to reflect more about it, I continued, to write out my feelings and write out my thoughts to reflect and, be a little bit more introspective. And I thought writing is the way that I was able to heal and thrive as I went through the hurt, healing, and hope and post sexual assault and Write, Heal, Thrive, the LLC and the imprint that published my book came out of that same thought pattern. So, it's a very circular. I think it's a bit of a circular, everything that goes around comes around and I was able to form Write, Heal, Thrive based on that. And that's something that I'd like to be able to bring to others in the future.
[00:12:17] Sanjay Parekh: Melissa first discovered GoFundMe when working in the tourism industry in Nicaragua.
[00:12:22] Melissa B Lombardo: I lived abroad in Nicaragua for 17 years and it was while I was living in Nicaragua, working in the tourism industry that I first learned about GoFundMe. There was a guest that came to the condo complex that at the time that I was running, and she really wanted to help the community. She wanted to ask her friends for donations to work on this water project and this school. And I said, okay, how can we do this? And she said, oh, I know this great platform. It's called GoFundMe. And I had no idea what it was at that point in time. So, I researched it. We started a small fundraiser through there. So, that was my initial introduction to the GoFundMe and to fundraising for, other projects. And the fundraiser went really well. And as years passed, COVID hit, and I'm still very connected to Nicaragua. And there's 2 different projects of people that I know there, and they were interested in getting funds together to make masks and also having other funds to donate items. So, I started other GoFundMe campaigns and I never thought at all that someday I would be starting my own for this endeavor.
[00:13:34] Sanjay Parekh: Later, when Melissa was playing around with the idea of publishing a book, she was reminded of GoFundMe and the previous success she had using it for charitable efforts.
[00:13:43] Melissa B Lombardo: As time went on and I was budgeting how much this might cost to publish a book, you know what are all the things that go into it? I started thinking, that I might need others to help support my venture and people had been commenting to me, how can we help? We want to help. You just let me know. And I didn't know what that meant until I finally conceptualized, wait, maybe there's a GoFundMe for a business venture. So, I researched it again, and sure enough that, there was something. I created a GoFundMe campaign. Very easy, in my opinion, to create. And it was just, I think the most difficult part was putting everything together, and on paper to say, this is what I want to transmit to others who want to support and then from there, sending it to a friend or two and say, can you read this? Does this make sense to you? I'm trying to organize my own thoughts. Does this work? And people are like, yeah, I want to contribute to that. So, I started with an initial ask of $1,979. That's what I had budgeted of what it would cost to publish the book.
[00:14:54] Sanjay Parekh: The goals seemed daunting at first. But Melissa had support from her community, and she was soon able to reach that $1,979 goal.
[00:15:03] Melissa B Lombardo: In the end, I made that, and there were still people that wanted to support. So, I actually increased the goal to $3,236 for additional book activities and LLC-forming activities and things like that. And in the end, I was able to raise $2,595 total dollars for it. I think it was very easy for me to link a bank account, to send out updates to people to update people on progress, to thank people, which I think is really important. And through that same process of fundraising, I started thinking, can I also, use this platform as presales for the book? So, I ended up putting an extra part in that in the campaign that if somebody donated $50 or more, then they would actually get a complimentary copy of the book once it published. So, if they were involved to that point and I was able to send out lots of pre-sale books per se, I consider, I look at that now as presales and because there are that many people supporting, there are that many people that were giving over $50 to be able to help me get to that goal of mine.
[00:16:21] Sanjay Parekh: Melissa was extremely successful in her GoFundMe venture, raising over $600 more than the original goal. We asked Melissa why she thought her fundraising efforts were successful when many GoFundMes don't see that level of success.
[00:16:37] Melissa B Lombardo: My topic is sexual assault and healing and thriving. And I think a lot of people have known my journey throughout this. And I think that's one of the reasons that people might have wanted to support and wanted to make sure that this type of resource gets out into the world. And I think that was one big portion of it. In my case, I don't think that telling people if they donate $50 or more, they'll get a book. That didn't seem to be a reason that people donated. It felt more of a reason, what I have heard from people is that they wanted to support me in the endeavor and what I was trying to accomplish because we need more people to do that. And I think sexual assault is a topic that's still very much silenced and I think just being able to write about something like that and let other people know what you're doing. It seems to me like it's a big thing. For me, it was one of the hardest things. I hadn't really told anybody people were shocked. Oh, that happened to you. Melissa. Oh, my gosh. And I'm so sorry that happened. I said, no, that's okay. But I want to support the healing of others, through this book publishing and then through what comes next through, through Write, Heal, Thrive and it just is for me. And, if I had just received one donation, it would have been successful to me. If I hadn't received my initial asking, it would have still been successful to me. It was amazing. It was also part of my healing journey as well that people supported and had believed in me to the point where they're going to give me $50, $60, $100, somebody donated $200, and I was just shocked. I just didn't think that would happen. When it kept going beyond the goal, it was just even more shocking. So, I was able to expand my initial budget to include things I didn't have initially in there, to be able to do more with that publishing effort in that form.
[00:18:44] Sanjay Parekh: On paper, it seems like Melissa's fundraising efforts were a success. However, it did come with challenges. Like Sarah, Melissa had feelings of self-doubt.
[00:18:54] Melissa B Lombardo: I think my biggest challenge has been with myself and just being able to reflect on the fact that I have imposter syndrome. I think it's just so important. And it’s true what people say, just do it, or just go ahead and do it. People are going to support you and it's just getting over that. I said, a lot of times, we have these great ideas. I've had these great ideas I wanted to put into place, but it might be my own fears that are holding me back. And it's true, and they are my own fears, because every time I looked at the fundraising campaign, I'm like, oh my gosh, this person donated, or I don't even know who this person is, and they donated. And I think if I had known that before, or if I had gotten over my fears before, I might have done more, prior. But at the same time, I think everything happens for a reason when it's supposed to happen. So, perhaps this was the moment. But my biggest challenge was myself.
[00:19:57] Sanjay Parekh: Finally, we asked Melissa what advice she had for entrepreneurs looking to raise funds for their side hustle.
[00:20:03] Melissa B Lombardo: I think definitely, putting the time into the research, the learning, the reading, the reflecting about it. The more we know about it or about the possibilities of what might work for everybody. Because, for example, GoFundMe. That worked for me. But it might not work for someone else.
[00:20:33] Sanjay Parekh: We wanted to end this episode by talking to an entrepreneur who has a very unconventional small business. Meet Nate Javier, a magician and escape room designer from Southern California.
[00:20:44] Nate Javier: My name is Nate Javier. I am a professional magician and an escape room designer located here in Southern California. I've been practicing magic for 26 years now. I'm 30 years old, so I've wasted the first four years of my life. But I've been practicing the art for about 26 years and doing it professionally for the past 14.
The way I got into it was actually when my younger brother was born, there was no animosity or anything. I just understood that my parents and grandparents had to take care of him. And I would watch World's Greatest Magic Live from Las Vegas on the television and eventually recording it on VCR and the grand stage illusions were cool. But they just weren't my jam. It wasn't until people like Mac King and Tom Mullica got up there, but the turning point was the amazing Jonathan. It was just after a commercial break and the amazing Jonathan popped up in one of those 30 second clips. And he put pantyhose over his head and stuck a bright red straw up his nose, out his mouth, and I went, that's what I want to do for the rest of my life. The 9-to-5 just wasn't my thing, instead I enjoyed freaking people out and making them laugh.
[00:22:00] Sanjay Parekh: Nate specializes in a few different types of magic, and as he said before, has been a professional magician since he was 16 years old.
[00:22:07] Nate Javier: After years of studying the art, I can say that I'm decently versed in a whole variety of magic, but not all of it fits my wonderful bubbly personality. I'm also not a kid's magician, and I apply myself to a corporate audience more often than not, especially when I tour or if I get hired for a gig, it's usually for adults, red carpet, things like that. So, I found that in addition to my personality and my target audience, mentalism and a little bit of geek magic is where I sit at. Mentalism being like mind reading, predicting the future, being able to do drawing duplications, things like that. Like the esoteric kind of thing. I'm a psychic minus the psychic.That's essentially it.
Geek magic is the kind of stuff on like a circus or fairs thoroughfare. It's up there with the world's strongest man or the bearded lady, but I'm the guy who, well, you can't travel with swords anymore, really. So, I swallow balloons, like those balloon animal balloons. I blow those up, swallow those. I do some fire eating and breathing. Most well-known for taking the six-inch nail and nailing it into my face. Those are geek magic, essentially. So, I kind of mix the mind reading and geek magic and make a very unique and strange show for my audiences.
[00:23:33] Sanjay Parekh: Unfortunately for Nate, he couldn't just pull money out of a hat. He, like many entrepreneurs, had to figure out how to raise money for a number of projects he wanted to launch.
[00:23:44] Nate Javier: I've had to raise quite a bit of money for different occasions. I remember one of my first public shows, I had to figure out a way to raise money in crowdfund other than ticket sales to be able to secure down the theater and the lighting, like basically ran out of the theater. I had to figure out my own way to secure the funds to make sure that I could make that event happen. And luckily, I could recoup the costs afterwards. In addition, designing and building some of the escape rooms that I've done in the past, isn't just on a corporate card. Other times I'd have to figure out ways to make an event happen for whatever organization that had hired me at the time for a team building event and whatnot. So, I've had to figure out my way around with crowdfunding, also getting investors involved to make some dreams happen.
[00:24:39] Sanjay Parekh: In addition to magic, Nate also specializes in designing in-person and virtual escape rooms. He's had to work alongside brands to prepare budgets and raise funds.
[00:24:50] Nate Javier: A couple of the companies have already a large social media following. They have a large online presence, which aren't always the same things. They already have a Patreon, but the ones that didn't, we also added in a GoFundMe and a Kickstarter for their specific creative experience. We just basically garnered their audience and said, hey, we have a secret thing coming, and so I would have to develop online puzzle hunts, for example, just to get people interested. And at the end of it, we allow them to become part of the process to designing and building out this game that's for a limited release of a certain project that they had going on at the time. So, it's very central on who their audiences are. And I had to figure out, okay, accounting wise, how much do we need? How much can we hit? What's a stretch goal also? And how can we get these people interested in funding something that's only going to be up temporarily?
[00:26:02] Sanjay Parekh: Garnering public interest is Nate's biggest challenge. How do you raise funds for a project that the public doesn't find any value in?
[00:26:09] Nate Javier: It's also the audience just doesn't want to help out or they just don't find any value in it. So that was the other thing, is catching other people's attention and helping them understand where their money's going without telling them what it's for, because of the prowess a lot of these companies have.
Some of the challenges with doing it for myself, for those theater shows and whatnot was finding people who are interested. That's always the toughest part for me is trying to find people who want to be a part of the experience. I guess that goes for both sides of it all, but with magic, the toughest thing is that here in America, the good old U S of A, nobody really cares about magic anymore, or they just find it interesting, but it's not as passionate as other countries. Luckily, places like Spain, Italy, even Canada, there's a huge magic following. What sucks is in the UK, instead of getting a wedding band, they hire a magician. That's normalized. And here in the Southern California area, everything is so saturated with the magic castle and that's pretty much all people know. So, getting up to investors cold calling, cold emailing, GoFundMe just walking up to other people saying, hey, you got to trust me. This is going to be a hit.
[00:27:36] Sanjay Parekh: Although it's been challenging, Nate has successfully raised funds for countless projects using tools like Patreon, GoFundMe, and general crowdsourcing. Before we say goodbye to Nate, we asked him to give his best advice for raising money for your entrepreneurial ventures.
[00:27:52] Nate Javier: Have a business plan. Now it doesn't need to be something super formal. It doesn't need to be 346 pages like some of the previous ones I've worked on have been. Even if a one-page document is where you want to start, start with a one-page document. As weird as it sounds, as bubbly of a personality as I sound like, I'm a heavy introvert. I like my alone time. I like to get down to brass tacks and figure things out on my own. And I've had to do that, unfortunately, without the help of anybody. And I realized that I could use a lot of help in that area. But having a business plan and a basic goal board. If you're an entrepreneur or if you're looking to start your small business, have a set business plan. So you understand how much you want to be making at one time in a month, preferably, or even a fiscal quarter. You want to know how much that you're willing to spend. You're going to need to know where your investments are coming from, all of that stuff. Basically, create a fail-safe plan, I mean everything's going to fail, it's part of the adventure. You always fail forward and you always figure it out. There's no such thing as a bad fail, unless you get injured. That's pretty bad. But every failure is a learning opportunity. And I've been through it many times. So, don't be afraid of that, but have yourself a set plan so you understand how your business is going to work. Don't just throw caution to the wind.
[00:29:22] Sanjay Parekh: After speaking with Sarah, Melissa, and Nate. We learned about various ways to raise funds for your side hustle. And although there was a lot to learn from these three entrepreneurs, we think the biggest lesson is that no matter what you are offering as a product or service, there is demand if you know where to look for it. Thank you to Sarah, Melissa, and Nate for sharing their stories and advice to fellow entrepreneurs.
Thank you for listening to this episode of the Side Hustle to Small Business Podcast. To learn more about Hiscox Small Business Insurance, visit the Hiscox blog at www.hiscox.com/blog.