When Funding Your Own Startup, What Should Come First?

The idea of HairFare first came to me when a friend of mine had been made redundant from his job. He was searching for something to do when he decided to open up a barbershop. He wanted to rent his chairs out as he did not want the hassle of managing people as well as wonder if there would be enough customers each day. After searching for several months, he managed to find barbers that could rent the chairs on a monthly basis. Within one year, he managed to make enough money to start looking at another barbershop and repeating the gruelling process of finding more barbers.

There had to be an easier way for shop owners to find professionals and professionals to find places that are willing to rent their spaces within the Hair & Beauty (H&B) industry. I went to my good friend, now Co-Founder, Murat Feimoglu and told him about the issue and a potential solution and he was instantly all in. 

We received a really positive reaction to the idea of HairFare from our own network of hosts and professionals and we already knew the renting of chairs and spaces is widely adopted in the industry, so we were super confident in the product / service and its potential.

What to do first?

Before we started anything related to HairFare, our first step was to create a plan of action. What did we need to do first? How were we going to keep track of our activities? Did we need to patent or trademark our idea? 

The first decision that we had to make was where would we launch our platform from, through a website or through an app. An app would have required a larger initial investment which we did not have at that point in time so we decided to pursue the website route. This would allow us to still be accessible on phones and tablets without spending a significant amount on the creation of an app. 

Additionally, this would give us time to sign up customers, gauge what the response would be like to our platform and then pursue creating the app once more funds were raised. I’m delighted to say this is exactly what will be happening next on our HairFare journey. 

Whilst the website development was in progress, we wanted to ensure that our brand was protected, so we made the decision to trademark HairFare To add further security to our brand and broaden our reach we created a number of social media handles for HairFare across various platforms such as Instagram and Twitter.

How much of your own capital do you invest?

When you start to look at how you will initially finance these ideas, I believe it is very important to always put your own capital towards the business. This gives you the psychological advantage of making sure it works due to the fact that it is your own money that you are using and hence gaining the rewards associated with it, but at the same time you take on all the risk.

From previous jobs, I had managed to save some money and chose to use this as my initial investment, which would be for creating the platform. This would include the design and coding of the website. After this initial investment, we chose to allocate 30% of our salaries into further developing the platform. However, if one off fees would come up where we would need to invest more than this, we were open to putting more money into it. 

Money management is an incredibly important factor for a startup. You need to be careful with how much you spend but even more careful with where the money is allocated. One thing which we used extensively was freelancer websites, it allowed us to pay very small amounts for high quality pieces of work from professionals we would use again. There is always the risk of not getting exactly what you asked for so I would always recommend paying a little extra and making sure you have the option to talk directly to the freelancer so they can understand your end goals and passion. We have had plenty of instances where we tried to save money by looking for a cheaper alternative but always ended up spending more than we would have liked.

Thanks to the launch of HairFare we have learnt so much in a very short period of time. One of the most important things that I have learnt is that it is extremely important to have someone by your side from the very beginning. Financially it is a massive help as all costs are split 50:50 but additionally, there is also the emotional aspect. 

This journey is like being on a rollercoaster where you can go from feeling elated after signing up your first customer to having doubts about the whole venture – especially when launching during a global pandemic – and whether it was worthwhile. Having someone by your side to ground you, pick you back up when things do not work out as planned and having a close knit support system is a very precious thing to have. 

For anyone considering launching a brand new venture, using their own pockets – now or in the very near future – I wish you every bit of success. Here are a couple of questions I would recommend asking yourself before you make a decision to dig deeper into your pockets. 

● Is this the right time to be putting more money into it? Can it wait?

● What will be the results if you invest now compared to doing it in a couple of months time?

● How will your investment now impact you paying your household bills this month?

● Could you use this capital in another area of the business that could give better results?

● Have you made sure you’ve negotiated as much as you can, to get the best possible price?