While at FEEcon 2019, my mind was completely taken over by the idea of starting a social enterprise. In order to help organize my thoughts and test the practicality of this idea, I'm going to pretend that some investor/other interested person was questioning me about the business. This post will serve as the idea's earliest form of public documentation. Anyways, I'm going to call it...
(Or something along those lines... Not 100% on the name yet)
"...Uhh, what is it?"
Generous Vending is a 'donate back' social enterprise that raises money for charity through various types of vending machines placed at various different businesses in a specific area (or areas).
"How do you plan on getting business owners to agree to have your machines in their stores?"
Simple! By explaining that their business's foot-traffic can be used to make the world a better place at no cost to them. Plus, they get to enjoy all of the other benefits of having a vending machine of their choice at their business location. Generous Vending will provide and maintain the convenient vending services to their business/customers and the owners don't have to worry about a thing! And of course, the fact that the proceeds directly benefit charity is a huge plus to many business owners. This is a popular business model that has existed for quite some time.
"Right, then what makes "Generous Vending" different from other companies that do this?"
None of the companies (we've seen) that use this business model are actually focused on "the greater good". They're corporations focused on profit, not social enterprises focused on charity. Many of these vending companies simply using the word "charity" as a selling point in order to get businesses to agree. Don't believe me? After doing some research, we found some that donate ~5%, and some that donate 10%. According to one source, it is fairly common to donate $1-2 per month (per machine) instead of a percentage. In our eyes, this is not enough to be considered a "charitable business". We have yet to find a vending company that donates a substantial percentage of their profits to charity. This is where we come in.
Since Generous Vending cares more about charity than profits, the "charity" vending scene will be completely disrupted. The businesses that truly care about charity would much rather support a company that shares their values. We still have to do more research in order to determine the right percentage, but we're currently looking into 50% or more of the profits. Whatever percentage allows the business to grow while making the biggest difference possible is the ideal percentage.
"Pshh, is that the only thing that makes you different?"
Nope! Generous Vending innovates this business model in a couple of ways. Unlike other companies, all donations are made in the name of the business partner that helped raise the funds rather than our company's name, which adds more incentive for businesses to partner with us. Additionally, since Generous Vending has a lot more proceeds to work with compared to other companies, we offer our business partners different 'donation plans' for how much and which charities the money goes to.
If that wasn't enough, all donations are also tracked online through Generous Vending's website. Business owners and consumers alike can see just how much every vending machine in the company has contributed and to what causes. When businesses receive public (online) recognition for their contributions, it adds even more incentive to partner up! A tracking system like this has never been done in the charity vending business.
"What charities would you donate to?"
All of the profit reserved for charity is divided up into two groups. One half goes to the non-profit/charity chosen by the business partner, and the other half goes to the "non-profit of the month" chosen by Genous Vending. This way, a decent amount of profit from all machines is concentrated into a single cause (to make the most impact), but business owners still have the freedom to support local charities if they wish to.
"I've heard enough about charity. How much profit will you make?"
Well, not much... This wasn't designed to replace my full-time job, it was designed as a side-hustle to make the world a better place. The profit from each machine depends heavily on the type of machine and the location. The national average revenue for a double head gumball machine (which what I'd likely start with) is $60 per month. If the company can partner with 20 businesses, that's $1,200 per month, ~$600 of which is profit to be put back into the business. This model can be scaled into soda/snack machines or healthy vending machines, which generate even more revenue.
"How would you grow and promote this business?"
By partnering with a different non-profit each month to become the "non-profit of the month" (or a catchier version of that concept). Generous Vending would preferably partner with charities that allow us to be involved directly in the charity so that pictures can be taken. These pictures (along with the certified receipts of our donations) will serve to improve our public image and credibility. As we continue to document the impact our company is making, it will become increasingly easy to convince businesses to partner with us.
That's the plan! Although I won't be able to register another LLC until I finish the Praxis boot camp and move to another state, I intend on getting started with the planning right away. If anyone is actually reading this and wants to follow the progress, you can follow Generous Vending on twitter.
Am I jumping the gun on this one? Perhaps, but that's just how I roll. When I'm obsessed with an idea, I just have to start executing. If I find out later that this isn't a viable business model, then I'll move on. But for now, I remain inspired.