Myself and a team of 3 other girls were recently given the challenge (whilst studying Strategic Design Management at Parsons) to make as much money as possible in 2 hours with just $5 seed money. Was this possible and how should we go about doing this?
When we first heard the challenge it was tough, we had many great ideas but everything kept coming back to the fact that we had a limited amount money. We needed to ‘think outside the box’…
After the initial ideas we realized that we need to almost disregard the $5 all together. What could we do for free? What did we have that other people would value? Soon the ball was rolling and we had great ideas ranging from selling our knowledge of the local area to tourists to selling restaurant bookings for sold out restaurants that we booked in advance.
We then considered what we could do, where our skills lay and what assets we had at our finger tips. We decided being students ourselves that they were the market to target, we would seek our our fellow peers and hope that they have a little bit of disposable income. So after focusing on what things we could do with small start up costs we chose to set up a stall doing manicures for the fashion-loving students of Parsons in the University Centre. We bought a french manicure set for under $5 and decided we would offer the manicures for free and allowed people to tip what they believed to be fair.
Then came our 2nd bit of ‘thinking outside of the box’ we decided to split this task in to two one hour sessions so that we could learn from the first hour and make changes to help increase our intake during the second hour.
What we did in our first hour?
We split our team up in to two groups of two, the first group went around trying to entice people to our stall and informing everyone of what we were doing and where we were located whilst the second group did the nails. We then rotated this and from there we worked out who was best to market and who was better to do the manicures so we could get the best results.
When demand was high all four of us would work on the nails and then the first finished would continue to promote the stall until those best at promoting were released and we could all return to the roles we were best at.
We chose the canteen in the university centre because we felt people would have the time during lunch to have a manicure. It gave us the space we needed, it had a good mixture of people and it was somewhere people go when they have spare time.
What we learned and how we improved in our 2nd hour?
Our first hour showed us a couple a ways we could improve.
Firstly, for our first hour we started at 1.30pm but we found that at this time people were often finishing lunch and needed to get to their next class so we decided to change the time during our second hour to earlier.
Secondly, some of the people we were approaching said the would have had their nails done but didn’t have the time then so asked when we were returning so for our second hour we tried a bit of promotion using social media which resulted in a few people turning up specifically for a manicure. We felt that with further and more extensive marketing through social media we could have improved on the number of people even more.
Our pricing system also needed changing. Though our tipping system worked with some people, we found that it was very varied and having no anchor point meant that we would sometimes get as little as $1. So for the second hour we tried to influence our clients by putting visible $5 and $10 bills in our tip jar and this greatly improved our average tip price.
Finally we came up with a new extension of our business that we believe to be more profitable. We realised that for 5 min we got the full attention of our customer, not only that but we noticed that it was us and not the customer who initiated the conversation and topic. we felt we could use this ‘power’ to communicate a message: Use this time for advertising.
We contacted a hairdresser to see if he was interested in potentially promoting his business to Parsons students. He was very excited about this project and so during our second hour we found that out of 18 customers 8 asked for his contact details and of these 8, 2 called to book an appointment.
This experiment showed we had the potential to strongly market brands and we could charge them to promote their brand through us. In addition if we were to promote feminine brands we could potentially use their products and materials for the manicure and thus reduce drastically our expenses.
How successful were we?
We made $97