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An app developed in Maine provides a subscription service designed to help small businesses get cash upfront while delivering discounts to customers on products and services they routinely buy.
Brunswick-based startup SubLocal was founded in September and its app went live in late October. The app is designed to provide small businesses with the predictable, recurring revenue necessary to navigate the financial uncertainties caused by the pandemic, the company said recently in a news release.
“Small businesses are like households: Their income is spent on the next month’s expenses, and rainy-day funds are small,” the startup’s founder, Reilly Kons, said in the release. “Imagine what a difference it would make if you had access to all of your month’s income at the beginning of the month — you could plan out your expenses and cover any unexpected bills.”
Three businesses have signed onto the app so far: Jorgensen’s Café in Waterville and, in Brunswick, Gelato Fiasco and Box of Brunswick, which Kons has a connection to.
Kons grew up in Topsham and went to Thomas College, where he studied marketing, management and finance, graduating in 2017. He worked as an insurance agent to the craft beverage and brewpub industries where, he said, he became attuned to the needs of food and beverage-based businesses.
Afterward, he became an implementation consultant for Tyler Technologies Inc. (NYSE: TYL), a Texas-based government software provider with Maine offices. But early in the pandemic, Tyler reduced his role.
Kons responded by taking a free product design program, taught by product designer Nick Rimsa through Tortoise Labs, a central Maine software design and development team that helps rural founders turn their ideas to income-earning startups, according to its website.
“You come into the class with an idea. Mine was SubLocal,” Kons explained.
Through the program, Kons reached out to local business owners to get an understanding of their needs as far as keeping their doors open through the pandemic, and to local residents to see what their needs were.
“That became what is SubLocal today,” he said.
SubLocal rolled out “as a manual process,” he said.
In early September, he signed Jorgensen’s Café onto the subscription model.
“We didn’t have a tech solution,” he said. “We used punch cards to keep track of transactions.”
In the first two weeks, subscriptions resulted in $250 delivered to Jorgensen’s, the equivalent of selling about 100 cups of coffee.
“That was a good sign that this was something that could help small businesses and that it was something people wanted to subscribe to,” he said.
Kons used services provided through Tortoise Labs — free of charge, he said — to develop the app and his website.
The app launched in October. On Nov. 10, Gelato Fiasco, a maker of gelato and coffee, joined SubLocal.
“We're excited to partner with SubLocal to offer this cool technology to our customers," Mitch Newlin, employee-owner of Gelato Fiasco, said in the news release. "We especially love that the program makes it super easy to give a coffee or gelato subscription as a holiday gift."
From the SubLocal website (SubLocal.us), users select a monthly subscription to a local café or restaurant, pre-pay for the month, and redeem the subscription code at point of purchase.
The effect is similar to a gift certificate. However, SubLocal’s subscription model is designed to offer customers several advantages over gift certificates, including technological convenience and discounts on their normal purchases; Gelato Fiasco offers a $35 monthly subscription that purchases 20 coffees, representing a 30% savings, and a $25 gelato subscription that purchases seven treat-sized dishes.
As part of his efforts to help more small businesses, Kons formed a separate service called Box of Brunswick, which allows subscribers to go onto the SubLocal app, select from products made in Brunswick, and have them boxed up and delivered. Items include baked goods from Wild Oats Bakery & Café and Wildflours Gluten-Free Bakery, coffee and gelato from Gelato Fiasco, products from local breweries and soda from Green Bee.
He started taking orders for Box of Brunswick mid-November and was packing and delivering the first batch of boxes last weekend. Participating business don’t have to pay to participate; the service involves a delivery fee charged to people ordering the boxes.
“Our mission is helping small business get predictable, upfront, recurring revenue,” he said. “This is just another way we can do that.”
Now he’s recruiting other businesses to join the app.
“Starting off, we wanted to make sure the technology would work, so we didn’t try to recruit businesses too aggressively,” he said. “Now that things are up and running, we’re trying to recruit businesses in the Waterville and Brunswick areas, mostly via email.”
Kons is getting word out about the app through press releases, social media marketing and personally messaging and emailing people.
He said he expects the app will eventually generate earnings through a 10% fee on business revenue made through SubLocal.
“Being new, we’re focused on building the portfolio of businesses that are listed on our platform,” he said. “We’re just happy to have businesses utilizing this technology solution.”