Drew Raphael, a third-generation New Yorker, had a love of history, a background in sales and marketing and no job. So what did he do?
He bought a hearse, dressed himself up as an undertaker and started driving people around New York to visit the scenes of the deaths of the famous and infamous, of course.
Started in 2009, Dead Apple Tours now runs nine tours a week in Raphael’s seven-seat, customized vintage hearse. And while a death-themed sightseeing service might sound like something he started on a whim, in reality, Raphael’s business and marketing plan are the stuff of big business, even though he’s a one man show.
“When I came up with the idea I knew I had to do something unique and different,” said Raphael, who first considered starting a death-themed sightseeing tour after seeing the crowds gathered outside the New York apartment building of the late Heath Ledger.
Once he had his business plan in place, he started looking for a vintage hearse. When he found it, it took nearly a year for it to be customized. He financed the customization and the entire startup with $100,000 of his own money.
“I did all myself. No business loan . I had the money saved up and knew I wanted to start a business,” Raphael said.
At first Raphael didn’t know exactly what he wanted to do, but he knew what he wanted to avoid doing.
“I didn’t want to run a brick-and-mortar location because I didn’t want monthly rent. And I didn’t want to own inventory,” said Raphael. “So I asked myself what I could do that’s a product but doesn’t have physical element. Sightseeing is an experience.”
No dead weight
Raphael knew from the beginning that in order to be profitable, he’d need to keep the business lean and mean.
“Because it was all mine and my wife’s money, I made sure I knew what I was doing and took into account everything so that the mistakes I knew I was going to make weren’t going to be too expensive,” Raphael said.
And even though he thought he’d anticipated everything in his business plan, he found he still made several mistakes that he needed to remedy.
For one, he initially hired a driver who drove the hearse while Raphael rode in the passenger seat, guided the tour and used a laptop that was hard-wired into the glove compartment to show a slide show that played on a display screen in the back of the hearse.
He quickly learned that he didn’t need the driver (or the payroll associated with an employee) and took over driving the hearse himself. To continue to be able to operate the slide show while driving, he switched to an iPad, which allows him to use the touch screen easily while driving and runs on battery power, thus staying powered up when the car is shut down.
Today, his overhead is extremely low, Raphael said. “As a business owner, you start out wanting everything then realizing you don’t need everything.”
Today, his costs are pared down to the bare minimum: Insurance, parking, gas (his biggest monthly cost), maintenance and marketing. He needs to sell 25 to 30 seats a month to break even. He had his first month in the black – so to speak — in September.
One of the reasons for the quick trip from startup to profitable venture is that Raphael recognized from the beginning that his sightseeing tour needed to be something unique.
“The competition for dollars is extremely tight. I knew I needed something really out there and dramatic so people would identify with it immediately and that would be the branding,” Raphael said.
To differentiate himself, Raphael integrated his marketing plan into every aspect of his business.
“It needed to be theatrical immersion,” Raphael said. In addition to the hearse and the undertaker outfit, the customer’s tickets look like funeral mass cards and the hearse is outfitted with boxes of tissues just in case anyone is overwhelmed with emotion during the tour.
“It’s rolling performance art,” he said.
Dead Apple Tours offers private tours for parties of up to seven people for $400. Tickets for his regular tours cost $45 per person.
Raphael’s marketing plan also includes actively using social media – he currently has more than 2,000 Facebook “friends.” He also uses a very low-tech marketing method — posters — which can be seen all over Manhattan. His promotional plans will reach their peak on Halloween when he participates in the Halloween parade in New York’s Greenwich Village.
While he’s very excited to be involved, he says it’s been a long road getting to this point.
“I’ve gone through hell. It’s been stress city and I’m the mayor,” Raphael said. His advice for new business owners? Come up with an estimate of your startup costs and then double that number.
In addition, he said, “have faith, suck it up and know that you’re going to be successful and you’ll make money back.”