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My Son Is A Young Entrepreneur

January 15th, 2012

My son has been watching me blogging, and decided that he wanted to try to do the same, but in an area that interest him. His new blog is called Entertainment Timez and his blogging efforts along with other online activities now makes him a young entrepreneur!

While his blog is just a hobby, he noticed that I was doing some free SEO activities for other bloggers, but I was getting tired of doing it and planned on stopping.  He then offered to continue the service for $1.00 a week per blogger and so I presented his idea to the group that I was doing the activities for, and many of them decided to give him a chance with his service.

Entertainment Timez

Entertainment Timez

I realize that the other bloggers that have signed up for my son’s service are really just trying to help him have a taste of what it is like to be an entrepreneur, and for that I’m very grateful!

So you might be wondering how much he is making with his online service?

Currently, only $9 per week, so that comes to about $468 a year which is not too bad for an eleven year old.  His Goal is to make $20 a week, which would mean that he would make $1024 a year.  This is not very exciting for adults, but for an eleven year old to see that he can make over  $1000 a year would be a great confidence builder!  Who knows how far he’ll take it.

Personally, I’m excited about his entrepreneur activities because it means that I can now help him start a Roth IRA!  If you are wondering why starting a Roth IRA excites me, please read the article:  Starting Up A Roth IRA For Kids.  In this article it explains why I want to start a Roth IRA now that my son has earned income and why it’s a great idea for kids to have one.

I’m especially proud of his latest efforts,  because he is now including videos that his he created with friends.  He created the youtube account, copied the video up, and embedded the video into his post.  If you have time and want a quick laugh, check out The Stickman Show.  I think the video is pretty good considering that it was made by a bunch of eleven year olds.

Check out his site, and leave him a comment or two!

MR

 

Carnivals I participated in this past week or so:

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5 Financial Tips For Start-Up Entrepreneurs

September 23rd, 2011

5 Financial Tips For Start-Up Entrepreneurs

Free enterprise is amazing.  The ability to formulate a business idea, create a business model, develop a product/service, market the product/service, close deals, and make money—that is the entrepreneur’s dream!  The current economic climate in the United States is poor, but this type of environment can often be the best for launching a new company.  The reason is simple.  Recessions force established companies to cut back on expenses and reign in company spending.  This decreased spending makes it very hard for established companies to adapt and change during a recession, and oftentimes severe recessions force companies to change everything from products to marketing to sales.  This makes it much easier for a new company to enter the market.  A common metaphor is comparing a new company to a fast, agile ship on a wide open sea. Large ships have a hard time changing course and maneuvering.

Money, Money, Money

The most common cause of business failure is a lack of capital.  If you are just starting out your entrepreneurial venture, take this truth to heart.  If you build your business plan around this concept, your chances of success will increase significantly.  If you have bad credit, you can apply for a business loans for bad credit.  Here are a few tips to consider when making financial decisions in the ramp-up phase of your operation.

The Foundation

First, you must understand that if you have a vision for a product/service, there is real power in that vision.  And that power can tempt you into thinking that you are going to make tons of cash right out the gate.  I like to call this the throes of entrepreneurial passion.  If you are not careful, you can easily conceive an illegitimate child in the throes of this passion!!  Therefore, be conscious of this.  Let the energy and power of your idea invigorate you and drive you every day, but don’t let it cause you to make unwise financial decisions.

Forgo Office Space

Now, this will depend entirely on your type of business, but if it is possible, do not sign a lease or secure office space until you have launched the new company and are making money.  One of the quickest killers of momentum in the early stages of a company is a lack of cash, and office space is generally one of the largest overhead expenses each month.  If possible, delay it.

Office Furnishings

If you do acquire a space, or even if you operate out of your home, do not spend money on lavish furnishings.  You may think you need to in order to create a certain type of “feel,” but the truth is that you do not.  Remember, Microsoft and Apple were both started in a garage.  Don’t use business loans for bad credit to buy things you do not absolutely need.

Employees

You will need help, but try to hold off taking on employees until huge sales requires more administrative help.  Sure, it may be nice to have a secretary that gets your coffee and newspaper every morning, but it’s not worth killing your cash flow to make it happen.

Pre-Sales

Do not bury yourself in a hole by building up inventory before you make any sales.  If at all possible, do the opposite.  Try to secure as many pre-sales as possible.  This will not only help you gain essential momentum in the early stages of ramp-up, but it will significantly reduce the cost of inventory.

Review and Analyze

Look at your financials on a consistent basis.  Take a seriously look and conduct in-depth analysis in order to determine where you can cut back. If you commit to rigorously keeping costs down, then you will be positioning yourself to not only survive the inevitable challenges of the ramp-up and launch phase, but you will also be instituting good habits and principles that will help guide your decisions when cash does begin to flow strongly.

This was a guest post by Michael T.

Thanks,

MR

 

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My Largest Business Purchase For My BlogTo Date

August 16th, 2011

Today, I’m going to go through the thought process that a financial blogger such as myself would go through to make a business purchase.

Understand that I’ve been considering this business purchase for a long time, at least since last year.  So you are probably wondering what has been holding me back?  The financial considerations involving such an expensive purchase…

When I initially started looking for the type of laptop that I wanted, they were running at a cost of around $700.  Since my blog is small and for the first five months I only made about five dollars, I couldn’t justify spending that much money for what was basically a borderline business, but more of a hobby.

So what has changed?

First, the Apple iPad and other tablets have come on the scene and made me rethink whether I wanted a laptop or a tablet.  After playing with my son’s Apple iPod Touch and my dad’s IPad 2, I’ve come to the conclusion that they are both awesome products but for me, the larger screen of the laptop just fulfills my blogging needs better.  I especially like the larger screen when I’m working on graphics for my blog.  Needless to say, the apple products were very tempting and it wasn’t an easy decision.

Second, the price of the laptops that I was looking at dropped by more than half the original cost!  The particular type of laptop that I wanted now costs $300!  That makes a four gigabyte laptop with a 320 Gig drive cost as much as my son’s iPod Touch…  As awesome as the iPod Touch is, the pure horsepower and larger screen make the laptop an obvious choice.  Still, I think an iPod Touch or iPad would have been very useful and functional…  perhaps next year.

Third, my blog is finally making a little bit of money.  Not enough money to quit my day job, but enough to afford better tools for working on the blog.  I plan on pouring some of the money from my blog back into the blog itself.  This purchase will enable me to blog from many more places than I previously could.  Now I’m able to be more mobile with the longer battery life of my new laptop.  Previously, I was occasionally using the laptop from work but this feels more right, and the longer battery life and greater processing power will enable me to do far greater things with it than the older laptop I was using.

All told, it still took me longer than 1 year to make this purchase.  In fact, had I not see this bargain on one of the bargain sites (techbargains.com), I wouldn’t have made the purchase.

Even after the salesperson brought out the laptop and handed it to me, I had to walk around for about 30 minutes before going up to the cashier for the purchase.

Thanks for letting me share my largest business purchase with you!

MR

 

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How To Be Like A Landlord Without Owning Rental Property

June 27th, 2011

I have a friend at work that has experience what it’s like being a Landlord, even though he doesn’t own rental property.

My friend (let’s call him Phil), has a 4 bedroom house but only 2 kids.  So one year my friend and his wife decided to rent out their extra room.

I believe this is an excellent way to creep into the Landlord/”rental property” owner role.

Here’s why:

  • You don’t take the financial risk of purchasing rental property and trying to make a profit off of it.  If you rent out a room in your house, so you should be able to be profitable each and every month.
  • You don’t have to go through the process of getting a mortgage for the room since you already either have a mortgage or you own your house mortgage free.
  • You still have to deal with collecting monthly rent, but if your tenant misses a payment, it doesn’t hurt as much since you don’t own any extra expense from renting your room out.
  • You draw up a contract between you and your room renter!
  • If you tenant leaves, you are still in great shape financially.
  • You learn to put ads in the paper for renting a room.  This should transfer pretty well to the same process for renting out a rental property.  Plus you get to learn what works and what doesn’t at a low-cost.
  • You get practice running background check!  This should give you experience when you really do take the plunge and buy rental property.

Taking it to the next level, rental property!

Another great thing about renting a room before jumping into the real estate market, is that you can save money from renting out your room, and over a few years you can use that money for a down payment on a rental unit.  This way you reduce the hit on your own personal checking/savings account since the money from renting out your room is money you wouldn’t have had anyway.

Conclusion to Renting a Room

While there are could be some negative to renting out a room in your house, I believe that this reduces that big step from not owning rental real estate to owning it!  I really believe this could make the transition much easier (especially if you are single).

Good Luck,

MR

 

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Using Ebay to Teach Kids About Business

April 20th, 2011

Today I would like to share with you a story about my son, and how I’m using ebay to enhance his desire to make money.

My Entrepreneurial Son

James (randomly chosen name) started selling lemonade from a lemonade stand for 25 cents when he was almost six years old.  I thought he wouldn’t last, and while he only did lasted an hour, it was thirty minutes more than I thought he would do.

On that particular day, he made $3.46.  Since he was selling to young kids, there is always a kid or two that doesn’t have enough money, so he sometimes sells to them for less money, and that is why the money sometimes comes back with unusual amounts…

The following year, he sold lemonade too, but what caught my attention was when he decided to try to sell lemonade in late September.  It was way to cold for a lemonade stand, but he wanted to try anyway.

At first, I was going to explain to him the principles of supply and demand, but then I decided it was better than he experienced “no sales” first hand.  “Trying and failing” is sometimes a great opportunity for a life lesson!

So he went out to try to sell lemonade on a damp, chilly day.

After thirty minutes, I went out to check on him (at this point he was seven years old).  And lo and behold, the lemonade stand was unoccupied.  Then, I saw him riding his bike a few housed down yelling “Lemonade, get your lemonade here, refreshing lemonade“.  I started to call out to him, intending to making him stop yelling, but then I let him go.  I shook my head as I walked back into the house, slightly impressed with his clever advertising idea.  I thought, not too shabby for a young seven-year old…

So another 50 minutes passes, he gives up and comes in, and I’m all ready to explain why my “supply and demand” lesson to him on “why he didn’t sell any lemonade“… but he had!  Apparently, some of his neighborhood friends heard him yelling and bought some lemonade.  And while his total sales only came to $1.75, it was $1.75 more than I thought he would sell!  This is the time I decided to teach him about business, using eBay as a learning tool.

You might be thinking “Why eBay“?  Here are the  reasons:

  • It’s a fairly simple business, that you can do mostly from your home.
  • It has all the important elements of a business, such as:
    • a product to prepare and sell, and possible a vendor
    • an advertising element (the write-up for the auction).
    • consideration of business operating expenses for:
      • eBay listing fee
      • eBay final sale fee
      • buy it now fee
      • Paypal fees (if you use Paypal)
      • transportation (gas) expense
      • packaging costs
      • Postage expense
      • Shipping Insurance expense
      • Time and rate of pay calculation
      • Taxes!
    • customer relations
    • invoicing
    • collections
    • and so on…

So, while eBay is just a simple auction, it’s still a great place to start to learn about business!  All of the bullet points above are excellent business functions to learn!  The cost for the point of entry into this business is ridiculously low too!

Our Adventure as Sellers

Since my kids (I also have a daughter) were born, I’ve always tried to give them financial advantages.  During my period of reading any financial book that I could get my hand on in the library, I read about a  board game called “Cash Flow for Kids“.  Intrigued, I started to try to find it online.

All of the sites that I came across online listed the product for $40.00 or more!  Then I got lucky!!!  I found a site that sells the product for $26.00, and if your orders total over $50.00, shipping is free!  In addition, after you buy so much, you get a 40% discount on the next shipment!

I wanted the game, but I knew I had the eBay opportunity that I was looking for!  Not only would I buy the game to teach my son about business and investments, I would also teach him by selling this production on eBay for profit.  Surprisingly, on eBay, it was going for a higher price than what the online stores were listing it for…  Although, some were out of stock of the products too.

This was great because after my son and I look the pictures (this was his contribution, with help from me of course), and developed the sales pitch (this was all me, but I reviewed it with him) our entire advertising and eBay listing phase was completed.  All we needed to do was use the previous auction as for the basis for a current one!

Next, I created an auction watcher shortcut, and my son and I would check daily to see if our product sold or not.  We only sold two at a time per week  because we didn’t want to flood the market and drive the prices down.  After all, it was a narrow niche!

A big bonus came in October and November!  While the number of auctions for this product increased on eBay, demand still outstripped supply, so the price of the auctions went all the way up to the $90 and $95 dollar range!  My son and I were ecstatic!

So we did this for about a year and a half, until the supplier discontinued carrying the product.  I kept one of the games for the kids to play, and then discontinued the eBay business.

What is My Son Doing Today?

Well, he must have learned something about eBay and business because now he wants to sell some of his toys on eBay instead of in a garage sale.  He has learned that the market is larger and pays more than the smaller garage sale crowd!  So this October and November, I’m going to help him with his own eBay experience!

-MR

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