One of the questions I field from parents is “what does my kid need to do to get a business going?” It’s made me realize that what most parents want is a step-by-step guidebook for their kids to follow (and one of the reasons I created The Simple StartUp). While every business is different and there isn’t a “one size fits all” approach, we can identify some core steps and principles that every kid business should go through.
Here are the 10 steps to starting a kid business that I’ve identified and share with my students:
1. Look for problems and begin proposing solutions to those problems.
People love to complain and will always have problems that need to be solved. Start actively watching and listening to see where the pain points are for the group you’d like to help. Write down as many problems as you can and then start trying to think of ways those problems could be solved. Don’t evaluate your ideas or discount any as impractical yet. This is just an exercise in idea creation!
2. Identify solutions that you can provide and charge for.
Take a look at the solutions you suggested to your identified problems. Are there any solutions that can currently solve multiple problems at once? Do you think people would be willing to pay for this solution if it were available? Do you feel like you could easily provide these solutions?
Evaluate each of your solutions with those questions to narrow down your list to 5-10 potential ideas you can take forward as a business.
3. Evaluate your ideas based on excitement and difficulty to get started.
For each idea you are still considering, give it a ranking from 1-10 under two headings:
- How easy is it to start (1 being really hard, time-intensive, requires a different season, or would have a long wait time for needed materials, to 10 where you start the idea right now or tomorrow)?
- How excited are you about the idea (1 is not excited at all and it sounds really boring or difficult, to 10 where you are really passionate about it and would look forward to working on it every day)?
Once you have given each idea two scores, add the scores together. The idea with the highest combined score is the one you should start with! The next highest is your plan B if the first idea doesn’t work out or isn’t what you expected.
4. Develop a Business Snapshot
Traditional business education will tell you that now is the time to stop and write a business plan. This is a long, detailed document that is intended to show potential investors that your business will be a successful venture. While there is nothing wrong with thinking about the details of your business, there is no need for a long, tedious, formal document with plans for a business that could change the moment you start.
Instead, do a Business Snapshot! This is a Business Canvas Model approach where you list out the important areas of your business that need some thought before you begin, and you write down what you think the business will/should look like under those headings. It should take less than 30 minutes.
Once done, immediately get started bringing the business to life!
5. Market Research
What do your customers actually want? You think you have a solution to your customer's problem, but have you checked to make sure? Do some research online, ask people questions, show them samples or free trials, and get their feedback about what they liked, didn’t like, and wished was included.
Adjust over and over to what your customers are sharing with you until you feel you have a decent understanding of what they really want. You should always continue to listen to your customers and pivot based on their needs, even after you start the business. This is how you grow into the business people really want!
6. Start for Free
Don’t put a lot of money into your business as you get started. This increases your risk of loss and puts pressure on you to make sales sooner, rather than later. Instead, look for ways to start the most basic version of your business (I call it the MVP version), and find ways to bring it to people for free.
7. Do a mini-experiment
When you are starting up, don’t sign up for a lifetime commitment that you are going to feel obligated to continue, even if things aren’t working. It’s totally fine to say you are going to show up daily, weekly, or monthly for your business (podcasts, live events, blog articles, farmer’s markets), but put a hard time frame for how long you are going to do it for. Then evaluate if you want to continue.
This is called a mini-experiment, and it gives you the opportunity to reevaluate how things are going after a short period of time, and you can decide whether to continue, pivot into something different or shut the business down. I like 4-8 week experiments for kid businesses to see if people want what you are selling and if you are still excited about working on the business.
Location, Location, Location. Where is your business going to physically or digitally sell? How are people going to find you and how are they going to buy? Try some different locations out and use your market research to try and figure out where/when people want to buy from you.
There’s no magic number or formula for figuring out how much to charge. I usually recommend starting with a price similar to what your competition is charging (as long as you can make a profit from it) and then seeing how that goes. Do mini-experiments with pricing. Try different prices on different days or in different locations to see what price generates the most sales and profits.
How are people going to know who you are, what you sell, where you sell it, and how they can buy it? Think about the different ways you can communicate with your customers and what you want them to know about your business. Again, try lots of different things out to see what works.
There are so many reasons to throw out there as to why now is not a great time or something else is needed before you can start a business, but the reality is that the best time to start a business and begin learning is right now. Will it always work? No, of course not. Will you always learn something? Absolutely.
If you would like more support and guidance for you or your child whilst working on a kid business, visit The Simple StartUp for more ideas, advice, and courses to help you get started.
Read these tips from a teen entrepreneur running a multi-million dollar business.
About the author:
Rob Phelan, CFEI, is a full-time high school personal finance teacher living in Frederick, Maryland with his wife and son. He is the founder of The Simple StartUp, where he guides 10 to 18-year-old entrepreneurs through starting their first businesses, and he most recently published a children’s book, M is for Money, that introduces 3-8-year-olds to age-appropriate money words and normalizes conversations about money. You can connect with Rob on Facebook, Instagram, Twitter, or LinkedIn.