Editor's note: The article was excerpted from 202 Ways to Make Big Bucks and Stop Mooching Off Your Parents. Buy it today from Entrepreneur Press.
When an allowance or minimum-wage job just won't cut it, it's time to start a business. There's an idea for everyone, regardless of skills, experience or funds. Getting started in any new moneymaking enterprise is always the hardest step. To help you get past this stage, here are the different types of businesses you can start, as well as some other things to consider before choosing your ideal business.
- Provide a service. The first option is to provide a service, such as dog walking, car washing or grass cutting. The best thing about providing a service is that everyone is qualified regardless of age because we all have a skill, knowledge or experience that other people are willing to pay for in the form of a service that you provide; or, they are willing to pay you to teach them your specific skill or knowledge. Providing a service knows no boundaries--any young person with a need or desire to earn extra money can sell and provide a service.
Providing a service is a great option for young entrepreneurs because in many instances the initial investment to get started is little more than business cards and a bit of initial advertising, and often not even that.
- Sell products. Another possibility is to purchase new products, such as sunglasses, clothing, fashion accessories, furniture or gifts in huge quantities at wholesale prices and resell these items for a profit. You can sell them from home, online, at flea markets, from mall kiosks or a vending cart in town. Or you might choose to purchase secondhand products, such as furniture, antiques, collectibles, cars, restaurant equipment or books at bargain basement prices by scouring garage sales, flea markets, business closeouts, auction sales and classified ads, and resell these items for a profit using many of the same venues from which you purchased them. Like providing a service, selling new or used products knows no boundaries, and everyone is qualified regardless of age and experience.
- Manufacture simple products. A third option is to manufacture and sell a product at retail prices directly to consumers, or at wholesale prices and in bulk directly to other businesses such as retailers, exporters, wholesalers and distributors. I know that I am starting to sound like a broken record, but once again, everyone is qualified because we all know how to make something, or with basic training can quickly learn how to make a simple product that can be sold for a profit. Ideally, you will want to start with something you already know and turn a hobby such as making stuff from wood or quilting into a profitable business venture. However, there are also literally hundreds of products that can easily be made at home with just basic training, and then sold for big profits. Just a few of these include candles, soap, toys, clothing, art, jewelry, furniture, garden products, herbs, birdhouses and picture frames.
How Much Money Can You Earn?
How much extra money do you want to earn? I have to put the answer in the form of a question because operating your own business, even if it is a small part-time moneymaking enterprise, almost always gives you the potential to earn more money than you would be able to by working a job. Why? One reason is simple duplication. When you work for someone else, there is only you and only so many hours in the day to work for a specific set wage. When you operate a business, you can duplicate yourself by hiring employees and therefore increase productivity and duplicate your customers. If you're really ambitious you can even duplicate your business by opening in new geographical areas to sell more products and services to more customers and earn more profits and income. Without question, there are upper limits to how much money you can earn operating a small business, but at the same time your ability to earn an above-average income or a ton of extra cash will be determined by your ambition and motivation, and not by punching a time clock trading hours for a wage.
Choosing the Right Moneymaking Opportunity
The type of business or moneymaking opportunity that you are considering must suit you. You may have an interest and even experience in a specific business, selling a product, providing a specific service, or making and selling a product, but that doesn't necessarily make it a good thing for you to do to make money. There are many points to consider when finding a good match, including doing what you want and believe that you would enjoy, capitalizing on current skills and experiences, the amount of money you have to invest to get started, and if you are younger than 16 or so, obtaining parental permission and support.
- Do what you love. I cannot stress enough that you should do what you love to do to earn extra money, or at least something you believe you'll enjoy. If you don't like what you're doing, chances are you won't stick with it for long, and even if you do, you probably won't be motivated to do a good job. What you get out of your business in the form of satisfaction, money and enjoyment will be the direct result of what you put into your business. If you don't enjoy what you're doing, it's safe to assume that will be reflected in the success (or lack of it) of your business.
All successful businesspeople, regardless of their ages, share a common trait: They love what they do. If you enjoy fitness, consider starting a personal trainer service; if you like the great outdoors, then seek out an opportunity that will get you working outside; or if you love animals, then start a pet-sitting business, dog-walking service, or any other number of opportunities that will enable you to work with animals. The old saying "Do what you love and the money will follow" is great advice. Ultimately, if you don't think you would enjoy it, then don't start. You can't stay motivated and rise to new challenges if you don't like what you're doing.
- Capitalize on your skills and knowledge. The first thing you should know about capitalizing on your skills and knowledge is not to worry if you lack business skills and experience in areas such as selling and bookkeeping. These are important skills to have, but at the same time they are also skills that you can learn. More important is the question, "What specific skill or specialized knowledge do you currently have that can be used to start your own business?" Skills and knowledge that you possess are your best and by far your most marketable asset. For instance, if you know how to pay the piano, that is a skill that other people will pay you to teach them. Or, if you know how to build a birdhouse, that is also a skill that you can capitalize on by starting your own birdhouse manufacturing and sales business.
However, with that said, most people have a tendency to underestimated the true value of their skills, experiences and knowledge. But keep this in mind: What may come naturally to you may not come so naturally to others. Likewise, you might think your particular knowledge or expertise may be of little value, but if someone else needs or wants to learn about that knowledge, needs the service, or needs the product, it is very valuable to them. Create a list of all of your skills, experiences and specific knowledge. Then look for ways to build a business or moneymaking opportunity around one or more of these.
- Startup funding. Another important issue you need to consider in terms of finding a good match is the amount of money you have to start a business. The first question is, do you have access to the money needed to start the business? If not, it probably isn't a good match--at least right now--and you should consider alternatives. An alternative might be to start a different type of business that requires less money to get rolling, or find a partner to help share the costs of the business startup and workload.
The money needed to start a business (called "investment capital") can be broken into two categories: The first is startup capital--what you need to purchase equipment, meet legal requirements, or buy inventory, for example. The second is working capital--the money you need to pay all the bills until the business is earning money and reaches a break-even point. Unfortunately, more times than not, a new business that is started without enough money will ultimately fail. This is the harsh reality of the business world.
On a positive note, the vast majority of young people who start a business have little in the way of personal expenses to pay (such as rent or mortgage payments), which means that you can use most of your startup money for the business. Likewise, many of the opportunities featured in 202 Ways Not to Mooch Off Your Parents can be started for less than a few thousand dollars, and lots for as little as $100. Therefore, while having or having access to enough startup funding and working capital is important, if you don't, you will still be able to find a moneymaking opportunity that is right for you.
- Parental permission and support. A good match also means you have full parental permission and support to start and operate a business. Parental permission is an important one because if you are underage, your parents or legal guardian will need to act on your behalf and sign or cosign any number of legal, financial and insurance documents depending on what business you choose.
Equally important is parental support because in many instances you will be relying on your parents or other family members to help out with your venture. This could mean borrowing the family car, having parents drive you around for various business-related reasons, or using space in the family home to store things or set up an office or work area, just to mention a few. Therefore you should discuss your business desires and plans with your parents to get their full permission and support for your venture before making any decisions.