Entrepreneurship is not solely about making money, though that is certainly a huge perk. It is also about creativity, innovation, problem-solving, and learning essential life skills during the entrepreneurial journey.
By starting your own business as a young person, you have the opportunity to bring your ideas to life and make a real impact on the world around you.
But before embarking on this exciting venture, you must know the fundamentals of starting a business and brighten the chances of making it a success.
This article will highlight everything you need to know about becoming a young entrepreneur. Let’s dive in.
Choose Your Business Idea
The first thing you need to do to start a business is to come up with a kid business idea. That might sound daunting, but it can be super interesting and easy. If you have a particular passion that you would like to turn into a business, such as cooking, then you are lucky.
Otherwise, it does not need to be a struggle, and here is what you can do:
Begin with a Brainstorming Session
While it may seem like this is a decision you can not make without being very serious and channeling in all the critical thinking skills you can, it does not have to be that hard.
Just grab a notebook and a pen, and put your imagination to work. There are innumerable businesses out there to choose from as a child. The goal here is to explore all possibilities, no matter how crazy or radical the idea may seem. Remember, creativity is at the core of becoming a successful entrepreneur. Many of the world’s biggest businesses today started with an eccentric idea and eventually became giant corporations.
Start by jotting down any interests, hobbies, or activities you are passionate about and enjoy the most in your free time. Consider your unique skills and talents, subjects you excel in at school, or problems you encounter that you would like to solve.
For example, if you are a math geek and love computers, you might have a great foundation to become a successful programmer. Likewise, if you are good at painting or crafting, you can set up an online store and sell your artistic talent. If you like pets, you can consider opening a pet shop or providing pet sitting or grooming services. A babysitting service could also be a viable choice if you like being around kids.
Your unique abilities and passion can be the basis for potential business ideas that you could turn into reality.
Once you have a list of ideas, take some time to narrow it down to your top contenders. Think about which ideas you can put all your energy in the most to execute and stick to, especially during the tough times. Gather your friends and family members to discuss which ones have the greatest potential for success.
Research the Market
Once you identify your interests and passions, you must conduct thorough market research to study customer needs and preferences and reduce the risk of failure. That is crucial for ensuring that your business idea aligns with what customers want to buy and has the potential to succeed. Start by researching current market trends and consumer preferences in your chosen niche.
You can talk to potential customers who can provide invaluable insights into what the target audience might be looking to readily buy and pay for. These could include classmates and other people in your high school and family.
Ask them what products or services in the specific niche are in high demand and how your business idea can address those needs and provide value to them.
Do not forget to consider the competition. If the market is already saturated, you might face difficulty standing out from your main competitors. It is a good idea to observe their strengths and weaknesses, and what you do can differentiate yourself and establish a unique position in the market.
Accordingly, you can better assess the practicality and feasibility of your small business idea and make informed decisions moving forward.
Create a Business Plan
Now that you have decided what business you want to start, it takes you one step closer to becoming a business owner at a young age. However, there is still a long way to go, and the next vital step is to create a solid business plan.
A business plan is a written document that encompasses everything you need to set up and run your business, including but not limited to your initial startup costs, product or services on offer, pricing, target market, budget, financing and marketing your business and expected profit.
Set SMART Goals
Set goals to help you bring your vision to life; however, they must be SMART, which stands for specific, measurable, achievable, relevant, and time-bound. In other words, your goals should be clear, realistic, aligned with your mission and vision, and have a defined timeframe for completion.
Gather your family and start by identifying the key objectives you want to achieve in the short term (e.g., within the next year) and long-term (e.g., within the next five years). Break each objective into smaller, actionable goals that meet the SMART criteria.
For example, if your objective is to increase sales, a SMART goal might be to increase monthly revenue by 20% within the next six months. This goal is specific (increase revenue), measurable (by 20%), achievable (based on current performance), relevant (to your overall business objectives), and time-bound (within six months).
Likewise, you could set other realistic goals for your business, such as acquiring a specific number of new customers within a certain period or increasing prices up to a specific percentage over the months.
These SMART goals will provide a direction toward which you must steer your business in the near future. By defining goals, you have a road map to success. You can revisit them to track your progress along the way and make improvements to achieve them.
Crafting a Unique Selling Proposition (USP)
Creating a compelling unique selling proposition (USP) is vital, especially in a saturated market. It can be the difference between standing out from the competition and attracting your target audience or going out of competition very soon. It is what sets your business apart from others in the industry and why customers should choose your product or service over your competitors.
To craft a compelling USP, start by identifying your competitive advantages. What makes your business unique? Is it an innovative product or service, or perhaps attractive prices?
Next, consider the benefits your product or service offers to your customers. How does it solve their problems? What makes it different or better than other solutions on the market?
Create a short and sweet statement communicating the significant benefit or value of choosing your business, such as a catchy slogan or tagline. Your USP must resonate with your target market and leave a strong lasting impression, distinguishing you from others.
Financial Planning and Budgeting
Financial planning and budgeting are essential aspects of effective money management and ensuring the long-term success of your business. Financial literacy is one of the most important factors you need to learn before starting any business.
As you write down your business plan, create a detailed financial plan that outlines your business’s startup costs, overhead expenses, and profit estimates. Consider how much money you have on hand and what you need to start and operate your business until you break even and start making profits.
Think about how you will acquire the funds needed. Do you intend to invest your savings, get help from your parents, work extra to raise some extra cash, or maybe a combination of them?
Next, develop a realistic budget determining how much money you can spend toward various crucial areas of your business, such as buying equipment and supplies, marketing and advertising, and overhead costs.
By taking a proactive approach to financial planning and budgeting, you can ensure financial stability by having adequate resources to keep the startup running and meet your goals while avoiding debt.
Marketing Your Business
Even the best ideas in the world can fail if the potential customer does not get to know about your business. Without effective marketing, all your hard work could go to waste. Therefore, marketing your business is indispensable to acquiring customers by informing them what you have on offer.
Start with creating engaging branding materials that reflect your brand identity and image, such as a logo. Whether it is setting up a lemonade stand or a business selling handmade crafts and homemade crafts or baked goods, you must set yourself apart from the rest of the businesses in the same market.
In the modern digital age, having a powerful online presence is an effortless way of reaching and engaging with your target audience.
Here are some easy and viable steps to building an effective online presence to promote your business from the comfort of your home:
Leverage Social Media
Social media is an effective medium through which you can reach massive target customer accounts to build brand awareness with minimal effort and for free.
Make sure to choose the right age-appropriate platforms; that is where your audience likely spends most of their time. Facebook, Instagram, and YouTube are some popular choices to boost your brand visibility. Post relevant, valuable content that is engaging and keeps the viewer entertained, and build a customer base by interacting with your young followers who might be excited to support your business.
If you are a parent reading this, prioritize your little one’s safety and privacy. Educate them about online safety and privacy best practices, and always adhere to COPPA (Children’s Online Privacy Protection Act) guidelines when collecting personal information from kids under 13.
Create a Website
Your website serves as the one-stop shop for your business, offering detailed information about your brand and its core values and offerings. It enables potential customers to find and contact you for more information or queries and adds to your brand’s credibility.
Therefore, make sure the site is well-designed, user-friendly and easy to navigate, and optimized for search engines (SEO) to drive maximum traffic.
Use Email Marketing
When you interact with your followers online, ask them if they would like to receive regular updates about your business. That way, you can build an email list of prospects and directly advertise your product or service by sending regular promotional materials like newsletters to only relevant people.
Consider Online Advertising
Pay-per-click (PPC), or paid online advertising is another valuable way to market your business and reach maximum eyes conveniently. If your budget allows, consider running targeted ads on platforms like Google, Facebook, and Instagram to reach new customers.
It might seem like extra money spent on nothing, but it can help reach your local audience and get you more customers quickly.
By building a strong online presence, you can reach a larger niche audience, increase brand awareness, and drive sales for your business.
Meet the Legal Requirements
Before you officially launch your business, it is crucial to understand and stay on top of all relevant legal requirements, even if it is a kids business. By ensuring compliance with state laws, you are less likely to encounter any legal issues along the way, such as fines or penalties.
If you are under 18, your parents will have to help you fulfill all paperwork and manage other legal responsibilities on your behalf.
The following are some vital legal considerations:
Think of a Business Structure
Determine the legal structure of your business, whether it is a sole proprietorship, partnership, corporation, or limited liability company (LLC). Each structure has different permit requirements and tax implications, so choose the one that best suits your startup.
Register the Business
Choose a unique and catchy name for your startup and register with the relevant authorities. That ensures no one else can use the same name and helps protect your brand identity.
Obtain Necessary License and Permits
Obtain a business license and other required permits if needed for your specific type of business from the relevant authorities. For small businesses, things are not super complicated, so you only need to fill out some forms and meet certain requirements as given, like showing your business plan, deciding the business structure, providing identification documents, etc.
You can usually find all the information on government websites or by contacting the help center of local or state government offices.
Submit Applications
Fill out the necessary application forms and submit them to the appropriate government agencies along with paying a small fee. Be sure to double-check that you have completed all sections accurately and provided all requested information honestly.
Follow Up
Keep track of your applications and follow up with the relevant authorities if you do not hear back within the mentioned time frame. You might need to provide additional information or address any questions or concerns that may arise to keep the ball rolling.
Fulfill Tax Obligations
Understand your state tax requirements as you must file income tax returns. If you have earned $400 or more in a year, you will be liable to pay taxes to the government.
Consider hiring an attorney or accountant to help you manage the complex tax laws and ensure compliance. For the most part, it is just about keeping records of the money being spent and earned for tax filing purposes.
Intellectual Property Protection
If your business involves creating original products, designs, or content, consider applying for trademarks, copyrights, or patents to protect your intellectual property rights. That way, no one can take advantage of you being a kid, and you will protect your ideas and assets.
By understanding these legal requirements, you can better navigate the legal aspect and set your business up for success.
Display Permits
Once you have received your permits, you can choose to display them prominently at your place of business. That can help build trust with customers and authorities by demonstrating your commitment to compliance with the laws.
You Are All Set!
Starting a business is not just something older kids and adults can do. If you have an idea and the drive to put in the hard work and deal with some obstacles during the process, you can launch your own business successfully.
By following this guide about how to start a business for kids, you can embark on an enthralling path to successfully unleashing the kid entrepreneur in you.