There are two basic ways to earn money. One way is to make or gather something that others are willing to buy. The something you make or gather is called a good. The other way is to do work that others are willing to pay you to do. This work is called a service. Maybe your family gives you money for doing household chores like dusting, washing the dishes, or feeding a pet. The amount of money your family is willing and able to pay you is probably limited. Have you ever tried to sell a good or service to people outside your family -- perhaps to friends or neighbors? If you have, you were probably an entrepreneur.
The dictionary says an entrepreneur is, "A person who organizes and manages a business, assuming the risk for the sake of profit." In short, an entrepreneur is a businessperson who does these things:
- Sees an opportunity for making money
- Makes a plan
- Starts the business
- Manages the business
- Receives the profit
A business can be a big company that makes televisions or computers. A business can also be small such as a neighborhood grocery store or a soft drink stand at a local ball game. In this lesson, you are going to learn more about what entrepreneurs do and what it takes to become a successful entrepreneur.
During this lesson, you will be asked to identify three businesses that you could start to earn extra money. Once these are identified, you will need to create a flier to promote one of your money-making ideas.
Activity 1: Choosing a Business
What do you like to do? What do you do well? Some people think that working means doing something they don't enjoy. But there are jobs that are both interesting and fun! Often the jobs that people enjoy are the ones they do well or are have an interest in. Maybe you like to draw. You might turn this into a job designing greeting cards or T-shirts. If you are good at math, you might tutor others who need help with their math homework.
Are there customers who want to buy what you are selling? Perhaps your friends have complimented you on something you have made and asked you to make one for them. Mary Catherine Lindsay made personalized cards for a school project. So many adults wanted to buy her cards that she and her dad created Grasshopper Press Stationary.
Are your potential customers willing to pay the price you are charging? When setting a price, you will want to consider how much work you must do and the price others charge for a similar product where you live. If you know others in your area are charging three dollars per hour for walking a dog, it is probably not a good idea to charge five dollars per hour for the same service. Maybe you have seen bookmarks selling for two dollars in a local store. You might sell yours for the same price or perhaps for a little less.
Can you make a profit? You will also want to choose a price that lets you make a profit. With some jobs you have to spend money before you can earn money. If you decide to sell lemonade, you will have to buy the ingredients -- lemons and sugar. You will also need cups in which to serve the lemonade and ice to keep it cold. The cost of the things you use to make and sell the lemonade will be your expenses. To earn money, you will have to charge your customers a price that is higher than your expenses. The money you collect from the sale of the lemonade is your revenue -- the price of the lemonade multiplied by the number of cups you sell. When your revenue is greater than your expenses, you have earned a profit. If your revenue is less than your expenses, you have a loss. Use this activity sheet to practice calculating profit and loss for several money-making ideas.
Is your business something you can do safely? This is VERY IMPORTANT! Some jobs can be dangerous. A hot oven is used when you bake cookies. Mowing lawns requires a lawn mower. Can you get permission to use the equipment you need and is there an adult who will help you use it safely? If you are working at someone else's home, you will always want to get approval from an adult to go there.
Use this activity sheet to record three jobs you think you could do. Be sure to consider all the points mentioned above when making your choices. For ideas on what others your age are doing to earn money, visit these web pages:
- Kid's Money Making
A page managed by KidsMoney.org where young people share money-making ideas and advice.
- Summer Jobs for Kids
Disney Online's Family Fun web site suggests tried and true ideas as well as some more unusual, creative ideas.
- Twenty Money-Making Ideas for Young Persons, which offers more ideas for making money. You can also print copy of this list.
Activity 2: Letting Others Know What You are Selling
To let people outside your family know you have something to sell, you will need to advertise. How you do this depends in part on what you are selling.
- One of the first things you can do is to ask everyone you know to spread the word -- relatives, friends, friends of friends, teachers, coaches, neighbors, and anyone else you know who might be interested in buying what you are selling OR who knows someone who might be interested in buying what you are selling.
- Another way to advertise is to show off what you can do. Offer free samples of the cookies you want to sell. Rake your family's yard. When neighbors comment on what a good job you are doing, let them know you can be hired to do the same job for them.
- Choose the right time and place to offer what you are selling. A good time to sell lemonade is on a hot day at a ball game, or where there is a neighborhood yard sale. If you are selling bookmarks, you might want to ask people at a local bookstore or library if they will display and sell them for you.
- Create a poster or flyer that advertises what you are offering. Post your advertisement on bulletin boards in neighborhood stores and other places where potential customers are likely to see it. You could also pass out flyers door to door, but do NOT put them in people's mailboxes. (There's a law that only U.S. mail can go in mailboxes.) If you have advertising expenses, don't forget to include these when determining the price of what you are selling!
Choose your favorite money-making idea from Activity 1. Create a flyer that advertises what you are selling. These are things you may want to include on your flyer:
- Pictures, words and other things that catch people's attention.
- What you are offering.
- Your qualifications for doing the job.
- Why customers might like or use what you are selling.
- What your good or service costs.
- How to contact you -- usually a phone number if you are providing a service.
If you want some extra money, becoming an entrepreneur may be a solution. Keep your eyes and ears open -- you will be surprised how many opportunities for making money will pop up at home, at school, and in your neighborhood! Keys to a successful entrepreneurial experience are finding something you like to do that is safe and that others are willing to buy; it is also crucial to set a price that will yield a profit, and to spread the news on what you are selling.