Patrick G. Mackaronis on Teaching Business Skills to Child Entrepreneurs

Patrick G. Mackaronis, co-founder and Director of Business Development at social media startup Brabble, waxes poetic on teaching business skills to child entrepreneurs.

Parents whose children have entrepreneurial leanings are likely to discover it early in the children’s lives. Before preschool is over, these children want to run lemonade stands or hold yard sales. By elementary school, their business plans expand to include pet sitting, dog walking, yard work and a variety of exotic and sometimes harebrained schemes flowing from the child entrepreneur’s vast imagination.

Not all unusual business schemes are doomed to failure, of course. One 8 year old child in our community convinced her parents to let her buy glow sticks for $1 at the dollar store and resell them for $2 on the town square. She made $200.

Children with entrepreneurial spirit are easily recognizable for their persistence. These children don’t give up when someone discourages their business plans. They may speak their ideas for running a business more emphatically in response to adult expressions of concern. They may even make some revisions to accommodate the concerns. But the one quality that is a hallmark of child entrepreneurs is that they will continue to show interest in pursuing their business ideas.

As the parent of a would-be child entrepreneur, your role is to support and guide the child so that he or she learns solid business skills. It does involve some work, but take heart: studies have shown that most successful business owners started their first business as a child.

Business Plan

Most children with a desire to run a business know exactly what sort of business they want to operate. Parents can help them establish a very basic business plan so that they understand the different facets of running a business.

For example, the parent and child can figure out what product or service the child will offer, what costs will be incurred in providing that product or service, where the start-up funding will come from, where the customers will be found, how to price the product or service, how to advertise the product or service, limitations on providing the product or service, and work quality.

Product or Service

Help the child organize his thoughts about exactly what product or service he or she will offer. Is this a product or service for which there is a genuine need in the community? Is this a product or service the child can realistically provide?

Start-up Funding

Whether for supplies or advertising, a child’s business may involve start-up costs. It is important for a child to understand that selling something or providing a service involves more than taking in money. Business investment is a risk. Is the child going to buy the lemonade ingredients for his lemonade stand with his allowance? Is he going to do some chores to earn that money? Are his parents willing to give him a start-up loan to be repaid from his profits? The child should understand that he will only make money if he is able to earn more than he invests.

Customers

No matter what service or product the child plans to offer, customers wanting that service or product are essential. A child who decides to write and sell a newspaper or make and sell homemade perfume or take on a task that to all appearances is beyond her years may have a hard time finding customers beyond those few friends and neighbors who hire or buy out of kindness.

Choosing the location or timing for a product or service based solely on the child’s schedule will also limit the customer base.

Encourage children to think logically. What kind of people want to buy lemonade? Thirsty soccer players? Why not set up the lemonade stand near the soccer field? Where do you find people who need dog walkers? Maybe a nearby vet or pet store will allow the child to advertise on their bulletin board.

Children also need to put their creative abilities to work. When my 7 year old wanted to start a leaf raking business, we expressed concern that people would be hesitant to hire a 7 year old and her 6 year old sister. Her solution? Hire her 11 year old brother to work with her at 3 times her “salary” so she could capture customers by promising the services of a 3-person team that included an 11 year old.

Pricing

Children are often unrealistic about pricing. They tend to approach pricing from the perspective of the amount of money they want to earn. Encourage your child to view the pricing issue from the customer’s perspective as well as their own. Also encourage them to take costs and the price of competing products into account when pricing their product or service.

What does this product or service normally cost? What makes hiring or buying from a child more risky or beneficial for the customer? Is your child offering something extra? What is the cost of any supplies or advertising? Show the child how to calculate a profit by taking into account the payoff of any start-up costs and ongoing expense of supplies and/or advertising.

Sales/ Service Area

In choosing a sales/service area, parents will be concerned about the child’s safety as well as reasonableness of the child having access to the work. A job across the city is not feasible unless the child is old enough and permitted to ride a bike or bus there, or unless a parent will drive the child to and from the job.

Advertising

Where and how does the child plan to advertise? Do local ordinances restrict neighborhood signs? Make sure the child understands that permission is required to post notices on private property including store bulletin boards. Will the child be advertising on the neighborhood listserve?

Limitations

Parents are likely to limit a child’s business activities to accommodate safety concerns and to ensure that the child’s business is not interfering with school and other important activities. Spell out in advance what the rules are: does a parent have to meet a prospective customer? Is the child restricted to providing service only to persons known to the family? Is the business only able to operate on weekends? Does a child have to be able to perform all of the work himself without parental assistance? Is there a limit on how many customers the child may take on in a specific time frame?

Work Quality

Helping a child develop a sound work ethic is an important role for a parent. A child undertaking work for pay should understand her responsibility to perform all of the required work to the best of her ability. If she gets tired or bored, she cannot simply abandon the job. If she is babysitting, she may never leave a child in her care unattended and must know when to seek the help of an adult. If the child cannot do the work because of unanticipated skills issues, the child needs to be honest with the customer and not accept payment. If the child inadvertently breaks something of the customer’s, the child needs to know that it is her responsibility to offer payment, even if that means she potentially makes no profit or incurs a loss for the job. If the child wishes to do another activity when work is scheduled, it is her responsibility to either reschedule the work if possible, find a replacement acceptable to the customer, or sacrifice her own preferred activity to live up to her business commitment.

The child’s business commitment should also be viewed as a family commitment. If you have allowed your child to commit to taking care of someone’s pets or to babysit, forcing a cancellation for subsequently scheduled family activities of your own sets a very bad example for your child. It also affects your child’s credibility as a reliable service provider.

Teaching children the skills necessary to operate their own businesses can be trying, but the child who masters these skills has developed important tools for success in the adult business world. The responsibility and self-reliance that running a business engenders will aid the child entrepreneur in a vast array of future endeavors.

Patrick G. Mackaronis’ Interview with the BreadStreet Investors Union Founder, David Kent

Patrick G. Mackaronis, co-founder and Director of Business Development at social media startup Brabble, interviews BreadStreet founder David Kent.

Breadstreet.com, Inc. is one of the nation’s leading investor leads providers. David Kent, President of BreadStreet.com, Inc. recently started the first and only of its kind Investors Union founded to create a marketplace for private investment deals such as oil and gas drilling, films, alternative energy, new technologies and other types of worthy ventures that do not have access to the public capital markets because of stringent SEC regulations in the area of private investments in start ups. I thought it would be interesting to learn more about his newest project along with his tips for Entrepreneurs currently on the market for investors funding. Check out his answers about this latest project!
Jim: David, can you tell us a little about yourself?

David Kent: I consider myself an entrepreneur. I enjoy being in business and helping other businesses find investors and get their ventures off the ground. I’ve had curiosity about business ventures and investments from an early age. I started my career in an oil and gas call room pre-screening investor prospects for big Texas oil and gas companies. I worked my way up into a supervisory position, learned the ins and outs of the business and soon managed my own call room. I’ve been in the investor leads industry for 10 years now and I’ve been the President of BreadStreet.com, Inc since 2005.

Patrick G. Mackaronis: You mentioned the investor leads industry? For many Entrepreneurs, this industry remains a mystery. Can you tell us about the secret behind the veil? Who are these investor leads and can they help Entrepreneurs looking for funding?

David Kent: Absolutely! According to a study by the Small Business Administration, 96% of small businesses get funded through individual private investors. A private company looking for angel capital needs access to quality pre-screened investor leads that they can present their opportunity to. Lead providers normally purchase investors leads lists from companies raising capital or create their own lists through investment surveys and then sell those lists to other companies looking for funding. A good investor leads provider surveys investors to make sure they meet the standards for an “Accredited Investor” set by the Securities and Exchange Commission (SEC). BreadStreet.com further goes beyond the basic definition of a leads provider and actually invites accredited investors to join as members of the BreadStreet Investors Union for the purpose of reviewing investment opportunities. This process tremendously helps Entrepreneurs in that they end up talking to an interested investor willing to listen to their proposal as supposed to cold calling an investor lead from a generic investor leads list sold by our competitors.

Patrick G. Mackaronis: What is the BreadStreet Investors Union?

David Kent: The BreadStreet Investors Union was started as an initiative to help accredited and financially sophisticated investors streamline their investment research process and to create a marketplace for private deals that cannot be marketed to the public because of the SEC non-solicitation rule. In the past few years, we had received many reports from BreadStreet Investor Members that they get overwhelmed with investment calls from all kinds of companies and that they do not have the physical ability to properly screen the multitude of calls to find “the one”. This gave us the idea to start the Union where members set their exact investment criteria and investment range. When the right opportunity comes along, our members are the first to have a look. Now, investor members of the Union refer all of their investment calls to the BreadStreet web site. Callers complete their proposals on our secure Investments Message Board and our investor members get a notification if the opportunity meets their criteria. They can further take a more proactive approach and search the board themselves. The best part about being a Union member is that you get activity reward points for the investment reviews you complete that you can redeem for various perks like gift cards, travel, laptops etc. Thus, investor members of the BreadStreet Union never get taken advantage of by investor lead providers who sell the investors’ personal information without the investors’ authorization. Our members totally love the program and we enjoy great loyalty from our members!

Patrick G. Mackaronis: What about Businesses looking for funding? In what ways can the BreadStreet Investors Union help them find that funding?

David Kent: The benefits to capital seekers and issuers are many and the Union can definitely have a great impact on businesses’ ability to find funding. Let me start though by saying that BreadStreet.com, Inc does not participate in the capitalization process in any way. Breadstreet.com, Inc does not pre-sell, close or advise investors to invest in any company and BreadStreet cannot promise or imply the final results from the discussions between Issuers (capital seekers) and Investor members. What we guarantee though is that any capital seekers who comes to us and meets the criteria set by our union members will have the best shot. It is our guarantee that every single investor prospect from the BreadStreet Investors Union (categorized as “Documented Investor” at our site) will not only be a qualified financially sophisticated investor but will also be ready to take our Client’s call and have a hard look at their deal! No wasted time for Entrepreneurs + 100% Reg D compliant leads! Further, the letter that the Union members provide to BreadStreet is made available to the Entrepreneurs. The letter includes the investor’s financial professional (accountant, investment advisor, banker) contact information and an authorization to any party in possession of the letter to verify the investor member liquidity stated on the letter.

Patrick G. Mackaronis: Ok. From what we heard so far, I have no doubt that many Entrepreneurs will be thrilled to talk to the BreadStreet Union Investor Members. How does BreadStreet get compensated though? Clearly, lots of work goes behind the scene.

David Kent: Yes of course. We make sure we do our homework. Yet, the service is inexpensive compared to commissions charged by licensed broker dealers. Our Clients only get charged a flat fee for contacting an investor member of the Union. Further, they pay the fee only if they want to contact an investor member and not if the investor calls them as a result of seeing their ad posting on the Investments Board. The contact fee is anywhere from $250 to $400 per Documented Union Investor Member and the average liquidity of our investor members is in the range of $193,000. We have members with liquidity as high as $10 million and the contact fee is still a flat fee of $400. Besides, if an Investor member declines to review a proposal, we guarantee the delivery of an investor prospect with comparable qualifications to the Entrepreneur who recruited our service.

Patrick G. Mackaronis: Can you give us an example of the type of Client who comes to the BreadStreet Investors Union?

David Kent: We have one man sole proprietorship type start ups to big oil and gas corporations using the service. Any private company looking for investment capital will find the service invaluable. We have Clients in all industries.

Patrick G. Mackaronis: What will you recommend to the business people who are long on ideas but short on cash who may not be able to afford the service?

David Kent: If they cannot afford the proactive approach of directly contacting the accredited investor members of the BreadStreet Investors Union, I would recommend the next best thing which is having their investment proposal posted on our Investments Board. We give many incentives to our investor members to regularly check out the board. If an investor calls you as a result of seeing your ad, all you pay for is the ad spot, which is $49.95 a month and you further get complementary access to our premium database of surveyed investor leads and listings of angel capital and venture groups..

Patrick G. Mackaronis: What is your single best idea for Entrepreneurs on the market today seeking capital to get their ventures off the ground?

David Kent: Get proactive and make some calls to investors! It never hurts talking to a millionaire!

Patrick G. Mackaronis: Thanks for your time David! You’ve given us some invaluable insight to your organization that I am sure will be helpful to Entrepreneurs!

Interview by: Patrick G. Mackaronis

Patrick G. Mackaronis Has Seven Steps to Starting a Successful Home-Based Business

Patrick G. Mackaronis, co-founder and Director of Business Development at social media startup Brabble, has seven wonderful steps to starting a successful business from the comforts of your own home.

If you are thinking of going starting a home based business you are are not alone! Each year several thousand people begin a business at home on either a full or part time basis. The process brings with it a myriad of emotions to include excitement, anxiety, and uncertainty since there is no certain outcome. However, if you dream of charting your own course, developing a business from concept through operation, feel excited by the challenge, and believe you will enjoy the freedoms that business ownership brings with it, then move forward because the rewards for success are many.

While there is no set formula for ensuring that your business will thrive, you can greatly increase the likelihood of success by creating a strategic plan of action. The brief outline of steps which follows is just such a strategic plan and should enable you to embark on the path of entrepreneurship much more confident of your ability to succeed!

Step One: Setting Realistic Expectations

One of the first questions to be asked in starting a home-based business concerns your expectations with regard to business ownership. One of the first tasks to perform in deciding to start a home-base business is to carefully reflect on what it will take to establish a successful and growing firm. Certainly it will take financial investment, how much will depend on the type of business you establish, but it will also consume large amounts of your time from inception trough day-to-day operation. Carefully consider how prepared you are for this journey.

Does your home have sufficient space to accommodate a home-based business? Do you have the financial resources to begin? Are you prepared to put in very long hours and possibly seven day work weeks to get the business up and running? How will this time commitment impact your family? Do you have an already established network of potential customers? Are you prepared to assume the risk that the business may fail?

The above questions are not intended to dissuade you from starting a business; quite the contrary, they are meant to guide your thinking. By establishing a realistic mental outlook at the outset, you will have gone a very long way toward turning your dream of business ownership into reality! Being an entrepreneur is all about mind-set!

Step Two: Which Business is Best for YOU.

If you have made it to Step 2, congratulations! You have carefully weighed every consideration and are ready to take the next step on the entrepreneurial path. Now it is time to decide which business will be the right one for you.

As a first step, it is best to evaluate your skills, past experience, needs, interests, and hobbies to see if one of them sparks an idea from which you can build a business. You can record your thoughts with regard to each area in your journal to help you in clarifying your thoughts and narrowing your focus. Although starting a home-based business in an industry with which you are familiar can be helpful in terms of a limited “ramp-up” period, it is a misconception to think that you need to build a business based on your prior professional experience.

Many successful businesses were built by people who had an idea and ran with it! It is well known that those who feel a “passion” for their business are much more likely to succeed in! Once you generate some possible business ideas, do research to test its feasibility in the marketplace by performing industry- and consumer-based research. After you have narrowed down the choice to three or four ideas, you will want to assess which most closely align with your skills, preferred work style, as well as financial and lifestyle goals.

Step Three: Financial Considerations

A primary consideration in starting a home-based business is the total costs involved, as well as a thorough analysis of your current financial situation. The total costs include not only the monetary outlay necessary to launch the business itself (licensing fees, professional fees, supplies, etc) but also how much money you will need on a monthly basis to pay your bills and meet other financial obligations. However, careful planning combined with research into all the avenues available for financing means that anyone with the desire can certainly achieve the goal of small business ownership!

Step 4: Develop A Business Plan

It is well recognized that the creation of a well thought out and strategic business plan has been an important factor in the success of many small businesses. A business plan is basically a blueprint for how you will operate the business. While many business plans are written for the purposes of obtaining financing, it is generally a good idea to create a plan even for your own use.

The plan need not be very lengthy if you are not seeking funding, but should include all the essential areas such as legal structure, marketing research and the development of a marketing plan, as well as financial projections, most importantly the cash flow and income statements. Overall the creation of a business plan will help you to clarify your goals and objectives for the business, as well spot areas where you will need to make adjustments so that you can move forward with a clearer picture of the road ahead!

Step 5: Managing Your Business

Congratulations! You have moved through all of the preparatory work for business ownership and are now ready to get into the nuts and bolts day-to-day operation This will be a time of excitement as well as confusion since you won’t know where to start with so many priorities ahead of you! Your first task will be to carve out a separate office space in your home where you may work undisturbed so that you are able plan out all the steps necessary to launch a great new company! Your second task is to create a strategic plan with daily, weekly and monthly goals for every area of the business: financial, marketing, and operations. Think of it as the beginning of your policy and procedures manual.

The important thing is to not overburden yourself but, rather, to create a realistic plan with deadlines you know you will be able to meet. It may very well happen as you move through the stat-up process that you will find the need to change the order of goals or delete/add others. This is part and parcel of business ownership where the first rule is that nothing is written in stone!

Step 6: Developing A Sales Mind-Set

Every business owner is first and foremost a salesperson, no matter the product or service being offered. There is just no getting around the need to perform sales-related tasks if we hope to firmly establish and then grow the business. With this in mind, we can see that developing a sales mind-set is a critical skill for any business owner. To develop a sales mind-set is it helpful to think of yourself as an educator: you will be teaching your customers or clients all about your product and service and how it can benefit them. It is widely known in the sales world that consumers don’t purchase the product or service in-and-of itself, but purchase the feeling which that product or service instills in them. The key to successful sales is persistence and patience. Having a sales mind-set means you understand and accept that a “no” today can very well turn into a “yes” tomorrow through a targeted and consistent marketing campaign!

Step 7: Purchasing A Franchise

There is another avenue to home business ownership aside from starting one on your own and that is to purchase a franchise. Franchising offers many benefits such as a successful track record, fully formed operational plan, ready-made marketing materials, on-going support (so that you are in business for yourself but now by yourself”), along with the opportunity to obtain financing, either in-house through the franchise itself, or through the franchisor’s affiliation with third-party funding sources. There is a wide selection of home based franchises for you to explore so no matter your particular area of interest, there is very likely a franchise to match it! If you have a dream to be a business owner but would also like to work within an established and successful business model, franchising may very well be the answer for you!