If you want to start a business you can’t really just paint pictures on speculation then try to sell these on the market, without some market research, a business plan and a contingency plan. That is, unless you have a patron. If you have a second job or ‘real job’ that will help, especially if you are, say, working in a gallery or perhaps an art shop. You might be teaching art. Then you can begin speculating and seeing what sells. Also you will become informed about commisisons nad the market place.
My grandchildren have just started a business, and the complete business plan is in place. I interviewed Isabel who is 9½. I was inspired by her lovely packaging.
(Decide on your product)
Lin: I saw a box of eggs that Grampy bought and it had your and Nick’s names on it. How long have you been an egg farmer.
Isabel: Ummm we ‘ve had the chickens for two and a half months but they have only been laying for about a month.
(Work out the details of your product)
Lin: Tell me about your chickens.
Isabel: We have four chickens and their names are Willow, Maple, Tulip and Lime and they are Neros.
(Start-up Costs – outlay)
Lin: How much were they and how much money did you have to put into the business?
Isabel: They were £12.50 each and Nick and I each put £25.00 into the business.
(Estimate running costs)
Lin: How much do they cost to feed. How many eggs do they lay per week.
Isabel: They cost Nick and I £6 every three weeks to feed them. Well, Mummy has three chickens and we have four, but we each pay half for the food.
(Insurance)
Lin: Are there any other costs?
Isabel: Daddy said he would insure them for the first year. Dad insurance works like this: We had to each pay £1.00 (a one-off payment) and then if they die in the first year, he’ll replace the chicken. But we have to pay another 50p if he replaces the chicken (Insurance Excess)
Lin: What about the hen-house?
Isabel: Mummy said the chickens can share her hen house, so we don’t have to pay rent.
(Estimate production)
Lin: How many eggs do the chickens lay?
Isabel: They lay about one egg a day, sometimes we get three eggs and sometimes five eggs a day.
(Estimate selling price based on recouping outlay and making a profit)
Lin: How much do you sell the eggs for?
Isabel: £1.40 for 6 eggs.
Lin: What about packaging costs?
Isabel: Our egg boxes are donated and I make the labels.
Lin: Have you got your outlay back yet?
Isabel: Yes and now we are making a profit.
(Estimate labour time)
What work is involved?
Isabel: I collect the eggs and feed the chickens on weekdays. Nick does it on weekends and cleans the hen house every second weekend. Mummy cleans it every other weekend.
(Who is the target market? Building a customer base)
Lin: Who do you sell your eggs to?
Isabel: We have three regular customers: You, and two of our friend’s mothers.
Lin: How do you promote your eggs?
Isabel: We have an honesty box with the eggs outside our house (passing trade) and we told our friends, and Mummy told her friends. (word of mouth)
(Contingency Plan)
Lin: What will you do if any of your chickens stop laying?
Isabel: Get rid of it. (Country children are rather matter-of-fact!)
I suppose this could be called liquidating your assets. However, she would not allow Willow, Tulip. Maple or Lime to become Sunday lunch!
Well Done Isabel. I wish you and Nick lots of success.
And as you can see, these are the same issues we have to address ourselves…
Oh Lin, what a delightful interview! It brought such a big smile to my face. Too true, business planning is all important for a successful story. Love, Sue, who has to admit that it is becoming quite chilly here in Yorkshire!
Too precious for words, and what lucky kids to have such grand advice from grandma. We should take a lesson too, thanks Lin.