Did you know you can start your own business before you even leave school? There are no age limits on how old you have to be before you can start, although you may need some help from an adult to get set up.
In this article we’re going to look at how you can start a business while you’re still at school. We’ll cover the things you need to think about before you start, and then go over the steps to get your business up and running.
Step 1 – start with a problem
Before you can get down to making the money, you need to work out what problem you are going to solve for your customers. Perhaps they have stinky rubbish bins that need cleaning, or energetic dogs that need walking, or something else entirely – the point is that you need to identify a problem that they will pay for you to solve. If there’s no problem (or no ‘demand’) then your business is going to struggle from the start.
If you’re reading this you may already have identified your problem, but if not that’s ok – check out this article which is jam-packed with great high-school business ideas.
Step 2 – do the math
This is the fun bit where we work out how much money you could make. There’s no point in starting a business unless you have a fair idea that you’ll be able to make money out of it – you are not a charity – so sit down with a calculator and google and work out the numbers.
You’ll need to work out two things:
- How much you can charge for the product or service you’re going to offer – look for similar products and services and work out how much they charge, and don’t forget to take into account that you’re just starting out so you may not be able to charge as much just yet
- How much it will cost you to deliver the product or service. This amount needs to include everything from the cost of materials to advertising, packaging, and postage.
Once you have both of these numbers you can then work out your likely profit margin – this is the amount you think you can charge minus the amount it will cost you. So if you think you can charge $20 and it will cost you $12 to deliver the product then your profit margin is $8.
You also have to think about how long it will take you to deliver each product or service, and if the amount you make will be worth the effort. For example, if your profit margin is $8 per product, and it takes you an hour all up to make and sell 10, then you’ll have made $80 per hour. On the other hand, if you make $8 for each bin you clean and it takes you 30 minutes to clean each bin and 30 minutes to advertise for and liaise with each client then you’ve only made $8 per hour.
You’ll need to compare this amount with what you could earn in another job to decide if you think it’s worth it. You can explore pay rates depending on your age and industry using the Fair Work Ombudsman’s Pay and Conditions Tool; but we found that for anyone under 16 working in fast food you can expect to take home $11.16 per hour. If you add in the time it takes you to get to work and back, and the fact that you have little control over your work hours, you may think $8 an hour is a good trade off.
Unless your business goes nuts, you’re unlikely to need to pay tax for a while as the amount you earn will be under the low-income tax threshold, but you can find out all the details here.
Step 3 – test your MVP
MVP stands for minimum viable product. Many small business owners fall into the trap of waiting to long to test their product in the market – they don’t release an MVP. This is pretty normal – we’d all like to wait until our product or service is ‘perfect’ before releasing it into the wild, but it can cost you big time if you haven’t read the market need. Waiting too long also robs you of vital feedback at the start of business, and it could end up taking you longer to get to product-market fit. Product market fit is what happens when you have a good product that people want to buy at the price you want to sell if for.
In Step 3 you need to create the most basic version of the product or service you really want to sell and see if you can sell it. Some entrepreneurs will literally just pay for an ad on Facebook for a product and count how many click-throughs they get – this is a totally ok MVP. Work out what the most cutback basic version of your product or service looks like, and get it off the ground.
To take the product to market you need to consider your product and your market:
- If you’re offering a local service such as lawn mowing or dog walking, you could post an ad into a local social media group (Facebook, Whatsapp, or whatever else works for you)
- Test physical products at the local markets or community sports days, or take them down to your local shopping centre or IGA (although you may want to ask permission first)
- Try old-fashioned letterbox drops in your area and other areas you want to target
Where you can, avoid relying on friends and family to test your MVP; they may be good for feedback, but you need to see how your product will go ‘in the wild’.
Step 4 – write a plan
Chances are you’ll be able to get through the first three steps without much of a plan, but once you’ve done the numbers and launched your MVP you’ll need to work out what comes next. By this point you should have more information about how much you can make and how keen the market is for your product, so you’ll need to sit down and write a detailed plan so you know how and where you are going to scale.
Business plans can be a bit intense, so we won’t cover all the details here. Youth Central have a great guide to writing your plan, and watch out for our course coming later in the year.
Don’t wait, start now
The hardest part of starting a business is taking the first step, so if you’ve got an idea then now is a great time to get started. Starting your own business takes time and energy, but can be much more rewarding than a casual job, plus you’ll be learning a whole range of entrepreneurial skills as you go that will help you throughout life.