If you are thinking of ‘Being Your Own Boss’ this summer and creating your own summer business, here are ten tips that can help increase your odds of success:
1. Set Goals and Write Them Down:
What do you want to accomplish? How much money do you need to make? How much time can you devote to the business? What is your timeline? Do you plan on the business existing just for the summer, continuing while you are at school or restarting next summer? Writing down a goal (versus just thinking it) dramatically increases the chance of it being realized. It also gives you a destination to move towards and way to measure success.
2. Plan a Quick Start:
If you only have 2 or 4 months to make money for school, you can’t spend a long time getting ready, getting the word out and working out the bugs. You also may not have the luxury of planning for a profit ‘next year’. Keep it simple. Keep it lean. Try to design a business where you can make your first sale quickly.
3. Know Your Customer:
In order to get off to a quick start, you need to know who will buy your product or service. Your customer isn’t everyone. Your customer isn’t an age group. Get as specific as possible. Talk to people who could be likely customers to test the idea and pricing BEFORE you start. If you don’t know any likely customers, it might be wise to rethink the idea.
4. Don’t Be Cheaper, Be Better:
Your product or service needs to solve a problem and offer value for the customer. Try to offer value beyond just being cheapest (even if your overhead is really low). Is there something that customers dislike about their current product or service? Are you doing a task that the customer hates to do themselves? Are you selling a product or service that is too niche for an established company to bother with? Are you faster, fresher, more convenient, more reliable, more specialized, offer a bonus or a guarantee? Cheaper (unless you have a real, durable cost advantage) is a really poor point of differentiation. You may be willing to work for less than your current competition, but what happens when your future competition decides to be cheaper than you? It also limits your options for long term development of the business. It may be difficult to adjust your prices should your living costs (and therefore income requirements) change in the future.
5. Build the Business Around You:
The best businesses are also an extension of you. You should be enthusiastic about your summer business. It shouldn’t be a slog and it isn’t all about the money. Understand and tap your passions, interests, hobbies, experience and talents. Can you build a business around your love of singing, computers, baking, math, woodworking or _______? You also want to leverage you and your family’s connections. Do you have a huge Facebook network, are you a part of a church or organization, do you know people in your neighbourhood? Can those networks help you reach customers or get referrals?
6. Know Your Business Model:
How will you make money? How will you get the money from the customer’s pocket to your pocket? You need to know your material cost and how much time going into creating the product, performing the service and marketing it. Make sure you are making a profit after you have covered all of your costs.
7. Focus on the Best Opportunity:
You likely have lots of different options, different customers and products to choose from. Think about what might be the easiest. Think about products or service that you sell. If you make more profit on one particular item because it has lower costs or time involved, focus on that product. It might not be your “favourite” item, but if it makes you the most money and involves the least effort, it might become your new favourite! A business that has a tight focus and markets one or two things (that they do great) has been proven to have better odds of success than a business that tries to do many things.
8. Research Businesses Around You:
In the era of Google, you have access to so much information to help you build a business. Researching other companies in your home community and elsewhere can give you a lot of insight. It might be a new product or service not offered here. You might learn about who their customers are and how they make them ridiculously happy. You might also identify problems they faced and overcame (or didn’t, so you can avoid that mistake). You might get some tips on engaging customers through social media or promotional campaigns.
9. Do it by the Book
Even if you are a student or it is “just a summer business” or if you are dealing mostly in cash or you are only “making a little bit”, you still need to run a legitimate business. It is relatively easy. There are often financial benefits. It will be easier to grow the business in the future and nothing sucks more than an audit letter from Revenue Canada that arrives right in the middle of exams. The profit from your summer business is income and is required to be declared as part of your annual income tax filing. It is easy to register your business and get a Master Business Number by visiting www.serviceontario.ca. The Business Advisory Centre offers free workshops on setting up your business. Utilizing a bookkeeper to set up your books is affordable and saves you time and money.
10. Embrace Free:
‘Free’ (and really low cost) is a big part of most business plans. It is also an important part of a successful summer business. You likely have a limited start-up budget. You need to get the word out quickly. You need to find creative (and low cost) ways to perform all of the essential business functions, like bookkeeping, marketing, getting paid and engaging with customers. There are lots of tools out there, here are a few of our favourites:
- Wix: Wix allows you to create a free, professional looking website.
- Wave Accounting: Wave is a free accounting, invoicing and receipt scanning web app with a low cost payroll processing service.
- Google Docs: Google offers a wide variety of free apps for word processing, creating spreadsheets and presentations, online storage, email and wiki/website creation.
- Square: Square is a free point of sale/cash register application for your smartphone. It is also a free credit card swipe reader that enables you to accept Visa or Mastercard anywhere. No merchant account or terminal is required and it is just 2.75% per swipe transaction. It allows you to make the sale, even if the customer isn’t carrying cash.
- Facebook: Your Business’s Facebook page is an invaluable tool to engage with customers, promote your products/services and tell your story. Fans are saying they WANT to hear more from you (as opposed to tuning you out). Fans have friends. If you do a good job of engaging your fans, their friends who probably have similar interests and needs will learn about you. It also has opportunities for low cost, targeted advertising.
‘Free’ can also be a great way to promote your business and get your name out there. Can you be strategic in giveaways? Can you provide your product or service to a charity or community group that will help them save money/fund raise and create exposure for you? If people just try your product, will they love it? Can you offer a “100% satisfaction or it is free” guarantee?
Oh and one more thing:
11. Connect the Business to Your Career Path:
The goal of the summer business may be to make income. Entrepreneurship may have been your dream.
The business may have also been a fall back option if you weren’t able to find the perfect job or internship in your field. Make the most of the opportunity by using the summer business to get relevant experience. The business may seem like something totally different than your career path, but are there common or transferable skills? Can operating this business build your network or open doors for future work opportunities? Will the business enable you to do some volunteer or in-kind work? Think of it as a ‘build your own internship’.
Creating and operating your own summer business also looks great on a resume for many employers. It builds a multitude of skills, it shows you are a self starter and have an eye for opportunities.