Part 2 - 14-Year-Old Entrepreneur
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Hello and good day! When I left off, a mother had asked me to give business advice to her 14-year-old son. The young man has a banana bread business, and I met his mother in one of our chocolate shops. I gave her my contact information, and the young fellow wrote to me. The first two tips I gave him were as follows. One, never, ever, sacrifice the quality of his products. He must be proud of every single loaf that he bakes. Two, he must be sure that he actually loves to bake banana bread. If he is serious about building a real business, it is going to take somewhere between five and ten years to become well established. It is easy to see why this must be the case. He is selling loaves for $7, 2 for $12, or 3 for $15. Once you figure in the ingredient cost, he is probably making somewhere around $2-$3 a loaf. To support himself, and potentially a family in the future, he'll need to bake and sell thousands of loaves a month. It will take time to find enough customers. And it will take time to figure out how to produce that volume without messing up the specialness of his products. I am intimately familiar with these issues. Most of our products sell for $9.99 and we offer free shipping on purchases over $49. We have 15 employees in the United States and about 35 in Peru during the harvest season. We buy cacao from roughly 500 cacao farm families. To support that level of payroll and purchasing on products that sell for $9.99 takes a fair amount of volume. Time and patience are required to build a big enough customer base and one must learn to set up production lines, which is a skill separate from baking. This leads me to the next couple of tips I gave to my young friend. I advised that he save every dollar he makes. Money burns a hole in a teenager's pocket. Especially if he is successful in finding customers and he starts making decent money for his age, his desire will be to flaunt his success and spend. This would be a big mistake in my opinion. In order to build his business big enough, he will need machines. And it would be so much more satisfying if he could buy those machines outright with his own money, rather than having to get a bank loan or beg his parents to kick in. I promised him that when he looks back on his life, he'll barely remember the frivolous purchases of his teenage years. But if he saves his money and buys quality baking equipment, he will never regret it. It will serve him for a long time and will be by far the best investment he'll ever make. I've run the numbers over and over again. There is no doubt in my mind that buying equipment for your manufacturing business is a world beating investment. It is better than any alternative by a long shot. To be a teenager with manufacturing equipment, and to know how to use it, would be a tremendous life advantage. Think Ben Franklin here. Next, I told my young friend to never forget that customers are what make the whole thing possible. As such, he needs to realize that service is part of the product. Very few products are so good that they can overcome bad service. On the other hand, many mediocre products stay alive because the person offering them has a great attitude and really hustles. Here is something to think about. If a person tells three of their friends about your company, your customer base just quadrupled. You went from 1 to 4. If your three new customers are so impressed that they each tell three people, that's nine more customers. Those nine each tell three, there's another 27 new customers. The amazing nature of compounding turns 3 customers into 177,000 with just 11 turns of the wheel. You can do the math yourself if you have a calculator handy, 3 to the 11th power. Every decision that a business owner makes should be geared towards producing the highest satisfaction possible for customers. When you are 14, I don't think you necessarily have the self-awareness or empathy to understand how people are perceiving you. Since this young man's customer base will likely be much older than he is and will likely have higher expectations for service than he realizes, it would behoove this young man to get his parents involved in crafting a service plan. And once his parents tell him how he needs to operate with customers, he'll need to do something that teenagers are not known for. He'll need to have the discipline to comply. Which brings me to the final pieces of advice that I dispensed. If building a business is truly this young man's dream, he must be prepared to be different. There will be a lot of influences trying to pull him away from doing the right thing. When he should be responding to customer service messages, or be out making deliveries, or be in the kitchen experimenting with recipes, or be reading cookbooks, or talking to his mom about how to improve customer service, his buddies will be pressuring him to take the night off and come out. There isn't anything wrong with going out, if you planned it. But if it is unplanned and the work isn't done yet, you have to say no. The business and your customers require that of you. Also, you can't be getting high or drinking excessively or running around with too many girls. If a young entrepreneur has a girlfriend or boyfriend, the significant other will have to accept and buy into the journey, or it probably won't work. Lastly, it isn't enough to only know what you ought to do. Sometimes a person takes pleasure in knowing what is right, but they don't act on it and so they don't get the results. This happens to all of us. You hear a sermon in church that really moves you, but then you don't change your life accordingly. Or you buy another weight loss book, but you don't follow the steps. Likewise with starting a business. It isn't enough to simply read the words I sent. He'll have to live them. And only he can make that happen. I've offered to send out a link to his website whenever he is ready for that. I'll keep you posted on how things turn out for this young man. Thank you so much for your time today. I hope that you have a truly blessed day! Adam Click here for wonderful chocolate made with pure Nacional cacao. Follow us on Instagram - @fortunatonochocolate
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