By Daniel Sherwin of Dad Solo
Starting a business as a teenager is a great way to save up for college and develop your communication, organization, and time management skills. But, entrepreneurship can be a tricky endeavor given the sheer amount of challenges you’ll face at every step of the process. To help teenagers bring their entrepreneurship aspirations to life, this article by Alliance Tutoring will serve as an in-depth guide for the steps required to get your business off the ground and the best ideas to explore.
How to Start a Business?
Before taking your business into the market, you need to dedicate a good chunk of time towards planning for the future, making important financial decisions, and ensuring your business is in line with legal requirements at all levels.
- Find Your Target Audience
A target audience is a niche group of customers to whom you plan to sell your products. This group of customers will have a high demand for your product and will be easier to convince when making sales. As a first step, note down the characteristics of your ideal customer which should include their age, income, location, education level, purchasing trends, and more.
For instance, if you plan to start a lawn mowing business, your customer description can be: retired professionals living locally who prefer to outsource their gardening needs. To include further details regarding income, purchasing power, and actual demand for your product, consider using a free online market analysis tool, which can be found here!
- Plan for Finances
Regardless of whether you’re selling goods or services, there will be various recurring and non-recurring business costs to manage. This can include the cost of utilities, marketing, hiring freelancers for important projects, stocking inventory, purchasing licenses, and more. If your business picks up quickly, these costs can be covered by profits. But, till you reach that point, the business will require an influx of funds which can be through your savings, parental support, or grants.
The key will be to create a monthly budget, keep expenses to the minimum and focus on making the business self-sufficient as quickly as possible.
- Create a Business Plan
A business plan is an all-encompassing document covering major aspects of the business. In addition to customer demographics and financial requirements which we touched upon above, your plan should include:
- Insights About the Product: If you’re selling goods, specify how they will be procured or created, and the channels you’ll use for making sales. Similarly, services include the mediums through which you’ll interact with customers and the types of services you’ll provide.
- Price Points: Ideally, the price should cover expenses and include a mark-up, allowing you to make a profit and attain the goal of self-sustainability. But, as a new business, you may need to keep profit margins low to attract customers and create a plan to increase earning capacity in the future.
- Register Your Business
While this may not be necessary when starting, if your business experiences consistent growth, it is advisable to register it as a Limited Liability Company (LLC). By default, all businesses are considered sole proprietorships, which can expose you to various unwanted risks. As the owner, you’ll undertake unlimited liability for damages or claims against the business. If your parents are part owners, their assets such as the family home, car and savings will be at risk as well.
In comparison, as reported by Nerd Wallet, an LLC establishes the business as a separate legal entity, hence business liabilities cannot be passed onto personal assets or finances. While you as the owner will still be held liable, only business assets could be used to repay debts. Additionally, an LLC provides the benefits of pass-through taxation i.e. you’ll only need to pay taxes once when filing your income tax. In comparison, owners of corporations are taxed twice.
- Invest in Marketing
It is safe to assume that you know all about the power of social media and how to harness it. Hence, look for cost-effective ways to promote your business on digital platforms such as Instagram, Facebook, Pinterest, Snapchat, and more. This can include:
- Registering business profiles on all platforms. These profiles provide you in-depth analysis of your account’s performance for free.
- Regularly posting content to drive engagement and create an online following. Using trending hashtags is a great way to garner more eyeballs for your business.
- Running frequent contests to encourage users to interact with your handle. This is a smart way to develop brand awareness and educate potential clients about your business.
A key aspect of your marketing activities will be the business logo. Rather than spending money hiring a designer, try this free-to-use logo maker tool. The tool provides various professionally made templates to choose from, which can be customized using your brand colors and text.
What are the Best Business Ideas?
Now that you have a good understanding of what it takes to start a business, it’s time to look at the best options to explore. As a teenager, in addition to the business, you’ll need to dedicate time to school, extracurricular activities, and hobbies. Hence, it’s best to choose a business that is simple to manage, yet, can be easily scaled when needed.
Idea 1: Start a Blog
Starting a blog is fairly simple – create a WordPress account, choose a theme, pay nominal costs for hosting and your website is up and running! Your blog can be based on a topic of interest such as cryptocurrencies, financial literacy among teenagers and young adults, investing, technology, and more. Here are the various ways to earn from a blog:
- Enroll in affiliate programs for online retailers such as Amazon, Target, Walmart, etc. You’ll be provided affiliate links to be integrated into your blogs to drive sales. On each sale made using the link, you will earn a commission.
- Once your blog is raking in consistent traffic, running advertisements is an easy way to earn revenue. Your earnings will be based on the number of people that view the ad. Google AdSense, Taboola, and Monumetric are prominent ad networks to consider.
Idea 2: Become a Freelance Writer
The pandemic compelled businesses to move operations online and invest heavily in establishing a strong digital presence. A business’ google ranking plays a key role in its success, as research shows that customers trust listings are shown on the first page more than on other pages.
One of the factors for a business to obtain a high google search ranking (SERP), is to have a blog and publish content regularly. This massive need for content has led to a boom in demand for freelance writers, who are hired to write content based on real estate, investing, healthcare, education, technology, self-care, and any other topic you can think of. Given the sheer number of postings, you have a high chance of being hired even with limited experience.
Additionally, once you do build a portfolio, you have the power to charge higher rates for your services and cater to businesses in need of experienced writers. Furthermore, consider creating a portfolio website to showcase your experience and stand out from the competition.
Idea 3: Start a Dropshipping Business
As a dropshipper, your responsibility is to promote products on social media and drive sales. Based on the number of sales you’ll be paid a commission. You can promote products through personal social media accounts or by creating a new account for the business. Additionally, social media advertising can be used to drive higher conversions. While this will involve an investment, when done right it can provide good ROI and increase your earning capacity.
The benefit of being a dropshipper is that you do not need to manufacture goods or store inventory, as these duties will be handled by your supplier. However, you will need to spend time researching the best suppliers as they will play an integral role in the success of your business.
While running a business in your teenage years, money should not be the priority. Yes, monetary gains are great, but the knowledge and experience you’ll gain from managing a business will be much more valuable. Along the way, you will face challenges and make mistakes, but overcoming these will make you a better entrepreneur and push your business closer to success.