My boys are eight and six years old. They are just learning about the value of money. They feel like they’re rich when they have five or ten dollars in their hand (then they realize that they can’t buy everything they want with five bucks…).
They wanted more money, so they started to think about some things that they could do to make some extra cash. Over the summer we went to a block party thrown by our church. They had food, pony rides, inflatables… and…. wait for it… glitter tattoos. My boys (and especially my two-year-old daughter, who I’ve never seen sit so still as she got her tattoo) went crazy for it. They came home and spent hours on amazon.com looking up glitter tattoo supplies.
A month or two later their school had an “all school picnic” on a Friday night. My boys invested THEIR money and ordered the supplies (dad may have procrastinated in putting in the order and paid for expedited shipping because he felt bad). The boys asked permission to set up shop at the picnic, made a sign, practiced a few times on mom and were ready to go.
We work hard to teach our kids to give and be generous. They decided that a portion of their profits (we did a P&L with them so they would know what was and was not profit) would go to the Home Sweet Home Ministries (our local homeless shelter and food co-op).
With a little help from Mom and Dad, the boys served a bunch of their friends at the picnic and made some money! They were fired up and were ready to do it again. They wanted to make a website and get a billboard to advertise their business (until I told them the billboard runs around $1,500/month).
Mom and I are pretty proud of our cubs. They had an idea, they invested their time into learning how to do it well, spent their own money, created their own marketing and made a profit. We brainstormed where else they could get in front of potential customers (while making sure they focused on school first). Over Thanksgiving break they asked the manager of Moe’s if they could set up for an hour of their “kids eat free” night.
They made a little bit more money and were able to buy a domain for their business (thankfully daddy has an internet server and you can pay for service in hugs) and set up a website. Each time they make a little more money they are able to invest a little more and gather more to share with those in need.
They didn’t borrow from their parents to start the business. They didn’t get a second mortgage on their treehouse, they didn’t run up their Matercard (you know, it’s a credit card with Toy Story’s “Mater” on it). They saved up some of their cash from working around the house and bought just enough to start. They made a little, gauged their results and pricing in the marketplace, and grew a little bigger.
I can tell you that tonight they spent 20 minutes looking at different stencils and colors that they think will be popular. It’s exciting to be part of a business that is growing debt free. My boys feel no stress. They don’t have to make payments to the bank. They can work when they want (and when their parents allow them). They can test new ideas, marketing and techniques.
So what does that mean for you? Whether you’re a super-small business that’s just getting started, or you’re thinking about expanding your business… do it slowly. In the story, The Tortoise and the Hare, the tortoise wins… EVERY TIME!
I’m guilty of taking the opportunity to grow too quickly. I had the chance to take on some big contracts, but I didn’t have the staff or infrastructure to do it. What did I do? I borrowed money. I added risk into my life by having to make all of my business decisions based on whether or not I would be able to make the payments. When one of those contracts disappeared before I was able to pay back the loan, it started a spiral of debt that was very difficult to overcome. In fact, I was so focused on paying off the debt that I missed other, less risky opportunities.
This is the number one reason that businesses fail. Growth that happens too fast, or before the business is ready (and especially when the growth is done with debt), will tear through a startup. It causes stress in your business, which leads to stress at home. It’s just not worth it. The risk of using debt and growing before you’re ready is not worth the potential reward.
Entrepreneurs often have broken risk meters, so it’s good to have someone in your life that will help you make strong business and financial decisions. You want someone who will tell you to take a cold shower when you start getting hot for unsustainable growth.
Now if you’ll excuse me, I have to run my arm under rubbing alcohol to try to get these butterfly tattoos off my arm before my consulting appointment tomorrow.
(Also, if you want a couple of cute kids to come to your party or gathering, you can find them at The Miller Brothers Glitter Tattoo Factory)