This is exactly a key difference between business and entreprenerurship.  Most entrepreners struggle with numbers and often have to pay accountants or work really hard to keep their books. 

Business owners tend to be more analytical, worrying about finances and growth rates.  These are all important things, but most entrepreneurs are more creatively driven and worry more about inventing new business models and products than increasing their growth rates.

These two worlds are very close.  But if you have an interest in business but hate numbers.  Well, just join me and millions of other entreprenurs that agree with you.  If you love numbers and can’t seem to think creatively about problems then you will fit in with millions of other small business owners.

            You probably see small businesses constantly throughout the day.  From the dry cleaner you dropped that suit off with to the diner you had lunch.  And you might have been to a couple of entrepreneurial ventures as well, from that new gym that opened up to that ice cream place to seem to be seeing everywhere now.  What makes the two different?  It mostly has to do with creativity and growth.

            Small business is easy to define.  Small businesses tend to keep small, provide a modest salary for a few people, and fill only a small need in a given area.  A good example is a local pizza shop.  Your neighborhood pizza shop probably provides for the owner’s living expenses, as well as one or two employees depending on the size of the shop, and only serves pizza to about a 30 minute radius around the shop.  The shop owner probably wants the restaurant to become bigger and more profitable but the owner probably isn’t too concerned about branching out or becoming the biggest household name in pizza.

            That small pizza shop might have better pizza than another shop, but they probably don’t have anything unique.  If you want a slice of pizza, a sandwich, or some pasta, chances are you can find them in twenty different shops in your area.  That pizza shop isn’t bringing anything new to the table; it simply is selling the food you already know at either a better price or better quality than the other guy.

            Have you figured out the difference between small businesses and entrepreneurial ventures yet?  Let me explain what makes an entrepreneurial venture using the same example as before, a pizza shop. 

            Our entrepreneurial pizza shop might be the same size as the other pizza shops in the area, having only one or two owners and a handful of employees.  However, it might have more stake holders than the small business shop.  If your look pizza stop makes more money this year, its owner will have more money to bring home.  However, if our entrepreneurial shop makes more money it will probably either have to pay some money to its investors, or what we call silent partners.  Silent partners are people who invest money in the business, but don’t actually work at the business.  I can pretty much guarantee that most small businesses in your area don’t have any silent partners and the only people worried about business growth is the business owner or the bank waiting for loan payments.

            If the entrepreneurial pizza shop has silent partners or not, chances are the majority of the money made by the shop is going to be poured back into the business’ growth account.  In fact, where a small business owner will take the extra money made home with them, the average entrepreneurial business owner will have a small living expense salary or will not make any money from the business at all.  This is because the entrepreneur is more concerned about business growth and the long term pay off while the small businessperson is more concerned about his or her own needs and short term pay offs than future growth.  Investing all of this money back into the business means our little entrepreneurial business shop is going to start growing very quickly.  The entrepreneur will use all this growth money by either opening up new locations to serve a greater area or by spending that money on new ways to make their store unique.

            I said before that the two main differences between a small business and an entrepreneurial business is growth and creativity.  This means that either the entrepreneur is going to take the money made that has been reinvested into the company to open new locations for the business, or he or she is going to make that business more unique.  Opening new locations is doing just that.  Taking the first pizza shop and opening a clone of it in a new area to serve a new market.  However, there are many ways to make a store more unique, so let me explain a little bit about what I mean.

            When you walk into your typical pizza shop what do you expect?  Well you expect them to have a location, a product, and a way to pay.   That is what we call the core of the business.  Right off the bat you know that the pizza shop will sell pizza, will have a cash register to make change, and they will have a location to sit down or pick up the pizza from.

            After the core of the business you have what we call the expected part of the business.  This section is made up of things entrepreneurs have done that were so successful that everyone is expected to do this.  When you walk into your local pizza shop you now probably expect them to accept credit cards, you expect them to sell sandwiches, cheese steaks, pasta, and sides like French fries or Buffalo wings.  You also expect to see a place to sit down and eat, a phone number for you to call your order in ahead of time, and some sort of service where they will deliver it to your house.  These are things that were at one time unheard of but are now common in all small pizza shops.

            It is at this third part of the business that separates small businesses from entrepreneurial ones.  This part we call augmented.  This part is made up of things so unique to the business that it makes you want to go to them.  This part will become so popular that eventually it will become expected and you will see them in all pizza shops.  One example of something that was recently augmented but is now becoming more expected is online ordering for pizza.  Other examples of augmented things for a pizza shop might be delivering your pizza with a choice of movie rental.  Or having a van that can cook your pizza exactly to order and deliver it to you as fresh as possible.  These are typical things that your average small business owner might be afraid of or doesn’t dare think of any way to make them happen.  This is one of the biggest differences between an entrepreneur and a small business owner.  A small business owner plays it safe and does what works while an entrepreneur takes huge risks and tries to change the game.

            Now hopefully you see the difference.  Next time when you go to get pizza, try asking your kids if that shop is a small business or an entrepreneurial business.  Some key things to look for are how many locations does the pizza shop have and/or what that pizza shop does that no other pizza shop has done before.  After that, challenge your kids to think about what they would like to see that business do and if the owned the business what could they do differently.  No idea is too big, challenge your kids to think big and they might become an entrepreneur too.

              I said before that the two main differences between a small business and an entrepreneurial business is growth and creativity.  This means that either the entrepreneur is going to take the money made that has been reinvested into the company to open new locations for the business, or he or she is going to make that business more unique.  Opening new locations is doing just that.  Taking the first pizza shop and opening a clone of it in a new area to serve a new market.  However, there are many ways to make a store more unique, so let me explain a little bit about what I mean.

2nd Hand dealing:

Basically the idea behind this project is to browse through yard sales, church sales, flea markets, and things like that to find cheap items that your child has some interest or experience in.  It can be anything, from books to toys; however the easiest thing to deal is media, such as books, cds, DVDs, and video games.

Once you buy these items you are going to go on eBay and resell them for a higher price.  Your student will be acting like a retailer, buying from a distributor and selling to the end user.  These skills can be easily transferred to any retail job you child may work at later on in life.

This may seem complicated but it really isn’t.  Follow the steps one by one and you will be up and running in no time.

For Example:

One Saturday morning while driving around to yard sales your student finds a copy of a book that is in great condition and the original owner is willing to sell it for only 25 cents!  Using yours or the child’s own money you pick up the book and go home to check what people are willing to pay for it. 

Since it is media (books, cds, dvds, video games) your student logs on to half.com (if it was a toy, antique, art, or anything else they would log on to eBay) and using the search field he or she enters the ISBN number from the back corner of the book above the bar code that has either 13 or 10 digits.  Turns out that 25 cent book are in demand and people are willing to pay up to $3 for it.  Your student lists it for sale in your shop and before you know it someone will buy it for $3.

Then when you are out running errands one day you take the book and ship it through the post office to your customer.  You just made your first sale and have become a real entrepreneur!

Project Recipe:

1 middle school aged or above student

1 eBay account

1 company email address

1 Checking account

1 Paypal account

A few Saturday mornings

A pack of shipping envelopes

$5-$10

Instructions:

I would recommend you do this with only one kid at a time, however, if you want to get the whole family involved make sure you keep a close watch.  I would also recommend this for older students, although there is room for younger ones to help too with close supervision.

The idea of this project is to take advantage of two great money saving things, eBay and yard sales. 

Step 1: Brainstorm with your children, there is a few things they have to come up with.  First of all is a business name, it can be something serious sounding like the one I created when I did this project, Synergy Products, or it could be something simple or fun.  You could do something simple like using your last name “Smith Products” or “John Doe Books.”  You could also let your kids run with the idea and name it something like “Awesome Express Products.”  Once you have a name you need to brainstorm your product.  Are you going to stick to something specific like books or video games, are you going to keep to a larger category like Media (Books, videogames, cds, dvds) or toys (Baby toys, Legos, Dolls) or are you going to try your hand at a little bit of everything.  The key here is to do what you know best.  For example, I stuck to the media category because I worked in a bookstore and was really familiar with how much used books and DVDs sold for on average.

Step 2: Create a business email address.  The practical reason behind this is because your email is going to be flooded with different emails from eBay and your customers and it is easier to create a whole new email address to handle this.  The fun reason behind this is because it makes the whole process feel more official and charges your child with more responsibility for this project.

Step 3: Have a checking account ready to be linked to your business.  Now don’t start a real business checking account because they will cost a lot more and have more features than you need.  Starting a 2^nd personal checking account or using the one you have now will have all the tools you will need.  Note: Make sure you don’t sign up for a fee based checking account.  Many local banks will be glad to offer no minimum no fee checking accounts; you just need to know where to look.

Cool side project: Creating this second account (that will probably have to be under your own name) will give your student a chance to learn more about managing finances and balancing check books in preparation to creating their own checking account.

Step 4: Create a Paypal account. Go to paypal.com and take your time and create an account. Paypal is a free internet service that will act as an agent between your bank account and eBay.  It will also add another level of security.  Use your official business email and checking account with Paypal and you are almost ready to go. 

Cool Side Project:  Paypal allows people to send you e-Checks for your services.  You can use Paypal for many types of businesses, even a neighborhood lawn service can use Paypal for billing, making it a worth while thing to have.

Step 5: Create an eBay/Half.com account.  Go to ebay.com and read the help guide.  It will explain very clearly step by step how to buy and sell on eBay.  If your student is older (8^th grade-12^th) they can probably figure it out by themselves, but for anyone younger you might want to do it with them.

 In the process of creating that account you are going to have to enter your business email as your main email.  Then for your user name make sure it is very similar to the email you created.  So if the email is: smithbooks@emailservice.com your user name should be as close as possible like Smith_Books, or Smith’s books, or Smith Bookstore.

For your eBay site you are going to have to enter your paypal information and when you go to Half.com you may choose to enter your direct checking information bypassing paypal altogether which is a good way to speed up your finances.  When you create an eBay account you are also creating a half.com account.

Clarification:  Think of eBay as an auction site for just about everything.  While Half.com is like an internet store for media (books, cds, DVDs, videogames) So if you want to sell things and experience the fast paced action of an auction, go with eBay.  But if you are reselling books like it was mentioned in the example, it is best to go with Half.com.  Half.com only charges you a fee when you make a sale while eBay charges you a fee if you auction is a success or not, so I highly advise you sell things on half.com.

Step 6:  Get familiar with your product.  If you want to sell books for example see which books sell for good money.  Does fiction sell better than non-fiction?  Do books from 2007 sell better than books from 2000?  How quickly do they sell?  Maybe a text book sells for cheap in a week, while a non-fiction book may sell for more but take a month.  A handy tip here is to pretend to sell things from your own house.  See what your book collection would sell for.  Once again, if it is any type of media, such as books, I highly recommend only using the half.com website and not the original eBay site.

Step 7: Look up your local newspaper online and look up the classified section for yard sale listings.  From that classified listing, chart out a plan of attack to find the best product.  Remember, the early bird gets the worm and it is best to be in the car and ready to go no later than 8am. 

Only go for the product that you find sells best.  If you think Non-fiction that has been published in the last three years sells best, go for that.  Once you find what you are looking for, don’t always go for the posted price.  The seller may want to sell the book for a dollar, but haggle and see if you can talk them down.  This is a cool sales practice for your students to learn.

Handy Tip: The minimum sale price for books on half.com is 75 cents.  That means if you buy a book at a yard sale for a dollar that you think looks good, you may find yourself only able to sell it for 75 cents and losing a quarter.  So I personally will never buy a book for more than 50 cents unless I know without a doubt that it could sell for a few dollars.

Step 8:  Now you got you store and product, you are open for business!  Search for the item you just bought and what other people are selling it for and in what condition your book seems to be in.  Then decide whether you are going to beat the competition and sell it for cheap, or are you going to price above them and hope that the prices will come back up.

Also be clear in your description, remember your customer is trusting you without seeing the product.  Describe every scratch and highlight the book has.  A rule of thumb is if you can’t find any real problem the book could be sold for Like New, and for every two to three things you find just mark the condition down one, to Very Good, Good, Acceptable and so on.

Step 9: Now you wait to make a sale.  But don’t just sit and wait, a good thing to do now is to buy a pack of shipping envelopes from Walmart or Target to ship your product in.  Look for the bubble wrap self sealing envelope.  They cost about $4.50 for a 6 pack.  Once someone buys a product they will pay for shipping and handling which will help cover the cost of the envelopes.

Step 10: Once you make a sale you are going to package the product in the envelope and consider adding a packing slip that you make yourself.  Something with the company name on it that outlines how much the customer paid for the product and for the S&H.  Take it to the post office or UPS and ship it to your customer.  Handy note, if the product is Media (Can you tell I really like media?) you can ask for Media Mail which will ship your product for about $2-$3 dollars.

Step 11: Make a project out of watching your costs.  It can be a quick accounting lesson for your student.  Write down on a piece of paper how much you spent on the product originally, plus how much you spent on the envelope and shipping.  Then write down how much you were paid for the sale plus the S&H.  Take what you made minus what you spent to figure out how much you made in profits.  This allows you to see if you are making or losing money and what changes you might have to make to correct that.

Step 12: With half.com money is automatically transferred to your checking account every 15 days.  With eBay money goes to your paypal account and at anytime you can order a transfer from your paypal to your checking.  Take this money and use a portion of it to reinvest into the company and buy more product and envelopes and take another portion to cash out as a payment for hard work.

Step 13: This is the last step.  Now that you are making money spend a little time each day as business management time.  Log on to your accounts and check your email, see if you may have to lower or raise the prices on your products, or see if there is any other product you can sell.  The more you play around with it the better you will become and the more money you will make.

Conclusion:  This project won’t make you rich, but at one time I was making about $20 a month with this and having a blast.  Also take the time to surf the web and search for other people doing this, you will find many helpful tips to make this even more profitable and educational.

Questions:  Feel free to ask any questions in the comments about this project; I will be happy to clarify.

I am not saying to give up ambition, in fact, drive is the single greatest weapon any entrepreneur has in his or her arsenal. What I am trying to say is that you can’t get so caught up in your long term goals to forget that you don’t need millions of dollars or years of professional training to become a great entrepreneur right at home.

Through this blog I will show you many great entrepreneurial projects for the average home school family. I am not going to tell you these projects will help you buy your own island or allow you to make five million dollars every night while you sleep (although if it does make you rich, don’t forget to send me a cut for all my help) but what I do promise is that these projects will be a ton of fun and secretly educational.

I will also share insight and write a few articles about all things entrepreneurial. As a home schooled child myself (K-12) I know a great deal about what inspired me to pursue entreprenurialship. I will share all my knowledge of business and home schooling to help you become the great home school entrepreneurs of the future. Because, of course, homeschooling isn’t just to create the world’s next set of spelling bee champs and missionaries, homeschooling allows us to encourage students and parents alike to be the best people they can be. Through homeschooling hopefully we can make the world just that much better for all of us.