In part one, we looked at making money by doing what makes your heart sing – combining the activity, environment and people you most enjoy, to find a project or idea to make a little extra money. That got the creative juices going for some, others needed more encouragement, so we took another step on this entrepreneurial journey by carrying a small amount of cash around for a week and asking how we could use it to make more. That began to give more shape to people’s ideas and practical projects emerged. Last week, the exercise was about adding value to something we could source. This series began as a way of introducing children to the basics of entrepreneurship and doing projects together as a family, preparing children for adulthood in a rapidly changing world…

This week we are looking at how to germinate the ideas and turn them into a seedling project. To do that we need to take broadly the same steps we would if we were starting a major international business, just in a smaller more family-friendly way. This weeks exercise will start this process at the right scale for this project.

Marketing

The next big step and where we are focusing this week is marketing. Often people get marketing mixed up with sales, but it is so much more. It has long been defined as the Four Ps;

• Product: The product part of marketing is about deciding what you want to sell. How will it address the needs, wants and/or problems of your customers? Shannon, the 11 year old girl we’re following through this process, has two big ideas. The first is to make home made cookies. In this section, then, she can look at whether her cookies are to fill hungry bellies at school break time and be sold in a clear plastic bag to her friends, or whether they will be packaged quite differently and sold as a gift. That one decision will affect her market, who she sells them to, and the price she can ask. Even if she sold them for school snacks, the price would be different if sold to children at school, or aimed at parents as healthy snacks for their children.

• Pricing: This is about setting a price for your product, including discounts. It’s important to think carefully about it. If the price is right, your product will make you a good profit. Too high, and you won’t sell enough to make it work; too low, and people may miss the value or you won’t be able to produce enough to keep up with demand. Tyler, the 12 year old boy following this process, sells sweets at school. He has carefully watched his classmates and observed their preferences. He buys very popular candies in bulk and doubles the price selling singly. Pricing also includes whether you will allow discounts. You may also barter some of your product for time or credibility. For instance, if you know someone who heavily influences other’s choices in the area of your product, you may want to offer them a discount or even a free gift. If your product is food related and you have a friend who is known as a gourmet, get them to recommend your product – you’ll have no problem getting them to try a free sample.

• Promotion: This is about how other people get to hear about your product or service. How will you advertise or talk about it? Will it have a brand, an identifiable look or feel or will it be generic? My sisters-in-law make beautiful and sometimes funny one-off greetings cards. They have a particular look to them and are stamped with their name on the back. It adds a professionalism to their special personal touch and tells people where to come for more. Shannon’s other big idea came from the adding value exercise. She thought she could buy some good paper and add value to it by drawing one of her wonderful pictures on it. Shannon now has to decide if she will do special pictures for commissions, or draw what she feels and then see if she can sell them – how will she let people know? Will she get others to talk about them, give her Granny a free gift or carry a portfolio of pictures with her?

• Placement (or distribution): This is about how the product gets to the customer; for example, do you sell on the internet, door to door in your neighbourhood (cookies etc) or is it through other people? This is also about where and to whom the product or service gets sold. Is it for children, gap year students, families or business people? My business partner, Zandria, has the idea of adding value to food and preparing a meal, then further adding value by serving it in someone’s house. I think that’s a fantastic idea. She cooks exquisite Jamaican food. So, should she aim her service at busy Jamaican families with no time to prepare or English people, looking for something a bit different?

Just as a road map guides you on a journey, a marketing plan guides you to your goals. This simple plan will keep you on target towards your goal of multiplying your original $20 or £10.
This week’s exercise

For this week, take your three best ideas from the previous exercises, (links are all included if you haven’t been following). Write them onto a piece of paper in 3 columns. For each idea answer these questions;

1. Who would want this product or service?
2. How much will they pay for it?
3. What are the profit margins (how much more can I sell it for then it cost me)?
4. How much of my time does it take?
5. Will I enjoy making it or doing what’s required?

Then look carefully at your answers. Is there an obvious frontrunner? If one makes more money but another is more enjoyable, which is the most important for you right now? There is no fixed right answer. To check if you have chosen the right project for you, use my Mum’s simple trick. She taught me this when I was a nipper and I’ve used it all my life. Assign two choices to different sides of a coin and toss it. Look which one won. Immediately, check your response. If you feel disappointed, choose the other one. If you are happy, you know you’ve chosen the right one!

Time to get started and multiply that cash!

Image from www.freedigitalphotos.net

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