I applaud you for thinking this way instead of just looking for a job. we homeschool our son and this is something i am trying to instill in him.
a few people mentioned some limits to think about - could you make more at work, bartending, etc.? how much money can you realistically make, and is it worth your time?
I started a small business last year and it made about $1000/month, not fully ramped up. am still learning the ropes, but could conceivably bring $2000/month with a small investment of additional hours. its not life changing money, but its a college fund or a vacation fund. frankly, its not worth the extra work for me, and if i can't ramp it up more i'm on the verge of quitting. i'm really doing it so my son learns to think like an entreperneur. the business is related to a hobby my wife and i share, so its not all work. I would estimate that i'm making 40-50/hour before tax, which is nice rate for a kid but not for me. (now, in my industry, there are people who have taken it to the next level, and gross in the millions, but what they are ally doing is hiring lower-paid employees to do a lot more of what i am already doing).
if you look at semi-successful and successful businesses, they can be boiled down to three things.
1. arbitrage of labor - you manage a bunch of relatively lower paid people to provide a product or service that someone wants. they want it because they can't do it themselves at their personal labor rate.
2. arbitrage of time - essentially the same thing. you buy convenience food because your time is worth much more than the small premium the restaurant charges.
3. something unique/royalty - someone comes up with an idea and sells it again and again. - ex., you write a song and get paid everytime it sells. software. ebay. amazon.
most fit within category one or two. some can make a lot of money, but they usually take a lot of management time. the growler idea is nice but there are barriers to entry and there are limits - you can't scale it up.
the point of all this is if you are going to put in more time building a business rather than a job, there ought to be more upside. a lot of business owners just have a job. if that's what you are going to do, you might as well bar tend. that said, even the dumbest, simplest labor arbitrage business can be scaled up with enough money and persistence. ex. mcdonalds is an example, and to the extent they are more successful than other hamburger stands its because they have done things to moved from category 1 to 3 -superior product/experience, branding, etc.
a few people mentioned some limits to think about - could you make more at work, bartending, etc.? how much money can you realistically make, and is it worth your time?
I started a small business last year and it made about $1000/month, not fully ramped up. am still learning the ropes, but could conceivably bring $2000/month with a small investment of additional hours. its not life changing money, but its a college fund or a vacation fund. frankly, its not worth the extra work for me, and if i can't ramp it up more i'm on the verge of quitting. i'm really doing it so my son learns to think like an entreperneur. the business is related to a hobby my wife and i share, so its not all work. I would estimate that i'm making 40-50/hour before tax, which is nice rate for a kid but not for me. (now, in my industry, there are people who have taken it to the next level, and gross in the millions, but what they are ally doing is hiring lower-paid employees to do a lot more of what i am already doing).
if you look at semi-successful and successful businesses, they can be boiled down to three things.
1. arbitrage of labor - you manage a bunch of relatively lower paid people to provide a product or service that someone wants. they want it because they can't do it themselves at their personal labor rate.
2. arbitrage of time - essentially the same thing. you buy convenience food because your time is worth much more than the small premium the restaurant charges.
3. something unique/royalty - someone comes up with an idea and sells it again and again. - ex., you write a song and get paid everytime it sells. software. ebay. amazon.
most fit within category one or two. some can make a lot of money, but they usually take a lot of management time. the growler idea is nice but there are barriers to entry and there are limits - you can't scale it up.
the point of all this is if you are going to put in more time building a business rather than a job, there ought to be more upside. a lot of business owners just have a job. if that's what you are going to do, you might as well bar tend. that said, even the dumbest, simplest labor arbitrage business can be scaled up with enough money and persistence. ex. mcdonalds is an example, and to the extent they are more successful than other hamburger stands its because they have done things to moved from category 1 to 3 -superior product/experience, branding, etc.
