Video: Should You Sell Services or Products – Starting a Micro Business

Should You Sell Products or Services?Are you wanting to start a micro business, but aren’t sure whether to start a product based business or a service based one? In the video below, I explain the differences between the two.

The biggest reason you might want to consider a service based business over a product based one is because they are easier to support and much more manageable.

As I explain below, product based businesses can be very successful, sometimes too successful. This can lead to a major problem, keeping a stock of inventory.

Watch the video below as I discuss to a group of parents and teens at the Cincinnati Home School convention, the differences between service based businesses and product based businesses:

micro-mid-1Have you ever had a great idea and thought about starting a micro business? If so, you should check out my book series, Micro Business for Teens. In my books, you’ll gain valuable insight for starting a micro business.

A micro business is a small, simple and fast to start-up, sole-proprietor business that usually consists of one worker, the owner. Micro Businesses are usually low-risk and easy enough for a teenager to manage along with schoolwork and other extracurricular activities.

Check out my books today and start your own micro business for success! Available for purchase on Amazon, Amazon Kindle, Createspace, and as a PDF eBook on my website.

Carol Topp CPA

Video: Getting an Idea for Your Micro Business

Getting an Idea for Your Micro Business - Read More at: microbusinessforteens.comGetting an idea for a micro business is as simple as finding a need and creating a solution. This is exactly what Rachel Coker’s sister, Hannah, did!

A year and a half ago, Rachel and Hannah signed up for ball room dancing. The only problem was there was a dress code for the ball room dance class. The dress code required that all the girl dancers must wear a skirt that comes down to their knees. This was difficult because neither of them were able to find skirts that matched the dress code.

But one day Hannah came down from her room for church and was wearing a beautiful blue skirt. Rachel took notice and asked her where she bought it. Hannah told her that she made it on her sewing machine. Of course Rachel asked Hannah if she could make one her one in a different fabric and she did!

Watch the video of Rachel Coker below as she explains how this blossomed into a micro business for Hannah:

micro-mid-1Have you ever had a great idea and thought about starting a micro business? If so, you should check out my book series, Micro Business for Teens. In my books, you’ll gain valuable insight for starting a micro business.

A micro business is a small, simple and fast to start up, sole-proprietor business that usually consists of one worker, the owner. Micro Businesses are usually low-risk and easy enough for a teenager to manage along with schoolwork and other extracurricular activities.

Check out my books today and start your own micro business for success! Available for purchase on Amazon, Amazon Kindle, Createspace, and as a PDF eBook on my website.

Carol Topp CPA

How to Start a Micro Business with Little Money

How to Start a Micro Business with Little MoneyStarting a micro business doesn’t mean you should take on debt! In fact, you can start a micro business with the things that you already own such as: your computer, you lawn mower, your camera, your oven, and even the knowledge inside your brain.

Here’s an example: Lucas wanted to start a micro business mowing lawns. He want a riding lawnmower for the business, but didn’t have enough money. So instead Lucas worked delivering papers and eventually bought a lawnmower at a garage sale. His lawn mowing business is now quite successful and was started debt free!

Watch an excerpt from a workshop I did at the Midwest Home School Convention called, “The Best Micro Business for a Teenager to Start”. Here I explain why it’s best to start a micro business with little money:

micro-mid-1Have you ever had a great idea and thought about starting a micro business? If so, you should check out my book series, Micro Business for Teens. In my books, you’ll gain valuable insight for starting a micro business.

A micro business is a small, simple and fast to start up, sole-proprietor business that usually consists of one worker, the owner. Micro Businesses are usually low-risk and easy enough for a teenager to manage along with schoolwork and other extracurricular activities.

Check out my books today and start your own micro business for success! Available for purchase on Amazon, Amazon Kindle, Createspace, and as a PDF eBook on my website.

Carol Topp CPA

Micro Business for Teens e-books

MBFT Ebooks on DropCard

I will be selling Micro Business for Teens electronic books using this card when I speak at homeschool conferences this spring.

(I’ll be in Greenville, SC, Indianapolis, Cincinnati and Ontario, CA this spring. Hope to meet some of you!)

The purchaser buys a card and on the back is a website and access code.

They can then download the ebook in their choice of formats (pdf, mobi or epub). In my case I’m selling all 4 Micro Business for Teens ebooks and then adding 3 audio (mp3) files as a bonus.

Pretty neat way to sell an ebook! If you have written an ebook  or recorded music and want to sell it when you meet customers face-to-face, consider using a card like this.

The cards are available at Dropcards.com

 

Carol Topp, CPA

 

Starting a business selling products with multi-level marketing.

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Ever thought of trying to start a business that uses a multi-level marketing (MLM) plan?

Here’s the story of one guy, Josh Day from Australia, who tried to sell Herbalife.

I asked permission from Josh to share his story.

 

So over the years I’ve tried all sorts of different business ideas and the first one that Ii really lost any money on was when I tried to sell Herbalife. If you don’t know, Herbalife is a weight loss product with an MLM (multi-level marketing) type structure of selling. I was 17 and decided that if it was to make some serious money I’d have to invest so I started talking to a Herbalife distributor and after a couple of weeks I paid him the $550 to get started in the business.

I’m a good sales person and I’ve always know that, so I thought I could sell anything. Well, being a 17 year old who has never even come close to being overweight makes it very difficult to sell weight loss products, especially since most of their marketing ideas are about sharing your own stories and being a success story of the product.

So after a few weeks of trying to sell off this product I only ended up making around $300 in sales (which was only around $100 profit) and I had exhausted all the ways I knew possible to sell this product.

The lesson I learned here is that just because it’s a highly sort after item, doesn’t mean its going to sell easily unless you know how to market it. I’m sure if I tried to get into it again being older and knowing a different crowd I’d probably be more successful, but to make back that $550 would be quite a task.

I met Josh on the Teen Business Forum, a great website for serious teen entrepreneurs. Check it out.

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If Josh had created a marketing plan, as I show in Starting a Micro Business, he might have chosen a different product to sell as a 17 year old.

Grab a copy of Starting a Micro Business today and avoid the mistakes Josh made.

Micro Business for Teens in Greenville, SC

GHC_MBFT_SC

I’ll be in Greenville, SC March 20-22, 2014 at the SouthEast Great Homeschool Convention helping teenagers start a micro business.

If you come to the convention stop by booth # 1404 and say hello!

 

Carol Topp, CPA

 

Tax tips and tricks for teen entrepreneuers

april_15_calendar

Kenneth over at Teen Business Forum asked,

My name is Kenneth and at the moment I am a freshman in college. As you probably already know, tax season is here! I do plan on filing them soon, but I was wondering what tips and tricks I could do to increase the amount of the refund.

Kenneth,

Tips: Read all you can about tax deductions. My blogs at http://TeensAndTaxes.com and http://TaxesForWriters.com are a good place to start.

Buy my ebook Teens and Taxes at http://TeensAndTaxes.com. The $3 cost is a business deduction!

Keep good records. Consider using accounting software like Quickbooks, Outright.com, Freshbooks.com or Wave accounting.

Tricks: Keep track of mileage. It’s a bigger deduction than just gas.

If you travel out of town you can deduct a per diem amount for meals that is higher than actual meal expenses (unless you’re a really big eater!).

The standard rate of $46/day for meals is set by the General Service Administration which has higher per diem rate for high-cost cities. On the day of traveling to and from home, you can only deduct 75% of the per diem rate, but it still adds up.

For a trip to Orlando (with a per diem rate for meals of $56/day) my per diem totaled $196, a lot higher than my actual expenses of $94.97.

Hope that helps.

Money_small-259x300Money and Taxes in a Micro Business has several chapters devoted to federal , state and sales tax. There’s quite a bit to learn about taxes, but this book is written in clear English so a teenager easily can understand taxes in running a micro business.

 

Carol Topp, CPA

 

Teenage Taxation Without Representation video

 

Here’s a short video produced by three teenagers on

Teenage Taxation Without Representation

http://vimeo.com/user24314218/teenagetaxation

Teenage Taxation Without Representation (C-SPAN Student Cam 2014) from lei on Vimeo.

You can jump to 4:00 min to see me explain that the self-employment tax threshold of $400 has not been adjusted since 1954!

If it had been adjusted it would be $6,000!

Imagine being able to earn $6,000 before you had to pay self-employment tax! Think that would encourage some teens to start a micro business?

Help me and these teenagers adjust the tax on teen entrepreneurs. Click on the link for a letter you can send to your Representative or Senator.

Eliminate tax on teen entrepreneurs

 

Carol Topp, CPA

What is crowdfunding and can a teenager get in on it?

Credit: http://www.salon.com/2013/04/10/kickstarter_just_might_get_you_audited_partner/

What is crowdfunding?

The word seems to be a hot term that’s used everywhere. Anytime someone needs to raise some money for a project they turn to crowd source or crowd fund. But what exactly does that mean? Well Venturebeat.com best describes it as:

“crowdfunding is funding from a crowd of people; that is, many people provide small amounts of money to finance something. Crowd funding has its roots in charitable causes, including the advent of micro financing to provide financial services to poor people, but has progressed to the online funding of creative and other projects via sites like Kickstarter and Rockethub…” Read more on VentureBeat

Can a Teenager Start A Crowdfunded Project?

Crowdfunding may not work for micro business owners under age 18, because legal contracts with minors are not legally binding, so most investors will not make a contact with a teenager.

But with that said, there are a few teenagers that have used sites like Kickstarter to launch their project. In fact, I just wrote a blog post about a teen who crowdsourced an iPad app last week, you should check it out. You might also want to check out his Kickstarter page to see that the project wasn’t launched under Emerson Walker’s name, but his father’s instead. This is most likely because of my reasoning mentioned above, legal contracts with minors are not legally binding.

Keep Good Records and Be Careful Not To Get Audited

Another thing to keep in mind is that any funds that you make off of your crowdfunded project are considered “taxable income” by the IRS. Even though you are not selling a product via a crowdfunding site like Kickstarter, the IRS will see the transaction as a taxable income because the IRS defines gross income from ‘whatever source derived,’. You can read more about this on Salon.com.

But crowd funding is definitely something to keep in mind for your future.

Carol Topp, CPA

 

P.S. Here’s a neat story of how some students pay for college through crowdfunding: New crowd funding site helps kids with little money achieve big college dreams

 

 

Is your age an asset when running a micro business?

Ray Land was a shaggy-haired teenager when he founded Fabulous Coach Co. in 2004. He says he struggled to recruit drivers—and eventually gave in and trimmed his hair. Fabulous Coach Co.

 

There are many benefits to starting a micro business as a teenager including:

  • You know more about somethings than some adults (like Algebra II and social networking)
  • You usually have more energy
  • You can charge less than adults

But can your age be a hindrance to getting respect? Some young entrepreneurs say that being young can be a problem:

From the Wall Street Journal article  Baby Face a Challenge for Entrepreneurs by SARAH E. NEEDLEMAN comes this story:

When Ray Land launched Fabulous Coach Co., a Brandford, Fla., transportation business in 2004, the then shaggy-haired teen struggled to recruit drivers—and eventually gave in and trimmed his hair.

“They didn’t say it was because of my age, but that’s what I’ve always thought,” says Mr. Land, who is now 23 years old. “I keep a very professional look and try to be cautious in how I talk to people. I don’t use the word ‘yo.’ “

The take-away from this entrepreneur:

  • dress nicely
  • look professional
  • use professional language, especially in emails. Avoid text message speak when you want to sound professional.

In other words, use your age as an asset, but don’t let it get in the way of making a sale or serving a customer!

Carol Topp, CPA