A business to fund my fastlane business! Feedback wanted!

[Mike39]

So as summer break is quickly approaching my parents keep bugging me that I should really get a job over summer. I DO NOT want to work a job but I would like to have some extra cash to spend and some to save for future expenses that may involve my fastlane business (already underway :smug2. My solution: a door to door sales and marketing business!

The competition: 1 (30 something) guy locally who does not pay sales tax and is not even registered as a real business and only does business with small local restaurants (aka Mr. Scumbag). So in other words, NO REAL competition!

The Plan: Contact local businesses and offer both door to door marketing in the form of advertising brochures (you leave on the doorstep) and coupon sheets (actually knocking on doors). Part #2, designing either the brochures or coupon sheets if the business does not have someone to do it for them.

The Pay: Hire local high school kids and they will receive a commission on each coupon sheet and a $ per X houses on brochure distribution.

My money (Coupon Sheets Only): $20 per coupon book, $5 commission per book to employee = $15 per book

Bulk order: 1000 Coupon books = $15,000

By day: Selling 4 days a week (hypothetical), 1 kid can sell around 4 sheets an hour, 5-10 kids, usually 4 hour selling block. 4 sheets x 15 (profit per book)= $60 an hour per kid! 60x5 (# of kids working) = $300. Next, 300x4 (hours a day)= $1,200 a day. On the high side with 10 kids working it would be $2,400 a day! $1,200x4= $4,800 a week. My total profit per month would be $19,200 on the low side, high side would be $38,000 a MONTH!

Note: I left out the money we would get from designing sheets/brochures, the profit of the brochure distribution, and the cost of printing both the sheets and brochures.

Scaling: I want an autonomous business for my fastlane and i know this isn't autonomous but this IS NOT my fastlane business! I have a lot of time over summer and am fine putting in some hours to make money!

The estimated profit above was strictly per business. If I could acquire several businesses at once, I could always have 1 group of 5-10 kid teams working on 1 project, and a second one working on another and so on through the use of managers (they would probably have to be ADULTS ). Also, there are many areas outside of where I would be operating that I could expand to if need be, the possibilities are huge!

Conclusion: All of this is strictly hypothesis and I having just got my wisdom teeth removed, am enjoying my percocets at the moment so if it all sounds like gibberish I'm sorry but at least I think I am in a pretty normal state of mind :coolgleamA:. If you have any feedback for me I would love to hear what you guys think and any constructive criticism is welcome to! Thanks for reading! P.s. you can PM me also if you prefer

-Mike39​

Edit: Also! If anyone has any experience with minors running a business that would be great, anything such as should i run this strictly under the table, should I attempt to register as a business, if so, then what type of business is the best (ex. LLC?) Any help on that would also be much appreciated!

 

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[Mike39]

Edit: if you or anyone you know has had any experience in this field i would love to hear from you!

 

[MJ DeMarco]

Have you proven the concept? In other words, is there demand for these coupon books? Off the cuff, it sounds feasible but I haven't worked the numbers. And don't worry about this not being Fastlane; this is awesome experience that will serve you well, far far into the future.

 

[Mike39]

Have you proven the concept? In other words, is there demand for these coupon books? Off the cuff, it sounds feasible but I haven't worked the numbers. And don't worry about this not being Fastlane; this is awesome experience that will serve you well, far far into the future.

First of all thank you for responding to my thread it only reinforces in my mind that this is a great forum! Secondly, I know there is a legitimate demand for this service, my next couple of weeks will probably consist of making a market analysis to see just how big the market is and when I find out I will be sure to update the thread!

Again thank you MJ for responding, I've read TMFL and really enjoyed it and I really hold you in high regards!

 

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[socaldude]

I know there is a legitimate demand for this service, my next couple of weeks will probably consist of making a market analysis to see just how big

I think what MJ is saying is have you sold a few, instead of buying thousands and hoping they will sell and making assumptions without selling 1 or 10. i mean if the coupons represents a basket of goods that almost everyone buys like detergent, rice, milk, eggs, oil changes etc then the consumer would clearly see that the marginal benefit of saving money would exceed the marginal cost(the cost of the coupon book $20) hence it would be clearly perceived as a good deal to the consumer. good luck :smug2:

 

[Mike39]

I think what MJ is saying is have you sold a few, instead of buying thousands and hoping they will sell and making assumptions without selling 1 or 10. i mean if the coupons represents a basket of goods that almost everyone buys like detergent, rice, milk, eggs, oil changes etc then the consumer would clearly see that the marginal benefit of saving money would exceed the marginal cost(the cost of the coupon book $20) hence it would be clearly perceived as a good deal to the consumer. good luck :smug2:

Oh I see where your coming from, to clarify, the coupon books wouldn't be on every day items such as rice, milk and eggs, rather, as an example a pizza company would configure a group of coupons such as buy one large and get one free or buy a medium and get the 2nd medium half off. The reason these sell well where I am is because I live in a relatively wealthy county (In fact I think it is the 6th richest county in America!). So I think to test the market to see if they sell, I am going to go to a couple of local businesses where i know the owners and see if they would be willing to do a trial with their product/service, however without a business "host", I can not print off coupons because they are not coupons like you find at the grocery store, they are coupons that encourage people to come in and spend money and are strictly promotional. Oh also, I agree with the marginal cost part, the coupons "value" MUST be more than the purchase price of the sheet so that the customer feels they are saving money! I should have clarified earlier but thanks for the input!
:thankyousign:

 

[hedgehog757]

It's an interesting idea. Bit how do you figure your profit and expenses while paying employees?

 

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[Mike39]

It's an interesting idea. Bit how do you figure your profit and expenses while paying employees?

The "host" company would either hire my company to design a sheet or they would send me a completed sheet designed by them or a third party (some very minimal profit from designing the sheet), next, employees would go door to door in a pre-planned area and sell coupons (I have found that 1 kid can sell around 4 coupon sheets an hour), for every sheet sold, the employee would receive a commission say $5 if the coupon sells for $20. This is beneficial because it is a high pay which is rare for most kids in high school and really motivates them to make the sale. In other words, for a $20 sheet, my company would be making $15 a sheet net, not including printing costs (if we print the sheets instead of "host" company.) Also, depending on the "host" companies decision on what deals to put on their sheet, some companies sheets may be priced at $15 (probably minimum) and other may be up to $30 (probably max). Commission will be based on price of coupon sheet. Does that make any sense haha?

Also, still working all the numbers out but there may be a base charge for the "host" company based on the number of coupons to be distributed or a charge per coupon sold for the company (still all up in the air)

 

[pro]

You're a pretty greedy bastard -- paying out only 25% for kids to do this when the market rate is higher and kids are misinformed. I don't like it.

If you agree to give them at least 50% of your margin, I'd offer good advice.

Golden rule.

 

[Mike39]

You're a pretty greedy bastard -- paying out only 25% for kids to do this when the market rate is higher and kids are misinformed. I don't like it.

If you agree to give them at least 50% of your margin, I'd offer good advice.

Golden rule.

In the words of the great Gordon Gekko, "Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit."

And where there is a point that greed is good, I do agree with you that their is a time and place to be fair, as of this point in time, all numbers are strictly guessing, I tell you what, if YOU (or ANYONE) can convince me WHY I should increase their commission and take away from my precious horde of profits that are sure to fund my fastlane business to financial freedom, then I will SERIOUSLY consider what you say when I sit down and figure out commission rates. I need some motivation here, I look at it as I'm allowing a teenager to get $20 an hour compared to $7.50 and that's pretty damn good! Subway isn't giving 50% of their daily profits to the kids they have working there! Oh, and just as a side note, I am 16 as well. I honestly will consider this change if I can see the benefits, feel free to PM me or just post it on this thread! I wish you the best of luck!

 

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[kwerner]

You're a pretty greedy bastard -- paying out only 25% for kids to do this when the market rate is higher and kids are misinformed. I don't like it.

If you agree to give them at least 50% of your margin, I'd offer good advice.

Golden rule.

I don't understand this type of thinking. I don't believe he's taking advantage of anyone in this situation, they can either agree to accept the terms or not; it's not like he's holding a gun to their head. If you think what he's paying them is peanuts, you should see what I pay my outsourcers from the Philippines.

 

[JEdwards]

Oh to be young...

(I have found that 1 kid can sell around 4 coupon sheets an hour), for every sheet sold, the employee would receive a commission say $5 if the coupon sells for $20.

Found where? I will state this as fact: No way a kid going door to door selling a coupon book is going to sell 4 an hour.

If they are lucky they will sell 2 in a 4 hour period.

In the words of the great Gordon Gekko, "Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit."

And where there is a point that greed is good, I do agree with you that their is a time and place to be fair, as of this point in time, all numbers are strictly guessing, I tell you what, if YOU (or ANYONE) can convince me WHY I should increase their commission and take away from my precious horde of profits that are sure to fund my fastlane business to financial freedom, then I will SERIOUSLY consider what you say when I sit down and figure out commission rates. I need some motivation here, I look at it as I'm allowing a teenager to get $20 an hour compared to $7.50 and that's pretty damn good! Subway isn't giving 50% of their daily profits to the kids they have working there! Oh, and just as a side note, I am 16 as well. I honestly will consider this change if I can see the benefits, feel free to PM me or just post it on this thread! I wish you the best of luck!

The reason why you will have to pay them more. If they sell 2 in a 4 hour period under your pay plan they would make 10 bucks. or 2.50 an hour. You think they will show up the next day?

Also, the lowly 7.50 is guaranteed, plus they don't have to beat the street, have doors slammed in theirs faces for it.

I did almost the same idea when I was 16, oddly sometime after actually seeing "Wall Street" at the Theater in 1987.

First day, it seems great all these kids show up, you give them the deals to sell, they go out, and then you don't hear back from them for a week.

Having said that, it can be sold, I get guys in my office all the time selling golf things. You just need to prove it out, get out on the street and see what you can do, and then put the numbers together.

 

[Mike39]

@kwerner Exactly my point, if every company owner gave their employees 50% of what they sold, they wouldn't be in business long. The golden rule for business is more like, get someone to work most efficiently at the least pay, that's why outsourcing exists, if I could fly in a bunch of guys from a different country and pay them 10 cents a book I would, but the problem is, nobody would buy from them.

@JackEdwards In my first post I explained that the competition was some 30 year old, right, he hires kids from MY high school to work for him and do the exact same thing, I personally have sold for him, from what I have experienced personally and from what my buddies who have worked also have found is that 3-4 books an hour is average (my highest, I sold 8 books in an hour :coolgleamA, some nights in the poorer neighborhoods we may only sell 2-3 books total but that is because this schmuck of an employer makes us go to some pretty bad neighborhoods (out of our county). Where I'm banking on is that targeting businesses in local (aka wealthy) areas would allow us to optimize our sales per hour. Also, the guy does not implement any sort of training, dress code, or anything really. I feel that by wearing a polo or nice t-shirt with my companies name printed on it nicely (I know some guys in the shirt biz), coupled with a formal training video or session, we could also heavily boost the odds that we can reach the 3-4 sheets an hour mark! Lastly, I just came up with this idea, I haven't gone out and tested the market personally yet but I'm currently working on it and should have cold hard facts in about 3-4 weeks, until then, all my numbers are based off my personal experience and are strictly estimations.

 

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[biophase]

Bulk order: 1000 Coupon books = $15,000

Why are the coupon books so expensive. Maybe I don't understand what you meant here.

 

[Mike39]

Why are the coupon books so expensive. Maybe I don't understand what you meant
here.

Thats net profit per book, they cost almost nothing to print haha sorry I wasnt thinking very clearly when I started the thread, I should have clarified that it was profit not cost

 

[Determined2012]

How did this turn out?

 

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