Need advice on business model

[regevdl]

background:

 

I make art and jewelry, sell it locally and online all over the world.  I also do workshops for adults and children for various art and craft projects.  

 

I am getting my son into making things to sell and it also teaches them money, supply demand, budgeting, etc.

 

A parent approached me and was excited about the idea and is trying to get his daughter excited but it having trouble and was asking me advice.  He is into computers and not as 'creative' in the crafty sense so I am sure that's where most of the troubles are coming from.  He has the business idea but lacks helping her spark some crafty/girly projects.  Plus I have more connections overseas especially in the US.

 

I offered to teach her a craft, have her make several and sell them via my business and connections overseas.  I will give her her profits minus the materials (since I provide the materials).  He will talk to her about it to see if she's interested.

 

From this, I am already thinking, if it succeeds and others are interested I could do this for other children.  Teach them entrepenurial skills and crafting skills and if they find they are into other hand-made projects, I can help them hone in on those skills.  I teach them economics in business budgeting, pricing, etc.  

 

 

The only thing is that I can't decide how I want to make money from this.  Meaning...do the parents pay me a monthly fee for my workshops and then when the child makes money on their creations, I deduct the material costs and give them the rest?

Example:

$50/month- includes workshop and business tips

Child sells their items, I give them their profits minus the material cost.

 

 

Should I take a portion of their profits on top of the cost of materials and a fee per class?

Nothing is paid upfront

Child sells $100, I take material cost plus x% or whatever....

 

A mix of both?

$50/month - workshops, etc

Child sells items, I take material cost plus X%?

 

The thing too is that either way....they make the items now but I won't put them on market for a few more months (waiting to accumulate inventory and sell during the Christmas holiday)

 

I really don't know which is the best way to approach this or if there is another approach I haven't considered. I guess too that there is no guarantee their items will sell.  So if they don't pay anythig up front....how will I cover my investments such as time/material during the workshops?

 

 

I mean the kids aren't expecting to get rich, it's just a way to teach them valuable life lessons and of course be rewarded with financial profit.  I too am not looking to get rich off of the labor of KIDS! lol  Just cover my cost and my time.  Since this is a side-project to my main business, I can keep my rates low but having trouble valuating it. 

 

I appreciate any feedback!  

 

 

[Somewhere]

I like this idea. A small innovative business like this would no doubt evolve a lot as it grew. Some craft/how-to teaching communities use Membergate http://www.membergate.com/although the cost is perhaps too high for the early stages of the business.

[aviet]

I like the idea of getting your son involved.

I do not have children, but if (hopefully when) I do, I will be opting for homeschooling, which is made easier since I work at home; and will be looking to get them earning money. So rather than coming out of university aged 22 with huge debt, a useless degree, a lack of autonomy and no economic wherewithal, hopefully they will have confidence in themselves and enough money to buy their first house.

I'm not sure what would be best, but I have a few concerns. From what you have said it seems like money is a side issue here and this could be considered quasi-charity. From people who donate their time, e.g. mowing bowls laws, organising rugby clubs, running club magazines, they always tend to moan about how no one values what they do and how they can be left in the lurch as their work is taken for granted. I would be worried about this by parents who may think little beyond what's in it for them and their child.

Another concern is that you may get some complaints from parents if their items do not sell, or they are disappointed with the level of income - maybe thinking you are skimming. There could be all manner of other concerns, as you will be responsible for children. As you may already know, running a business can contain a lot of twists and turns. People make their business plans and then a whole host of unforeseen problems arise.

I would question whether it would be a better idea to work on your own business and educate your own child, rather than taking this route.

[Worlok]

Minimum monthly charge or x% after x exceeds the minimum. Subtract the fee, then subtract the cost of materials. For example, $50 monthly charge or 10%. If profits are 100$, you simply receive the $50 monthly fee and cost of materials. The child receives the rest. If profits are $500 that month, 10% would equal $50, so it would only cost the base 50+ materials. $600 profit would equal $60, so instead of the base $50, they pay the 10%, or $60 + materials. 

 

Essentially, you aren't looking to make a profit off of the children, but you also aren't looking to do it for free. Even if the profit is $10, you still covered your own costs and the children still have the experience. Supposing you have a golden goose or two, the children benefit greatly and you are rewarded for having supplied the opportunity.