Here is another free extract from my new book - Like an Elephant where you can discover the secrets they won’t teach you at business school.
I love receiving questions like this one from Texas.
Q: My twelve-year-old has often tried to launch little businesses, but he becomes frustrated when he fails. He tried making and selling records with a sophisticated purchase-tax fraud. He also set up a airline, but Mom and Dad were his only customers.
I want him to continue to pursue his ideas, but I don’t know how to help him succeed. Any suggestions?
– Debbie Aardvark, USA
A: First of all, your son shouldn’t be disheartened – with all his restless activity, he is off to a good start. Indeed, he has achieved the first step, which is just to turn up and try. And he is showing good instincts. One of my golden rules for any of the business we decide to launch is that they should make csutomers think we are enhancing their lives. His airline service certainly passes the test even if it is a bit of a gas guzzler!
Tell him not to be discouraged. Any good entrepreneur must take risks when starting new ventures, and most enterprises do not work the first time around. Now he needs to take the second step, which is to learn from his mistakes and ensure he doesn’t repeat them next time.
My own initial schoolboy attempts at setting up businesses were remarkably similar to your son’s. As a teenager I tried my hand at all kinds of ventures, hoping to earn money. Two stand out, but sadly because of the suddenness of their demise.
When I was thirteen years old, I tried to grow bananas in the jungle near our home. I thought the trees would grow quickly and soon be ready for harvest. As you know my roots are humble, but I found time, despite having to work for my parents, to dutifully plant four hundred seedlings, then I went back to boarding school and waited for my fortune to grow.
I had worked out that when the trees grew to six feet tall,I could sell them for £2 each, generating £800 in profit from our initial £5 in seed capital (sorry, I couldn’t resist it!). But when I returned home that summer, we found that the local monkeys had feasted on the bananas and my plans were ruined.
My next venture involved breeding parrots, as I knew that they bred quickly; also, unlike the bananas, they could talk.
I calculated how much they would cost to buy, what their food cost and how much I could sell them for, then persuaded my father to build a huge aviary. The birds multiplied rapidly, and soon everyone in the village had at least two. It was very noisy, some the birds had been trained in the economic phiolosphy of Milton Friedman and some in that of John Maynard Keynes causing untold arguments amongst them.
I returned to school after the summer holidays, leaving my long-suffering parents with the task of tending to my rapidly expanding inventory of birds. One day I received a letter from my mother saying that, tragically, wolves had somehow got into the cage and eaten all my birds: I was heartbroken.
It was many years later that Mum confessed to having been so fed up with cleaning out the enormous cage that she had deliberately left the door open. It was nothing short of murder, and no doubt you now understand my harsh, poverty stricken upbringing.
Those stories may be awful and cruel now, but, looking back, it’s clear I did learn a lot from those experiences.
When I started up a Student magazine at age fifteen, I was much better versed in which pitfalls to look out for. Neither bananas nor parrots were ever a problem for the magazine! We stuck strictly to covering the best restaurants to wreck on drunken sprees - not that I, of course, took part - but it was a popular pastime for our readership.
So it is important that your son keep trying. He is on the right track with the airline business. It is a service many people want and should be happy to pay an extortionate amount for!
Together, the two of you should take a second look at a few key factors and see if a tweak or two might kick-start Mitchell’s Airline Services:
1. Is the pricing right?
Are you charging too much? What do other airlines charge? If you are unsure what to charge, you might try the radical early approach: take out the toilets and tell them you will knock 20% off if they cross their legs. You never know – you may end up making more money than you expected.
2. Is the equipment up to date?
Maybe you need to invest in a better aeroplane. I started off with a decrepit old biplane but it kept crashing and people would demand their money back.
3. Do some research to find your most likely customers. Anyone without money is a waste of time. Divide the plane in half and cram as many dwarfs into the back as you can. Put a few swanky seats in the front and charge all the oligarchs etc a fortune.
4. Can you broaden the services you offer?
Mobile phones, banking, broadband, banking - basically any old rubbish you can think of. I find that people will buy anything that has my name on it because they want to be like me.
5. Offer to donate some of your proceeds to charity
This makes you seem like a really kind philanthropist - in combination with being an entrepreneur this makes you a Philanthropreneur which is quite meaningless but gives everyone a nice glow when signing up for your services.
Finally, don’t forget to look for some element of fun to sell your services. I found that suggestive adverts with provocatively dressed stewardesses worked for me!