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Table of Contents Introduction: Entrepreneurship .................................................................................................... 2 Step 1: Come up with an idea that has a low startup cost ............................................................. 3 Step 2: Calculate startup cost ........................................................................................................ 4 Step 3: Identify location for business to take advantage of inexpensive marketing ..................... 5 Step 4: Make your product ............................................................................................................ 6 Step 5: Establish an attractive price for your product ................................................................... 7 Step 6: Sell! Sell! Sell! .................................................................................................................. 8 Step 7: Calculate Net Profit: Gross Profit – Expenses = Net Profit .............................................. 9 Step 8: Invest into business ......................................................................................................... 10 Step 9: Expansion ........................................................................................................................ 11 Step 10: Give back ...................................................................................................................... 12 Conclusion................................................................................................................................... 12              

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Introduction: Entrepreneurship An entrepreneur is someone who creates and manages a business while taking on a considerable amount of risk. The power of entrepreneurship has been used by thousands of impoverished individuals just like yourselves. With immense passion and drive, they were able to unleash the shackles of poverty through the pursuit of being an entrepreneur, and creating their own businesses. Entrepreneurship unleashes opportunities that would never be available in the regular job market. It will allow you to take control of your own destiny, your own decisions, and will give you satisfaction and confidence of knowing you own something in this world… you own your own business. There are a few characteristics that can be found in most all successful entrepreneurs. It is important to pay attention to these characteristics and attempt to develop them in your own life. One of the most important, and perhaps the most common, is having tenacity. I can promise you that building your own business will not be easy by any means. It is critical that you possess a “never-give-up” attitude when attempting to build your own business and become an entrepreneur. The second characteristic is having passion. If you do not have a passion for the business you are going to create, then you have already failed. Passion will provide the motivation necessary to continue moving when you experience (and yes you will experience) difficulties on the road to building a business. The final characteristic, but certainly not the least, is having an innovative mindset. Being able to adapt and find creative solutions to problems serves as a vital complement to any entrepreneur. Possessing an innovative mindset will allow you to maneuver around difficult business problems, and also take advantage of deficiencies in the market. In other words, you will be better equipped to address problems in the market that will produce profit. *The following pages serve as a guide to create a hypothetical lemonade stand business. This is not a concrete solution to escape poverty. This guide is an educational tool for aspiring entrepreneurs wanting to break free from poverty. It focuses on teaching basic business concepts that are important to learn before embarking on your own entrepreneurial journey to start a new business.  

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Step 1: Come up with an idea that has a low startup cost

To be clear, startup cost is the amount of capital (or money) needed to start a business. For the remainder of the guide I will use a lemonade stand business, but it is important to brainstorm ideas of possible business ventures in your own area. Maybe there are a lot of people that need their dog walked while they are at work, or maybe there is demand for low priced handmade jewelry. Both of these options have low startup costs. Considering your financial situation, you do not have the money necessary to create a business such as a lawn care business. The initial investment of buying a lawnmower is too high. That is why it is important to identify needs in your community that will not take a lot of money to provide.

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Step 2: Calculate startup cost

Identify the cost needed to purchase the goods necessary to open up your lemonade stand. Add up the following costs: A bag of at least eight lemons, a gallon of water, at least two cups of sugar, a pitcher, paper cups, a table, ice, a small cooler, and materials needed for a sign. It would be most cost efficient to use recycled materials, such as card board and wood, to make the costlier items such as a table and a sign. Depending on wear you live, the costs will vary. Let’s say it sums up to an average cost of seven dollars. So, you must save seven dollars in order to open up your lemonade stand for business. This might seem like a high startup cost for many of you, but it is important to see the bigger picture. Once you save enough money, you will be able to sell your goods (cups of lemonade) for profit. The goal is to make more money than you paid for the items used to make the lemonade.

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Step 3: Identify the location for your business to take advantage of inexpensive marketing

For a lemonade stand, it is important to set up shop where there is a considerable amount of foot traffic. In order to sell your product, you must have customers. Sense you do not have enough capital to invest in expensive marketing, you must take advantage of cheaper alternatives. Your voice, lemonade stand, and word-of-mouth, all serve as sources of inexpensive marketing. You can use your voice, along with the display of your lemonade stand, to attract customers. As stated earlier, it is important to be in a populated area where lots of people are walking by, in order to take advantage of advertising from your sale’s voice and lemonade stand sign. Word-of-mouth marketing is when customers that have tried your lemonade, tell others about how it was tasty and refreshing. This is a powerful way to attract more customers.

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Step 4: Make your product

Once you have identified a location for your lemonade stand that has a lot of foot traffic, it is time to prepare for business by making your product (the lemonade). It is important that you estimate how much you are going to sell for the day so that you do not make too much, which will waste money. Many businesses fail because they overestimate demand. Considering that you only have the items necessary for one gallon of lemonade, it will be safe to make a whole gallon. Later on, you might choose to expand your business and make multiple gallons of lemonade. This is when it becomes especially important to closely evaluate how much you might sell. Expansion may lead to overestimation, which ultimately might run your business into the ground.

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Step 5: Establish an attractive price for your product

Now it is time to identify the price you will sell a cup of lemonade for. Depending on where your lemonade stand is setup, the price will change. If you are located in a more affluent area, the price will be higher than if you were setup in a low income area. It is important to establish a competitive price point that is high enough to cover materials, labor, and time, but low enough that people will buy the lemonade. Let’s say that a cup of lemonade for a dollar and a half is a competitive price point.

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Step 6: Sell! Sell! Sell!

You have your lemonade ready, and your stand is setup in a populated area, now it is time to sell! Let people know why they should buy your lemonade. Maybe it is the freshest on the market, or perhaps it will quench their thirst on this “sunny day.” Let them know why they should stop by your stand and buy a cup of cool lemonade. Polite manners go a long way in business. Being polite to your customers will make them more appreciative of their purchase, and might cause them to tell others about your wonderful lemonade stand. This is the word-of-mouth marketing mentioned earlier.

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Step 7: Calculate Net Profit: Gross Profit – Expenses = Net Profit

When the day is over, and you are finished selling your lemonade, it is time to calculate how much money you made (net profit). In order to do this, you must add up all of the money you made during the day. Let’s say you sold a gallon of lemonade, which equates to 16 cups at a dollar and a half a cup. This means your gross profit equals 24 dollars. Then, you subtract your gross profit by the amount of money you spent on materials (expenses). Earlier, I calculated a startup cost of seven dollars. By subtracting the gross profit figure by the expenses, I come up with 17 dollars of net profit. That means you made over twice the amount of money it cost you to open up business at the beginning of the day.

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Step 8: Invest into business

You could either take this money and never open up another lemonade stand, or you could invest this money back into the business. By investing the money back into the business, you will have enough money to buy more lemons, sugar, ice and all the other materials necessary to continue selling lemonade. This will allow you to make more lemonade, and more profit.

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Step 9: Expansion

As your lemonade stand continues earning profit, and you continue to invest this into the business, you will build up enough money to expand your business and higher employees. The best way to do this is to open up an additional lemonade stand in another populated location. To operate this additional lemonade stand you will have to higher an employee and pay him. Then you will be generating profit from two different locations. This process can be repeated to open more stands, but it is important to expand comfortably. You do not want the startup up costs of additional locations, as well as the wages of more employees, to cause problems. By expanding your business, you will not only make more money, but you will also create a source of income for your employees. This is the power of entrepreneurship.

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Conclusion By having studied this step by step guide, you will have learned basic business concepts such as calculating startup costs, establishing price points, and investing in your business. Learning these concepts will be instrumental to your success as you begin to open up your own business. Continue studying the fundamentals of entrepreneurship to fine tune your skills. As you continue your entrepreneur education, be sure to teach others about these concepts. It will not only help educate others, but will also solidify your own knowledge. And remember, take control of your future by never giving up on your journey to become a successful entrepreneur.    

Step 10: Give back

When you have become successfully profitable in your business and escape poverty, it is time to give back to those less fortunate. You know the discomforting feeling of living in poverty. Become a positive influence in the lives of an impoverished community, volunteer your time, and donate money to help them with their needs. And above all, teach them about the power of entrepreneurship to reduce poverty one business at a time!